What do rising interest rates really mean?

Almost all of this year the "fear" reportings have been warning us of interest rates rising as though this is such a horrible event. The Fed was supposedly going to do this in March, then certainly by June; I'd thought they'd do it in September, as did much/most of the financial markets. When they didn't raise them in September, we saw the worst stock market performance of this year; the Fed didn't do what most everyone expected they would. It looked like they may put this off until January, so the stock market rebounded. Now the Fed has raised rates and stock market rallied, minorly but positively, as the Fed did what it seemed they had to; raise rates. The overall economy has improved and if you don't raise rates now, when would you? If the overall economy declines in the coming year, they then have some room to move back down or ease on rates to try to spur on new investments.

So what happens now? Will rates continue a steady climb up? Will all interest rates rise? How does this affect me?

It's possible interest rates could rise but most rates already rose this year, for almost all of 2015 and yet it's turned out to be one of the strongest years for home sales and appreciation locally and nationally in 9 years and one of the strongest overall for sales as a whole. So, rising interest rates aren't a killer of the real estate market or home values.

In reality, real estate rates are set by the Fed at all but based on Bonds and Mortgage Backed Securities. While these don't operate in a vacuum, they aren't directly related, correlated or affected by the Fed. Often mortgage rates will move opposite of the Fed. The bonds and securities affecting mortgages are like all other investments, a factor of supply, demand and alternatives. It's possible interest rates will rise further in 2016 but not by any dramatic amount. In our local market, rates are hovering in the 4.125-4.25% rate. This might raise another .125-.25% in 2016 but what this means is your monthly mortgage payment might rise by $30-$60 per month, depending on the size of your mortgage and what rates you're comparing. While any rise is unwanted, it's not likely that $30-$60/month will change your ability to qualify or interest to buy or sell your home, if your true desire is to buy or move. Don't let the "fear reporters" run your life or your expectations. The market will continue to be strong in 2016 due to organic growth of population, strong employment and the returning buyers who've been sitting on the sidelines waiting for the credit, savings and employment to improve since the economic downturn of 2007-2011.

It is not likely that the Fed will raise their rates much, if any further, in 2016 as the bulk of the world's economies aren't doing as well as the U.S. and as we raise the Fed rate, the U.S. Dollar increases in value and we make our goods more expensive to the rest of world, hurting  our companies and putting downward pressure back on stock values, the Dollar and our interest rates. These variables are all operating on tiny margins of stability, so only tiny shifts can be made without upsetting the balance of many, seemingly unrelated aspects to our economy.

The main point to recognize is that while I can no longer get you a 30 year fixed mortgage at 3.5-3.75%, I can still help you find a historically great rate, affordable to your needs and if you want the lower rates of 2014, we can find those in 7 year fixed mortgages, which might be as long as you may be in your next home anyway. If you plan to stay longer, then recognize the true nature of a low 4% interest rate and you'll see you're benefiting by the stronger economy, even if your monthly mortgage rises a little more than you hoped for.

Posted on December 17, 2015 at 9:41 pm
Paul Isenburg | Posted in In The News | Tagged , , ,

Goals for 2016

Keeping my focus on my clients is always paramount to me. However, since I can't be in touch with all of you on a daily or weekly basis it seems I should be more diligent on keeping my thoughts coming out here, on my blog, for you to read and share at your leisure. This is one of my goals for 2016. To be a better resource for information for you. I hope you'll forgive my lapses as I try to reach my goal. If you have topics or concerns you'd like me to address, please feel free to speak up, give me feedback or otherwise bring me to my keyboard and website to address them. 

Lots of news comes at us daily and I write down, flag, and otherwise place reminders to make some sense or provide some balance or input on these topics but the quantity of news is tough to swim in or against the never ending torrent.

I'd prefer to offer you analysis or reference to the flood of information; as an example when the headlines tell you home sales were off in November from October, that's normal. Often by 20%; sometimes more, sometimes a bit less. In reality, this November's sales were the highest in the area since 2005 and 2004, but the highest in the last 10 years for November, so is the market actually down or up? Frame of reference can make a difference in how you look at an empirical number.
Adding another frame of reference is to look at the quantity of homes for sale; buyer's can't buy homes if they're not for sale. So, yes, sales declined in November, but again, less so than the past 10 years and this is when our inventory is at record low levels, with most areas having less than 1.5 months of availale inventory. 

The point being, seeing a number is nice; having some idea how it compares to "what" is better information. This is my goal, both in person and in this blog to offer you perspective from the trenches of the industry to understand how you may be affected by the market conditions.  

We've all heard that home prices have risen dramatically this year but what does this mean? On a recent home I had for sale in Redmond, I provided many buyers with welcome relief that the medain price of homes for sale near this home hadn't really risen over the past year. We all know that overall prices have gone up; I wouln't deny or argue against that. However the median price for homes in this area had stayed stable. It's a very nice area of homes, quite desirable by price range and location but the point I was sharing with my open house vistors was that a reasonable supply of homes has continued to be available in this area without significant price appreciation. The median home price had stayed around the $540K mark for homes of similar size and features. Again, this was quite encouraging to the buyers to know that they have not missed the market and more opportunities in their price range should continue to come available. 

Knowing your facts and figures is crucial. Having a better perspective on them and their implications can help you make wiser decisions and have more confidence in them. That's my goal, this year and always. To help you make better informed decisions and act with confidence as you take your steps towards your goals. 

Talk with you soon.

Posted on December 9, 2015 at 11:23 pm
Paul Isenburg | Posted in In The News | Tagged , ,

Market Perspective June ’15

So Many Statistics-What does it all mean?

All the headlines tell us that Seattle's real estate market is red hot; everything sells in hours to a few days and for prices not seen ever before. Really? While this might be true in the more urban core and for certain property types and price ranges, it's not universal. If you look at Capitol Hill, certainly a high-demand area, the average of the median sale prices so far this year is only 3% higher than 2013 but almost 5% below 2014's median price; $624,975 so far this year compared to $658,129 in 2014. Every buyer and agent knows that it's a difficult and competitve market but to believe the headlines, this year's prices should be 10-20% above last year, yet the reality is they are lower. You'll also see that the average sales price is only 3.5% above the asking price, not the 20-50% you hear or see headlines touting. 

My point is, don't believe that you can't get into a home in a neighborhood you want; that prices have skyrocketed past you and nothing is available. Patience and diligence need to be your friends and a good agent who is truly looking out for you is essential. There is no doubt you need to be prepared to act but don't be despondent. Good homes, values and options are out there. Not many at any one time but they are out there. If this year performs like 2013 & '14 we'll hopefully see an increasing inventory over the summer and into the fall which should help calm some of the bidding wars and help buyers succeed in getting their new home. Historically August is a month that leans towards buyer's favor. More of us are on vacation or completing summer vacations, back to school preparations or other social distractions. A small decline in demand coupled with a hopeful increase in available choices can help you win.

Home sellers shouldn't despair. Well prepared homes still sell well, even in August. Prices don't typically decline in August or the fall in general; only the frantic pace and craze mellows. If you're ready to put your home on the market, be realistic and recognize that the market isn't the headlines, there are nuances that need to be considered. Consult with an informed agent to see how your specific home's market is performing and craft a strategy to make your home shine and sell on your terms.

Posted on June 17, 2015 at 9:13 pm
Paul Isenburg | Posted in In The News | Tagged , , ,

2015 Q1 Eastside Market Review

Here's some interesting data on our Eastside region's market activity for the first quarter. No surprise, sales are up, prices are up and Windermere continues to be the most trusted and active real estate company on the Eastside. Click on the image below to see the full details on the various regions around the Eastside.


Posted on May 5, 2015 at 9:59 pm
Paul Isenburg | Posted in In The News | Tagged , , ,

National Home Price Appreciation Map

Real estate is almost always discussed and much more useful information derived from local figures but it can be nice to see how various parts of the country are doing for comparision. The below graphic is an interesting chart to show you overall figures. Not great to compare Seattle to Spokane or Portland to San Francisco but it's still nice to see how the figures stack up for sales volume and average price changes. This trend of increasing sales and prices is expected to continue this year and I expect into next year. If you're interested in your local market conditions or comparisons, please let me know. 

Posted on April 28, 2015 at 10:13 pm
Paul Isenburg | Posted in Uncategorized | Tagged , , , ,

March Statistics Highlights

This winter to spring marketplace and pace have been as frenzied as we've ever had in the Seattle area. I'm still hopeful that May to July will see a steady increase in homes for sale, similar to what we saw the last 2 years and this should help buyers with the frantic and frustrating pace and process of bidding on homes every week with the hope of buying one. That said, if you're a seller, putting your home on the market now, in front of this likely increase, should reward you with better pricing, quicker time on market to sell and a stronger negotiating position through the sale and closing process.

To the numbers:

On the Eastside, for the fist time ever the Median Asking Price for homes for sale is over $1M, at $1,028,986. 
The median price of homes selling is $687,268, up 9% from last year.
Closed sales are up 11% from last year to 1,461 for our first 3 months and available inventory is below 1 month. 
Again, hold on buyers, you will hopefully find relief coming soon and be rewarded for your patience.

Condo closed sales are up 8% from last year and median closed prices are up 6% to $293,792. 
Median asking price is $455,771 up 23% from 2014. This disparity shows some sellers seeking unrealistic pricing still.

In Seattle: Median asking price is up 23% to $692,541 and inventory is down to .6 months of supply. Again a record low.
Sales year to date is almost identical at 1348 vs. 1350 in 2014, surprising with only 519 available homes for sale.
Median closed price is up 10% at $517,362. I don't expect prices to decline with any increase in inventory; only that upward price pressures will moderate in the overall but highly desirable neighborhoods and price ranges will still see rises.

Seattle condos: Median asking price: $485,020; up 30% from last year. Inventory down 24% to 284 choices.
Median closed prices are up 3% to $319,798 with sales up 2% to 476

I've not seen the final figures for Snohomish County for March yet but they've been improving at a higher percentage rate than King County, due to the lower price points they began at. As a for instance, February saw condo prices rise 38% from February of 2014. Much of this gain is distorted as the quantityof foreclosure and short sale condos were dominating the condo sales of the past few years and typically these were lower price range of condos. Still, Snohomich County has been rebounding with the improving economy and more affordable home prices relative to Seattle and the Eastside. 

Posted on April 14, 2015 at 7:46 pm
Paul Isenburg | Posted in In The News | Tagged , ,

March Market Stats for 4 County Area

The folks with Bill Hurme's team at TeambuilderKW.com compile and track sales numbers from our local MLS and have a concise chart showing the sale stats for the past 15 years. Always nice to see sales trends and relative comparisons. Thought I'd share this with you. It does combine single family and condos but again it's the trends and relative comparison that yield better perspective vs. any given individual number. You'll see we're well ahead of the last few years activity so far this year and have to go back to 2005 to find stronger months than this years' March figure. Pretty amazing when viewed from the perspective of a very tight inventory market. The sales figures would have been higher if we had more good homes to sell. 


sarah Headshotshadow


Sarah ‘Krebsy’ Adams Looks at the Numbers

My goodness! March was the second best March since the year 2000, only bested by the incredible year of 2005. The news release from the NWMLS stated that “Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory….” The big boom, of course, is King and Snohomish counties. “Listings are selling as soon as they come on the market for sale,” said J. Lennox Scott. John Deely of Coldwell Banker Bain said that buyers are flooding into the Greater Seattle market due to abundant job opportunities. Measured by months of supply, King County is at 1.3 months and Snohomish at just under 1.7 months, both well below equilibrium.

Article One image


Posted on April 8, 2015 at 1:02 am
Paul Isenburg | Posted in In The News | Tagged , ,

Home Price Indexes Across the Country

I'm not normally a fan of national statistics about real estate as they tend to create confusion or become more or less irrelevant but there is some information in the below artice from a New Englad Real Estate Comapny and blog source, Keeping Current Matters, that I think offers some actual relevance.

When or why someone will move is fairly universal, so the reasoning and percentages of people who fall in these categories is likely applicable to you. More important is the year over year value changes of real estate in different states around the country. Within any given price range, property type and city of a state the numbers aren't so relevant but for comparison sake on overall values, it can help you see if postponing or making that move to or out of any given state makes more sense and an overall comparision between states for value changes.

Again, keep any specific city or neighborhood value separate as these vary widely. By some statistics you can see or say that California is still 14% below peak pricing levels, but then other statistics will show you that most of the Bay area prices are 10% over their prior peaks. We have similar stories and variations in the Seattle marketplace. I thought you might like this simple map for comparative ideas, maybe to help you plan your retirement or future employment destinations. 


Location, Location, Location

Posted: 16 Mar 2015 04:00 AM PDT

Location, Location, Location | Keeping Current MattersA recent Demand Institute report revealed “nearly half of all American households plan to move at some point in the future.” Seventy-five percent of those surveyed in the report cited one or more ‘location-related reasons’ for their eagerness to move. Here are the top 5 reasons:

1.    Safer Neighborhood – 30%

2.    Closer to Family – 27%

3.    Change of Climate – 26%

4.    Closer to Work – 25%

5.    For a New Job – 23%

While the majority of Americans (74%) will move within their home state, for the 26% planning to call a new state home, it is important to know that prices in each state are appreciating at different rates and waiting to buy or sell your home could cost you more in the long run. The map below was created using the FHFA’s latest Home Price Index and shows year-over-year price gains in each state. Year-Over-Year Price Gains | Keeping Current Matters

Bottom Line

If your plan for 2015 includes relocating to a new state, meet with a local real estate professional in that area who can help you find the best fit for you and your family’s needs. 

Posted on March 17, 2015 at 8:52 pm
Paul Isenburg | Posted in Uncategorized | Tagged , ,

Millenials and Normcore

While I'm not too familiar with this new label of Normcore, I certainly understand and have seen this shift in the mindset of many newer, younger home buyers. The idea of simpler, more open floor plans and home designs; of less ostentatious home styles and being in homes different from their parent's designs or architectural layouts of the past 30 or so years is desirable. The following article from Realty Trac shows some cities around the country where these home styles are more prevalent. While only Lynnwood made the list in our area, these home styles can be found in many neighborhoods in our region. If you want assistance locating them, feel free to contact me for guidance and assistance in locating them.

Best Zipcodes to Buy An Unpretentious Home



Posted on March 11, 2015 at 6:25 pm
Paul Isenburg | Posted in Uncategorized | Tagged , ,

Market pace continues to rise

Most of the local real estae market continues to thrive with price recovery in almost all areas strengthening to near or even above our economic recession data. February saw an increase in listings but that was matched with an increase in sales. While the statistics say we have higher inventory than last February, that's not matched with real life experience in the field, as any active buyer in the urban marketplace can attest. Prices are rising as multiple offers are once again the norm.

If 2015 follows the activity pattern of 2013 and 2014, which is my prediction, we will see the market calm in the summer months as buyer fatigue sets in and vacation times begin. Today's stock market decline was led by fears of the Fed raising interest rates as our national economy continues to rebound. This could lead to more upward pressure on home loan rates, already up about 3/8% so far this year, and that will likely lead to increased buyer/buying pressure by people trying to lock in what may be the last of our long-term rates in the 3% range. Recognize that a long term rate in the 4's is hardly a bad thing but, as always, people want to save money when and where they can, so jumping now is likely a stronger impulse for many buyers.

My caution would be that to buy something that doesn't really work for you as a home so you can save money on your loan is not the right step as selling this new home in a few years and buying what you really wanted or will need/want at that time and then having a likely higher interest rate will cost you more than exercising caution today and finding the right home at a still very remarkable rate and payment. 

Lastly, for those of you who think buying or selling without an agent will save you money, please recognize that it's very difficult to maximize the price for your home without full marekt exposure and even more difficult to win the home you're trying to buy in a multiple offer situation without the guidance of a knowledgeable agent to help you. You are most likely to make more money, save more money and lots of frustration with the assistance of a good agent on your team. 

Posted on March 6, 2015 at 11:26 pm
Paul Isenburg | Posted in In The News | Tagged , ,