Real Estate Information

Seattle’s Weather – It’s Not THAT Bad!

To date, over 120 people have been reported dead in Joplin, Missouri. Authorities say 25 - 30 percent of the city has been damaged by the tornado, which was reportedly one mile wide, with winds of nearly 200 mph. For those in Joplin our hearts go out to you.

If you would like to help people in need who have been affected by the tornadoes, please click on the link below.

http://abcnews.go.com/US/joplin-missouri-tornado-victims/story?id=13665690

While we Seattleites frequently complain about our rainy weather, I thought today’s blog post should readjust our perspective by dispelling 2 common myths.

Myth #1 The weather here is Terrible!!

With the devastating images of Japan’s recent earthquake and the nightmare wreckage of Joplin, Missouri’s tornadoes, I felt compelled to count my blessings for living in rainy Seattle. Both Japan and Joplin showed images of nuclear-like destruction that extreme weather can cause.

The truth is Seattleites really don’t have it THAT bad!! We don’t live in an area where we suffer from severe weather conditions. We don’t have the debilitating heat and humidity of the south, the extreme cold of the Northeast and we don’t get tornados, hurricanes or regular life-threatening earthquakes.   

In fact, we have it pretty good. Here’s why; while we do get a lot of rainy/cloudy days, we live in a very livable, mild climate. Most days of the year can be enjoyed outside with the right layering of clothes. Typically, we don’t get many days below freezing in the winter months and it’s rare to have a heat spell above 90 degrees in summer. Not only that, but according to many sources we live in one of the most livable cities in the US.

Kiplinger rates Seattle as one of the best cities to live in for the next decade.

http://www.kiplinger.com/magazine/archives/10-best-cities-2010-for-the-next-decade.html

And how about this, Forbes rates Seattle as one of the top outdoorsy cities in the US

http://www.forbes.com/2009/05/11/best-cities-outdoors-lifestyle-health-outdoors_slide_12.html

Seattle is one of the greenest, most beautiful cities with clean air and fewer people suffering from allergy related problems than many parts of the US. Nearby, we have the Olympic Mountains, the Cascade Mountains, Mt. Rainer National Park and much more. We also have numerous lakes and vast Puget Sound waterways to enjoy!

Myth #2 Seattle is the rainiest city.

Sure, we are known for our wet weather. Most of us have been complaining about our cold and wet spring this year. We had a record breaking cold April and this May hasn’t been much better. From May 1 - 28, there have been 16 days with cloudy sky conditions, 9 days with partly cloudy sky conditions, and only 3 sunny days.

However, we do not get the most annual precipitation (measured by total accumulation OR by the total number or rainy days). Hard to believe? Well, just look at the facts according to a study done by San Francisco based WeatherBill, Inc., which complied weather statistics across America over the last 30 years.

Here is the list of the top ten rainiest cities (measured by total annual rainfall) in the U.S. based on 30 years’ worth of data:

Believe it or not, the wettest, dampest city in America, with an average annual rainfall of 67 inches per year, is Mobile, Alabama. That is about 5 ½ feet of rain per year! When it rains in Mobile, it can easily dump 1 or more inches. Conversely, when it rains in Seattle we seldom get a heavy downpour. It’s usually a drizzle and often a mist.

This list shows the major US cities where it precipitates (rain or snow) the most:

This chart explains why we have the reputation as having such bad weather.

The next time headline news reports lives lost due to extreme weather conditions, lets pause for a minute and realize that we Seattleites don't have it that bad. Instead, grab your rain jacket and enjoy our Evergreen State.

Ok, even with that optimistic perspective I too need a break from the soggy weather and drizzle. And when that happens I take a trip to Las Vegas, one of the sunniest and driest cities in the US.

According to CNN Money, Seattle is currently the best city to purchase a home versus rent. Peggy Alford, president of Rent.com, points to raising rents in the near future. The other point made is that prices have fallen about 1/3 nation wide so affordability is much better.

To see the full article please click here and click here for the related page. Or simply copy and paste the links below.

http://money.cnn.com/2011/05/13/real_estate/rent_not_buy/index.htm

http://money.cnn.com/galleries/2011/real_estate/1105/gallery.rent_or_buy/2.html

Question: "Sterling, my home on Capitol Hill is assessed at $575,000, but the appraised value just came in at $630,000. Can you explain?"

This is a great question, and the source of a lot of confusion. When we talk about “values” in real estate, it is important to identify exactly what kind of value we are speaking of. The question mentions 2, but there are actually 3 types of values altogether.

1. Assessor’s Value, also called the “Assessed Value”
2. Appraised Value
3. Market value

Let’s start with the Assessed Value. This is the amount the government (King County, for most of us reading) determines your land and home are worth. As a property owner, each year you are sent the updated statement in the mail. This is for tax purposes. The amount of property tax that you pay directly correlates with the assessed value. Oh, and by the way just because the housing market has gone down steadily over the last few years, don’t necessarily expect your property tax to be lowered. The following is straight from the King County Assessor’s Office:

“Dear King County Taxpayer:
As real estate values have dropped, there is a natural expectation that your property taxes should drop as well. However, this may not be the case.
Depending upon where you live, the specific taxes levied in your area, and local real estate values, it's possible that while the appraised value of your home has decreased, your taxes have increased.
That's because about half of your property tax is determined by the levies that you and your neighbors have approved for such services as schools, parks, water districts, EMS and fire/rescue, among others. If these levies stay the same or increase from the year before, your property taxes may increase. Similarly, if other valuations decrease more than yours, your taxes may also increase.
Only 18 cents of every property tax dollar supports the King County General Fund. The other 82 cents are divided between the State, cities and other local jurisdictions.
There are 163 local taxing districts in King County, and break downs among levies are included in your specific tax bill.
Please call us at 206-296-7300 if you have any questions.
Lloyd Hara
King County Assessor"

For more information on your Seattle property taxes please visit the King County Assessor’s website: http://www.kingcounty.gov/Assessor.aspx

As far as the Appraised Value is concerned, this is the dollar amount that someone called an appraiser (surprise!) determines. Most often, an appraisal is necessary for a bank loan. The bank making a loan to a borrower finds out the “opinion of value” from the appraiser.

Last, and most exciting to me (perhaps you too if you are in the market to buy or sell), is the Market Value. This is the price that a ready, willing, able and informed buyer will purchase real estate for on the open market. This is a very important number to accurately determine. Deals are made or lost based on having the right knowledge of market value. A qualified real estate agent or broker usually finds this out by looking at comparable properties.

I have a good friend named Julie who owns in the Capitol Hill neighborhood in Seattle. She wants to put her house on the market in the next two months. Recently, Julie asked me, “Sterling, is my property value affected by the bank owned property next door to mine that just sold.” The simple answer to her question is yes. Property values are affected by all sorts of things that are often out of our control; local economy, zoning regulations, quality of schools, well maintained infrastructure, proximity to shopping and restaurants, public perception of neighborhood (crime rate, cleanliness, attractiveness) and more. What’s happening with your neighbor’s house can also affect your property value (for better or for worse) in a very real way. This is even the case with short sales and bank owned homes (also known as foreclosures or “REOs,” which stands for Real Estate Owned). Just look across the nation – markets that have been hit the hardest are those with the highest percentage of bank owned and short sale properties (i.e. Las Vegas, Detroit, Florida, Arizona).

One example of how a neighbor’s house can effect another’s property value is the following. A few years ago I put a house in Ballard Seattle on the market. The house itself was cute as a button and had everything a buyer could ask for…all except for the next door neighbor’s dilapidated house, overgrown yard, broker-down cars and crazy barking dogs. Luckily, we sold the house in a little over 2 months. However, I know we could have gotten the house sold in 2 weeks and for $10-20k more if the neighbor’s property hadn’t been such an eyesore with two annoying dogs.

Julie doesn’t have that problem. No, she has the all-too-common problem of the depressed housing market along with a foreclosure that just sold next door to hers. Since the home is very similar to Julie’s it is considered a comparable. Both homes were built the same year, offer the same square footage, same bedroom and bathroom count, same overall style and have the same finish quality (hardwoods, crown molding, granite, etc.). When Julie decides to put her house on the market, buyers and agents will look at the recent sales in her neighborhood to determine her home’s true market value, and that former bank owned home will be part of the analysis. It’s not that the sale of the bank owned home next to hers will completely dictate her property value. No, it takes much more than that. There are many variables and  circumstances, so one must look at many comparable properties (active, under contract & sold) when coming up with an accurate valuation.

When I told Julie this her reply was well thought out. “But since it was sold as a bank owned home it shouldn’t be considered a true comparable to my non-bank owned home. It’s not in the same league. I mean, doesn’t the fact that it has been repossessed by the bank and left neglected for 9 months put it in a lower price point than mine?” The sad truth of the matter is, many of the bank owned homes are very nice properties that only need very little updating or cleaning to make them shine again. Many buyers and real estate agents know this and that is why some of my buyers are eager to look almost exclusively at bank owned properties – they want a great deal! Just because a home is bank owned, doesn’t mean it can’t compete with the non bank owned properties.

Many sellers, especially those who have or once had equity feel that their home can’t be compared to a bank owned property or short sale. However, this is completely false in this current market. The reason for this is because of how market value is derived. Simply put, the market value of your home is what a ready, willing, able and informed buyer is willing to pay for your home. Bank owned properties usually have bad marketing (poor photography), the utilities shut off and are in need of some kind of cosmetic attention (i.e. carpet or paint). But they often times offer buyers the best priced homes in the market.

Suppose you bought a brand new townhome in Ballard, Seattle for $280,000 in 2005. You’ve taken great care of it and knowing the market has gone down, you plan to put it on the market this summer for $265,000. But there’s a problem; the bank owned townhouse (that is pretty much the spitting image of yours) just reduced it’s asking price to $248,000. Do you think just because you have designer color paint in your home buyers will think your home is worth the extra $17,000? This is exactly the sort of challenge many sellers are facing. Price is the most important determining factor in buying or selling a home. Beyond that, sellers must be able to compete with bank owned properties by being somehow special and standing out. What sells in this market is value. This is worth repeating in bold letters; what SELLS in this market is VALUE! Value is based on 3 things;

1) Price

2) Quality of product (characteristics about the home that set it apart from the competition)

3) Presentation (marketing)

If you are a seller like Julie and have the problem of short sales and bank owned properties bringing down your home’s value, there are very important steps you can take. The first, and perhaps the most crucial step is to call Sterling Lemmé and his team of professionals, the Sterling Team! They sell Seattle real estate successfully.

There are so many things to do in the greater Seattle area and Pacific Northwest that it’s sometimes a daunting task to try to figure out exactly what to include in your trip’s itinerary. While tastes and interests vary widely, the following activities and attractions have been reliably popular with our extended family, friends and guests who have visited our area.

This is what I personally recommend as my top things to do (in no particular order).

Seattle Area:
   1. Pike Place Market – just walk around and discover this historic outdoor market for yourself. www.pikeplacemarket.org

 2. Space Needle – I find the weekend brunch to be the best value if you decide to dine there. www. spaceneedle .com

3. Ride the Ducks tour of Seattle – an organized tour on land and water, starts downtown Seattle. Unlike the typical boring city tours, this is fun, active, entertaining and you will see a lot. I can tell you the best captains to request as your tour guide since I used to be a Duck captain myself! Be prepared, since this is all about family fun and can be quite wacky/silly too.   www. ridetheducks of seattle .com
   4. Walk around Seattle Waterfront. Discover shops & restaurants.
   5. The Boeing Tour in Everett. This is a very fascinating tour of the history and inner workings of the Boeing Company. It’s an organized tour, north of Seattle. www.boeing.com/commercial/tours/index.html

Enjoying the Puget Sound on the beautiful Kingston Side:
   1. Ride the Washington State Ferries. Seattle is known for a lot of things; The Space Needle, Starbucks, evergreen trees, and of course…the ferries! What a wonderful way to see our beautiful area and enjoy a relatively inexpensive cruise. I’ve ridden the ferries about 2 X week for years and I still love it. The best ferry runs include the Edmonds/Kingston ferry and the Seattle/Bremerton ferry. www.wsdot.wa.gov/ferries
   2. Experience the Puget Sound first hand with www.kingstonadventures.com . Get on the water with a paddle board or kayak. Or rent a bike. Maybe visit the small towns like Port Gamble (have coffee) & Poulsbo (enjoy lunch).
   3. Hurricane Ridge. Beautiful area to see and walk or hike around. Google “Hurricane Ridge pictures”. www.outdoorplaces.com/Destination/secret/hurricane_ridge
   4. Olympic National Park, Olympic Mountains & Rainforest (could also go to the ocean when visiting these areas).
   5. Spend the day in Victoria, Canada. Drive up to Port Angeles and take the ferry to Victoria. Leave the car behind and simply walk on the ferry. You can get along just fine by foot. Check out the Empress Hotel (maybe get high-noon tea), take a horse carriage and eat at Spinnakers Restaurant. www.cohoferry.com/main

 The following are other activities that are very popular as well, and things that you might really enjoy.
   1. Visit Leavenworth in the beautiful Cascade Mountains. http://www.leavenworth.org Go Tubing down the river – this is a fun, relaxing and a beautiful activity with the whole family. www.letsgotubing.com
   2. Seaplane ride/flight seeing tour with Kenmore Air. This can add up if there are a lot of people ($89/person for 20 minutes, but it sure is beautiful). www.kenmoreair.com
   3. Catch a Mariner’s baseball game at Safeco field. I’m not a huge baseball fan, but it’s a fun social event and we have a nice ball field with a retractable roof.   http://mlb.mlb.com/sea/ballpark/index.jsp
   4. Go to the ocean. I touched on this earlier. While it is nice, the Seattle area is already surrounded by an abundance of water (including the Puget Sound water ways which are inland ocean waters), so the ocean is for those who do have the extra time to check it out.
   5. Tour a Winery in Woodinville. www.woodinvillewinecountry.com
   6. Woodland Park Zoo www.zoo.org
   7. Seattle Aquarium www. seattleaquarium .org
   8. Seattle Pacific Science Center www.pacsci.org
   9. Seattle Underground Tour is pretty good. It’s more interesting for locals or for history buffs. Often times, my out of town guests don’t find this very interesting…it’s mostly stories and history but not much to see. www.undergroundtour.com 
   10. Museum of Flight. Different from the Boeing tour, this is also a cool place to check out. www. museumofflight .org
   11. Rafting with www.alpineadventures.com . While you’re at the base of the Cascades do a hike up to Wallace Falls State Park or check out Lake Serene – very beautiful!

Have fun with these activities!

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.