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Rising Home Values Hitting Pre-Recession Peaks

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New research from Zillow indicates that seven out of 35 of the largest U.S. housing markets have regained all value lost during the recession, and that could signal a looming turning point in those markets. Zillow considers a market to have recovered to pre-recession values when more than 95% of homes surveyed in a market are worth more than their peak value during the housing boom. In this housing cycle, that equates to those markets have a median home value of $217,300.

The seven markets to surpass pre-recession peaks join 14 others that had already reached this milestone, leaving only 14 markets still below pre-recession highs. “In markets like Las Vegas that got farthest ahead of themselves during the boom and, consequentially, fell the most, a large majority of the homes are still not worth as much today as they were a decade ago,” observed Zillow senior economist Aaron Terrazas. He added markets that were “more stable” prior to the housing crash have recovered more quickly.

Scars of the Recession

Terrazas went on to warn that even in recovered markets, “the scars of the recession still run deep for millions of longer-term U.S. homeowners.” He said it could take “years of growth” for some homeowners to regain lost value and that stabilization of rent rates may not be enough to enable buyers in competitive markets to save enough money to buy a home in the near future.

What Does Recovery Mean for a Housing Market?

While Terrazas is concerned about homebuyers in competitive markets finding prices still out of reach in many cases, other analysts say that hitting the pre-recession-peak milestone may be the first signal that a market is about to turn. For example, Nobel Prize-winning economist Robert Schiller said recently, “This could be the very beginning of a turning point,” although he emphasized he would not yet make that call.

Bloomberg contributors Prashant Gopal and Sho Chandra were not willing to make that call yet either, but they did recently marshal evidence that some regional markets might be cooling. The two wrote, “A slew of figures released this week gives ample evidence of at least a cooling,” citing:

  • Falling existing-home-sales volumes
  • The slow pace of new-home purchases
  • Rising inventory
  • The rate of price increases climbing less, year-over-year, than it has since early 2017
  • Shares of national builders declining in value

Carole VanSickle Ellis

Just how much more bang for your buck do you get tacking 15 minutes on your commute?

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You don’t have to get far out of Seattle to reap the reward.

Your money typically goes further outside Seattle. But is that change in commute worth the extra money?

A new report from Zillow and HERE Technologies looked at exactly how much homeowners could save by adding 15 minutes on to their commute. As it turns out, it may be worth a bit of compromise.

In the Seattle metro, the typical home becomes 11.3 percent less expensive when it’s shifted 15 minutes away from downtown, or about $54,599. For renters that number is more like a 6.2 percent drop in monthly rent, or around $125 per month.

That places Seattle as one of the top cities that see the greatest home value savings by moving at least 15 minutes further from the city core (others include Washington, D.C. and Chicago).

Of course which direction you take your 15 minutes will affect both your commute and your home: Heading north or east from downtown puts you smack in some of the priciest and most sought after neighborhoods in the city right now.

So where’s the best bang for your buck according to Zillow? If you’re a homeowner that’ll be Highline, where the current median home value is $387,700, and the median commute time in a car during rush hour is 38 minutes.

Which makes the first-time-on-the-market, Mid Century Modern above, which is listed for $599,000, on the higher end of the market.

Almost any neighborhood south of Seattle is going to see more “bang for your buck” than the neighborhoods to the north.

Then again, if you want to remain a renter you should be looking elsewhere, according to Zillow’s report: The best “bang for your buck neighborhood” for renters are South Park and Georgetown, in the 98108 zip code. There the current median rent is $2,356, while the median commute is 27.2 minutes in rush hour.

By Zosha Millman, SeattlePI

Can You Use Bonus Income to Help Qualify for a Home Loan?

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Yes, you can. But the bonus income needs to follow a few rules, first. Employees get paid in different ways. The most common is a regular paycheck on the 1st and the 15th of each month or maybe every other week. One of the primary responsibilities of a mortgage lender when evaluating a loan application is to make the determination the borrowers have the ability to repay the new mortgage along with any existing monthly credit obligations. The process is relatively simple. The lender compares total monthly credit obligations with gross monthly income. When calculating the mortgage payment, which includes an amount for taxes and insurance, lenders like to see this amount be somewhere near 28-33 percent of gross monthly income and closer to 41 percent when including all monthly payments.

Lenders then verify income by reviewing the most recent paycheck stubs covering a 30 day period. The stubs will show the gross income, deductions and net pay. It will also show a year-to-date amount. In addition, copies of your last two years of W2 forms will be needed. Lending guidelines require there be at least a two-year history of employment and then make the determination the income is likely to continue into the future. If someone is self-employed, then the last two years of personal and business income tax returns will be reviewed along with a year-to-date profit and loss statement.

Okay, but what about a bonus? Can that be used if needed? Guidelines for bonus income follow the same type of review as other types of income. Is there a history of receiving bonus income? There needs to be verification the bonus income has been received for two years. In addition, the bonus income needs to be regular and of a similar amount each time. Let’s say an employee gets a bonus each quarter for reaching a particular goal. The bonus amount is $1,000. The lender will need verification this amount has been received for the past two years. With this history, the lender can reasonably determine the bonus is likely to continue. Using this example, there is an additional $333 per month that can help the borrowers qualify.

If on the other hand, the bonus amounts vary in amount or frequency, it’s possible the income cannot be used, even though there is evidence the employee has received it. Or, the bonus might be an annual bonus paid at the first of every year. In this instance, the additional income can’t help, even though it’s been the same for the past two years. Why? Because a bonus paid in January probably might not be around come August or September.

One final note about bonus income- if more than 25 percent of the individual’s income comes from a bonus or as a commission, that person is then considered self-employed and will be underwritten as such. If you’re planning on using your bonus income to help qualify, it’s a good idea to speak with your loan officer first to see how you’ll need to document this additional income.

Written by: David Reed

 

 

How Seattle spent its boom money

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Now that the construction boom that made the city of Seattle rich is starting to decline—and putting newfound pressure on homelessness spending—it’s time to ask where the money went.

After analyzing the city’s budgets over the last eight years, we found some answers.

How rich were we? Are we still rich?

The year 2013 was a clear turning point. Seattle’s general fund started ramping up from $800 million then to $1.1 billion now. That’s 30 percent growth. Overall city revenue grew, too, from $4 billion to $5.6 billion. But overall revenue also contains the money gushing through Seattle’s utilities.  The general fund is where the political action is, and where the tough decisions are made. And yes, Seattle is still loaded compared to the way it was during the recession. But the city is spending pretty much all of it.

Which taxes made Seattle this money?

Business taxes, and sales taxes and new property taxes, in that order, all related to construction. These were the taxes that led the way. Forty million dollars-worth of tax revenues from construction in 2010 ballooned to more than $100 million this year, according to the City Budget Office.

So how did the city spend this dough?

Infrastructure: buttressing the Seawall, roads, and other growth-related investments.

Police officers: Mayor Ed Murray wanted 100 new cops on the beat. He got those cops, and then he wanted 100 more. That didn’t happen. But permanent funding happened: In 2016, the city hiked business taxes, largely pay for this ongoing expense. With the Chamber of Commerce’s blessing.

Homelessness: It is very hard to follow homelessness spending through every annual budget process. But the Budget Office’s 2018 budget proposal reports that Seattle’s spending on homelessness rose from $39 million four years ago to $63 million in 2018. That’s an increase of 60 percent. Until the head tax, many of the commitments already made for homelessness were not secured by their own revenue source, meaning they were paid for by construction boom money. Meaning they could be at risk when the boom stops. The head tax did pass, but it only lasts five years before it must be renewed. And now the tax faces stiff opposition from people who want it repealed.

How did the politics of spending change over the boom?

The politics of spending changed a lot.

After several hard years of killing jobs – 294 in 2011 alone – and snipping away at expenses, in the 2012 budget year the Seattle City Council pushed back. It said no to more cuts and pulled money out of the city’s Rainy Day fund to cover the $18 million crater in its budget.

If council members were gambling on a turnaround, they were right. In 2013 the money rolled in. Cash was back in the Rainy Day fund and spending resumed. Mayor Mike McGinn had a “new approach to address street disorder,” including money to address homelessness, and the council added more money for homelessness on top of that.

It was the start of a new pattern. Each year mayors put forward their own spending proposals, and the City Council usually added more spending on top of that.

In 2015, Mayor Ed Murray and the City Council allowed a $26.4 million budget gap. “Surprise” boom money arrived to cover it.

The following year, the city spent big on everything, including homelessness. The council added $7 million in social services spending. And then Mayor Murray declared a homelessness state of emergency, throwing an additional $7.6 million at the problem. At first, the goal was emergency housing, but last year the focus turned to permanent housing, leading to deeper investments, like $29 million in affordable housing bonds.

But today, with revenue from construction in decline, the Budget Office is telling the city it’s risky to spend on faith that more boom money will cover budget gaps. “A shift to slower growth could happen very quickly,” the director of the Budget Office wrote in a 2018 proposed budget summary. The same document acknowledges that homelessness is “the most significant policy challenge that the City is currently facing.”

Historic population boom pushes Seattle to 19th month in a row as the nation’s hottest housing market

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Seattle has earned a couple of titles that explain a lot of the tension going on in the city lately: it is the fastest growing big city of the last decade and the hottest housing market in the country, a designation it has held for 19 straight months.According to the latest update from the Case-Shiller national home price report, Seattle home prices in March rose 13 percent over the same period a year ago, followed by Las Vegas and San Francisco. While Seattle has held its place at the top for some time, Las Vegas and San Francisco were ranked 10th and 16th, respectively, on the list, a year ago.

The main reason behind Seattle’s reign at the top of the for-sale housing market? A lot of new people, and not a lot of homes to buy.

Citing recent U.S. Census data, The Seattle Times reports that Seattle more than 114,000 people came to Seattle since 2010, pushing the population to nearly 725,000 people. This dizzying increase of 18.7 percent ranks first among big cities. To put those figures in perspective, Seattle added about the same number of people over the previous three decades.

In 2017 alone, census data shows Seattle’s population increased by about 17,500 people or about 1,458 people per month. If that pace has continued throughout this year, the number of new people in the city would nearly double the 730 active listings for homes and condos in Seattle for the month of April, reported by the Northwest Multiple Listing Service earlier this month. Stepping outside the city limits, last year’s population gains outpace the total number of active home and condo listings for all of Western Washington at 10,079.

This decade has seen a migration back to cities, reversing a decades-long trend of population increases to the suburbs, and Seattle’s growing tech reputation has made it a top choice. People from all over the world have flocked to the city to work for homegrown tech giants like Amazon and Microsoft or the 100-plus companies with engineering centers in the area, led by household names like Google, Facebook and Apple.

As home prices continue to skyrocket, apartment rents are starting to level off after years of record-level construction. The effect is filtering down to rental homes as well, as new construction creates more choice in that area. The region has not seen a similar wave of construction in the for-sale market to match the demand for new houses.

Population rises have led to growing pains in the city, highlighted by the controversial debate over a tax on big businesses. Amazon, now the face of the debate and Seattle’s struggles with growth, has following the passage of the tax threatened to slow growth in its hometown, which some observers say could actually have some benefits for the city.

BY  on 

15 Best Things to Do in Seattle

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Don’t let the cloudy skies deceive you: Seattle is full of things to do—outside, on the water, in the air, and inside. A stone’s throw from Mt. Ranier and with direct water access, seafood- and boat-lovers can fish, tour, or just sit nearby and enjoy the views. Iconic spots like the Space Needle and Pike Place Market remain central attractions for good reason, and the city’s got its own arts scene, well-captured by the Museum of Pop Culture and performance venues like Kremwork. You certainly won’t be bored while you’re here; you’re more likely to struggle to fit it all in. Let our curated list of the what to do in Seattle be your guide.

ACTIVITY

Museum of Pop Culture

$

The collections here focus on the most impactful moments in popular culture, including science fiction, rock music, and many others across the pop culture spectrum, with innovative exhibits and interactive installations bringing it all to life.

ACTIVITY

Let’s Go Sailing

$$

Those looking for a classy way to cruise the Puget Sound will find it on Let’s Go Sailing’s racing yachts. The sleek vessels coast through Seattle’s waters, offering glimpses of sea life, Mount Rainier, and the coastline. Excursions are customizable, for private charters or group trips.

BAR

Starbucks Reserve Roastery

$

This massive, gleaming roastery is the Starbucks Mecca. Translation: Be prepared to be awed and overwhelmed. It’s not just an oversized Starbucks—there is a coffee-centric cocktail bar serving espresso martinis, multiple food counters, and of course, a roasting area with tours available, all served in a theatric environment.

ACTIVITY

Seattle Art Museum

$

The Seattle Art Museum’s sleek and contemporary digs are as artful as the works that inhabit it. As an institution of Seattle’s art scene, it’s a must-see for any visiting art lover. The multi-level space is expertly curated, with a permanent collection, rotating exhibits, a library, and restaurant.

ACTIVITY

Pacific Science Center

$

Designed by Minoru Yamasaki for the 1962 World’s Fair, this science museum boasts 300 interactive exhibits, two IMAX theaters, and the coveted Laser Dome. Science geeks, inventors, and creative kids (and adults) lose track of time nerding out on all the exhibits.

ACTIVITY

Ethnic Seattle Food Tour

$

Exploring Seattle’s ethnic neighborhoods can be overwhelming without a guide to help navigate the unfamiliar signs and specialty foods at hole-in-the-wall restaurants with foreign menus. Ethnic Seattle helps guide patrons through Little Saigon and Japantown on manageable 2.5-hour tours.

SHOP

Pike Place Market

$

Pike Place Market is one of Seattle’s most iconic destinations. This century-old public market houses dozens of stalls and shops for farmers, restaurants, purveyors, and artisans, all overlooking the Elliott Bay waterfront.

ACTIVITY

Wing Luke Museum of the Asian Pacific American Experience

$

This 60,000-square-foot facility pays tribute to the confluence of Asian and Pacific American history. Set in an industrial-chic brick building, three floors house contemporary galleries with temporary and permanent exhibits, in addition to historic spaces accessible through guided tours.

ACTIVITY

Seattle Aquarium

$

Situated on Pier 59, appropriately right on the Elliott Bay, the Seattle Aquarium has become a landmark for the city and a fun way for people to see the diverse underwater world of the Pacific Northwest.

ACTIVITY

Ballard Kayak

$

Launching from the Shilshole Bay Marina, Ballard Kayak & Paddleboard hosts people looking to get a closer view of Seattle’s waterways without venturing too far from shore. Manageable group sizes make it a pleasant experience as you paddle your way through Seattle’s coves, locks, and sounds.

ACTIVITY

Seattle Cycling Tours

$

From basic Seattle cycling tours to neighborhood-focused outings like “Amazonia” to Bainbridge Island half-day journeys, Seattle Cycling Tours has nearly every inch of bike-able asphalt covered. Group sizes tend to hover around a dozen, and the local guide will dish plenty of narrative about the city along the way.

BAR

The Crocodile

$

This classic Seattle music venue draws people for its casual setting, national acts, and devoted music community. A stage and dance floor are the centerpiece, and black-and-white rock-and-roll photos proudly decorate the walls, while a bar on the back dishes out pizza.

ACTIVITY

Seward Park

This sprawling, lush park spans 300 acres of forested land and is home to an array of native wildlife like eagles. A 2.4-mile bike path makes covering a lot of ground with little time a cinch. After exploring the old growth forest, carve out time to walk the shoreline and check out the art studio.

ACTIVITY

Space Needle

$

The Space Needle is undoubtedly one of Seattle’s most iconic landmarks. Built for the 1962 World’s Fair, it’s a futuristic observation tower and the most prominent building in Seattle skyline. Visitors can reach the top of the Space Needle by elevator for unparalleled views of the Seattle area. It’s undergoing a major $100 million renovation that will be unveiled in summer 2018.

BAR

Kremwerk

$$

This eccentric performance venue and nightclub hosts some of Seattle’s wildest nights in its industrial blue-shaded basement—DJ nights, drag shows, and an epic dance floor ensures it. Seattle’s underground music and arts culture gravitates to this LGBTQ-friendly venue.

 

 

 

 

Don’t Be Afraid Of The Seller’s Disclosure

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State and federal laws are strict in requiring sellers to tell what they know about the condition of their homes that isn’t obvious or discernable to potential buyers. Buyers can’t see behind walls or under houses, so they rely on truthful information from the seller about the operations, appliances and systems of the home.

When you sell your home, your real estate agent will present you with a federal and/or state-mandated disclosure form called a Real Estate Disclosure Statement, Property Condition Disclosure, or Condition Report. You’re required to disclose the presence of lead paint, radon, asbestos and other toxic products if you know your home has them.

While the forms may ask you to disclose whether or not you know there is lead paint or radon present, you aren’t required to do tests to determine the presence of toxic chemicals. But your buyer’s lender can always require proof of tests and/or remediation for any problem that has been disclosed, such as fire and water damage.

It’s important to answer every question as truthfully as you can. You must answer the questions yourself – your real estate professional can not fill out the disclosure for you, but he or she can help you understand what’s being asked of you. If you’re in doubt about what to disclose, such as a repair, it’s best to err on the side of too much information than not enough.

While disclosure forms allow you to check the “I don’t know” box, you should only do so if you truly don’t know the condition of that item. If you answer that you don’t know the condition of an appliance you use daily, such as a sink or bathtub, you might raise suspicions in the buyer.

The best way to feel confident about the condition of your home is to have it inspected by a licensed professional home inspector. Your real estate professional can recommend someone or provide you with a list. For a few hundred dollars and a few hours of your time, you’ll either find that your home is market-ready, or the inspector will bring a problem to your attention that you can fix.

When you disclose a problem to the buyer that has previously been fixed, be sure to provide a copy of work orders, receipts and invoices. If the problem hasn’t been fixed, expect the buyer to either ask you to fix it, or to offer a little less for the home.

Remember, the more that’s left unrepaired, the more the buyer will discount the offer, if he makes one at all. Homes in the best condition sell the best.

The seller’s disclosure is designed to do one thing — hold you and your real estate agent harmless if you’ve disclosed the truth about your property. You don’t want to give the buyer any room for complaint or litigation after the closing.

To get an idea of the types of questions you’ll be asked in a disclosure, you can find legal forms at FindLegalForms.com.

So, don’t be afraid of the seller’s disclosure. It’s not meant to be a deal-killer, but a deal-maker. Many agents provide a copy of the disclosure to interested buyers, so they can get an idea of the home’s condition before they make an offer or have an inspection.

 

Fate of Cougar Mountain development still unknown

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The fate of a 57-unit housing complex on Cougar Mountain is still being decided by the city of Issaquah as the project makes its way through the city’s review process.

The Bergsma Development was proposed last year by Windward Real Estate Services. Its initial proposal was for 78 new homes to be built on a portion of a 45 acre lot on the side of Cougar Mountain. The City Council unanimously rejected this proposal so the developers went back to the drawing board and submitted a land-use application for a 57 house project.

This proposal has prompted a backlash in Issaquah, as documented in earlier Reporter stories, with the creation of a group called Save Cougar Mountain. Member Susan Neville said they were expecting to hear a decision from the city on March 26, but the deadline was pushed back 30 days.

Comments from the community have been submitted to the city for consideration, including a legal comment drafted by the firm Bricklin and Newman representing Save Cougar Mountain. In it, the firm outlined a list of environmental concerns the group had, which include impacts to soil and slope, air quality stemming from the removal of trees and traffic, stormwater runoff and stream protections, among others.

The firm said 100-foot buffers could be reduced by 27 percent under the proposal. Also included in the firm’s comment were concerns about the aesthetic impacts of a development on the hillside, which is currently undeveloped forest.

Save Cougar Mountain has said around 60 percent of the proposed development includes critical areas with wetlands, streams and steep slopes. For the houses to be developed two wetlands would have to be cut down and 22 acres of trees removed, the comment read.

Landslides are another concern of Save Cougar Mountain, which points to a 2015 study that identified potential landslide risks on slopes greater than 40 percent. Windward has pointed to various other studies that have found no risk of landslides.

Julie Clark, also with the conservation group, said their concerns have basis in reality following a 2015 landslide on a nearby portion of the mountain which cost the city millions of dollars to repair.

Save Cougar Mountain member Kay Haynes said she hopes the city and county will band together to purchase the land and potentially add it to the county’s Cougar Mountain Park, which abuts the property.

Windward President Jim Tosti has previously told the Reporter the development will benefit the city by providing more housing as well as making improvements on Newport Way. The development is located near Interstate 90 with views of the valley.

It is unclear how much the property is worth or how expensive the houses would be, but if real estate trends in Puget Sound are any indication, the houses would likely be near or more than $1 million each.

Tosti said in an email he couldn’t comment on any updates yet.

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Here are 3 ways parents can help their grown kids to own a house

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When responsible first-time homebuyers need help buying a home, the family bank sometimes can lend a hand.

Younger homebuyers face a mountain of obstacles, including rising home prices and interest rates, too few homes for sale and unpaid college debt. Student debt is a major source of trouble. When the National Association of Realtors surveyed recent homebuyers who had problems saving up a down payment, 53 percent of those in the youngest group (37 and younger) blamed student loan debt for their difficulty.

Families appear to be pitching in to help, according to the results of that survey in the 2018 NAR Home Buyer and Seller Generational Trends Report. Among homebuyers who made a down payment, 23 percent of those 37 and younger used a gift and 6 percent a loan from family or friends — the highest proportion for either type of assistance among all age groups.

Family assistance like this works best when the kids qualify for a mortgage on their own and parents make the purchase more affordable with, for example, a bigger down payment or a lower interest rate, says Jeremy Heckman, a certified financial planner with Accredited Investors Wealth Management in Edina, Minnesota.

FIRST, THE GROUND RULES

To create a businesslike distance for these transactions, Heckman suggests that parents:

• Consider disclosing the assistance to all immediate family

• Consider treating all siblings equally

• Use contracts

• Document gifts

Formal agreements offer important benefits, says San Francisco real estate attorney Andy Sirkin. They define obligations and minimize misunderstandings. And if parent lenders die or become incapacitated, all their heirs can view the transaction and its history.

WAYS TO HELP

Here are three ways parents can help make it more affordable for new homebuyers to purchase a home:

1. GIVE MONEY

A gift of money is often best, Heckman says. Parents can write a check for any amount they choose. That’s it — no contract or ongoing commitments. Or they can pay all or part of an expense such as mortgage closing costs. Providing down-payment assistance can help new borrowers avoid paying for private mortgage insurance, which helps keep their monthly payment low.

HOW IT WORKS

Strict rules dictate how cash gifts are used in a home purchase, and they vary by mortgage type, lender and lender offer, says Mark Case, a senior vice president at SunTrust Mortgage.

Lenders like to see money gifts — easily traceable checks, bank transfers or wire transfers — in a borrower’s bank account three or four months before applying for a mortgage, Case says. Givers and recipients may need to sign letters confirming that the money isn’t a loan.

When it comes to taxes, anyone can give any other person a gift up to $15,000 in value (money or, say, stocks) in 2018 without filing the gift-tax return IRS Form 709 . So a parent with two children can give each of them — and even the children’s partners — up to $15,000 this year without having to complete Form 709. A tax professional can confirm how the rules apply to individuals’ specific circumstances.

2. FINANCE THE MORTGAGE

Parents with cash to invest can become the mortgage lender, offering extra-easy terms, like no closing costs or no down payment. Heckman says they can charge a higher rate of interest on their money than it earns in a savings or money market account and still offer kids a lower-than-market mortgage rate.

“I said, ‘This could be a win-win for both of us,’” says Jay Weil, an attorney in Wayne, New Jersey. He and his wife, Judy, have financed two mortgages for their son Matt and Matt’s wife, Allison.

HOW IT WORKS

Jay and Judy fully funded the younger couple’s first home, a Columbia, Maryland, townhouse. They decided to use a service that facilitates family loans. They worked with National Family Mortgage, which charges one-time setup fees of $725 to $2,100, depending on the loan size; provides all necessary forms and documents to meet state, local and IRS requirements; guides families through the settlement and filing process; and connects borrowers with loan servicers.

Then in 2017, the Weils lent the kids money again, for a $579,900 house in Laurel, Maryland. Matt and Allison got two loans. One was a primary mortgage from SunTrust Mortgage for $259,900, at 3.875 percent. His parents provided a second mortgage for $260,000 at 1.98 percent. They used money earned from the sale of their first home to make a down payment.

Family lenders must charge at least the Applicable Federal Rate , the minimum interest rate required to keep the assistance from being considered a gift.

3. CO-BORROW

Although riskier for parents, co-borrowing is another option. Mortgages with co-borrowers were nearly a quarter of all new-purchase mortgages in the third quarter of 2017, according to ATTOM Data Solutions, a real estate data company.

Co-borrowing helps borrowers overcome a limited credit history or a too-high debt-to-income ratio, says Case, of SunTrust Mortgage.

HOW IT WORKS

Parents apply for the mortgage, too. They must meet the lender’s credit requirements and sign loan papers with their kids at closing.

Aside from the mortgage itself, a separate family contract can define expectations and details such as who gets how much equity when the home sells and what happens in case problems arise, says Sirkin, the real estate attorney.

For parents interested in being co-borrowers, there are some things to keep in mind:

• Not all loans allow co-borrowers, so it’s good to confirm the option when shopping for mortgages

• Some lenders may call this step co-signing, which may have different parameters, but the outcome is the same: Parents and children are equally responsible for the loan and any missed mortgage payments

• Parents’ credit could be affected, making it hard to finance another big purchase later, even if children make payments on time

With all the headwinds facing first-time homebuyers, family help sometimes makes all the difference.

By MARILYN LEWIS
NerdWallet


Best of the Burbs: The Next Generation of Seattle Suburbs

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Living outside the city has always been an attractive option for many, but with housing prices in Seattle going up, up and up, the suburbs around us are more magnetic than ever.

The Issaquah Highlands, a planned community, offers city-like density and amenities in the burbs

No matter how you look at it, neighborhoods in the city are still a huge magnet for newcomers and long-timers. Since 2010, Seattle has grown by 105,000 people; more than 26,900 of those residents have come in just the past year, a greater number than all the rest of King County combined. But with home prices skyrocketing, inventory low and bidding wars over homes the norm—especially for those in the fixer-upper category—home buyers and renters alike are opting out of the city and looking outward for more: more space, more options and more cash remaining for things not related to mortgage, rent or remodeling.

In a trend forecast for 2018 from Svenja Gudell, Zillow’s chief economist, people who already own homes in the city will stay put and remodel rather than seek a different home, while would-be homeowners just entering the market will look for new construction in the affordable category, which means heading to cities where zoning laws and land costs make that easier. In other words, the suburbs.

Combined with this is a big group that’s embracing the suburbs: millennials. With the oldest of this generation in their mid-30s, they are beginning to settle down, albeit a little later than previous generations (who, on average, bought homes at age 29). According to Zillow, almost 50 percent of millennial homeowners live in the suburbs, and they’re choosing larger properties with more bang for their buck, paying a median price of $217,000 for a home that is about 1,800 square feet.

So, are we entering a new era of greater suburban sprawl in the Puget Sound region? Yes and no. While these places don’t have the density of Seattle, they are growing. According to the Puget Sound Regional Council, King County held the largest share of regional construction permitting activity in the area, with 18,400 units (72 percent) as of 2015. (See here the area’s fastest-growing burbs.)

But many of these suburbs, from Duvall to Bremerton to Gig Harbor, are different than suburbs of the past: They’re walkable (like Edmonds), they’re economically and racially diverse (Burien), and they have decent public transportation options (SeaTac and Kent). And many have amenities to spare, driven by the influx of newcomers who want a taste of the big city in their bedroom communities: performing arts centers, good restaurants, boutique shopping and trendy fitness options, all in pedestrian-friendly town centers rather than strip malls, or malls in general.

Often, when home buyers begin looking for a place to put down roots, their expectations are upended—they discover they can find what they want in places they may never have considered before. Charles Mortimer, a Redfin real estate agent, had a customer who found a place in Des Moines, a town not on the client’s radar but with a lot of new construction (part of a trend in cities south of Seattle). Another client seeking a home in North Seattle—for its schools and commute time into the city—ended up buying just outside of Tacoma and was happy to commute to Seattle via the Sounder train. That’s somewhat of an open secret these days: Commuting from the burbs often takes as much (or as little) time as it takes to get from Ballard to downtown, but minus the in-city gridlock angst.

So, where should you locate? Here we’ve distilled the best of the Seattle suburbs—and exurbs—to help you decide the next place to call home.

By Niki Stojnic

 

 

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