How To Make Your Dream of Homeownership a Reality

SOURCE: Keeping Current Matters

According to a recent Harris Poll survey, 8 in 10 Americans say buying a home is a priority, and 28 million Americans actually plan to buy within the next 12 months. Homeownership provides many financial and nonfinancial benefits, so that interest is understandable.

However, it’s unlikely all 28 million Americans will accomplish that goal in the coming year. Experts project a total of around five million homes will be sold in 2023. Why is there such a big difference? It’s partly because there can be challenges to buying a home.

In the same survey, when asked, “Which of the following are preventing you from pursuing homeownership at this time?”:

• 34% answered, “I don’t have enough saved for a down payment”

• 30% answered, “My credit score”

If you’re aiming to buy a home, here’s what you need to know to accomplish that goal.

Save for Your Down Payment

Your down payment is a big chunk of what you pay up front for your home. For most home purchases, buyers put down some amount of cash up front (a down payment) and then take out a loan (a mortgage) to pay for the rest.

It’s a longstanding myth that you need to pay 20% of the purchase price for your down payment. In reality, 20% down isn’t always required. In fact, according to the National Association of Realtors (NAR), today’s median down payment is 14% for the average buyer and just 6% for a first-time buyer.

Regardless of how much money you can save for your down payment, know there’s help available. A local lender can show you options to help you get closer to your down payment goal. Plus, there are even loan types, like FHA loans, with down payments as low as 3.5% for some buyers, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

Beyond assistance programs and different loan types, here are a few other tips to help you as you save for your down payment:

• Remember to factor in closing costs. In addition to your down payment, closing costs are usually 2-5% of the home’s purchase price.

• Maintain your savings. Your down payment shouldn’t deplete all your savings. It’s important to still have some money set aside for homeownership expenses after you move in.

• Explore your options and lean on your trusted advisor for expert guidance. Do your research, ask questions, and look into the resources available for buyers like you.

Improve Your Credit Score

Your credit score is a number that indicates how financially reliable you are to lenders. A higher credit score usually means you’ll be able to borrow more money at a better interest rate. If your credit score is preventing you from getting an affordable mortgage, there are steps you can take to improve it. Here are two:

• Pay your bills on time. When you pay your bills on time, your credit score improves. When you’re late, it takes a hit. One way to make paying your bills on time easier? Set up automatic payments when and where you can.

• Mix it up. From auto loans, to credit cards, to mortgages – there are several different types of credit. And having a mix of them improves your credit score.

Bottom Line

If you want to purchase a home this year, contact me so you can start preparing.

SOURCE: Keeping Current Matters

How to Set and Preserve Financial Goals

Knowing your short- and long-term goals is the first step to building wealth. By creating and maintaining a plan to achieve them, you can ensure you remain on track over time.

How to Set Your Financial Goals

The first step in goal setting is to identify the reasons behind your desire to save money and build wealth. Knowing what you are working toward will make it easier for you to create a savings plan that fits your budget and needs.  

One way you can categorize your goals is by separating them into time-based buckets:

• Short-term goals (3-6 months): These are funds set aside for emergencies or other miscellaneous spending needs.

• Medium-term goals (5-10 years): These are funds set aside for larger purchases, such as a home loan or a child’s college.

• Long-term goals (15 or more years): These are funds set aside for spending needs during retirement.

Saving for the long-term requires consistency and commitment. To put yourself in the best position to achieve your savings goals, you should consider creating a savings plan. This can help you set aside money consistently — often automatically — and build a habit of saving. However, even though it’s important to save, you should ensure you still have the funds to cover your expected costs, such as rent, transportation and food.

In addition to setting aside funds, also consider limiting or eliminating unnecessary purchases and sources of debt. To reach your financial goals, you’ll want to prioritize saving over unnecessary spending.

How to Preserve Your Financial Goals

Once you have a savings plan, it’s time to work toward your goals. Saving money over an extended period may be discouraging for many people, given how long it can take to see results, but it’s important to understand the importance of taking small, consistent steps on your savings journey.

Whether you’re saving up for an unforeseen emergency or a future home purchase, every dollar saved puts you closer to your goal.

Though you may be prepared to save, there are still several external factors that can affect your plan. The best approach to these challenges is to adopt a proactive mindset and stay positive. It’s impossible to be prepared for every situation, but we recommend following these tips to best preserve your savings goals:

• Monitor your accounts: Make sure you’re aware of all activity occurring in your bank accounts.

• Plan for inflation: If your savings don’t grow at the same rate as inflation, you may lose out on long-term purchasing power because the cost of goods and services will increase.

• Protect yourself from scams: Guard your information carefully and beware of any suspicious communications.

• Find support: If saving is a challenge, consider speaking with a financial expert to identify products, services and advice that can push you in the right direction.

• Have a purpose: Remind yourself why you started saving in the first place, and why it’s important for you achieve your financial goal.

• Be healthy and fit: Taking care of your physical and mental health will help you save money on medical visits, prescriptions and other treatments over time.

• Budget, watch and talk spending: Engaging in money-conscious behaviors and activities will encourage you to more actively manage your finances and reach your goals.

SOURCE: Freddie Mac

Moving to Seattle? An abbreviated guide to Seattle's neighborhoods

For many years, Seattle has been considered one of the most liveable cities in the U.S.

Part of the lure of Seattle is its many neighborhoods. These areas range from the industrial warehouse district of SoDo to quaint established neighborhoods such as Magnolia and Laurelhurst. The rich distinctions in each of these areas allow for the perfect fit between home and lifestyle.

While not exhaustive, this list should help point you in the right direction toward finding the ideal location to buy a home in Seattle.

Ballard

Right now, Ballard appears to be leading the way in a newfound “coolness.” Ballard has a rich history starting with its Scandinavian fishing industry roots and the working Hiram M. Chittenden Locks. Today, Ballard is hip. While Ballard remains the winter home to the Alaskan fishing fleet, it also has a great nightlife with music venues and restaurants lining Market St. as well as a diverse housing market. Like most of the closest neighborhoods to downtown, Ballard is a bit more expensive than some of the southern or northern areas. Still, Ballard is definitely on the list of great places to live.

Queen Anne

Perhaps the most recognizable neighborhood in Seattle is Queen Anne. Queen Anne is recognized by the three broadcasting towers just north of Seattle's famed Space Needle. With its proximity to downtown, there is a price premium. If you are fortunate enough to afford a house on the south slope, you also have the most sought after view in the region. That is of Mount Rainier and the Space Needle with downtown thrown in for good measure.

Capitol Hill 

Capitol Hill has perhaps the most diverse combinations of sub-neighborhoods. In the heart of Capitol Hill is the bustling nightlife. Great shops, restaurants, and bars are plentiful. North of this area is some of the most distinct estates in the Seattle area. On the backside of the retail center are streets of lovely, mostly modest, turn of the century homes. If you want to be close to downtown and still feel like you are in a suburb, Capitol Hill might be the perfect area. There is a bit of everything.

Belltown

For a genuinely urban feel that combines trendy shops, upscale restaurants and Puget Sound views, Belltown is hot. Historically, Belltown was a bit of a nondescript commercial district. In recent years, old union halls and smaller commercial buildings have either been converted to new uses or replaced. In their place are high rise condominiums and trendy retail. Belltown is an excellent area for the walker in you as parking is at a premium.

Madison Park & Seward Park

The areas that line Lake Washington with views of the ever-growing Bellevue skyline starting at WA-520 in Madison Park down to the south of I-90 in Seward Park offer some of the most beautiful residential locations in Seattle. Except for Seafair Sunday during the summer, access is easy. However, for this large local event, don't expect to get to the water quickly. For the rest of the year, these neighborhoods are fantastic.

Green Lake, Wallingford & Greenwood 

To the north of downtown Seattle are some other areas that offer quite distinct living environments. The area immediately west of the University of Washington is Wallingford. This neighborhood is perhaps the most eclectic of all Seattle neighborhoods with its mix of pubs, ethnic restaurants and nearly anything else you can imagine. Other areas immediately around Wallingford include some of the most inviting residential areas, such as Phinney Ridge, Green Lake, and Greenwood. Each of these neighborhoods has small local retail centers made up of coffee shops, pubs and restaurants. What they all share is tight parking but beautiful, established trees-lined residential streets.

Fremont & University District

Fremont offers the artsiest environment where near anything goes. Known for the troll under the Aurora Bridge, Fremont has no shortage of pubs, ethnic restaurants and vibrant nightlife. Similarly, the University District offers the diversity one expects in the immediate area around a major university. A series of trendy neighborhoods conveniently located around the University District allows for proximity while maintaining a much more residential feel. These include Laurelhurst, Ravenna and Sand Point.

Beacon Hill, Mount Baker & Rainier Beach

A couple of other areas that should be on one’s serious list to investigate are just south of downtown Seattle. These include Beacon Hill, Mount Baker and Rainier Beach. You will find that the Mount Baker area is a bit more expensive than Beacon Hill, while both offer a great mix of an active lifestyle and great neighborhoods. In Rainier Beach, you will find a mix of housing, from costly properties with Lake Washington views to many beautiful areas just to the west.

West Seattle

Last but not least, West Seattle. Neighborhoods like Alki, with it’s fantastic Puget Sound views and great nightlife, come at a cost. Inland of Alki are beautiful neighborhoods such as Genesee, Delridge, High Point and Arbor Heights. Each offers a blend of being close to the city, lovely homes and excellent schools.

The general rule is that the closer to downtown Seattle, the more expensive the area.

While views are plentiful, so are the pricing premiums. Puget Sound or Lake Washington water views offer a fantastic feature that few cities in the world can match. Combine these with beautiful trees, established neighborhoods and coffee shops, pubs, highly-rated schools and ethnic restaurants everywhere; it is near impossible not to find a great area.

Finding a seasoned professional to help you sort through this wealth of richness is highly recommended. As with most large cities, Seattle is tough to navigate as a new transplant or even if you have lived here your entire life.

SOURCE: Seattlepi

New Inventory Thoughts from Leonard Steinberg

New Inventory

One common theme we hear around the country is all about the lack of inventory. As COVID fades, chances are many new sellers may emerge in 2021 for the following reasons:

1.  Some were fearful of leaving home during a pandemic, health-wise. Looking at new homes and making a move might have been a health risk.

2.  Hearing about inventory shortages caused many to fear they may not find a new home.

3.   Many sellers are only now hearing about the robust markets and rising prices.....enough to entice them to sell. They may have been fearful of leaving money on the table during a market where a pandemic was in full force.

4.  Many sellers did not want strangers in their homes out of fear of catching the virus. Many did not want to disrupt their work-and-learn-from-home schedules. Showings are disruptive.

5.  Some sellers simply could not deal with the additional stress of a move on top of all the stress 2020 delivered,

6.  Some sellers thought their markets were dead, yet now we have seen many dead markets roar back to life.

7.  Some sellers seeing rising interest rates may think this golden window of seller opportunity will not last forever.

8.  Some sellers take more time to figure out future plans. 2020 was a great year to think - REALLY think - about your future.....and enact plans in 2021.

9.  A rising, heated market can be the PERFECT market for down-sizing. If you sell a $3 million home for a 10% premium, that's a $300,000 premium. Then when you buy a $1 million property and the premium is 10%, that's $100,000. The upside is obvious. MANY potential sellers right now are empty nesters and babyboomers.....10,000 are retiring every day!

10.  Nothing lasts forever. Already we can see rising interest rates and bond yields are visibly impacting equity values negatively. The natural forces of economics are pretty powerful and consistent.

SOURCE: Leonard Steinberg

Why Days on Market Matters for Sellers

How long a home has been listed for sale, often referred to as days on market or DOM, can provide helpful insight about a home listing. DOM is defined as the time between the date a home is listed for sale and the date it’s officially sold and taken off the market.

DOM is a useful metric for sellers because a market with low average DOM indicates that there’s strong competition from buyers and homes are being sold quickly. A high average DOM is undesirable for sellers and can indicate that there is low competition, or the home listing needs to be adjusted to better showcase the property.

Basically, the longer a home stays on the market, the more likely it will raise a red flag to buyers who will question why it hasn’t sold yet.

While DOM varies by location and even neighborhood, there are things you can do to help make sure your home sells quickly.

1. Understand your local housing market

We are currently leaning toward a seller’s market, where there are more potential buyers than available homes. A seller’s market makes it more likely that homes will spend less time on the market. While the housing market is strong overall, knowing your local market conditions can help you get a better understanding of buyer demand (or lack thereof) for your home.

2. Check your price

Setting the right price for your home when it’s first listed for sale can help you avoid lengthy DOM. Once you get a general idea of what your home could sell for, the list price should reflect an accurate and realistic value of the home. Remember, an agent can help sell your home by listing it at the right price initially based on local market conditions and recent comparable home sales.

3. Prep your home

Make sure your home looks move-in ready for potential buyers. Staging your home or making small updates can have a big impact on the overall appeal of your home – especially for today’s buyers who are likely viewing it online. Adding a fresh coat of paint or installing new appliances will make your home feel fresher and more modern, especially to buyers who might not have considered it otherwise.

SOURCE: FreddieMac