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5% Interest Rates
50% Home Equity
Did you know that 50% of homeowners have at least 50% equity in their homes?! This means that half of the homeowners in the US have a loan balance for less than half of the value of their home.
These equity amounts will keep the housing market stable and real estate a smart investment even as we see interest rates rise and record-high prices.
This needs to be kept in perspective as the market recalibrates and finds stabilization. Realtors are excited to see contingencies become more normal again and buyers gain back some of their deserved protections during their process. That being said, real estate is a long-term hold and one that provides for amazing wealth-building opportunities and nimble footing to make big life transitions.
Sellers can expect to still sell for the most they ever could, but not continue to have escalations and “bidding wars” like the last few years in the coming months. Accurate pricing is going to be critical and the hardest part of Realtors’ jobs as the market shifts.
If you are curious about the value of your home and how it might help you pivot to your next goal, please reach out. I’d be happy to weigh in on your home’s value and empower you to make an informed decision with your equity.
Current Market Update
Housing inventory is holding strong! We continue to have record numbers of new listings since the start of the pandemic. It’s time to start paying attention to how long it’ll take for a listing to accept an offer and if the sold homes will continue to close at over asking price. Windermere’s economist, Matthew Gardner, said this week that it would take interest rates going over 7% (which is highly unlikely) to slow buyers' demand enough for pricing to start going in a direction we have not seen in more than a decade.
Those of you thinking you are going to wait for pricing to go down… it’s not going to happen friends.
Is Your Home Properly Insured?
I’ve been thinking about this a lot lately and when it became a topic of discussion at our office meeting this morning I decided it’s time for a PUBLIC SERVICE ANNOUNCEMENT‼️
I’m not talking about disaster or actual emergency preparedness in your home… although that’s important too. What I’m talking about is all this value you’ve gained in the last few years…
If your house were to burn down tonight or flood from a plumbing leak, is it properly insured? You want to make sure you’d be able to replace it and wouldn’t lose out on the equity you have in your home if it became worthless overnight! So here’s your to-do list:
- Ask your insurance professional when the was the last time they updated your coverage amounts.
- If your insurance professional hasn’t kept your values fairly up to date on their own initiative consider making a switch- I have some wonderful insurance agents that would love to give you a quote!
- Ask me or your trusted real estate advisor for an accurate value to update your policy with!
- Revel in the equity you’ve gained and let me know if you’d like to chat to strategize your next goals in real estate!
The Gardner Report
At Windermere, we are fortunate to have Matthew Gardner as our Chief Economist. In fact, we are one of the only real estate companies in the country to have such a well-respected expert sitting in this role. Not only is Matthew an asset to Windermere brokers and their clients, but he is a coveted resource within the industry. He is often called upon by major media outlets and industry think tanks for his insights and knowledge.
Every quarter Matthew produces The Gardner Report which explains statistics and trends and provides predictions for all of the market areas Windermere serves, see the links below. What is so great about this is you can read about where you live and also get a glimpse into other markets that may pique your interest.
Read the full Western Washington report here. Additionally, since Windermere spans the entire Western Region of the United States, he also provides this same report for Washington (Western, Central & Eastern), Oregon, Idaho, Montana, California (Southern & Northern), Utah, Colorado, and Nevada.
There has been a lot of state-to-state moves over the last few years. Many of these moves have been prompted by retirement, second home purchases, affordability, and remote working opportunities. This is a great way to research other markets you may be interested in. These reports update every quarter; please let me know if you’d like me to send them to you when they update. Also, I am connected to the Windermere-wide network of brokers and can easily find you a reputable broker who would be a stellar match for your real estate needs outside of my normal market area.
Further, I am also a part of a national and international network of real estate companies for referrals outside of the Windermere footprint. This is through Windermere’s affiliation with Leading Real Estate Companies of the World. Bottom line, I can help provide information and can help align you with a trusted real estate advisor anywhere in the world. Please reach out if I can help!
Lastly, Matthew also releases a monthly video that speaks to real estate market hot topics. Here is his latest video that touches on the interest rates, inventory, inflation and more.
My office is working together with our entire Windermere family to hit $50 million raised for our 50th anniversary. Each dollar returns to our community through the Windermere Foundation, helping homeless and low-income families in the neighborhoods we serve.
Help us reach our goal by donating here!
Being part of an office and a company that cares deeply for the community is so important to me, and I’m excited to watch these numbers grow! We are currently wrapping up a donation drive among our Windermere North brokers to help send kids to YMCA summer camps. Look for those final numbers in the coming weeks!
Hovander Park Opening!
Hovander Park is one of my favorite places in Whatcom County! I love running along the Nooksack River trails and taking in the beautiful views of Mt. Baker. Unfortunately, it was closed to the public after suffering major damage during the 2021 flood. Good news is that the Nooksack River trial, the boat launch parking lot, and the dog off-leash area have re-opened to the public! Repairs continue in other areas of the park, but a full park opening is anticipated by next week!
Avoiding Capital Gains: When You Have a Ton of Equity and Want to Make a Move
Did you know that over 50% of homeowners in Washington State have over 50% home equity? We have had 10 years of price appreciation, and the last 3 years have been record-breaking. The chart below shows complete year-over-year (the last 12 months over the previous 12 months) price appreciation for the seven main market areas in Whatcom County. Home equity gains have been plentiful!
What does this mean when you go to sell? You need to consider capital gains taxes when estimating your total profit. This is important as we typically move our profit into our next home, making this a critical element in planning our future. You can qualify for a tax exclusion: $250,000 for a single person and $500,000 for a couple as long as you meet certain requirements.
- You must have owned the house for at least two years. Check out this IRS linkfor more details.
- And you must have lived in the house as your primary residence for two out of the last five years, ending on the date of the sale.
The two years do not need to be consecutive as long as you’ve lived in your home for a total of 24 months out of the five years prior to the sale. You can also only claim the exclusion every two years. This is important for folks who own multiple homes and are looking to liquidate. This would need to be strategically spaced and would require living in each home for the designated amount of time.
Another important element for calculating the tax implication is understanding your cost basis. The cost basis is a combination of the purchase price, certain legal fees, improvement costs, and more. It is important to have good record-keeping on all capital improvements you’ve made to your home to increase your cost basis which will in turn decrease your taxable profit. Capital improvements increase the value of your property versus a repair which only restores the property to its original condition. This informative Charles Schwab article provides a sample tax bill that outlines how capital improvement can help offset your tax burden.
Of course, consulting your trusted CPA on your tax implications is a valuable resource. It is my hope that this overview of the requirements and how you would go about a calculation helps you understand how to prepare for your next move if you are in an equity position that would incur capital gains. It is always my goal to help keep my clients informed and empower strong decisions.
Skagit Valley Tulip Festival IS BACK!
| One of my favorite things to do in spring is to visit the Skagit Valley Tulip Festival! Words truly cannot express the vibrant beauty of the colors spread across millions of flowers! The pandemic limited the festival's activities, but this year many activities that were on hiatus for the past few years are ON AGAIN, making it a great time to go check it out!
The festival is designed as a driving tour as there is no one “site” to enter. The fields of tulips are scattered throughout the Skagit Valley as are the many events and activities that comprise the festival. Visit a farm to get a closer look and take a walk in the fields. A signature event this year is the Downtown Mount Vernon Street Fair which will operate April 15-17. You will also find art shows, a gala celebration, and the Tulip Pedal Bicycle Ride. For more information click here. |
Quarterly Reports – Q1 2022
The 2022 real estate market started with a bang! We started the year with the lowest amount of available inventory we’ve ever seen coupled with interest rates a point lower than they are now, along with a plentiful buyer pool due to a strong job market and work-from-home influenced moves. The combination of supply and demand and low debt service created an intense seller-centric environment which resulted in huge home price increases from January to March. This is on top of ten years of solid price growth; over 50% of homeowners in WA state have at least 50% home equity.
As we head into the spring and summer months, we anticipate seasonal increases in inventory, which will provide much-needed selection for buyers. Interest rates have increased as a tool to combat inflation, which was predicted by experts across the nation and announced by the Fed. Rates still remain historically low and have only departed from the “tell-your-grandkids” levels between 3.5% to 4.5%. Price growth should start to temper after a feverish Q1 and buyers will enjoy more selection. If you are curious about how your real estate goals match up with the market, please reach out. It is my goal to help keep my clients informed and empower strong decisions.
Fair Housing
I commit to Provide equal professional service without regard to the race, color, religion, gender (sex), disability (handicap), familial status, national origin, sexual orientation or gender identity of any prospective client, customer, or of the residents of any community.
Keep informed about fair housing law and practices, improving my clients’ and customers’ opportunities and my business.
I commit to develop advertising that indicates that everyone is welcome and no one is excluded;, expanding my client’s and customer’s opportunities to see, buy, or lease property.
I commit to Refuse to tolerate non-compliance.
I commit to learn about those who are different from me, and celebrate those differences.
I commit to take a positive approach to fair housing practices and aspire to follow the spirit as well as the letter of the law.
I commit to develop and implement fair housing practices for my firm to carry out the spirit of this declaration.