News In Brief
April 2014 - NWREporter
- Though home prices are projected to grow at a 3 percent to 5 percent appreciation rate, economists at Clear Capital are saying there should be no worries about a housing bubble brewing any time soon. In fact, according to Clear Capital's Home Data Index, if home appreciation continues at its current pace, prices may not return to peak levels until 2021. The National Association of Realtors® reported in its December existing-home sales report that home prices rose 11.5 percent in 2013 compared to 2012. That marked the strongest gain since 2005, when median prices for existing homes rose 12.4 percent. Following the double-digit growth in home prices last year, Clear Capital economists predict that national home prices will now fall into line with inflation and follow more historical rates of growth. Home prices at the metro level, when adjusted for inflation, reveal 46 out of 50 metro markets have home price levels that are at pre-2003 levels. Twenty-five of 50 markets are reporting prices below 2000 levels.
- Tom Kelly reported that the United States has the most major markets in the world where buying property is considered affordable, according to the Demographia International Housing Affordability Study, an analysis of 360 cities in nine countries. The study showed that those who pay the most in the world for housing are often getting the least as far as house size. The smallest houses are in the most expensive market (Hong Kong), while the largest houses are in the United States which has the best major-market housing affordability, according to the report. Ireland has the best overall housing affordability. Of the 360 worldwide markets evaluated in the study, 95 were labeled "affordable" of which 84 were in the U.S. The study labeled 67 metros "seriously unaffordable markets" with 23 in the U.S., led by San Francisco. Pittsburgh led the pack in affordability among major cities around the globe. Other affordable major U.S. cities that topped the list were Detroit; Grand Rapids, Mich.; Rochester, N.Y.; Atlanta; Buffalo, N.Y.; Cincinnati; Cleveland; Indianapolis; and St. Louis.
- Boeing will pay substantial annual incentive bonuses to both white-collar staff and production workers that should inject more than $400 million into the Washington state economy in March. On Boeing's white-collar side, approximately 51,600 nonunion employees and unionized engineering staff in the state will receive between 16 and 17 extra days' pay on February 27.
- Based on its strong short term socio-economic and commercial real estate momentum, Seattle has been ranked No. 18 in a list of the world's most dynamic cities as reported by the Puget Sound Business Journal. The list was created by commercial real estate company Jones Lang LaSalle, which used a "City Momentum Index (CMI) for its rankings that listed San Francisco No. 1 in the world, followed by London and Dubai.
- Seattle ranks 6th in the 15 US cities that are driving the future - The American economy is being reshaped along the booming industries of technology and energy, according to new rankings of America's Best Performing Cities by the Milken Institute. In the 2013 rankings, thirteen cities defined by Milken as tech hubs made it into the top 25, while nine could attribute their impressive growth to the energy industry, notably the shale and natural gas renaissance. Milken's ranking is based on data from both long-and short-term growth in jobs, wages, salaries, and technological output.
- Consumers should be advised that new mortgage regulations that took effect in January, making lenders adhere to specific guidelines, as reported by Tom Kelly. Dan Sargent of Alpine Mortgage Planning in Federal Way offers five tips for borrowers looking to secure a mortgage and get the best rate.
- Pay careful attention to credit. The best mortgage rates often go to borrowers with credit scores of 720 or higher. While those consumers with lower scores usually qualify, make sure your score is the best it can be.
- Be prepared to document your finances. In a nutshell, lenders want to know the borrower's ability to repay the loan. Borrowers should gather bank statements, tax returns, W-2s, investment accounts, and documentation of any other assets they own. Also, be prepared to explain any large deposits to accounts-even a check from a family member.
- Act sooner rather than later. Mortgage rates are expected to rise in 2014 as the Federal Reserve winds down its $85 billion per month bond-buying stimulus program. A rate lock is usually good for 30, 45, or 60 days, although that time period can vary among lenders.
- Shop around. Lenders have lost a large amount of their refinance business as rising rates encourage fewer home owners to refinance. That means they are turning their attention to homebuyers and may be more willing to compete for their business.
- 5. Watch your spending. While you might be tempted to go outfit a new home with all new furniture-on credit before closing - it's better to wait. Lenders will be carefully scrutinizing debt obligations, such as credit cards. Borrowers are advised to keep their monthly debt obligations, including mortgage and property taxes, to below 43 percent of their income.