House for Rent

RENTING VS. BUYING

House for RentWith the changing of economies in the housing sector over the past half dozen years, many wonder, “How does that affect my decision to rent vs. buy a home?  Is renting a better bet?  If not, is now a good time to buy?”

According to a new analysis by Zillow the “Breakeven Horizon” in seventy-five percent of the U.S. cities they studied is less than three years.  In other words, a homeowner would be financially ahead by buying a home compared to renting that same home if they remain in the home for more than three years.  The study included 7,500 U.S. cities to determine how many years it would take before owning a home becomes more financially advantageous than renting the same home.  All possible costs associated with buying and renting were incorporated into the analysis, including down payment, mortgage, rental payments, transaction costs, property taxes, utilities, maintenance costs, tax deductions and opportunity costs, while also adjusting for inflation and forecasted home value and rental price appreciation.

The 7,500 city study included many neighborhoods in the Tacoma-Seattle marketplace, too.  Luxury markets, such as Hunts Point and Medina in the Bellevue/ Eastside area reported a “Breakeven Horizon” of upwards of 20 years.  By comparison, the Pierce County market, which included Tacoma (2.8), Spanaway (2.3), Puyallup (3.0), Gig Harbor (4.9) and others, averaged a “Breakeven Horizon” of approximately 3 years.  In other words, after 3 years you are money ahead to buy a home in Pierce County compared to renting.

For all your real estate needs, we invite you to Put Our Knowledge On Your Side.

Do you remember when…

Do you remember when an attendant, often the owner, cheerfully pumped gas, cleaned windshields, checked oil, fluids and tire pressure, and emptied ashtrays? If something was wrong with the car an affordable mechanic in the back would take a look at that, too. Full Service

Full service meant exactly what was advertised: Full service!

Then came self-service stations in the mid-’70s and the business model changed. At first, stations offered self-service at the pump at a slight discount, but it wasn’t long before all of the services of the local “Service Station” disappeared, making not only the gasoline attendant obsolete but also the automobile expert who offered the routine mini car-physical.

I wonder, “Is self service really cheaper?”

Many industries have suffered from this devolution to self-service.  Even real estate companies have tried self-service or limited service plans.  Companies like ForSaleByOwner.com have cut services to the point where the only service offered is placing your home on the electronic website or into the MLS, leaving the sellers to do the balance of the job.  Well, this self-service method didn’t work for the founder of ForSaleByOwner.com, Colby Sambrotto!  Josh Barbanel reported in a recent article in The Wall Street Journal titled: “DIY Guru Gets Help from Broker”.  Mr. Sambrotto eventually resorted to hiring a full service real estate broker after his own “self-service” company failed to get the job done. He spent six months trying his own system then finally gave up and decided “Full Service” might work better. As a result, the full-service broker sold Mr. Sombrotto’s condo for $150,000 more than the list price Sombrotto had previously offered through his “self-service” company!

Yes, I miss full service gas stations.  I loved my windows being washed, my hands being gas-smell free, oil and tires being checked and the privilege to ask the attendant, “What’s that funny noise I’m hearing in the front end”?  I wonder, “If someone were to check my car’s oil and tire pressure every time I filled up, would it pay for the higher price at the pump?  Would I get better mileage and wear from properly inflated tires?  Would unanticipated mechanical problems be caught by an expert’s mini-physical?  And… would the investment of a few cents at the pump actually save me money in the long run?”

I don’t know about the cost-return analysis on full service gasoline, but as Mr. Sombrotto can attest, a full service Realtor® is certainly worth the investment!

Established in 1906 as a full service real estate company Coldwell Banker has provided over a century of service to be remembered. “Full service” in 1906 and “full-service” today!  For service to be remembered contact a Realtor® at Coldwell Banker Bain.

 

Will The Federal Government Be Your Next Landlord?

A recent article in Realty Biz News, Mike Wheatley reported that “The government is investigating new plans to try and limit the number of foreclosures going onto the market in an effort to prevent unsold foreclosed homes damaging values even more – by simply renting them all out instead.”  This is the newest of Government concoctions to stabilize real estate markets.

House for Rent

This new Government plan made me wonder, “In recent years, how often have Federal Brainstorms actually worked?”  Bank bailouts… did they benefit homeowners or perspective homeowners?  How about the various iterations of tax credits?  Well, some think they were great, but statistics show that they simply moved people who had already decided to buy into an earlier month, instead of creating more buyers.  So, bottom line, tax credits were given with no net improvement to real estate markets.  And now “TFPM”… you can call it “THUMP” The Federal Property Management… “THUMP” because like the others, somewhere, somehow we’re gonna get thumped.

I can see it now, The Department of THUMP.  And with a multi-billion dollar budget they will manage these properties with expertise-extraordinaire; well surpassing private enterprise.  But, the good news: Government jobs. There will be a Secretary of THUMP; every major city will need a THUMP office; and every city will need a THUMP director; and all the profits off those rental properties will not only pay for all of this, but will reduce taxes for all!!! Hooray!!!  And if you believe that, you deserve to be THUMPED!  By the way, I know a little about property management companies.  They work on a very small profit margin and being a property manager is absolutely one of the most difficult tasks of a real estate practitioner.  If you think the government can squeeze out more profit than the professionals, well… I have a bridge to sell you!

All that being said still I wondered, “Do the professionals have any thoughts on this government scheme.”  So, I conducted a little poll amongst some of the top real estate practitioners in the area.  I was interested to discover what they had to say about the most recent government hatch.

  • Michael McNiel said, “This is a bad idea. The government doesn’t have the infrastructure to manage rentals or tenants… This would be a move in the wrong direction…”
  • Jimi Couture said, “It’ll be three years before they get a system in place anyway…
  • Ken Theimmann said, “I can’t see where the government could ever begin to get a program like that off the ground. It’s a horrible idea.
  • Lella Hamilton said, “We cannot allow the government to become landlords…the government should keep out of the housing market.”

Others inside the industry said things like,

“Chutspa to the max!”

“I do not trust anyone or anything in this banking industry”

“This sounds like another one of those half baked ideas…”let private enterprise run business… do the management piece, we would be through the bulk of the inventory..selling as much as possible as quickly as possible. If they would focus on ways to improve voter confidence as it relates to the recession that is over… then folks would be more likely to open their wallets and purchase residences or investment property… run the country, and let private enterprise run business…

So, there you have it – the professionals are unanimously filled with confidence! Or not!  As hard as it may seem, the best way out for the real estate market is for the Feds to stay out.

 

 

The Point of Maximum Opportunity-the Cycle of Market Emotions

The Cycle of Market Emotions.

For many, their investment in Real Estate is downright depressing. According to The Russell Investment Group, that means it’s opportunity time (see chart)…

Cycle of Emotion

Referring to this chart, Murray Leith, research director for Odlum Brown, a large investment firm, “If you are feeling depressed and hopeless, there is a good chance that we are near the point of ‘Maximum Financial Opportunity’.”

You have to wonder how many times we have to experience this cycle before we finally get it right.

Now, look at Pierce County sales for the month of May: signs of depression turning to hope. There were 1166 single family home sales in May compared to 793 in May of 2010 – that’s a 47% increase! Equally important was the fact that new construction sales increased by 48%. Recovery of new construction sales is like buds on a plant: hope of new life.

Mike Grady, President/COO of Coldwell Banker Bain is encouraged by the momentum. “The last few years, home sales haven’t sustained much momentum without government support.” He added, “This year, however, the momentum is continuing to build naturally, as we would normally expect in the spring and summer months. Remember, by this time last year we had already experienced all of the benefit of the homebuyer tax credit, and sales began to wane after that credit had expired. We see an entirely different dynamic this year.”

Grady also suggested, “It’s also obvious that the basic market forces of low supply and high demand are beginning to shift buyer or seller attitudes in many neighborhoods. That’s good news for sellers and perhaps a cautionary message to buyers as well.”

This very well may be “The Point of Maximum Opportunity”.

“PUT OUR KNOWLEDGE ON YOUR SIDE!”

 

CB Bain’s Bobbie Chipman and Virgil Wells receive top Realtor honors.

Annually, the Washington Association of REALTORS® recognizes Washington REALTORS®, affiliates, businesses and private citizens for outstanding contributions to the state’s real estate industry and the communities. This year’s awards were announced on April 14th, 2011 at the Association’s Spring Business Conference held at the Skamania Lodge in Stevenson, Washington.

CB Bain's Virgil Wells Realtor of the yearTop awards were presented to Virgil Wells and Bobbie Chipman, both of the Tacoma/Puyallup offices of Coldwell Banker Bain. Virgil was recognized as the State’s outstanding REALTOR® among 15,000 real estate professionals, having contributed significantly over recent years to the Association and to the community. Bobbie, the recipient of the Eddy Award, was honored as the State’s top real estate educator.

Asked to comment, Bobbie said, “It was really unique that it happened to the same (local) Association (Tacoma), and then you look at (Coldwell Banker) Bain with all the past presidents… I think there is a tremendous theme there.”

The real estate professionals with the Tacoma/Puyallup office of Coldwell Banker Bain have a long history of dedicated service to the community and to their REALTOR® family. Six of the last fifteen local Association presidents have come from this Coldwell Banker team. In addition, six times the REALTOR® of the Year award has gone to Coldwell Banker brokers. Furthermore, the Coldwell Banker Bain brokers have served in countless Association offices and merited numerous special recognitions; evidence of their culture-of-service to the community and to their industry.

We are proud of these great leaders. Coldwell Banker is honored by their association!

Please see the brief video interview of Bobbie and Virgil.