Autumn Has Arrived, Take Care of your House

This is the time of year we start to see some stormy weather and those beautiful but pesky leaves start falling on your house. It is always a good idea to have leaves removed from your gutters and walkways. They can clog up drainage and cause actual damage to your home. When left on the walkway leaves can be a serious slipping hazard and lead to injuries. 

If you are listing your home in the fall buyers or their agents will notice these things and that can lead to a negative experience when viewing your home. The leaves are gorgeous and leaving then briefly on the lawn or other areas of the yard not walked in can be very pleasing. Definitely do not leave them there once they start to brown out as that is downright ugly and again leads to unnecessary negativity for potential buyers.

In other news: Our local real estate market continues to move forward with steady and modest price growth year over year. Inventory is starting to creep up a bit but we remain entrenched in a moderate sellers market. The median home price in Clark County sits at about $550,000 and is roughly 1.5% to 2% higher than this point last year.

 

Floor Space and Yard Size Equal: Two Stories is Cheaper

Home buyers on a budget should consider looking at small two story homes versus one story homes if budget is the overriding factor. One story houses take up more land per square foot than their two story counterparts. Therefore a 1500 square foot two story house can fit on a smaller lot a still yield the same sized yard. This makes the cost of building them cheaper. Plumbing, electrical, roofing, and land costs are lower. That 1500 square foot one story home will have a foot print on the land of about 2000 square feet including the garage and exterior walls. The same home with 800 square feet upstairs will have a smaller foot print of about 1200 square feet including the garage and exterior walls. The roof will be smaller and the plumbing and electrical systems will be closer together and cheaper to build. The two story version will fit comfortable on a 5000 square foot lot, whereas the one story version will need a larger almost 6000 square foot lot to have the same yard size.

Resale small two story homes tend to be about 10% cheaper than resale one story homes of the same size in a similar neighborhood. That is $40k-50k savings in our local market. For the budget minded, this could be the difference between qualifying for a loan and not. 

Don't get me wrong, I think the one story is a nice way to go, no stairs and they tend to feel a bit larger in the main living areas, but keep in mind that if the one story is out of reach, then look at the two story homes to help you get into the market. 

I see quite a bit of whining on the internet about how expensive houses have gotten over the last few years but some of these people should have bought a house back when they were 20% less expensive and mortgage rates were at the all time low. It is quite possible they were too picky about the houses and decided to wait. Waiting is rarely a good idea in real estate. There are a handful of times when it is a good idea, for example someone who was looking to buy in the summer of 2008 and decided to wait, probably did real well to do so. That was the last time it was a good idea to wait. So unless you think major economic collapse is eminent, buy what you can afford now, you will get a chance to upgrade later on.

FHA & VA rates in the low 6s

The government backed loan products are seeing rates nearly a full percentage point lower than Conventional loans in the current market. This bodes well for first time home buyers that have been priced out of local market when rates were at or above 7%. 

We should see PITI payments in the $3000 range on a median priced home here in Vancouver. FHA will allow up to a 50% debt to income with strong credit profiles. That means the local median household income can afford the median priced home for the first time since 2021. 

I have been harping on the fact that we just went through the most affordable housing market in US history. In fact rates were at or under 5% for more than a decade from about 2009 till 2021. This spoiled a lot of buyers into thinking that was the norm when in fact it was highly irregular. Now with rates settling down to about the 50 year average, we should see an opportunity for buyers once again to get into the market.

Incomes are not rising like they were a few years ago, but prices have also flattened out a bit as well. I have said all throughout this recent period that rates around 6% are healthy and we are now right there at least on the government backed loans like FHA and VA. 

Some people that bought a home a year or two ago may be in a position to refinance into a lower payment, but be careful and make sure you understand the costs involved in that process. Sometimes it is a good deal and sometimes it is not. A trusted professional loan officer with your best interests at heart is critical when considering a refi.

So buyers let's get out and start looking and homes and sellers, you may be able to get that next house after all.