Walkability to Amenities May Command a Higher Home Price
The National Association of Realtors® recently published an article with data from a Redfin study addressing the impact walkability to neighborhood amenities has on home values. Homes within walking distance of workplaces, shopping, parks, schools, etc. rank high on buyer wish lists but will command higher prices.
Homes with in-city locations are often condominiums (stack flats) or attached townhomes. Buyers willing to consider moving to close-in but less walkable, more car dependent neighborhoods, may find more affordable options as well as more single family house choices.
West coast urban markets have seen the premium walkability has on home values. In 2019 the premium for walkability in the Seattle marketplace increased the average price by 15.7% or $86,331. In San Diego urban/walkable homes averaged 10.5% more or $60,225 and in Los Angeles the premium for walkability was 5.8% or $34,583.
Senior Property Tax Exemption Program
It’s that time of year when we start collecting receipts, mortgage interest and property tax statements, all in readiness to work on taxes or at least deliver your box of receipts and statements to your accountant.
Did you know . . . anyone 61 years or older who owns their own home may be eligible for Washington State’s senior property tax exemption. The maximum annual income for this program has been significantly increased to $58,423 which will allow many more people to be eligible for property tax relief.
For more information, to find out if you or a family member qualifies fore a reduction in property taxes, or to apply, visit the King County website at https://www.kingcounty.gov/depts/assessor/tax relief/seniorexemptions .aspx or call 206-296-3920. Anyone who is eligible should take advantage of this tax exemption law.
Affordable Housing in Bellevue?
You might be surprised to find there are many affordable housing options close to downtown Bellevue. Apartments in the city are expensive and it’s likely the rent will increase each time the lease renews. The average monthly rent for a 2 bedroom apartment in downtown Bellevue is $3,250 or more per month (plus utilities). That’s a lot of money for housing with no return on investment.
Last year more than 100 one and two bedroom condos in or near downtown Bellevue that sold with median sales prices* under $475,000 (98004 & 98005 zip codes). Some of these homes were in communities walk-able to downtown, others were less than a 10 minute drive to Bellevue’s workplaces, shopping, dining, arts and entertainment events, parks and sought after Bellevue schools.
With a budget of $550,000, a lot of money but considered affordable in the Eastside real estate marketplace, if you were buying a condo what could you expect to pay for your monthly housing expense?
- A 2 bedroom condo priced at $550,000 with a 5% down payment ($27,500) would have a monthly mortgage expense (PITI) of about $2,850/month
- There are great loan programs available with 3%, 5% and 10% down, but if the down payment is less than 20% the lender will require PMI which will could add $300-$400/month to your mortgage payment. (Consult your lender for more information.)
- Budget $395-$495/month for homeowner’s dues, but that will include the water/sewer utility, garbage/recycle service, master insurance policy and sometimes even basic cable.
With a 5% down payment on a $550,000 purchase the monthly PITI + PMI would be approximately $3,240 – about the same as renting a 2 bedroom apartment downtown, except you would get the benefit of a tax deduction for some of the closing costs and the deduction for mortgage interest and real estate taxes every year.
Before you renew your lease, talk with your lender and Realtor®. This might be the right time to purchase a home and avoid the next rent increase. You would own your home, shelter income and start building equity and wealth. You may even reduce your commute.
* median sales price – half the homes sold for more, half sold for less
2020 Real Estate Excise Tax Revision
The Washington State Legislature has changed the way in which real estate excise taxes taxes (REET) will be calculated. This change will impact real estate sales beginning next year. Starting January 1, 2020, the real estate excise tax, currently a flat 1.78% of the sales price paid by the seller at closing, will be calculated on a graduated scale.
SALE PRICE TAX RATE
$0 to $500,000 1.6%
$500,000 to $1,500,000 1.78% (current rate)
$1,500,000 to $3,000,000 3.25%
$3,000,000+ 3.5%
Sample calculation for a sales price of $2,000,000:
1.6% for the first $500,000 = $8,000
1.78% for the amount between $500,000 to $1,500,000 = $17,800
3.25% for the amount between $1,500,000 to $2,000,000 = $16,250
Total tax in 2020 = $42,050
Homes sales priced under $500,000 will see a decrease in excise tax; homes priced up to $1,500,000 will see no change to the current real estate excise tax rate.
The tax rates listed above include the municipality tax of 0.50%. Some municipalities have different tax rates. For additional information about the real estate excise tax and local rates for each municipality, visit the Department of Revenue’s website.