How Pumpkin Spice Lattes and Home Values Are Connected

Having access to a good cup of coffee is more important than ever, and pumpkin spice lattes are an even bigger reason to visit a coffee shop at this time of the year. What does all of this have to do with home values? There’s more to it than you realize.     Consider the Demand for Coffee Did you know there are more than 19,000 Starbucks locations around the world? This $15 billion company is well recognized as a must-have, especially on the daily route to and from work. For home buyers, buying a home that’s close to a Starbucks actually could be very important, and for home sellers, being close to one could raise your home value. Don’t think that it’s true? A study by Quartz showed that, in fact, it is! They looked at the location of Starbucks locations and Zillow data to determine that, when it comes to home value, having a Starbucks close by often means a “venti-sized” home valuation is likely. In fact, Quartz found that a home near a Starbucks sold at an average of $137,000 compared to the same home without a nearby Starbucks selling for $102,000. To be clear, Starbucks itself goes to extremes to find the best real estate to build and expand on, which often means they choose locations close to affluent communities or areas where they believe business will be highly lucrative. Think near main routes in middle-class and above neighborhoods and near freeway on-ramps. The study found that it's not just a Starbucks effect either, but rather a coffee effect. They found that homes close to a Dunkin’ Donuts have the same type of higher valuation than areas without them. In all cases, having a coffee shop nearby often means home values will appreciate faster than properties without one. While Starbucks has analytic teams working hard to determine where they should build new locations, as a homeowner, you don’t have that type of easy access to data about your community or the perfect place to buy. Yet, there are ways to get a better idea of your home’s value.     Improving Home Values You can’t convince a Starbucks to be built close to your home to increase value, but you can do other things to boost it. Updating and modernizing it, but leaving out things like accent walls and very personal color choices, is a good starting point. You can also upgrade the basement, make sure the roof is in good condition, and keep the siding looking fresh and new. That will add value to your home if you plan to list it on the market. Many factors go into calculating a home’s value, including the most recent sales that have occurred near you. With pumpkin spice season upon us, now may be a great time to list your home for sale if you’re close enough to a Starbucks. Just let your buyers know how many minutes it takes to get there!     Get the Support (and PSL) You Need Now We can help you get the best home value for your home. We'll give you an idea of what’s impacting home values in our area and help you list your home for sale when you’re ready. Let's grab a cup of coffee and chat about your home. Click Here

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The Spokane Bubble Burst of 2022

There have been a lot of murmurings online and in social circles that we may be heading towards another 2006-style housing market crash. This inventory problem started as the Great Recession began. During that time period, many contractors found themselves out of work, causing the development of homes to be on hiatus for several years. Then all of the sudden, demand caught up somewhere around 2016. While the number of houses available in Spokane is growing, it’s not nearly high enough to offset the steep prices buyers have grown too familiar with.     Rising interest rates have kept prospective home buyers at bay, slowing the sale of homes in recent months. Interest rates have doubled in the past year, now at 6.99 percent in the state of Washington which caused many to be hesitant when it comes to locking down a home.     Not only that, but the bidding wars that saw offers of tens of thousands of dollars over the asking price have dramatically dropped in frequency. From an average of 4.2 offers just 6 months ago, we're now only receiving just around 2.8. The sale of homes dropped nearly 30 percent compared to September of 2021 as well. These factors have some thinking the Spokane market is going to see prices drop off dramatically. But all these aren't certain indicators of possible "bubble burst" or even something close to it. Historically, the housing market has not suffered from the frequent price bubbles and extreme volatility that are seen in other investments. Housing markets, however, occasionally experience moments of irrational exuberance that are followed by declines in both demand and prices.   What Causes Housing Prices to Fall? Many factors, national and regional, have an effect on housing prices. An increase in mortgage rates causes demand to cool or slow down. A big demographic trend, like baby boomers heading south to retire, has an impact as well. Locally, there are even more factors to consider. Cities and neighborhoods become more or less attractive based on local economic conditions, tax changes, crime rates, and the quality of local services. This is why consulting a real estate professional is oftentimes necessary for you to effectively navigate the volatile market conditons.     What Causes a Housing Market Bubble? The price of housing, like the price of any product or service in a free market, is driven by the law of supply and demand. When demand increases or supply decreases, prices go up. The supply of housing can be slow to react because it takes a long time to build or fix up a house. In some urban areas, there simply isn't any more land to build on. So, if there is a sudden or prolonged increase in demand, prices are sure to rise.   Why Does a Housing Bubble Burst? A bubble will finally bursts when the mood of the market changes, credit standards are tightened, demand decreases, supply increases, speculators leave the market, and prices start to fall. Which in our current case is far from happening given that there's still a shortage in supply of available homes   Will the Real Estate Bubble Burst in 2023? There are as many answers to this question as there are economists. The best guess may be based on the trends reported at the end of August 2022 by the S&P CoreLogic Case-Shiller Index, the leading measure of home prices in the U.S. The index for June 2022 showed a continuing deceleration in price increases. Prices nationwide still increased at a hefty 18% annualized rate, compared to 19.9% in the previous month. Case-Shiller's analysis indicates that slowing price appreciation is likely to continue, particularly in the metropolitan areas where prices rose most rapidly during the pandemic. Whether prices will actually fall is a tougher call. Fitch Ratings estimates that home prices are overvalued by an average of 11%. That argues for a price "correction," particularly in the regions where price appreciation has been steepest, starting with parts of the West Coast.   The Bottom Line While housing markets are not often a subject to bubbles as some assets, housing bubbles do occur. Long-term averages provide a good indication of where housing prices will eventually end up during periods of rapid appreciation followed by stagnant or falling prices. The same is true for periods of below-average price appreciation. Overall, a decision to buy or sell a home is far more complex than seeing numbers and stats. It's always about considering the long-term benefits homeownership can give.   We Can Help Whether you’re a home seller or a home buyer looking to navigate these turbulent real estate market conditions, our team of expert real estate professionals can help. We are skilled at negotiating home prices and working with clients during volatile times. Let's Talk

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Is It Too Late to Sell My Home In 2022?

As 2022 enters the final few months, you may be wondering about making your move now to sell a home. "Can I still sell my home?" "Should I sell in 2022 or wait until the spring market of 2023?" In every situation, this is a personal decision. If now is the right time for you and your family to move, there's no reason not to enter the market by listing. Some sellers, though, have flexibility and want to ensure they are selling at the ideal time when they can get the best price for their home or the fastest offer. Let's take a closer look at the market and overall conditions to get a better idea if now is the right time to sell.   What’s to Come in the Mortgage Market There is no doubt we are entering a bit of a period of the unknown in real estate. For the last few years, most areas have seen a significant amount of growth in home values. That's thanks to fewer people moving, with less overall inventory on the market. On the other hand, mortgage rates have been low and slow to move. It was pretty easy to obtain a loan with a decent credit score and income. In many ways, the recent climate has been that of a seller’s market, with quick offers and competitive bidding, even asking over the market price in some situations. That may change. Here are some things to expect about the near-term future: Home prices are likely to stay high for some time. Experts do not predict any type of crash occurring in the coming months that would level home prices. Mortgage rates are likely to become more stable, though most will see an uptick in mortgage costs right now. That means, for sellers, some buyers will be holding off purchasing now because of the added cost. Supply issues — with limited homes on the market — are likely to continue, though some areas are seeing an increase in inventory.   Mortgage Rates Could Impact Buyers Home buyers often need the lowest interest rate possible to make the purchase of a home affordable. There is evidence that interest rates are a big factor. Banks will likely continue to make changes to interest rates charged to home buyers. What does that mean for today's home seller? Monitor mortgage rates both for yourself, if you plan to buy a home now, and from the point of the buyer. Buyers may be fewer, and it may take a bit longer to sell a home if interest rates climb much more.   What to Expect If You Sell in 2022 Many experts believe that the second half of 2022 will be more of a return to the normal of pre-pandemic periods. It is during this time that home sales, home sale prices, and competition may rise. Price Peaks Selling now could be important if you want to get the best price for your home. There has been some indication that home prices are already slowing their rapid increase. In some areas, price reductions are hitting home listings, which could mean overpricing a home to get higher bids is no longer ideal. Listing Competition Home listings are retreating too. In the summer months, many areas saw significant growth in the number of homes listed for sale. Inventory became a bit more flush, providing more opportunities for buyers. For sellers, that means more competition. However, that’s turned around a bit. With fewer homes listed in the fall months, that could mean less competition and, as a result, a faster and potentially higher valued sale if you sell in 2022.   The Unknown of 2023 So, should I sell my home in 2023? Some people may feel the desire to put off their home’s sale until next year. Doing so could be met with more uncertainty, though. Inflation could become an ongoing factor, as could a recession. That could mean a drop in home prices in the coming months to years. While there is some predictability in what is likely to happen in 2022, there are a lot of unknowns about what could happen by next year. A key factor is home affordability. A 30-year, fixed rate mortgage on a median-priced home today has a $2,000 a month payment. That’s a 53% jump from just a year ago, according to Realtor.com. That's a significant increase, and wages are not growing at nearly that rate. The result is that homes are becoming less accessible to many people, and that could become more obvious in the real estate market during the first portion of 2023, if not sooner.   What’s It All Mean to You? As a homeowner hoping to sell, there are a few things to consider. First, the real estate market is calming, returning to more “normal” conditions as it was prior to the pandemic. That’s a good thing overall for sellers who price their homes right and don’t anticipate huge bidding wars. Housing availability is still low, which means selling your home in 2022 could mean getting somewhat of a boost in value if you are in a competitive market. Overall, your best bet is to have a comparative analysis of your area by your agent. That's going to give you a far better perspective of what's to come. For many property owners, there's no benefit to putting off the sale of your home right now. Instead, it's a good idea to take advantage of the current conditions.   Let's Get Started If you'd rather not wait to start the process of selling, the first step is finding out your home's value. We'd be happy to prepare a Comparative Market Analysis for you. CLICK HERE

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