Buying • Selling • July 8, 2016

How the Neighborhood Impacts a Home’s Value

by Windermere Staff

Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.

The “estimated” home prices you see posted online can be off by tens of thousands of dollars—not because they are dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.

A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:

School quality

The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.

A park within walking distance

Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.

Stores nearby

The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for eight percent less than average).

Freeway access

Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.

Vacant lots in the vicinity

Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.

Proximity to nuisances and environmental hazards

Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities—especially those that make lots of noise or produces noxious odors.

Neighborhood foreclosures

According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.

Percentage of homeowners

Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.

Public services

Some communities have a wealth of quality public services available to them—including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.

Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.

Market News • July 6, 2016

Should We be Concerned about Another Housing Bubble?

by Afshan Adil

Over the last several years, many of the circumstances that triggered the previous housing bubble have changed. Windermere’s Chief Economist, Matthew Gardner, breaks down how tax policy, bank regulations, interest rates, lending standards, and home equity have improved our ability to avoid another bubble.

Market News • July 1, 2016

How will the 2016 Election Impact the Housing Market?

by Afshan Adil

The 2016 presidential election will absolutely have an impact on the housing market and the U.S. Economy. What those impacts will be are dependent on who occupies the White House in 2017. Here what Windermere’s Chief Economist, Matthew Gardner, has to say about the influence each presidential candidate may have on the market.

Market News • June 27, 2016

What We Know (and Don’t Know) About the Impact of Brexit

by Afshan Adil

Image courtesy of speedpropertybuyers.co.uk/.

The decision of the British public to leave the European Union is a historic one for many reasons, not least of which was the almost uniform belief that there was absolutely no way that the public would vote to dissolve a partnership that had been in existence since the UK became a member nation back in 1973. However, rightly or not, the people decided that it was time to leave.

As both an economist, and native of the UK, I’ve been bombarded with questions from people about what impact Brexit will have on the global economy and U.S. housing market. I’ll start with the economy.

Since last Thursday’s announcement, there have been exceptional ripples around the global economy that were felt here in the U.S. too. This isn’t all that surprising given that the vast majority of us believed that the UK would vote to remain in the EU; however, I believe things will start to settle down as soon as the smoke clears. The only problem is that the smoke remains remarkably dense.

The British government does not appear to be in any hurry to invoke Article 50 of the Lisbon Treaty, which allows a member country to leave the conglomerate. Additionally, nobody appears able to provide any definitive data as to what the effect of the UK leaving will really have on the European or global economies.

As a result, you have those who suggest that it will lead to a “modest” recession in the UK, as well as extremists who are forecasting a return of the 4-horsemen of the apocalypse. But in reality, no one really knows, and it is that type of uncertainty that feeds on itself and can cause wild fluctuations in the market.

It’s important to understand that last Thursday’s vote does not confirm an actual exit from the European Union. There is a prolonged process of leaving that is set out in the EU Treaty which requires a “cooling off” period. And during this time, even confident political leaders, such as Boris Johnson who championed the exit campaign, might be tempted by reforms that would see Great Britain actually remaining in the EU.

The EU itself has been shaken by the vote, and there are already signs that many of its leaders are talking about moving away from the Federal structure of the Union in favor of a looser, intergovernmental agreement, that would allow greater sovereignty for its member states.

This is clearly an obvious attempt to accommodate what is already a groundswell of opposition to the Union that is much wider than just Britain, and now includes France, Spain, Greece and Portugal, all of whom are considering their own exits.

So what does this mean for the U.S.?

As far as any direct impact of the Brexit on the U.S. economy is concerned, I foresee a continued period of volatility given the aforementioned uncertainty. That said, any predictable effects on the U.S. will be limited to a “headwind” to growth, but not enough to drive us into a recession. Our financial system is solid and U.S. exposure to European debt is still limited. I wouldn’t be surprised to see a slowdown in U.S. exports as the dollar continues to gain strength against European currencies, but those effects will be fairly modest.

As for the impact on housing, U.S. real estate markets could actually benefit. Uncertain economic times almost always lead to a “flight to safety”, which means global capital could pour into the United States bond market at an aggressive rate. With this capital injection, the interest rate on bonds would be driven down, resulting in a drop on mortgage rates. And a drop in mortgage rates makes it cheaper to borrow money to buy a home.

On the flip side, one thing that concerns me about lower interest rates is that it could draw more buyers into the market, compounding already competitive conditions, and driving up home prices. And housing affordability would inevitably take yet another hit.

Let’s not fool ourselves; what we’re seeing is a divorce between the UK and a majority of Europe. And like most divorces, there are no good decisions that will make everybody happy. We need to be prepared for the fact that it is going to be a very ugly, nasty, brutal, lawyer-riddled, expensive divorce.

My biggest concern for the U.S. is that the Federal Reserve must now pause in its desire to raise interest rates (I now believe that we will not see another increase this year as a result of Brexit). This is troubling because we need to normalize rates in preparation for a recession that is surely on the way in the next couple of years. The longer we put that off, the less prepared we will be when our economy eventually turns down.

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 over 25 years of professional experience both in the U.S. and U.K.

Buying • June 24, 2016

Perspectives: Buyer Fatigue

by Jill Jacobi Wood, OB Jacobi & Geoff Wood

Buyer fatigue. It’s a very real thing and we’re seeing it in cities all up and down the West Coast. What’s causing it? Intensely competitive market conditions in which bidding wars and properties selling for significantly more than asking price are the norm. It’s tiring for buyers. It’s tiring for agents. And it’s emotionally draining when you continue to find, and then lose, the perfect home over and over again.

We recently received a letter from a buyer detailing their experience of bidding on and losing home after home. Eventually they were successful but they wanted us to know that they couldn’t have done it without their agent. Not just the winning offer, but the grueling process it took to get there. They felt that their agent provided the perfect balance of emotional support and professional expertise that they needed to stick with it and eventually find a great home.

For us, this really underscored the importance of having a well-trained agent who not only understands how to compete in a seller’s market, but also truly cares about their clients and the outcome. This market isn’t for the faint of heart, so to be successful you have to be determined yet patient, and you need an agent who will put together specific strategies to help you achieve your goals. It requires total transparency and, at times, brutal honesty.

We wish we could tell you that we’re going to return to a balanced market by the end of the year, but unfortunately that’s highly unlikely. So, if you’re already out there, stay strong. There’s a lot of pressure to overpay for homes right now, so be sure to consult with your agent about the best course of action for your situation. If you’re thinking about jumping in, we can’t stress enough how important it is to work with an agent who will help you successfully navigate the rough waters of this unpredictable housing market.

Living • June 22, 2016

5 Tips to Improve Indoor-Outdoor Flow

by Guest Author

Wouldn’t you love to double the size of your house for the holidays, or when you’re entertaining a large groups of friends? And when the party is over and all the guests have gone home, have your nice, cozy house back just like that?

It doesn’t make sense to maintain a large entertaining space that gets used only a couple of times a year. That’s why it’s so practical to have a functional and efficient indoor-outdoor space.

Modern Outdoor Spaces: Blurring the Lines Between Indoors and Outdoors

Having a well-designed outdoor area adjacent to your main entertaining rooms is a great way to get more space when needed and to add value to your home. The indoor-outdoor concept is not a new idea, but when you combine it with an open floor plan, you can create a large entertaining area that your guests will savor.

Here are some tips to make sure you get the most out of your indoor-outdoor design.

Dawna Jones Design, original photo on Houzz

Create a big opening. Don’t be afraid to invest in big openings between your indoor and outdoor spaces. Large pocket or accordion doors are a great way to blur the visual barriers between the two areas. When weather permits, you can open up the exterior wall and instantly double the floor space.

IndoorOutdoor 2: Giulietti Schouten Architects, original photo on Houzz

Keep it covered. It’s always best to have a combination of covered and uncovered outdoor spaces — but be sure to provide a covered entertaining area if at all possible. Essentially, you’ll be creating a series of outdoor rooms that will give you a sense of place without taking away from the fact that you’re outdoors.

Browse Thousands of Outdoor Umbrellas

JMA (Jim Murphy and Associates), original photo on Houzz

Make it level. The goal is to remove any visual or physical barriers between the two spaces — including any changes in floor level. Making sure your indoor and outdoor spaces are on the same plane assures they’ll function as one space when needed.

IndoorOutdoor 4: Horst Architects, original photo on Houzz

Create floor flow. Choosing a flooring material that works well inside and out is another great way to make the two spaces feel connected.

Hire a Flooring Professional

Take advantage of the view. There is nothing more impressive than a large, open space that takes advantage of an incredible view. Make sure you orient your interior to look at the vista through the adjacent outdoor space. This way you’ll get to enjoy the view from both inside and outside the house.

The truth is, great design is less about the way your house looks (although it should look remarkable), and more about how it functions. A well-designed house will work better, cost less to build, be more efficient to run and maintain, and get you more for less.

IndoorOutdoor 5: GM Construction, Inc., original photo on Houzz

Great design doesn’t cost more to build than good design, but it sure feels a million times better to live in.

By Dylan Chappell, Houzz

More • June 20, 2016

Announcing the Winner of the 2016 Windermere Real Estate Community Service Day Photo Contest!

by Windermere Staff

On Friday, June 3, Windermere offices across the states of Washington, Oregon, Idaho, Montana, Hawaii, Alaska, Utah, California, Colorado, Nevada, and Arizona, all took a day off from selling homes to help make a difference in their local communities.

We challenged our offices to share their community service day photos on Windermere’s CSD contest Facebook page, in order to participate in our fourth-annual voter-driven photo contest. More than 40 offices shared photos, and in turn, they each received a $100 donation to the Windermere Foundation charity of their choice.

To add some competition to this challenge, we offered an additional $1,000 charitable contribution to the office with the most votes on their photo. So, who won?

With a total of 578 votes, the winner of the CSD photo contest is Windermere Renton! The team plans to donate their winnings to the Emergency Feeding Program of King County, Washington.

An honorable mention goes to our Windermere Oak Harbor for coming in a close second place whose photo received 566 votes.

Thank you to all of our Windermere offices and agents who spent the day giving back to local organizations, community centers, and public spaces throughout the Western U.S.

More • June 14, 2016

Support Your Local Food Banks During the Summer

by Marilou Ubungen

Did you know that June is fresh fruits and vegetables month? That’s great if you can afford them. However, they are a luxury for people who struggle to provide even just the basic necessities for their families. Many families rely on their local food banks as a regular supplemental food source. And of those families, 84 percent of households with children report purchasing the cheapest food available, knowing it wasn’t the healthiest option, in order to provide enough food for their family.

And summertime is probably when food banks need your help the most. That’s because children are on break from school and their families have to provide the meals that they normally would get through school meal programs. Six out of seven low-income kids who eat a free or reduced-price school lunch do not get free meals during the summer because they don’t participate in summer meal programs.

So what can you do to help? Does this mean you should go out and buy a bunch of fruits and vegetables to donate to your local food bank? Or maybe donate some extra produce from your home garden? No. The best way that you can help families in need is to donate money to your local food banks. Food banks have agreements or partnerships with distributors/suppliers so that they are able to stretch your donation dollars to purchase more items, usually in bulk. For example, a one-dollar donation—to a food bank hub like Feeding America—can provide 11 meals to families in need. And 68 percent of the foods distributed are healthy foods that align with the USDA Dietary Guidelines.

At Windermere Real Estate, our offices support local food banks through grants from the Windermere Foundation. Here are just a few of the food banks that we have supported over the past year: Idaho Foodbank, Columbia Pacific Food Bank, St. Vincent de Paul Food Bank, Marysville Community Food Bank, The People’s Pantry, Republic, and Maple Valley Food Bank & Emergency Services.

If you’d like to help, consider making a donation to the Windermere Foundation or donating directly to your local food bank or food pantry.

To learn more about the Windermere Foundation, visit http://www.windermere.com/foundation.

Sources: feedingamerica.org, nokidhungry.org

Buying • June 10, 2016

Join us this Weekend for Windermere’s Washington Waterfront Home Tour

by Shelley Rossi

We’ve found the perfect way for you to kick off summer this year. On June 11 and 12, Windermere is sponsoring the second annual Washington Waterfront Home Tour. More than 95 homes throughout Washington are available for visitors to tour by boat, bike, or car. Properties are priced from $189,000 to $10.4 million. While the homes on the tour are on the water or have views of the water, they’re not all uber expensive; there are properties that fit a wide variety of needs, styles, and budgets.

If you’re wondering about the investment potential of a waterfront home, you should note that sales for these properties have been booming. In the Puget Sound region, the average sales price is up over 10 percent compared to a year ago, and over the past three years, prices have increased by more than 20 percent.*. With the amount of water we have throughout the area, it’s no surprise that waterfront homes are a popular choice, but our strong local economy is doing its part to drive up sales activity and prices.

A map of the homes and their open house hours can be found here; most will be held open from 1 p.m.-4 p.m. on June 11 and 12. The listing details will note the availability; for those listed as “by appointment only”, contact the agent for a private tour.

Happy hunting!

For more information, go to the Washington Waterfront Home Tour website.

*Source: Northwest Multiple Listing Services

Design • Living • June 9, 2016

A Beginner’s Guide to Managing a Remodel

by Guest Author

Browsing photos and ideas can be a fun part of creating your dream room. But making your designs a reality also takes smart planning and organization. Project management is an essential part of remodeling, and there’s nothing like the feeling of implementing a plan to create something new and beautiful. These tips can help you achieve your desired results.

Find a Local Contractor to Create Your Dream Home

YourSpace Contractors, original photo on Houzz

Become a list writer. Making lists is key when it comes to project management. It’s the only way to properly organize your thoughts and prevent any details from being forgotten.

The most important list is your scope of work, or specifications, document. This is basically a detailed list of everything to be done, from start to finish. If you’re dealing with one main builder who’s organizing all the work, then you’ll need to make sure he or she gets a copy, so the goals are clear and all the information is provided.

Also, having detailed specifications makes it easier if you want to obtain multiple quotes, and you’ll know it’s a fair comparison since all the builders will be quoting using the same criteria.

frenchStef Interior Design, original photo on Houzz

Make sure you’re all on the same page. If you’re coordinating separate subcontractors (cabinetmaker, plumber, electrician), then it would be worth indicating who’s responsible for each task. Give a complete copy of the specifications to all of them, so they’re all aware of what everyone is doing. Discuss the specifications with your subcontractors since they may be able to provide help and advice. A schedule is also useful, so you can keep track of progress and everyone knows who’s going to be on-site on which day.

With prior knowledge that a partition wall will feature some lighting, for instance, the builders will know to leave the stud frame open for the electrician to run the wires through before it’s boarded up and plastered over. Trying to feed wires through after the fact is much harder, takes longer and risks unnecessary damage.

Sian Baxter Lighting Design, original photo on Houzz

Break into subsections. In addition to your main specifications, it’s a good idea to have sublists for each separate element of your design. For example, your main specifications may say “install 6 x recessed LED downlights in ceiling,” but your lighting specifications will detail where they are to be positioned, the type of bulb, the hardware finish and so on. The more information you provide, the more accurate your quote should be and the less likely it will be for mistakes or misunderstandings to occur. It will also minimize any unexpected costs.

This bathroom has a minimalist elegance, but it’s far from straightforward. This project would have required a builder’s spec, including layout and elevation drawings with dimensions, an electrical spec with lighting plan, a plumbing spec with layout drawing, and a decorating spec — phew!

Plan like a pro. Finalize your design before starting any work, rather than trying to do it as you go along. The process will be much more enjoyable without constant deadlines presenting themselves, and if you haven’t planned, you may find your options restricted based on work that’s already taken place.

Take a couple of weeks to put it all together, write your specifications, draw up the plans, get everything ready and make all the decisions before proceeding. This will save you time and money along the way, and significantly reduce stress levels during the project.

This clever design features well-thought-out lighting and custom cabinetry. Careful consideration would have been given to where to position the outlets, radiators, lights, switches and other details.

Yellow Letterbox, original photo on Houzz

Never assume. You know the saying. When writing your specifications or drawing your plans, never assume that someone else will know what you want unless you explicitly state it. Include every tiny detail, no matter how picky it may seem. As well as avoiding mistakes, it also prevents any disputes over what is and isn’t included in the quote.

This bathroom just wouldn’t have looked the same if white grout had been used, for instance. You may think it would be absurd to even consider using white grout in this case, but if you haven’t asked for dark gray, you can’t expect it and you can’t assume that you will be asked what color you want. White is standard, and a tiler may use it if nothing has been specified.

Stand by for decisions. Your builder will present many questions and decisions to you along the way. Which tiles do you want on the walls? Where do you want these wall lights? What color do you want on the baseboards?

Your best bet will be to try to pre-empt as many of these decisions as possible and have the answers ready or, even better, provide the information in advance. Making these decisions under pressure can lead to impulse moves you may regret later. However, taking too long could hold up the project, costing you time, money and the patience of your builder. No one wants an unhappy builder.

Inevitably, there will be some questions you couldn’t have anticipated, but if you communicate well with your contractors, they should, where possible, give you time to make a decision without holding up the project. Don’t be afraid to ask their opinion on the best course of action, but don’t feel pressured to compromise on the design if you don’t want to.

Brilliant Lighting, original photo on Houzz

Give yourself time to deliver. This is one of the classic pitfalls, so take note. When pulling your design ideas together and deciding which products and materials to use, make a note of the lead times. Many pieces of furniture are made to order and can have lead times of up to 12 weeks, sometimes longer. Similarly, tile and natural stone can take much longer than expected to arrive, and products from abroad can encounter holdups during transit.

This chandelier was custom-made for the project and looks fantastic. This is no last-minute, off-the-shelf, next-day-delivery job. It can be a huge shame if you’ve spent hours, days, weeks choosing the perfect product, but when you come to order it, you find that it will take too long to be delivered, perhaps time you can’t afford. Then you have to decide whether to hold up the work or pick something else based on the fact it can be delivered quickly.

Find a Bathroom Vanity for Your Bath Remodel

Factor in a contingency. Even when you have the very best of intentions, issues that you couldn’t have predicted may arise during your project. So it’s a good idea to factor in a 10 percent contingency within your budget for these matters, especially with old buildings. Who knows what condition the walls are in behind those kitchen cabinets before you rip them out? Or what may be lurking underneath that carpet when you pull it up?

In these situations, it’s important to expect the worst and don’t let it throw you off your game. You are a project manager extraordinaire, and you’ve totally got this. Just accept that these things happen, find out what the options are and make a decision. Your contractors will be able to advise on what to do, so harness their expertise and trust them to help you find the right solution.

Elayne Barre Photography, original photo on Houzz

Call in the cavalry. If you choose to manage your project yourself, it’s certainly an enjoyable and rewarding process, but it also takes a certain type of person. You have to be organized, calm under pressure, strategic and confident — not to mention being able to afford the time to plan, coordinate and oversee the work.

If you have qualms about taking it on yourself, then consider hiring a project manager. Yes, there will be a fee, but consider that a badly managed project can cost you time and money, and you may not achieve the results you were after. A pro will take care of everything and allow you to rest easy, knowing you’re in safe hands.

By Jennifer Chong, Houzz