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November 2014

News In Brief

November 2014 - NWREporter

  • Joblessness in July was lower than a year ago in all of Washington state's 39 counties, but most of the state's largest counties saw slight increases from the previous month, data released last month by the state Employment Security Department show and reported by The Seattle Times. King County's unemployment rate in July was 4.9 percent, up slightly from 4.6 percent in June, but down from 5.4 percent in July 2013. In Snohomish County, joblessness increased slightly over the month as well to 5.3 percent, up from 5.1 percent in June, but still down from 6 percent last year.
  • The strengthening job market has more economists gaining confidence about the direction of the housing market over the next two years, according to a newly released Reuters poll of 29 housing analysts, including investors and economists. The economists surveyed expect existing-home sales to increase to 5.25 million units in the first three months of 2015. Currently, existing-home sales stand at 5.09 million. In May, the same group surveyed had expected much slower gains at 5.1 million expected in the first quarter of 2015. What's more, those polled expect home resales to continue to inch up in 2015, reaching 5.29 million by the second quarter of 2015. The job market is why most of the economists are starting to change their tone about housing's outlook. For the past six consecutive months in July, employers added more than 200,000 jobs. "Low mortgage rates and improving labor market dynamics should remain conducive to gradual growth in the housing sector," Gennadiy Goldberg, a strategist at TD Securities, said in a recent note to clients. The housing analysts surveyed expect mortgage rates to rise slower than they originally thought in May. Still, they contend rate rises are looming with expectations that the Federal Reserve will slowly begin to increase its benchmark interest rate around the middle of next year. The Fed has held the benchmark interest rate near zero since 2008. The economists polled expect the 30-year, fixed-rate mortgage to rise to 5.25 percent in 2016. That is a slight drop from the 5.68 percent average they had predicted in the May poll. The 30-year fixed-rate mortgage is currently averaging 4.10 percent, according to Freddie Mac. Nevertheless, the economists say the housing recovery likely won't be derailed by a gradual increase in mortgage rates. "If a rise in mortgage rates comes with a stronger economic recovery, the housing market will be able to absorb it," Alexander Lin, an analyst at Bank of America Merrill Lynch, told Reuters.
  • After 10 years of asking, NAR finally got the result it was seeking.  Late last month, the U.S. Department of Housing and Urban Development eliminated prepayment penalties on loans insured by the Federal Housing Administration (FHA).  The policy change prohibits lenders from charging FHA borrowers interest on their home mortgages for days or weeks after a principal balance pay-off.
  • John L. Scott Real Estate entered into an agreement to acquire the Kitsap County offices of Reid Real Estate. Reid Real Estate has over 45 brokers in Kitsap County with offices in Silverdale, Bremerton and Port Orchard. The acquisition of Reid Real Estate comes in advance of the upcoming Kitsap County retirement of owner Jerry Reid. The Reid Real Estate Silverdale and Port Orchard offices will be merged with John L. Scott's existing offices in those cities. Reid Real Estate's Bremerton office will be re-branded to John L. Scott Real Estate. Jerry will retain the Mason County Reid Real Estate office Belfair. Jerry Reid founded Reid Real Estate in 1967 and supports a number of local organizations like the Bremerton Rotary, Admiral Theatre, Boys & Girls Club, YMCA, Relay for Live, Habitat for Humanity, the Boy Scouts, Great Peninsula Conservatory, and the Olympic College Foundation.
  • According to a report by Tom Kelly in MyNorthwest.com, the nation's interest for smart home technology is growing, with more home owners seeking greater control of their home's appliances, lighting, and systems. More than 70 percent of about 2,000 adults recently surveyed say they wish they could just control something in their home from their mobile device, according to Lowe's 2014 Smart Home Survey. What do they most want to be able to do? The survey showed respondents wanted to be able to adjust the thermostat, turn on the lights, or start the coffee pot before they get out of bed. Besides added convenience, 40 percent of adults surveyed say they believe a smarter home would help them trim costs and save money on their utility bills. Sixty-two percent said they find smart home systems are most beneficial for monitoring safety and security. So with the technology pool in the smart home arena ever-expanding, what's holding back adoption rates? The top considerations holding back respondents from purchasing such products were cost or fees (56 percent); ease of use (13 percent), and security (11 percent). Americans are more than twice as likely to prefer a do-it-yourself solution, without a monthly fee, over a professionally installed/monitored system with a monthly service fee, according to the survey.