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COVID-19 Impact on the Housing Market – You Might Be Surprised
What Does King County’s Phase 1.5 Mean for Real Estate?
flickr/Rain Rabbit
King County has progressed to Phase 1.5 of the Governor’s “Safe Start Proclamation”. How does that impact buyers and sellers as they search for homes or list their homes for sale?
- Real estate firms may open their offices again. In compliance with State guidelines, staff, brokers and guests will be required to wear face masks when in the office. Common areas and conference space will have restricted access. The number of staff and brokers permitted to be in the office will need to follow State guidelines.
- The most significant change is that now three people (vs. two) are permitted at a property for real estate activities. This permits a husband and wife or partners to view the property together along with their broker. A buyer may now attend an inspection along with the broker and inspector.
- Sign installation companies are again permitted to install/remove real estate signs.
As we begin to move about more freely, an abundance of caution will continue in an effort to keep everyone healthy. Showing homes will continue to be by appointment only with sufficient time between appointments. Buyers and brokers will be required to wear face masks while inside a home and observe all health protocols required by the State along with any additional guidelines requested by the homeowner. Public open houses are still prohibited. Brokers, in an effort to maintain social distancing guidelines, will not transport clients in their car but continue to meet them at properties.
These guidelines are in place to continue to keep everyone safe and healthy as we begin to resume our normal lives. Brokers have become more comfortable working within these guidelines and assuring buyers and sellers that they can safely search for or sell their homes. This is the new normal and we aren’t likely to see the “old normal” for a while.
Downtown Bellevue Condos – Year-to-Year Stats
flickr/Dafne Cholet
Demand for urban housing remains strong, and with Amazon’s projected growth in downtown Bellevue, along with other corporations’ expansion plans, high demand is expected to continue over the next few years. Before the coronavirus outbreak and Stay Home/Stay Healthy order that went into effect in mid-March, the local condo real estate market was off to a very strong start.
2019 DOWNTOWN BELLEVUE CONDO SALES
1/1/2019 thru 3/31/2019 4/1/2019 thru 4/16/2019
39 sales 16 sales
2020 DOWNTOWN BELLEVUE CONDO SALES
1/1/2020 thru 3/31/2020 4/1/2020 thru 4/16/2020
55 sales 13 sales
First quarter downtown Bellevue condo sales were up significantly compared to the same period last year. Moving into the second quarter, numbers for the first half of April are surprisingly similar year-to-date, despite the impact of the COVID-19 health crisis. It’s possible this April’s sales stats reflect contracts written in early March just prior to (and perhaps to secure a home) before the anticipated shelter in place order.
Though well below normal for this time of year, homes continue to be listed for sale, and buyers are writing offers on some of those homes. Many sellers and buyers, for health and safety reasons, have chosen to put plans on hold until the shelter at home order has been revised or lifted and there is a better sense of what “normal” is going to look like. Like many businesses, it is expected the current strict restrictions on the real estate industry will be lifted gradually. What will the summer market look like? It’s tough to say, but based on activity during the first quarter, the high number of property and virtual tour views on websites over the past several weeks, and conversations with clients and potential buyers and sellers, summer may pick up right where the first quarter left off.
Will Open Houses Become a Thing of the Past?
Earlier this month, as concern regarding the coronavirus grew, my company, Windermere Real Estate, followed by the NWMLS a few days later, made the decision to suspend all open houses in an effort to protect the health of buyers, sellers and brokers.
There will be little real estate business transacted during the State of Washington’s mandated “shelter-at-home” period. Escrow and title companies and lenders will continue to work, as much as legally permitted, to be sure sellers and buyers involved in transactions already under contract will close on time.
Even before the mandated “shelter-at-home”, many sellers requested no open houses and buyer traffic dropped significantly at homes (mostly vacant) where open houses were scheduled. What about open houses in the future? While I always include open houses in my marketing plan, at the seller’s option, it is one of the marketing activities that delivers the least return to, and honestly, most inconvenience to sellers. The majority of my real estate business focuses on condominiums, and its not unusual to find open houses restricted or prohibited by the HOA. Homeowners who purchase in a secure building do so because they want to live in a community offering safety and where public access is limited to owner controlled, owner invited guests. A public open house that allows dozens of strangers to access a building is an intrusion on the privacy and security of everyone who lives in the community.
With the advancement of technology, professional and drone photography, 3-D and 360 degree virtual tours, buyers can virtually walk through a property before scheduling a private appointment with their broker to see the home. Going forward we may see fewer open houses, especially in secure residential buildings. Open houses create a logistical challenge for the hosting broker, sellers, buyers and the concierge staff, and are an intrusion to the privacy of all homeowners in the building.
February NWMLS Real Estate Market Snapshot
February statistics are in. Home prices, compared to February 2019, are up 9%. There’s less than a six week supply of available homes which is down 33% over the same time last year. Mortgage interest rates are historically low. Now is the time to maximize your home buying power. Open house traffic has been amazing. If you’re ready to sell, buyers are in the market and looking for homes. Amazon’s projected growth in downtown Bellevue over the next several years already has employees searching for homes in an effort to stay ahead of the competition.
Questions about the Eastside condo market? I’ve specialized in condos for most of my career. I have unique market knowledge, insight and experience to help you understand the market and help you meet your personal and financial goals.
Do You Need to Disclose a Video Security System When Your Home is Listed for Sale?
flickr/Jordan Hatcher
Today’s home security systems are plentiful, inexpensive and easy to install. While they can provide peace of mind, when you list your home for sale, are you required to disclose the operation of a home video or audio security system?
Washington State law makes it very clear – it is UNLAWFUL for anyone to record, by any device, the private conversation of others without their consent. (RCW 9.73.030). Disclosure of an audio monitoring system or device, warning of the monitoring system, is not sufficient. Giving warning is not the same as obtaining the consent of all involved in the conversation.
There is no law prohibiting a seller from having a video only system to record movement or physical actions inside the home; Washington State law prohibits only audio recording. The seller and listing broker should disclose in the MLS listing and inside the home that there is an active video security system and warn visitors they may be recorded while in the home.
Affordability and ease of installation has made home security systems more common. While many systems record only movement, some (including infant monitors) include audio listening devices. If a seller refuses to disable active audio surveillance, and records audio without gaining the consent of the speakers, seller will be in violation of state law. If a seller has additional questions or concerns relating to this issue, they should seek legal counsel.
Selling Your Home? Prepare for the Photo Shoot
This is the time of year when more homes are listed for sale. It’s rare to see a home on the market that doesn’t have professional photos. Quality photography is critical for on line marketing and could be the most important piece of the marketing plan your broker will (or should) commit to when listing your home for sale.
Not even professional photographs can hide flaws, clutter, dirt, etc. and sometimes those are more evident through the camera lens. There are easy steps to take to be sure your home is camera ready which will help the photo shoot go more quickly so you can return home sooner.
- Replace burned out bulbs (table lamps and ceiling fixtures)
- Clean and de-clutter all surfaces throughout the home. Remove personal items and photos from view (recommended for security reasons as well)
- Open all drapes and blinds
- Remove pets, bedding, bowls, toys, etc.
- Same goes for children – head to the park during the photo shoot
- Remove refrigerator magnets and artwork, paper towel holders, towels hanging on cabinet handles, sponge or soap holders/dispensers
- Make the beds and take a quick look from all sides to be sure covers are even all the way around. Fluff pillows and remove personal items from bedside tables.
- Clear bathroom counters, tub and shower ledges and remove toothbrushes, hair styling items, soap and shampoo bottles, etc.
- Decks, patios and courtyards – sweep all surfaces (power wash if needed), cover the bar-b-q, plant fresh flowers in the pots, remove broken pots or furniture
- Turn all lights before leaving
The photographer and your broker will appreciate your effort, the photo shoot will go more quickly and you will be able to return home sooner. It is, no doubt, inconvenient and stressful to have your home listed for sale. Your efforts to have it photo ready and prepared for open houses and showing appointments will go a long way toward having buyers take away a favorable impression and sell more quickly.
Bellevue’s Condo Market is Off to a Quick Start This Year
Today’s Seattle Times (link to the article below) provided a review of the region’s 2019 real estate market comparing sales activity and property values to the prior year. While prices in the county were flat throughout the year, the last quarter of 2019 bucked that trend with inventory selling quickly and multiple offers more common.
There are currently only 26 condominiums listed for sale in all of Bellevue. Since January 1st, 11 new condos were listed for sale – all have sales pending and many received multiple offers. What’s driving the spring market?
Low mortgage interest rates. Fannie Mae conforming loan limits increased to $741,750 in King County. (Jumbo loans will have slightly higher interest rates.) Conventional and FHA loan programs offer low down payment programs (3%, 5%, 10%) for qualified buyers, making it easier to purchase a first or move-up home.
Amazon is scheduled to start moving employees into the former Expedia office tower in downtown Bellevue this summer. Amazon has also signed leases for several office towers currently under construction that will be completed in the next 9-24 months. Employees who know their jobs will move from Seattle to Bellevue are already searching for homes in Bellevue.
Buyers want shorter commutes, and they’re willing to make compromises for less car time and more personal/family time. There are dozens of condo communities within a 15 minute or less commute to Bellevue’s central business district as well as Kirkland and Redmond workplaces. Those communities are in high demand.
The “spring” market is off to an early and active start. The next few weeks should set the pace and reveal what buyers and sellers can expect in the coming months.
Eastside Condos – What Can You Expect in 2020?
Today’s Seattle Times and Puget Sound Business Journal reported that the 2020 real estate marketplace was likely to open fast paced with low inventory levels and high buyer demand following a robust December of residential sales. Without a significant increase in available housing inventory it could be a “red hot market” this year with a return to multiple offers and rising prices.
While most of 2019 was relatively flat for home sales and property appreciation in King County, the last quarter of the year ended up being the most active in recent years. The same was true for Snohomish, Pierce and Kitsap Counties.
Downtown Bellevue’s condo market was no different – flat throughout most of the year with a flurry of activity in the last quarter. There were 258 downtown condo sales in 2019 reflecting a median sales price of $729,500, less than a 1% increase over the prior year. More notable is that 46 of those 258 condos sold during the last quarter and the median sales price for the last 90 days of the year was $869,500. There are currently only 16 condos listed for sale in the Bellevue downtown/98004 zip code.
More jobs are coming to downtown Bellevue this year and continuing for the next few years as companies plan to move to or expand their footprint in Bellevue. Employees, anticipating a move to the Eastside, are already searching for homes close to workplaces and transit. Location, location, location is still true in real estate, but of growing importance are transit options and access to those workplaces, schools, amenities, services, etc. Communities in and near downtown will be in high demand as buyers more on available transit options (light rail, bus, ride services, bike, etc.) to reduce commute time and regain quality of life. Location will always favorably impact value, but the word for this decade may be “transit” when it comes to property values and market desirability.
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.
