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Every month, CoreLogic releases its Home Price Insights Report. In that report, they forecast where they believe residential real estate prices will be in twelve months.

Below is a map, broken down by state, reflecting how home values are forecasted to change by the end of 2018 using data from the most recent report.

As we can see, CoreLogic projects an increase in home values in 49 of 50 states, and Washington, DC (there was insufficient data for HI). Nationwide, they see home prices increasing by 4.2%.

How might the new tax code impact these numbers?

Recently, the National Association of Realtors (NAR) conducted their own analysisto determine the impact the new tax code may have on home values. NAR’s analysis:

“…estimated how home prices will change in the upcoming year for each state, considering the impact of the new tax law and the momentum of jobs and housing inventory.”

Here is a map based on NAR’s analysis:

Bottom Line

According to NAR, the new tax code will have an impact on home values across the country. However, the effect will be much less significant than what some originally thought.

Full article here

Buying a Home Prior to Marriage

One of the questions I am sure many kids ask their parents is should we buy a house before we’re married or wait to buy until after the wedding?

Buying a house before marriage is something that should be given a considerable amount of thought. A Coldwell Banker study found that quarter of younger couples – those between 18 and 34 – are buying a home before they get married.

If you and your partner are considering a home purchase, it is essential that you take appropriate steps to protect yourself during and after the purchase.

While it can feel “unromantic” to talk about finances, legal protections, and what you plan to do if things don’t work out, failing to be smart about the most significant financial purchase of your life can lead to significant regrets down the road.

In fact, without proper planning, you’ll probably increase the odds of needing to sell the home due to a breakup. Even though you are not married, you might have many of the same issues to deal with as if you were going through a divorce!

Preparing for a home purchase as an unmarried couple takes a little effort on your part, including some honest conversations and careful planning.

Considerations Before Buying as an Unmarried Couple

Current Finances

You and your partner need be completely clear about both of your financial situations. You are about to make a major purchase together, and like any business transaction, you need to know that your partner is capable of holding up his or her end of the bargain.

You and your partner need to share current, up-to-date information about your credit score, debt, income, and other financial obligations. All of this information is going to be required for getting a mortgage anyway, so it will all come out into the open before you can purchase the home.

One very important thing couples purchasing before marriage need to understand is debt obligations. When you both co-sign a mortgage together, each party is responsible for the complete debt. What does this mean in the real world? If you and your partner split and he or she decide not to pay the mortgage, you’ll be held responsible.

If things go sour, this can put you in a terrible spot. For this reason, many financial planners recommend not to buy a home for more than one person’s salary. If there is a breakup, you would still be able to afford the mortgage even if only for a short time. Again, this is where discussing finances before purchasing becomes very important.

Check out these mortgage tips for first-time buyers to be financially prepared for home ownership. You’ll also get some great advice by checking out these twenty things to do before buying a home.

Credit Scores

Your credit score and the score of your partner is a significant factor in your ability to get a mortgage. A higher credit score tends to ensure a better mortgage rate, which can save you tens of thousands of dollars over the life of the loan. Before you buy, you want to know exactly what both of your credit scores are.

As a married couple, your scores could be lumped together, but as an unmarried couple, they can be considered separately if necessary. You have the option of having the person with the better score apply for the mortgage, thus avoiding the drag of the lower credit score on the loan terms.

But keep in mind that when the person with the better score takes out the loan, it is only his or her income that is taken into account for the home purchase. The single income will need to be enough to pay the mortgage – which may or may not be a problem in your circumstances.

Remember credit scores play a significant role in getting the lowest mortgage interest rates. Make sure you analyze your current credit and try to improve your score before purchasing. Increasing your credit score could save you thousands of dollars over the life of the loan.

The three major credit reporting agencies are required to give one free credit report a year. As long as you haven’t requested a free report in the past year, you can go online and download your three free reports. You can go to the Annual credit report to get all three.

Future Finances

Money problems are one of the leading causes of relationship troubles, for married or unmarried couples. And few purchases can lead to money problems more easily than buying a home. You and your partner need to draft an agreement – on paper – that lays out who will pay for what, and how much. These include:

Down Payment

One of you may have a lot more money to put towards the down payment. Or you may put in equal amounts. However, you arrange the down payment, be clear about who is putting down how much, and what that means over the long-term – such as if you sell, or break up.

Mortgage Payments

How much will each of you pay toward the mortgage? Plenty of couples have unequal mortgage payment arrangements due to differences in income, but again, you need to discuss what that means concerning each of your equity over time. Not talking about financial issues like these can cause unwanted stress down the road.

Fees

There are a lot of other costs that come up beside the mortgage payment. For example, you may need to pay homeowners association fees. Depending on your down payment, you might need to pay mortgage insurance. Property taxes are another fee that can be pretty substantial in specific areas. Here are some additional expenses when buying a house you may not have given much thought to.

All of these items should be factored into your budget when buying a home, especially when you are not married.

Maintenance

One of the most significant costs of home ownership that new owners are not prepared for is maintenance and repairs. The water heater breaks, the stove stops working, the fridge goes out – you need money to pay for these things when they happen. Will both of you cover the costs equally? If not how will these kinds of expenses be divided?

Upgrades

Upgrades may come a few years down the line, but when they do, you want to know who will pay for them. Not long ago, I had unmarried clients who purchased a home in Southborough Massachusetts. It was clear to me they were not on the same page when it came their purchase. One of the parties was already planning the improvements, while the other was without question putting up a big STOP sign.

Make sure you have an understanding of finances when buying a home together before marriage!CLICK TO TWEET

What Kind of Home You’re Going to Buy

When buying a home before marriage, it is essential to get on the same page about what you both want. This not only includes the house itself but these considerations as well:

• What kind of location –  big city, little town or a home in the country?
• What kind of home – a re-sale, new construction, an antique, fixer upper?
• What price point – a frank discussion of where your comfort level lies. The mortgage broker may say you are qualified to purchase a lot more than one party is comfortable with.
• What kind of neighborhood – once the location is narrowed down, you’ll need to decide if you want a large subdivision, country road or busy street. One partner might have a strong preference for one or the other. See the guide on how to pick a neighborhood.
• What about schools – if you are planning on having kids together, the school system could become a major consideration.
• Is commute relevant to one or both parties – understanding location needs is important when buying a home together.

Remember you both need to be on the same page so that one party isn’t left feeling uncomfortable.

Open a Joint Bank Account

While you may not be married, opening up a joint bank account might be a prudent consideration for those who are buying a home before marriage. The joint account can be used to pay agreed upon bills pertaining to the house you’ve purchased.

Some financial experts agree you might want to automatically have a certain amount of money from individual accounts deposited monthly. By doing so, neither party forgets creating money arguments in the future on who paid what. Each side would have a set amount deposited each month into the joint account.

Title Options

You have several different types of title arrangements that you can choose from based on your situation. They include:

Joint Tenants in Common

In the joint tenants in common arrangement, you decide what percentage of the home each partner is responsible for. You can do a 50/50 split, but most people choose this option because it allows a different arrangement, like 60/40, and because you can designate who your share goes to when you pass away.

Either through your will, or through the probate process specific to your state, your percentage of the home will be distributed to your heirs/relatives/etc.

Joint Tenancy with Rights of Survivorship

With the joint tenancy arrangement, you and your partner own the home equally, 50/50. You also agree that your partner will get your share of the property should you pass away, and vice versa. This agreement mirrors the standard arrangement assumed when a married couple buys a home.

If you die, your half of the property automatically becomes your partner’s. In other words, there is no option to leave your equity to your parents, siblings, other relatives, or other heirs.

Sole Ownership

It is also possible for the home to belong entirely to just one partner. Although it is not as common, there may be reasons you choose to go with the sole ownership route – like if only one person is getting the mortgage on the home.

What Happens if it Doesn’t Work Out

Most people don’t like to plan for failure, but it is something worth considering when buying a home jointly before marriage. When relationships turn sour, things can get contentious. Here are some items to think about:

1. If a break up does occur, who is going to stay in the home?
2. What happens if neither of you can afford to pay the mortgage alone?
3. Will the house be sold?
4. Will one party purchase the home from the other?
5. How will the purchase price be determined?
6. What if you want to sell and your partner doesn’t?
7. Who will be responsible for paying for a large unplanned expense like a heating system needing replacement?
8. How will you pick the Realtor to use when splitting up?

As you can see owning a home out of wedlock brings with it some critical considerations. It is prudent that questions like these be addressed in a legal agreement.

Consider Getting a Legally Binding Agreement

While the title agreement is legally binding, the other decision you make together concerning finances are not – unless you take the proper steps to make it so. While it can seem overly technical and cynical to talk to a lawyer about your agreement, doing so will give you more peace of mind in the future.

Making your agreement legally binding means, you are both serious about doing what you say you will do. You can always change the deal if the situation changes. Talking with a lawyer before a big business/financial decision is still recommended.

Some of the most prominent disagreements can be avoided when you have an agreement in place to spell out each other’s obligations.

Full article via: www.maxrealestateexposure.com/buying-house-before-marriage/

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I am pleased to present the second-quarter 2017 edition of The Gardner Report, which provides insights into the Western Washington housing market (see below). The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. I hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

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… The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me. … ECONOMIC OVERVIEW The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017. Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976. I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity. HOME SALES ACTIVITY There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016. Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County. The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago. The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017. HOME PRICES Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187. Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages. When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth. The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices. DAYS ON MARKET The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016. King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago. Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016. Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year. CONCLUSIONS This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement. Inventory is short and buyers are plentiful. Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year. Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust. ABOUT MATTHEW GARDNER Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

 

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