Olympia and Thurston County Washington
Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from national market statistics to greater Olympia area home value trends and Thurston County happenings. That’s because we care about the community we serve and want to help you find your place in it. Please reach out if you have any questions at all or have a question or situation we can bring clarity to, and maybe it will end up being an article to help everyone!

Search our blog for helpful videos and articles.

Nov. 24, 2021

Taking Time Off of Your Home Search Could Cost You Thousands

How Smart Buyers Are Approaching Rising Mortgage Rates | MyKCM

Last week, the average 30-year fixed mortgage rate from Freddie Mac inched up to 3.1%, and experts project rates will continue rising through 2022:

“The 30-year fixed-rate mortgage was 2.9% in the third quarter of 2021. We forecast mortgage rates to increase slightly through the remainder of the year and reach 3.0%, rising to 3.5% for full year 2022.”

If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.

Taking Time Off Can Be Costly

Mortgage rates play a significant role in your home search. As rates go up, your monthly mortgage payment increases if you’re buying a home, directly affecting how much you can afford. And even the smallest increase can have a large impact on your monthly payment (see chart below):How Smart Buyers Are Approaching Rising Mortgage Rates | MyKCMWith mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of waiting and hoping rates will fall, today’s rates should motivate you to purchase now before rates increase more.

Smart Buyers Can Succeed by Planning Ahead

You can use your newfound motivation to energize your search and plan your next steps accordingly so you’re prepared to act no matter what happens with mortgage rates. One way to do that: take rising rates into consideration as part of your budget.

Danielle Hale, Chief Economist at realtor.com, puts it best, saying:

“Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move. . . .”

You should also be ready to act when you find the home that meets your needs. That means getting pre-approved with a lender so there won’t be any delays when the time arrives.

The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a lender, help you adjust your search based on your budget, and be ready to act quickly when it’s time to make an offer.

Bottom Line

Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.

Posted in Buying, Mortgages
Nov. 23, 2021

Don’t Believe Everything You Read: The Truth Many Headlines Overlook

Don't Believe Everything You Read: The Truth Many Headlines Overlook | MyKCM

There are a lot of questions right now regarding the real estate market as we head into 2022. The forbearance program is coming to an end and mortgage rates are beginning to rise.

With all of this uncertainty, anyone with a megaphone – from the mainstream media to a lone blogger – has realized that bad news sells. Unfortunately, we’ll continue to see a rash of troublesome headlines over the next few months. To make sure you aren’t paralyzed by a headline, turn to reliable resources for a look at what to expect from the housing market next year.

There are already alarmist headlines starting to appear. Here are two recent topics you may have seen in the news.

1. Foreclosures Are Spiking Today

There are a number of headlines circulating that call out the rising foreclosures in today’s real estate market. Those stories focus on an overly narrow view on that topic: the current volume of foreclosures compared to 2020. They emphasize that we’re seeing far more foreclosures this year compared to last.

That seems rather daunting. However, though it’s true foreclosures have been up over the 2020 numbers, it’s important to realize that there were virtually no foreclosures last year because of the forbearance plan. If we compare this September to September of 2019 (the last normal year), foreclosures were down 70% according to ATTOM.

Even Rick Sharga, an Executive Vice President of the firm that issued the report referenced in the above article, says:

“As expected, now that the moratorium has been over for three months, foreclosure activity continues to increase. But it’s increasing at a slower rate, and it appears that most of the activity is primarily on vacant and abandoned properties, or loans in foreclosure prior to the pandemic.”

Homeowners who have been impacted by the pandemic are not generally the ones being burdened right now. That’s because the forbearance program has worked. Ali Haralson, President of Auction.com, explains that the program has done a remarkable job:

“The tsunami of foreclosures many feared in the early days of the pandemic has not materialized thanks in large part to the swift and decisive foreclosure protections put in place by government policymakers and the mortgage servicing industry.”

And the government is still making sure homeowners have every opportunity to stay in their homes. Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB), issued this statement just last week:

“Failures by mortgage servicers and regulators worsened the impact of the economic crisis a decade ago. Regulators have learned their lesson, and we will be scrutinizing servicers to ensure they are doing all they can to help homeowners and follow the law.”

2. Rising Mortgage Rates Will Slow the Housing Market

Another topic that’s generating frequent headlines is the rise in mortgage rates. Some people are expressing concern that rising rates will negatively impact the housing market by causing home sales to dramatically decline. The resulting headlines are raising unneeded alarm bells. To counteract those headlines, we need to take a look at what history tells us. Looking at data over the last 20 years, there’s no evidence that an increase in rates dramatically forces sales to come to a halt. Nor does home price appreciation come to a screeching stop. Let’s look at home sales first:

The last three times rates increased (shown in the graph above in red), sales (depicted in blue in the graph) remained rather consistent. It’s true that sales fell rather dramatically from 2007 through 2010, but mortgage rates were also falling at the time. The next two instances showed no meaningful drop in sales.

Now, let’s take a look at home price appreciation (see graph below):

Don't Believe Everything You Read: The Truth Many Headlines Overlook | MyKCM

Again, we see that a rise in rates didn’t cause prices to depreciate. Outside of the years following the crash, prices continued to appreciate, just at a slower rate. 

Bottom Line 

There’s a lot of misinformation out there. If you want the best advice on what’s happening in the current housing market, let’s connect.

Nov. 8, 2021

A Different Kind of Buyer's Remorse

It is still a challenging market in which to be a buyer, and we continue encouraging our clients to get in before prices and interest rates go up any more. If you don't currently own a home, you are experiencing inflation while homeowners are experiencing appreciation -- two very different things.

Besides being advisor, negotiator, and coordinator for our clients when they are purchasing a home, we do a lot of counseling; doing our best to keep their spirits up in what can be a rollercoaster ride until the very end. We remind our clients that everyone gets the home they were intended to have, and it will feel right.

But, despite all the counsel and insights we provide, many buyers still need to experience that sense of loss when they miss out on the first couple homes because they hesitate or don't make their "no regrets offer" right out of the gate, and that's okay. It's just part of the learning process.

Check out this article our CEO and Designated Broker, Matthew Plummer, was interviewed for in The Residential Specialist Magazine. https://trsmag.com/oh-no-no-dealing-with-buyers-remorse/

TRS Magazine Buyer's Remorse

Nov. 4, 2021

Why a Wave of Foreclosures Is Not on the Way

Why a Wave of Foreclosures Is Not on the Way | MyKCM

With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won’t happen.

There are fewer homeowners in trouble this time

After the last housing crash, about 9.3 million households lost their homes to a foreclosure, short sale, or because they simply gave it back to the bank.

As stay-at-home orders were issued early last year, the fear was the pandemic would impact the housing industry in a similar way. Many projected up to 30% of all mortgage holders would enter the forbearance program. In reality, only 8.5% actually did, and that number is now down to 2.2%.

As of last Friday, the total number of mortgages still in forbearance stood at  1,221,000. That’s far fewer than the 9.3 million households that lost their homes just over a decade ago.

Most of the mortgages in forbearance have enough equity to sell their homes

Due to rapidly rising home prices over the last two years, of the 1.22 million homeowners currently in forbearance, 93% have at least 10% equity in their homes. This 10% equity is important because it enables homeowners to sell their homes and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.

The remaining 7% might not have the option to sell, but if the entire 7% of those 1.22 million homes went into foreclosure, that would total about 85,400 mortgages. To give that number context, here are the annual foreclosure numbers for the three years leading up to the pandemic:

  • 2017: 314,220
  • 2018: 279,040
  • 2019: 277,520

The probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures that impacted the housing crash 15 years ago. It’s actually less than one-third of any of the three years prior to the pandemic.

The current market can absorb listings coming to the market

When foreclosures hit the market back in 2008, there was an oversupply of houses for sale. It’s exactly the opposite today. In 2008, there was over a nine-month supply of listings on the market. Today, that number is less than a three-month supply. Here’s a graph showing the difference between the two markets.Why a Wave of Foreclosures Is Not on the Way | MyKCM

Bottom Line

The data indicates why Ivy Zelman, founder of the major housing market analytical firm Zelman and Associates, was on point when she stated:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

Posted in Real Estate News
Oct. 22, 2021

FAQ - Inspection: Buyer Response Options

After the home buyer has completed the home inspection with their licensed home inspector, the Inspection Addendum to the Purchase and Sale Agreement gives he buyer a few options. We'll line them out below, and Matthew provides a detailed explanation in the following video.

Here are the available options and possible outcomes to each approach:

  1. Declare buyer satisfaction.
  2. Terminate and demand buyer be refunded their earnest money.
  3. Request seller make modifications to the property or modify the terms of the agreement.
  4. Notify the seller of additional inspections to come based upon the recommendation of the home inspector.

No matter what you ask of the seller, they do not have the right to terminate your purchase. However, they also have no obligation to negotiate with you or even respond to your requests.

Posted in Buying, FAQ
Oct. 15, 2021

Home Characteristics Buyers Compromise On

This chart from the National Association of Realtors Home Buyer and Seller Generational Trends report of 2021 shows that compromise is a big part of successful home buying. Further, you can see that, across the generations, price is one of the biggest compromises buyers make. Other major compromises include the condition of the home, size of the home and distance from work.

Are you ready to commit to a plan of becoming a homeowner? Or perhaps you need someone who understands how to appeal to the market in selling your home. Reach out today!

Sept. 17, 2021

Is the Number of Homes for Sale Finally Growing?

Is the Number of Homes for Sale Finally Growing? | MyKCM

An important metric in today’s residential real estate market is the number of homes available for sale. The shortage of available housing inventory is the major reason for the double-digit price appreciation we’ve seen in each of the last two years. It’s the reason many would-be purchasers are frustrated with the bidding wars over the homes that are available. However, signs of relief are finally appearing.

 

According to data from realtor.com, active listings have increased over the last four months. They define active listings as:

“The active listing count tracks the number of for sale properties on the market, excluding pending listings where a pending status is available. This is a snapshot measure of how many active listings can be expected on any given day of the specified month.”

 

What normally happens throughout the year?

Historically, housing inventory increases throughout the summer months, starts to tail off in the fall, and then drops significantly over the winter. The graph below shows this trend along with the month active listings peaked in 2017, 2018, and 2019.

Is the Number of Homes for Sale Finally Growing? | MyKCM

What happened last year?

Last year, the trend was different. Historical seasonality wasn’t repeated in 2020 since many homeowners held off on putting their houses up for sale because of the pandemic (see graph below). In 2020, active listings peaked in April, and then fell off dramatically for the remainder of the year.

Is the Number of Homes for Sale Finally Growing? | MyKCM

What’s happening this year?

Due to the decline of active listings in 2020, 2021 began with record-low housing inventory counts. However, we’ve been building inventory over the last several months as more listings come to the market (see graph below)

Is the Number of Homes for Sale Finally Growing? | MyKCM

There are three main reasons we may see listings continue to increase throughout this fall and into the winter.

 

  1. Pent-up selling demand – Homeowners may be more comfortable putting their homes on the market as more and more Americans get vaccinated.
  2. New construction is starting to take off – Though new construction is not included in the realtor.com numbers, as more new homes are built, there will be more options for current homeowners to consider when they sell. The lack of options has slowed many potential sellers in the past.
  3. The end of forbearance will create some new listings – Most experts believe the end of the forbearance program will not lead to a wave of foreclosures for several reasons. The main reason is the level of equity homeowners currently have in their homes. Many homeowners will be able to sell their homes instead of going to foreclosure, which will lead to some additional listings on the market.

Bottom Line

If you’re in the market to buy a home, stick with it. There are new listings becoming available every day. If you’re thinking of selling your house, you may want to list your home before this additional competition comes to market.

Sept. 9, 2021

2022 Education Opportunities from MVP


Matthew Plummer

CEO/Owner/Designated Broker
Of MVP Realty Group

Matthew has extensive knowledge in both Real Estate Opportunities and Tips to Gaining Financial Independence. Spend an evening (or both evenings) to learn how to take the next step toward your financial goals!

Bring your notebooks and come with your questions.

Class Offerings

Introduction to Real Estate Investing 

February 22nd from 6:30-8pm

Location: In-Person at 1219 11th Ave SE, Olympia WA 98501 & Virtually via Ringcentral Meetings

Learn about the best types of properties to invest in, what mortgage   options exist, cash requirements, and how to evaluate a property's   potential ROI objectively.

Introduction to Financial Independence

March 29th from 6:30-8pm

Location: In-Person at 1219 11th Ave SE, Olympia WA 98501 & Virtually via Ringcentral Meetings

Whether you wish to become wealthy or simply get out of the cycle of living paycheck-to-paycheck, this class will cover proven (not new) concepts only a small percentage of people understand and follow in order to achieve financial independence.

Aug. 20, 2021

Additional Cash Down Can Win a Bidding War

OK, so you made a really high offer to compete for a home; perhaps even tens of thousands over the seller's asking price. Problem is, you don't have all the cash to make that purchase. You are relying upon a mortgage.

That means that the sale price must be acceptable to your lender, and that is determined by the appraiser. Even if you think the home is worth what you offered, what if the appraiser doesn't? What then? Answer: Cash.

By committing extra cash in your offer, above and beyond your minimum down payment and loan fees required, for the potential of a low appraisal, you send a message to the seller that you really are serious about giving them the price you offered, no matter what, and you might even be able to beat out competing offers bringing all cash to the table. Here's an example scenario:

  • Buyer offers $575,000 which means lender's appraiser must agree that $575,000 is the fair market value for the property to get the loan.
  • Appraiser turns in an appraisal to the lender that indicates a value of $525,000.
  • Lender will only give the buyer a loan for a percentage of the purchase price or appraised value, whichever is less. In this case that's the appraised value, which means a loan amount of $472,500.
  • To continue with the purchase at $575,000, the buyer must not only come up with the previously agreed percentage of the $525,000 (let's use 10% which is $52,500) but also the additional $50,000 to bridge the gap between the appraised value and agreed price, which would be a total of $102,500 down, in this scenario.

So to make the above example work in a purchase offer, the buyer would included a provision in the contract that commits in advance to bringing up to $50,000 additional down payment funds in the case of a low appraisal.

What happens if the appraisal is off by only $25,000? Then the buyer only has to come up with enough to bridge the gap, no more.

What happens if the buyer committed up to $50,000 additional down payment for a low appraisal in their offer, but the appraisal is off by $75,000? The seller could lower the price by $25,000 and the buyer come to the table with the additional $50,000 agreed to. However, the seller is in no way obligated to reduce their price and, if they won't, then we are back to the negotiating table. If no agreement can be made, the buyer should have the right to a refund of their earnest money, if their broker drafted a sufficient contingency in their favor.

Bottom Line

There are so many details and possible combinations of terms that can be included in a purchase offer, especially in a competitive market. Whether you are a buyer or seller, be sure you have an MVP Realty Group expert in your corner to advise you.

Posted in Buying
Aug. 2, 2021

Key Questions To Ask Yourself Before Buying a Home

Key Questions To Ask Yourself Before Buying a Home | MyKCM

Sometimes it can feel like everyone has advice when it comes to buying a home. While your friends and loved ones may have your best interests in mind, they may also be missing crucial information about today’s housing market that you need to make your best decision.

Before you decide whether you’re ready to buy a home, you should know how to answer these three questions.

1. What’s Going on with Home Prices?

Home prices are one factor that directly impacts how much it will cost to buy a home and how much you stand to gain as a homeowner when prices appreciate.

The graph below shows just how much experts are forecasting prices to rise this year:

Key Questions To Ask Yourself Before Buying a Home | MyKCM

price appreciation is great news for existing homeowners but can pose a significant challenge if you wait to buy. Using these forecasts, you can determine just how much waiting could cost you. If prices increase based on the average of all forecasts (12.46%), a median-priced home that cost $350,000 in January of 2021 will cost an additional $43,610 by the end of the year. What does this mean for you? Put simply, with home prices increasing, the longer you wait, the more it could cost you.

2. Are Today’s Low Mortgage Rates Going To Last?

Another significant factor that should inform your decision is mortgage interest rates. Today’s average rates remain close to record-lows. Much like prices, though, experts forecast rates will rise over the coming months, as the chart below shows:

Key Questions To Ask Yourself Before Buying a Home | MyKCMYour monthly mortgage payment can be significantly impacted by even the slightest increase in mortgage rates, which makes the overall cost of the home greater over time when you wait.

3. Why Is Homeownership Important to You?

The final question is a personal one. Before deciding, you’ll need to understand your motivation to buy a home and why homeownership is an important goal for you. The financial benefits of owning a home are often easier to account for than the many emotional ones.

The 2021 National Homeownership Market Survey shows that six of the nine reasons Americans value homeownership are because of how it impacts them on a personal, aspirational level. The survey says homeownership provides:

  • Stability
  • Safety
  • A Sense of Accomplishment
  • A Life Milestone
  • A Stake in the Community
  • Personal Pride

The National Housing & Financial Capability Survey from NeighborWorks America also highlights the emotional benefits of homeownership:

Key Questions To Ask Yourself Before Buying a Home | MyKCMthere’s a value to homeownership beyond the many great financial opportunities it provides. It gives homeowners a sense of pride, safety, security, and accomplishment – which impacts their lives and how they feel daily.

Bottom Line

Homeownership is life-changing, and buying a home can positively impact you in so many ways. With any decision this big, it helps to have a trusted advisor by your side each step of the way. If you’re ready to begin your journey toward homeownership, let’s connect to discuss your options and begin your journey.