Chad Hauer Video Real Estate Blog

 Here’s what’s happening in our market and how it affects you.

There’s a lot happening in the market, and it’s starting to get a little weird. That’s why I wanted to share some hard data with you today to show you what’s taking place. Let’s dive right into these numbers and what they mean for you as a buyer or a seller.

You can watch the full video above or skip to each section using the timestamps provided:

0:00 — Introducing today’s topic

0:32 — Home prices are at an all-time high

1:13 — The five-year graph for the sales-to-list-price ratio

2:02 — We are still seeing a fast market

2:39 — The pending sales, homes for sale, and number of homes sold

3:52 — We’ve been in an extreme seller’s market for a while

4:21 — We only have 18 days of inventory

4:56 — Interest rates have jumped, and that will affect the buying pool

6:27 — Wrapping up

If you have any questions or would like to develop a specific strategy for your situation, call or email my team and me. We’d love to hear from you.

Even though we’re in a hot seller’s market, you may not want to sell right now.

Considering how much homes have increased in value recently, many people are wondering whether they should sell their homes or cash in on their equity. Selling may or may not be a good idea, so today I’ll give people in this position something to consider: capital gains taxes.

Many people don’t really think about capital gains taxes until after their house has already been sold. When you purchase a home, the IRS determines whether you’ll pay short-term or long-term capital gains based on how long you’ve lived in the home.

If you’ve lived in the home for less than a year, you’ll pay a higher capital gains tax, so be sure to check with your CPA to find out exactly how much yours would be if you sold. For simplicity’s sake, you can expect to pay around 22% of your total profit. If you’ve lived in the home for more than a year, your capital gains taxes are reduced. Again, your CPA can give you a more exact figure, but you’re looking at somewhere around 10% to 15%.

 "If you’re pretty close to that two-year mark, then it may be a good idea to hold off on selling."

Now, if you are in a position where you have lived in the home for at least two out of the last five yearsand you’re single, you are exempt from having to pay capital gains taxes on up to $250,000 worth of profit. If you’re married, you’re exempt for up to $500,000. If you’re pretty close to that two-year mark, then it may be a good idea to hold off on selling.

Hopefully this has given you some helpful information to better inform your decision to sell or not to sell.

If you have any questions or need assistance, give us a call or send us an email. We’d love to be a resource for you.

With how volatile the market is, does it make sense to sell your home now, or should you wait? Many homeowners are asking this question. After all, home values will continue to rise, so wouldn’t it be better to let home prices rise before selling? That way, you could extract the maximal value from your sale. Today I’ll address this question and some concerns that I have for those thinking of waiting.

First, let’s consider what’s going on in the market. As I said, home prices are on the rise. As prices go up, your pool of potential buyers shrinks since fewer people will be able to afford your home. The Federal Reserve has also announced that they’re going to increase interest rates multiple times. They’ve already jumped quite a bit in just the last few weeks. Rising rates also have the effect of reducing your buying pool.

It’s not hard to see why consumer confidence has been getting lower and lower. Many are starting to wonder if it’s even worth it to pay that much for a home anymore. If confidence continues to drop, that’s even fewer buyers in the market who will be prepared to make you an offer. That, in turn, means the value of your home will go down since you won’t be able to take advantage of high demand and bidding wars to boost your sales price.

With all that in mind, if you’re thinking about selling your home in 2022, I strongly encourage you to take action sooner rather than later. You’ll have a larger buying pool now than you will later in the year, meaning that you’re more likely to get a higher price if you don't wait.

If you have any questions or need help getting the sales process started, don’t hesitate to give me a call or send me an email. Hope to hear from you soon!

How rising interest rates could affect your ability to buy a home.

Interest rates are on the rise, so what does this mean for you? If you’re thinking about buying a home soon, you need to know what’s happening. Interest rates are in the low 4% range, so I want to break down what that means for your pocketbook.

A chief economist at a large brokerage recently said, “With certainty, by the end of this year, interest rates will be 5.5% to 6%.” That’s a huge jump from where we are now—up to a 2% difference. That might not sound like that much, but it is.

"Act sooner rather than later to protect as much of your money as possible."

The median home price in Pierce County is $525,000. Let’s say you own a home at that price, and you’d like to move into a larger house that would cost around $750,000. If you put 20% down on that home and rates were at 4%, your monthly payment would be $2,864. If rates rose to 6%, your monthly payment would be $3,597 for that same house. 

That’s a difference of $733 per month. Over a year, you’d pay $9,000 more, and over the life of your loan, you’d pay $264,000 more. I want to make sure you’re aware of how much rates affect your monthly payment. If you want to move, I recommend acting sooner rather than later to protect as much of your money as possible. 

A lot of people don’t want to sell until they find where they’re moving to, but there are a few strategies you can use to help. You can purchase the new property first and sell your home immediately afterward. There are ways you can structure and finance that option. 

If you know someone who would benefit from this information, please pass this on to them. As always, if you have any questions, I’d love to help. Just call or email me.

Here’s how you can use a HELOC to buy a new home before you sell. 

Are you looking to move? If so, you probably need to sell your old home before you can buy a new one. If you’re in this position, how can you sell your house without going homeless? I have a great tip that’s helped plenty of our clients, and I want to share it with you today. 

The big issue in our market right now is our low inventory. Sure, you can get a great deal on your home, but what will you do when you have to buy? Fortunately, we’ve worked closely with lenders to help solve this situation, and you may be able to use a home equity line of credit, or HELOC, to make your move. 

So how would this work? Let’s look at an example: Say you want to move up from your existing house into a bigger one. Because homes have appreciated so much in the last few years, you probably have a lot more equity than you think. In this instance, you can use a HELOC to pull the equity out of your home. It doesn’t cost any money until you deploy the funds, so you can use that cash to pay for a down payment on your new home. 

Even if you aren’t looking to move, there are plenty of good reasons to take out a HELOC, such as an emergency fund. While I’m not a financial expert, I will caution against spending your equity on things like expensive cars. If you need a lender to speak with about this topic, please reach out to us. We'd be happy to put you in touch with a great one.

If you have questions about today’s topic, please call or email my team. We are always happy to be a resource for you!

Are you thinking about selling your home in the Puget Sound area? You're invited to myHome-Selling Workshop: How To Get Top Dollar in Uncertain Times on April 28 at 7 p.m PST.It's a virtual, online event to stay safe.

I'm going to answer your biggest questions about selling your home, including:

• Is COVID-19 affecting prices?

• What if I can’t pay my mortgage?

• Can I get an instant offer?

• Can my home be sold safely?

• Are home prices dropping?

• Is now a good time to sell?

• Do I need to repair my home?

• Will my home pass inspection?

• What mistakes should I avoid?

• How do I get rid of my “stuff”?

• How do I attract buyers now?

• How do I get top dollar for my home?

You'll learn how to increase the value of your home in an uncertain market and what repairs to make (or avoid). You'll also get a free neighborhood market report with a complimentary listing price recommendation after you attend, too.

Hurry! It's limited to 25 homeowners. You can attend safely from your computer, phone, or tablet.

If you're thinking about selling your home, you need to attend this.

Get your free ticket on Eventbrite here.

Here’s what’s happening in our Pierce County market in October.

Today I’m sharing what’s currently happening in the greater Pierce County real estate market. Feel free to refer to the graphs in the video above if you’d like a visual representation of the data.

September had a median sale price of $507,480, which is the third month in a row we’ve seen a small decrease in prices. That isn’t unusual for the season, and we’ve seen a rise of 14.3% in home values compared to this time last year. That’s excellent appreciation; the normal rate is about 4% to 5% in a single year. So we’ve seen about three years’ worth of appreciation condensed into just this past year. 

Sellers are getting 2.7% over the asking price when they sell and are doing so very quickly at an average of five days on the market, on average! When we look at pending sales, the number of sales that are taking place has grown 7.3% compared to September 2020. The number of homes for sale has improved by 19.5%, and homes sold have climbed 4.4% in the last year. Our market truly needed more inventory, and we’re starting to see it. I would say the jump in sold homes is due to having more options available for buyers. 

When we have less than six months’ worth of homes on the market, we’re in a seller’s market, and home values are usually escalating. When we have six to seven months of inventory, we’re in a neutral market (not a buyer’s or seller’s market), and home values follow inflation. Neutral markets rarely last very long. When we have over seven months of houses for sale, we’re in a buyer’s market, and home values frequently decrease. 

Even though inventory has been creeping up a bit, we’re still very much in a seller’s market at 0.7 months of inventory, or just 21 days. We’re still desperate for more homes to hit the market, which is fairly consistent all across the U.S. right now. Diana Olick, CNBC’s Real Estate Correspondent recently said: 

“Fall is usually the start of the slower season for the housing market, but nothing is usual in today’s pandemic-driven housing market. Potential homebuyers are seeing a slight rise in inventory and consequently rushing back into the fray. Mortgage applications to purchase a home jumped 7% last week from the previous week… That is the highest level since April of this year.”

That’s a great sign that buyers are still interested, and as more inventory is becoming available, they’re excited and taking action. 

Please don’t hesitate to reach out to our team via phone or email if you have any questions about our market or real estate in general. We’re here to be of service to you.