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Larry & Kathy Reichle

Issaquah Real Estate | Call: 206-999-1690

Is Seattle’s red-hot real estate market cooling down?

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A Craftsman Style house in autumn.

For the first time in 10 years since the recession, the number of homes for sale in the Seattle area has increased considerably, reports The Seattle Times.

Is Seattle’s red-hot housing market cooling down?

For the first time in 10 years since the recession, the number of homes for sale in the Seattle area has increased considerably, reports The Seattle Times.

“There aren’t as many bidding wars right now,” said Beata Miklos, Managing Broker for Savvy Lane, a local online brokerage firm. “There isn’t as much urgency for buyers to place offers because they know that it’s softening up a little bit.”

Fierce competition for low-inventory of homes for sale has led to extreme bidding wars and lightning-fast sales. Now, the total number of single-family homes on the market in King County has jumped 43 percent in June from a year ago. And condo inventory has risen to an eye-opening 73 percent.

The Times reports homes already on the market are sitting unsold for longer periods of times, according to monthly data released Thursday by the Northwest Multiple Listing Service. Brokerages tell the NMLS since mid-spring, they’ve noticed fewer bidding wars and more homes selling for list price or below.

The total inventory of homes listed for sale has grown for three straight months on a year-over-year basis, reports the times, but the region still has a ways to go to make up for the past 10 years of declining numbers of homes for sale.

Now is the time to jump!  The price drop from May to June is the first price drop in King County since before the recession.

 

 

 

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 much house can I afford to buy?

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If you’re thinking of making the move from renter to homeowner, simply diving into home shopping is the wrong first step. What you need to do is first answer the question:

“How much house can I afford?”

The best way to determine your spending ability is to do a step-by-step calculation. While there are alternate rules of thumb for figuring out your housing budget — such as a ceiling of 2.5 times your annual salary or limiting your housing payments to a third of your gross monthly income — you should not take shortcuts on a financial decision as important as this.

Calculating ‘how much mortgage can I afford?’

Here are the major factors you will need to consider to determine how much house you can afford to buy:

Income. 

First, add up the income that will be used to qualify for the mortgage, including bonuses and commissions. Make sure you have the documentation to prove every source of income; otherwise it cannot be counted when you meet with a mortgage lender.

Debt. 

Add all the payments you make each month for car loans, credit cards, student loans and any other debt. Based on your income, there are limits on how much debt you’ll be allowed to carry, including your mortgage. These debts will limit how much mortgage you can borrow.

DTI ratio.

When a mortgage lender calculates your level of debt based upon how much money you make, it is known as your “debt-to-income (DTI) ratio.” Debt-to-income ratios are the province of mortgage calculators. One important ratio, referred to by mortgage professionals as your “front-end” or “top-end” ratio, is calculated by taking your proposed housing expense divided by your gross (before-tax) income. Many mortgage calculators set 28 percent as the desirable value for this ratio. The other ratio involves all of your loan payments – your housing expenses and your monthly debts (but not utilities or other living expenses) — divided by your gross monthly income. A home affordability calculator frequently set this number at 36 percent. This is called your “back-end” or “bottom-end” ratio.

Monthly obligations.

While your mortgage lender cares about your auto and credit card payments, they really don’t care whether you have cable TV, the latest iPhone or even that you eat on a regular basis. Those monthly expenses are up to you to include, and cable, smartphones and a few trips to the grocery store can easily add up to several hundred dollars each month.

Down payment. 

The minimum down payment for an FHA loan is 3.5 percent; for conventional loans, the minimum is 3 percent for certain buyers and 5 percent for most buyers.

Taxes.

Today, it’s easy to get an idea on a home’s property taxes by looking at the listing online. You can also get in contact with the county tax office or ask a local Realtor to investigate for you. Most homeowners will have their property taxes paid from an escrow account attached to their monthly mortgage payments. One percent in taxes is equal to $1,000 per year for a $100,000 home.

Insurance.

Lenders require homeowners insurance to cover your property. Contact an insurance company or ask a Realtor to estimate your homeowners insurance costs which will vary according to the type of property, cost and features of the home, and its location. To get a rough idea, you can ask a family member or friend what they pay for insurance (if their home is similar to the home you are interested in buying).

Homeowners association dues.

If the property you purchase includes monthly dues, don’t forget to include those fees in your monthly payments.

Mortgage insurance.

If you make a down payment of less than 20 percent on a conventional loan, you will need to pay mortgage insurance. You can utilize HSH.com’s mortgage insurance calculator to see how much this could cost each month. For FHA loans, there is an upfront and annual mortgage insurance premium.

Interest rate.

You can check today’s mortgage rates at HSH.com, but remember that your rate will depend on your credit score, the type of property you are buying, and the choices you make regarding fees and points. A lender will be able to give you a customized mortgage quote given your situation.

Loan term.

While many buyers opt for a 30-year home loan, if you can afford higher monthly payments, you may want to consider a shorter loan term. Shorter loans have lower interest rates and cost you less over the life of the loan.

As a homeowner, you need to have enough money set aside in an emergency fund — at least three months worth of expenses – in case you lose your job or have a medical emergency, and enough reserves set aside to pay for maintenance and unexpected repairs.

Considering all your financial goals and your monthly comfort level with your mortgage payment is the key to accurately calculating how much house you can afford. It’s smart never to borrow the maximum amount you can qualify for so that you leave yourself some financial breathing room.

Keith Gumbinger

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.”

5 Smart, Easy Ways To Add Smart Home Technology To Your Place

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Has technology passed your home by? It’s never too late to update it. Whether you just want to bring the home’s function into this century for your personal use or are looking to put it on the market, incorporating some smart home items is, well, a smart strategy.

The stock advice for homeowners putting a house on the market used to go like this:  Give the exterior, or the front door, a fresh coat of paint; tame unruly shrubs; and swap out a few light fixtures. But today’s homebuyers are expecting a little more according to Consumer Reports, most potential homebuyers want smart-home tech preinstalled.

Specifically, Seventy-seven percent want smart thermostats, 75 percent want smart smoke detectors, 66 percent want smart home security cameras, and 63 percent want smart locks, to name a few.

Smart thermostats

Not only will a smart thermostat make your air conditioner function better and make your house more comfortable, it will save you money in the process.  With a smart thermostat, easily control the temperature in your home from a central control panel, with the sound of your voice, or using your mobile device. Combined with a smart assistant that intuits and learns your preferences and behaviors, your thermostat can automatically adjust the temperature – saving you valuable time, energy, and money.

The Nest Thermostat is one of the most popular options on the market.  It currently costs $249 but projects an average savings of around $173 per year. We also love the ecobee because it has multiple sensors. The latest version, the ecobee4 ($249), also has built-in Amazon Alexa.

Smart door locks

There are lots of smart door locks out there, which eliminate the need for a key and replace it with a keypad and code that are used for entry. But, we love this August Smart Lock, which takes smart home capabilities up a notch.

The battery operated device sells for $199, and communicates with your smartphone via Bluetooth. When the Smart Lock identifies your Bluetooth signal approaching, it unlocks your door, and can lock it behind you if you choose that setting.  It also allows you to set up virtual keys for guests, with the ability to grant access for only certain dates and times for each key. The activity log keeps track of when each unique user comes and goes. Perhaps the best part about this smart home upgrade is that it goes over your existing lock, meaning that you can have strong security and an intelligent lock. If you choose, you can pair the Smart Lock with the ‘August Connect’ for $79, which lets guests in and locks the door behind them. The Connect also grants real time status of locked or unlocked, and alerts you instantly when somebody comes or goes.

The August Smart Lock Pro is also a Consumer Reports fave.  They tested the previous-generation August Smart Lock and found that it offers a wealth of smart features that potential homeowners will appreciate.

Video doorbell

The humble doorbell has come a long way in the past few years, according to Business Insider. Gone are the days when all a doorbell would do is alert you to the fact that someone’s at the door. These days, doorbells can connect to your Wi-Fi network to offer enhanced home security with built-in cameras and microphones. Of all the doorbells you can buy, the Ring Video Doorbell 2 (currently $199) is our top pick because it doesn’t have to be hard wired and it has an excellent 1080p camera.

Smart smoke detectors

If you’ve ever dealt with a smoke detector going off in the middle of the night, this product should thrill you. But, of course, knowing your family is safe is obviously your No. 1 priority. And why not save a little money at the same time, right?

Another smart technology product, the smart smoke detector, could not only save you money (approximately 5% on your insurance premiums), but could even save your life. One 2014 CBS news report cites a figure of 2/3 of all home fire fatalities occurring in residences where the smoke detectors are missing or disabled — which is something many of us have resorted to at one time or other out of sheer frustration when our typical ‘dumb’ detector insists on shrieking an alarm every time we try to fry up some bacon.  A smart detector will allow you to keep on frying without fear of interruption. Two such products, the Birdi and the Nest Protect, will not only monitor smoke but also carbon dioxide and general air quality. They can even send an alert to your smart phone or tablet if anything is amiss. These products retail for $119 and $99 respectively.

Smart irrigation system

The SkyDrop: Smart Irrigation System Controller is a next-level automatic sprinkler system that allows you to control your irrigation from anywhere by using their app, and, “The best part is the irrigation will adjust itself based on your local weather,” said Nerds on Call.  The SkyDrop can be programmed to adhere to local water restrictions in order to contribute to saving water. An amazing part about SkyDrop is that it can calculate how much water your lawn uses every day and adjust the amount of watering time to keep your lawn healthy. This device sells for $200 on Amazon, and connects to your existing irrigation system along with your WiFi network.

WRITTEN BY JAYMI NACIRI

8 Things to Do Before Applying for a Mortgage

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Know what to expect

Buying a house is one of the largest financial commitments many people make in their lifetimes. Between the down payment, principal, interest, taxes, and insurance payments, utilities, maintenance, repairs, and updates, the financial outflows can be overwhelming.

A key aspect for most homebuyers is a mortgage — a loan secured by the house that enables the buyer to pay for the cost of the house over time, instead of all at once. It’s a big deal to apply for and get a mortgage, and taking care of these eight items before you do will help you along the way.

1. Determine how much house you need

If your income is decent and your credit score is good, you might find that banks are willing to lend you more money than it takes to buy a house that meets what you really need out of a home. While it’s tempting to buy up to a larger house in a nicer neighborhood, remember that many of the costs — not just the mortgage payment — scale right along with the price of the home you’re buying. Keeping your home buying decision attuned to what you really need will help you keep your total costs in check.

Key factors to consider include:

  •          How many people will be living in the house?
  •          Is the school district a ‘must have’ of a ‘nice to have’?
  •          What does the commute look like to work/grocery stores/etc.?
  •          Is the neighborhood safe?
  •          How much work are you willing to do to update/upgrade/maintain the home?

2. Scrape together a down payment

Most lenders will give you better terms on your mortgage if you have a substantial amount of your own cash tied up in the home you’re buying. Generally speaking, you’ll need at least a 20% down payment to get the best rates and terms on your mortgage. That means that if your house costs $200,000, you’d need to cough up $40,000 of that amount yourself and be able to borrow the other $160,000.

You might be able to get a mortgage if you have a smaller down payment, but chances are that you’d pay a higher interest rate and/or be stuck paying private mortgage insurance on top of your mortgage. Those raise your cost of borrowing over time, which means you’ll end up paying more in the long run than if you had the down payment available.

3. Check your credit report — and clean up any errors

If you’re borrowing a large chunk of money, lenders want to know you’re a good risk before they offer you theirs. To see most of what the lenders see, you’ll want to check your credit report. You can get a free copy of your credit report from each of the major credit bureaus once per year by visiting AnnualCreditReport.com. From that report you can see which companies you owe money to, how much you owe, and whether or not you’re considered to be on time with your payments.

Around 20% of credit reports have errors in them, either because of things like identity theft or because of more mundane clerical errors in data entry. If you see errors in your reports, the bureaus have a process to allow you to challenge those errors to get them corrected. By correcting errors before you apply for your mortgage, you improve both your chances of getting that mortgage and getting good terms on it.

4. Pay off what you can, and get current on everything else

In addition to wanting to see that you have a good history of managing your debts, mortgage lenders want to make sure you’re not over-extending yourself by taking on that large of a debt. They will calculate ratios based on how much you currently pay towards debt service and how much in total you will pay towards debt service once you have your mortgage.

Generally speaking, you’ll need to be putting less than 36% of your income towards debt service before considering your mortgage. Once your mortgage is factored in, you’ll absolutely need to keep that ratio below 43% of your income to have a qualified mortgage.

If that sounds like a crazy high percentage of your income to be putting towards debt, you’re absolutely right. The less you owe, the easier it is for you to make your payments on time and in full, and the more flexibility you have when things go wrong. By getting your other debts under control first, the less risk you’ll pose to the lender, and the better the overall deal you’ll qualify for.

5. Document your income — and the source of your down payment

Your lender will want to see proof that you make enough money to cover your mortgage payment as well as proof that youcame up with the money for your down payment. Proof of income comes in the form of your W-2 or 1099 from work or investment income that you use to file your taxes. A recent paystub would also help showcase that you’re still earning the income you’re claiming as part of your ability to pay your mortgage.

Proof of down payment money comes from checking account, savings account, and brokerage account statements, along with explanations for any large deposits into those accounts in recent months. The lender is looking for evidence that the money you’re using to make your down payment is yours, and they prefer “seasoned” money over recent windfalls.

Seasoned money is money that you’ve saved up over time, and it’s preferable because it gives the lender confidence that you’re good with money. If the lender suspects your down payment money is a gift or loan from family members — because it’s a recent deposit of a lot of money — the lender will ask for documentation on where that money came from. If the lender isn’t satisfied with the explanation, it could jeopardize your ability to get favorable rates or the mortgage at all.

6. Figure out what mortgage terms you want

The key choices you’ll make are the length of the mortgage and the rate type of the mortgage. The most common length for a mortgage is 30 years, followed by 15 years, but several other lengths are also possible. As a general rule, the shorter the length of the mortgage, the lower the interest rate you’ll pay on it, but the higher your monthly payments will be because you’re paying the balance down that much faster.

You can also choose between fixed rate and adjustable rate mortgages. With a fixed rate mortgage, your interest rate and the principal and interest part of your payment never move throughout the life of your mortgage. With an adjustable rate mortgage, your interest rate resets every year — sometimes after a preset number of introductory years at a steady rate. With an adjustable rate mortgage, you take on the risk of rising interest rates, but the benefit is typically a lower starting rate than a fixed rate loan has.

7. Avoid taking on any new debts around the time of your mortgage

If you’re buying a house, you’ll typically have a lot of expenses above and beyond the house payment. Things like renovating, buying new furniture, moving, fixing up your old place, and so on all require money. Avoid the temptation to borrow money for any of those items — or anything else — between the time you start shopping for a house and the time you close on your mortgage.

That can be trickier than it sounds. Even if the merchant offers you deferred payments like “no payments for 90 days” or interest free financing, it still counts as a loan and shows up on your credit report. If your lender sees you taking on excessive borrowing capacity before your mortgage is issued, it will react in a way that protects its interests. That likely means either cancelling your mortgage altogether or reducing the amount you can borrow based on your credit no longer being as strong as it had been previously.

8. Research lenders before applying for your loan

The act of applying for credit — whether or not you’re approved for that credit and regardless of whether you accept that credit — causes an inquiry on your credit report. That inquiry will typically lower your credit score by a few points. If your credit is borderline, the impact to your credit score can be enough to knock you into a higher risk tier or out of contention for a mortgage altogether.

As a result, you’ll want to check around to see which select group of lenders you want to do business with before filling out the mortgage application. Banks and credit unions frequently post their current mortgage rates online, and other mortgage lenders often advertise on real estate listing or similar sites. By researching lenders in advance and limiting your applications, you reduce your credit inquiries and the cost and hassle of applying for your mortgage.

A home is a big commitment — so plan for it

Your home may very well be the largest financial commitment you’ll make in your lifetime. By planning well for the financing associated with it, you can minimize the costs of ownership and put more of your hard earned cash towards what really counts, rather than towards fees, interest, and overhead costs. And that will go a long way towards allowing you to enjoy your home — and the mortgage burning party you might want to throw once you’ve paid it off.

 

When You Want To Renovate Everything, How Do You Choose What To Do First?

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New fence. Covered patio. Expanded bathroom. Painted kitchen cabinets. They all cost about $3,000 (give or take a couple bucks). So when you want to renovate everything, how do you chose? What comes first, and what shouldn’t you bother with at all? It’s all so confusing.

That’s the conundrum many people face when they go to renovate, or they’re simply trying to make a plan of action that doesn’t include having to sell their house because they’ve gone broke fixing it up. Moving forward can be tricky, and the renovation process can be anxiety-producing. Taking the time to properly research, set your budget, and determine the return on investment of individual projects – if that’s even important to you – are the keys to success. Follow these tips before you swing that hammer.

Ask yourself why you’re doing it

“It is vital that you know the objective of the renovation before you start as this will help you keep on track and make the appropriate decisions once the work has started,” said Your Investment Property. “The objective may be any one of the following: increase rental return; improve capital value; own enjoyment; keep up with the next door neighbors; provide an income when property is flipped (ie: purchased, renovated and then sold in a short period of time); or something else that is important to you.”

Prioritize

This one can be hard when what you really want is a top-to-bottom overhaul, and it may require you to have a few tough conversations with yourself. You may love the idea of a covered patio, but will you get real use out of it? If you’re a person who doesn’t much like to go outside (or if the covered patio would only be the beginning of the expense because you’ll now need to add an outdoor fan and a heater and drapes and mosquito netting and new outdoor furniture and a waterproof television once you have the patio cover), perhaps your dollars are better spent elsewhere. When you have limited funds, taking care of renovations on items that are more frequently used, or that you can at least look at and appreciate on a more regular basis, might be a better bet.

Consider your budget

About that budget…some renovations obviously cost more than others. And some might be more important to you than others. Some of us have instant gratification issues (umm, guilty!). Perhaps it would be best to knock out a few small items that will make you feel good about your progress. Or, perhaps what you really need is a couple months of serious money-saving so you can put in those countertops you’ve been dreaming of.

Ask around

You might be able to slash your hard costs by finding a skilled handyman to do your flooring installation instead of going with a flooring company. Or, you may be able to take advantage of a special from a big box store that cuts down on costs, like free carpet installation at Home Depot – a special they are currently offering. Signing up for daily emails from Home Depot and Lowes is another way to take advantage of limited-time specials that can save you money. Both have “Daily Deals” they send out in their emails, which are good for that day (and until they’re all sold out) only.

Consider the ROI

If you can’t rule out one or the other based on how much use you think you’ll get from the areas you’re looking to renovate, look at the potential value. One might provide a much better return on investment than the other. The Cost vs. Value Report, which “compares average cost for 21 popular remodeling projects in 149 markets with the value those projects retain at resale in 100 U.S. markets,” is our Bible when it comes to determining ROI.

Assess Your House

You might have a lot of “wants” related to renovating, like updating your master bath and re-facing your fireplace. But there may be more pressing issues that need to be addressed before you get to the pretty stuff. “Hire a licensed home inspector to check your house from top to bottom,” said Home Guides. “He’ll climb into the attic to check for dampness, scour the basement looking for leaks, test the heating and air conditioning systems, examine the roof, the plumbing and electrical panels. Evaluate the results before deciding on a plan of action.

Think about everyday costs

New appliances and items like new doors and windows can have a significant upfront cost, but they will save you money on a regular basis because they’re energy-efficient.

WRITTEN BY JAYMI NACIRI

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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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

 

 

Why is Seattle home inventory so low?

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Current homeowners are staying put—leaving fewer options for first-time buyers

Low inventory was the theme of last year’s Seattle real estate news, and so far this year, inventory has been even more sparse. The latest data from Northwest Multiple Listing Service (NWMLS) shows less than a month of inventory available in King County during February—as opposed to about a month that time last year.

It’s a statewide, and nationwide, problem, but it’s especially pronounced in Seattle; according to a report released by Remax earlier this week, the Seattle metro area is tied only with Denver for lowest housing inventory and has one of the fastest markets in the country, driving up competition and prices for would-be buyers.

But why is inventory staying so low—and getting lower?

According to a survey by Equation Research on behalf of home financing company Valueinsured, with real estate prices at a record high—Seattle homes are routinely seeing year-over-year increases in the double-digits—current homeowners are unsure of their prospects after selling. 65 percent of Seattle homeowners who would be open to selling are choosing to hold off because they don’t want to buy their next home in this market.

Those same homeowners wouldn’t blame potential buyers for not wanting to buy in the current market. 67 percent of surveyed homeowners said that people who buy in their neighborhood right now are “overpaying.”

It speaks to a general air of uncertainty around Seattle’s home prices; 30 percent of homeowners surveyed said they are “not confident” that their current home, or any home bought today, will be worth more by the end of 2019. 48 percent of Seattle residents don’t consider the current market healthy.

“Experienced homeowners and buyers know we are at the top and are sitting out to avoid buying,” said Valueinsured’s CEO Joe Melendez in a statement on the survey. “Inventory is, therefore, pushed way down, inflating prices for those who are willing to buy high. But for the most part, there are not enough people who are willing to buy high. That’s why sales volume is down. It is not a sustainable picture.”

Overall, Seattle residents were “more pessimistic” than the rest of the United States, with 76 percent believing they could “witness another 2008-style housing crisis again in their lifetime.” (There are huge differences between the market then and the market now, although the prices do gate many out of homeownership.) That increased among millennial, interested first-time buyers to 85 percent.

A more negative outlook among people who aren’t yet homeowners shouldn’t be a shocker; those who already own a home tend to be in a much better economic position than those who don’t. According to data from the Harvard Joint Center for Housing Studies, 45.4 percent of Seattle-area renters were cost-burdened in 2015—meaning their housing costs make up more than 30 percent of their income—as opposed to 25.4 percent of homeowners. That same data found that median owner income in the metro is $96,400, compared to $50,000 for renters.

That means, despite a general uneasiness around the market, current homeowners tend to feel a little more secure in owning a home. Despite many not being willing to move, a whopping 82 percent of current homeowners said they could afford a down payment on their next home, as opposed to 25 percent of first-time, millennial buyers. Among senior homeowners—65-plus and planning on downsizing—20 percent plan to buy a new home without a mortgage.

Regardless, with the coming of spring, inventory could improve when the March numbers roll in. “The arrival of daylight savings triggers a burst in new listings,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, in a statement with the NWMLS numbers. “More listings lead to more sales.”

An inventory crunch, as many argue, isn’t the only thing driving up home prices in Seattle, and it’s not like we’re adding new homes for sale at the same rate as we’re bringing rental homes on the market—or new people to the region—anyway. But shrinking inventory certainly isn’t helping.

By Sarah Anne Lloyd

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