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Coronavirus not slowing down Seattle region’s supercharged housing market

Reprinted from Puget Sound Business Journal

Home buyers hoping the coronavirus pandemic will cool off the Puget Sound region’s red-hot housing market are out of luck.

Sale prices of lower cost and mid-range homes remain torrid, with multiple offers common. The virus has, however, altered the way sellers handle open houses, nationally but especially in Washington state, the nation’s COVID-19 epicenter.

Nearly a quarter of U.S. sellers are changing how their homes are viewed, according to a new National Association of Realtors survey of its members. The percentage of sellers stopping open houses or requiring potential buyers to wash their hands and take other precautionary steps climbs to 44 percent in the Evergreen State.

In the Seattle area, some sellers no longer want to host open houses and have their brokers screen potential buyers for by-appointment showings. This ensures they’re dealing with either all-cash buyers or ones who have pre-qualified for mortgages.

Some companies are urging brokers to work with buyers and sellers to implement virtual-tour viewing

“Just like every other industry, things are changing so quickly, but right now our market is more on fire than I’ve ever seen it,” said one WA real estate broker, who has worked 15 years in real estate. Especially hot is the sector of the market with homes listed for $800,000 or less, she said. She has one such listing in Kent. “By last night it had 20 showings,” she said. “People are begging me to take an offer.”

One of her buyers looked for a condominium in Bellevue last weekend, and she said it “was a race against the clock to see condos before they went pending.” Some units are going pending as fast as 12 hours.

One area of weakness is homes priced at $1.2 million or more.

“Things have slowed slightly because I think many of those buyers are more reliant on the stock market” when the S&P plummeted 9.5 percent, the worst slide in 33 years.

The market continues to not have enough inventory, Northwest Multiple Listing Service data shows. Across the four counties in the Seattle metro, the number of single-family homes for sale fell 39 percent last month compared to February 2019, while the pace of closed sales was about the same.

“This is rapidly evolving, but so far, we have seen a continuation of the robust spring market and have seen little effect on how quickly a home sells,” Scott said. He added the market will know more in the coming weeks how the virus will affect the industry.

Also fueling the market are record low mortgage rates. According to Mortgage News Daily, a 30-year fixed loan is 3.5 percent.

Last week, one homeowner we spoke with refinanced and got a 3.1 percent rate on a 30-year fixed. On Wednesday, the rate on a 15-year mortgage was 2.5 percent.

Windermere Real Estate Chief Economist Matthew Gardner said this is making some buyers conflicted. They might want to hold off on a home purchase in light of the uncertainty caused by the virus, but they don’t feel they can do so because of the low mortgage rates.

“Every situation is different, but talking to our brokers, they’re saying they’re getting offers left, right and center,” said Gardner, who added the market “is tight and getting tighter.” 

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Did You Say No More VA Loan Cap?

Caliber Home Loans, Inc. knows you may or may not have heard about the Blue Water Navy Vietnam Veterans Act of 2019. Due to this important piece of legislation, the VA loan cap will be removed, starting in January.

Tell Me More!

Historically, VA loan amounts over the maximum guaranteed loan amount $484,350 (which was the same as FNMA/FHLMC limit, set to change in 2020) require a down payment. This new legislation removes that down payment requirement, paving the way for VA loans without a down payment regardless of the loan size.

  • This will apply to VA loans guaranteed on or after January 1, 2020.
  • Max Loan Amount $1,500,000.

The legislation also changes guaranty fees for certain veteran groups:

  • Starting January 1, 2020, both active duty servicemen, veterans and reservists will pay 2.3% funding fee for initial use. This change lowers the funding fee for reservists.
  • On subsequent use of their VA entitlement, there will be an increase of 30 bps in their funding fees to 3.6% for each of these groups.
  • The funding fees will revert to the current fee structure in January 2022 unless additional legislation is enacted.

As a Military Friendly® Brand, Caliber Home Loans, Inc. is committed to being a trusted resource in meeting the specific mortgage needs of the brave men and women of the United States Armed Forces who serve, or have served our country with resolute sacrifice. This is a positive change for the VA loan program. We look forward to helping even more of these brave men and women take advantage of the VA loan benefit they have so valiantly earned.

Guest post by:
Christina Wieser
Team Loan Consultant, Caliber Home Loans

Direct: 253-267-7813
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Tacoma, WA 98409

Tacoma Rising

I lived in Seattle for almost 10 years. I moved to Tacoma for the affordability and what I noticed was a much cleaner downtown Tacoma. It’s also much safer than ever. When I was a kid growing up in Lacey, Olympia, and Tumwater, Tacoma was on the news all the time for all the wrong reasons. Today, we’re in the news for all the right reasons! But don’t just take my word for it, check out this article by South Sound Business:

“I think the same is happening in the (Tacoma) Dome District” and elsewhere in town, like the Proctor and Stadium districts, he said. There’s available real estate — old warehouses, for example, that can be better used and that have significant character, he added, noting the city’s willingness to rehab them, as has occurred in the Brewery District, rather than demolish everything for new towers.”

By South Sound Business

Seattle Home Fairs

Join Us at the Seattle Home Fairs! 
Once again, the Seattle Department of Construction and Inspections (SDCI) is bringing two Seattle Home Fairs to the community. We’ll have free information for renters, homeowners, and landlords with experts on rental housing rules, coaching on obtaining permits for renovations, and breakout sessions on topics including landslide prevention, earthquake retrofits, and backyard cottages.

The North Seattle Home Fair will include a wide range of free information and takes place on Saturday, January 25, at the Meadowbrook Community Center from 2:00 to 5:30 p.m. Please RSVP here for more information on the North Seattle Home Fair.

We’ll also be hosting another home fair in South Seattle on Saturday, February 1, at the Filipino Community Center from 10:00 a.m. to 2:00 p.m. Please RSVP here for more information on the South Seattle Home Fair.

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