INSIDE
This Issue
THE INFLATION CALCULATION. WHY BUYERS ARE RECONSIDERING HOME PURCHASES IN 2022 DUE TO INFLATION PAGE 5 A NEW JOB COULD DELAY HOME BUYING PAGE 7 CLASSIFIEDS P7 FEBRUARY 4-10, 2022
INSIDE
TABLE OF CONTENTS
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The Inflation Calculation. Why buyers are reconsidering home purchases in 2022 due to inflation................................................................P5 Q&A Ask Our Broker.......................................................................P6
A New Job Could Delay Home Buying ..........P7 Classifieds............................................................................P7
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February 4, 2022
STAT Real Estate Stat
$358,000 The median price of homes sold in the month of December 2021. Source: National Association of Realtors
500 PARK STREET, MOUNT VERNON
$380,000
WINDERMERE REAL ESTATE/SKAGIT VALLEY 360-424-4901 • www.windermereskagit.com
ELIZABETH MILLER 360-420-3607
Adorable 1940’s vintage craftsman filled with the charm of an era when days were unhurried. This splendid treasure provides enchanting old-world charisma with original built-ins, coved ceilings, wood wrapped windows, white millwork & glistening wood flooring. Great living area w/cozy gas fireplace & graceful archway leads into a light filled dining area w/bay window. Perfect kitchen w/gas stove, breakfast bar, corner window sink & good storage. 2 delightful bedrooms w/cedar lined closets, plus bright full bath. Sunny corner lot with fenced backyard, mature landscape plus elevated deck and great garden space. Detached garage/ shop & room for RV parking. Effortless stroll to Historic Downtown, the scenic River Walk & wonderful Eateries. MLS#1882796
191156-1
February 4, 2022
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n m e s a t f b p t r s m
The Inflation Calculation
Why buyers are reconsidering home purchases in 2022 due to inflation
According to a recent report by Redfin, 73% of buyers rices on homes for sale and sellers surveyed reveal have been through the that inflation is affecting roof for a few years their future buying or sellnow. It’s a big reason why ing plans. Nearly 3 in 10 many prospective purchasrespondents indicate they are ers have remained on the postponing purchasing plans sidelines, worried about their because of inflation, while ability to afford the transac- 24% are accelerating their tion. But that’s not the only buying plans versus 11% factor preventing would-be who are nixing thoughts of a buyers from committing to a purchase altogether. Among purchase. New data suggest sellers, 1 in 10 are speeding that inflation—meaning the up their selling strategies rising prices of goods and compared to 7% who are services—is also having a delaying and 3% who are major impact. canceling plans of selling. By Erik J. Martin
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February 4, 2022
Paul Knag, a licensed mortgage broker and founder of Ratezip.com, isn’t taken aback by these findings. “It’s likely that many buyers are delaying their plans due to the increased costs involved with moving, purchasing furniture, gas, and many other necessary services and items related to buying, moving into, and owning a home. Not only will moving to a new house be more expensive, but potential buyers may feel they need to save their money rather than spend it on a home pur-
chase,” he notes. Ralph DiBugnara, CEO of Home Qualified in New York City, seconds those sentiments. “I also believe many buyers are delaying their plans because they think the price of a house is going to eventually go down. But given that the housing shortage might last a few more years, home prices will likely continue to increase,” says DiBugnara. If you are in a healthy financial position to purchase now and can rely on steady employment, it’s probably
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in your best interest to buy a home sooner versus later, many experts agree. “Remember that inflation doesn’t affect your monthly mortgage payments, especially if you choose a fixed-rate mortgage in which the combined principal and interest portion of your monthly payment won’t change over the life of your loan,” DiBugnara adds. “It would be smarter to buy a home now because, in the long term, a year or two from now it will cost you less monthly than if you had waited.”
Nik Shah, CEO of Home. LLC in San Francisco, also recommends a carpe diem approach to homebuying, despite rising inflation. “If you can afford to buy that dream home today, go for it. Home prices are not going to fall anytime soon. The US housing market will continue its strong performance through this decade because there simply aren’t enough homes available for sale in the market,” explained Shah. “Plus, pent-up millennial demand will continue to exert upward pressure on home prices well into coming years, and banks have tightened credit requirements for mortgages. Homeowners have more equity in their homes than at any time in the last 30 years.” However, buyer candidates should determine what their budgets look like, how much they can afford to spend on a home purchase, and how much they need to have saved up to account for increased expenses associated with homeownership, advises Knag. Lastly, if worries about increasing inflation keep you up at night, it may be better to sit things out a while, according to Jim Pendergast, senior vice president of altLINE, a division of The Southern Bank Company in Birmingham, Alabama. “Inflation will only continue to spike in the next year as the government is increasing its spending and trying to counteract inflation,” he says. “That means that the Fed will likely increase loan rates to accommodate the rising inflation. So if you are worried now about affording a home, it may be best to wait a few years when everything has calmed down.” 5
What States Have the Lowest Property Taxes? Question:
We would like to move to a retirement area with lower costs. What states have the lowest property taxes?
Answer:
There are several ways to look at property taxes by state. You can consider average cost, cost per $1,000 in value, or the average effective property tax rate. In other words, the average numbers offer a useful guide, but what really counts are the actual taxes you pay. A study by David Logan, with the National Association of Home Builders (NAHB), looked at these measures, and here’s what he found for 2019, the latest measures. n Lowest annual taxes, on average: Alabama ($713), West Virginia ($815), and $1,083). n Highest annual taxes, on average: New Jersey ($8,687), Connecticut ($6,593), and New York ($6,410). n Lowest effective tax rate: Hawaii (0.31%), Alabama (0.37%), and Louisiana (0.51%).
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nHighest effective tax rate: New Jersey (2.13%), Illinois (1.97%), and New Hampshire (1.89%). nLowest cost per $1,000 in value, on average: Hawaii ($3.06), Alabama ($3.73), and Louisiana ($507). nHighest cost per $1,000 in value, on average: New Jersey ($21.31), Illinois ($19.69), and New Hampshire ($18.93). These numbers give some sense of tax costs by jurisdiction, but the question of “lowest” property taxes is complicated by several factors. States have a variety of exceptions to their general property tax rates that can impact final costs. For instance, there’s often a homestead exemption for a prime residence but not for a rental property, even if the two properties have the same fair market value. Exemptions are widely available to veterans, those with certain disabilities, widows and widowers, seniors over 65 with limited incomes, and agricultural property. The list of possible exemptions is lengthy and specific to local jurisdictions, for details check with tax collectors. When you see a property for sale, the current property tax is usually shown or can be found in the
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Q&A
ASK OUR BROKER By Peter G. Miller public records. However, the taxes paid by sellers are unlikely to be the taxes buyers pay. The reason is that property tax increases are often limited to a given percent increase per year. Longtime property owners benefit from such an approach, but all bets are off for new buyers. Their property taxes are based on the sale price they agreed to pay. This often means that the new property tax will be significantly higher than the tax paid by current owners. In addition, the current owners may qualify for exemptions that are unavailable to new purchasers and, of course, the opposite may also be true. There is also the matter of what, exactly, is being taxed. Is the tax based on the property’s fair market value or some percentage of that value? Lastly, tax appraisals are often conducted once every two or three years rather than annually. This means current owners may benefit from lagging valuations in markets that have seen recent price increases. In a sale situation, a new fair market value has been established and with it a potentially bigger bill for property taxes. Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.
February 4, 2022
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A New Job Could Delay Home Buying
By Marilyn Kennedy Melia
previous one will have to convince a lender that he is secure in his post. f you’re one of the millions of AmeriPaycheck Probability cans who’ve participated in the “Great Consider the lender’s viewpoint: He’s extending thousands in a mortgage that will be Resignation,” and apply for a mortgage in the next couple of years, remember how slowly paid back. A borrower with years of you convinced your new employer you were steady pay in the same role is seen as likely perfect for the job. Repeating that argument to continue earning. effectively could win you loan approval. But a borrower who makes a switch into a The pandemic-led upheaval in the job new industry or role—a restaurant manager market and record-setting number of job who becomes a store supervisor, for examswitchers, “has mortgage underwriters hav- ple—could stumble and lose earning power. ing to change age-old thinking when looking “It has to make common sense,” why the at someone’s employment,” says Ralph apparent leap is just a career stepping stone, DiBugnara, president of HomeQualified. says Neil Caron, vice president of Windsor, com. CT-based Freedom Mortgage. Still, anyone who’s moved into a new For example, if the former restaurant manindustry or assumed a job title unlike his ager explains how he still uses the same skills
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of scheduling employees and ensuring they serve customers correctly as a store supervisor, it gives comfort to a lender. Two-Year Threshold Successfully holding a new role for two years typically doesn’t pose any problem in securing a mortgage, says Caron. The closer to two years on the job, combined with a common-sense explanation for the switch, the higher the probability of loan approval, Caron adds. Solo Standard Since the pandemic, some 10 million have left their job to become an entrepreneur. That’s typically a risky move in the eyes of a lender, who will usually want to see two years of solo earnings and will average the income over that time.
Find it in the Classifieds! Houses for Rent -Unfurnished 2 bedroom in Lyman, 1 bath, large kitchen, large living room, laundry room, large front yard and large front porch. $1500 first, last and $1,000 deposit. (360)-770-2137.
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1405 AlpINE VIEW plAcE, EAglEMONT
$599,000 908 S. 18Th ST., MOUNT VERNON
Spacious Condo in up-scale Eaglemont Community designed for casual/elegant living. Great room with gas fireplace, vaulted ceiling, ideal space for entertaining guest or relaxing, opens to kitchen with island & eating bar. 3 bedroom/2 bath. Large owner suite with dual closet. Dining opens to private patio with views across the golf course. Low maintenance living with yard service. Great walking neighborhood, with open space and trails. Less than 10 minutes to downtown Mount Vernon. Elva Hunter MLS#1884132 (360) 202-3086 2XXX URBAN AVENUE, MOUNT VERNON
$600,000
Prime commercial property with utilities in street, including P.U.D. water, Puget Sound Energy electricity; Cascade Natural Gas, fiber optics; cable; and sewer. Subject To survey and short plat. Property is located between ChicagoTitle Company easterly parking lot and Max Dale Restaurant’s south Danya Wolf (360) 708-8294 easterly parking area. MLS# 1649968
Patricia Box Office Manager O: (360) 424-0300 C: (360) 941-9186
JoAnn Boudreau (360) 391-0746
24094 N. WEST VIEW RD, MOUNT VERNON
$850,000
After 60+ yrs this Big Lake prime property on the sunny side of the lake can now be yours. Approx. 80 ft of no-bank water front just minutes away from a nine-hole golf course. Property features a pier connected to a floating dock perfect for mooring your boat & watercraft. The approx. 4,500 SF of property bisected by N. West View Rd has an access road and additional possibilities for your needs. Besides the 2 bed 1 bath manuf. home the lot has a detached 750 SF garage/ shop, out buildings and RV parking. And the large covered deck is perfect for watching eagles, seasonal waterfowl & spectacular sunsets! Russ Lanker (360) 708-1117 MLS# 1848508
Juanita Bunch (360) 941-5530
Carla Fischer (360) 982-0010
2121 MARkET STREET. MOUNT VERNON
Elva Hunter (360) 202-3086
John Hunter (360) 202-3086
Charming 1950’s rambler on the Mount Vernon hill has been updated to a more open floor plan. Large kitchen with granite counters, three bedroom and 1 bath. Features hardwood floors, lots of closet space and spacious laundry room. Never run out of hot water with a tankless water heater. Garden shed in the fully fenced back yard. Near the hospital district, amenities, schools, & public parks. MLS#1882834 Carla Fischer 360) 982-0010
North Puget Sound Association of Realtors Award of Excellence
$158,800
Custom build your commercial enterprise: 13,361 square foot commercial tract (two lots) zoned C-2. `Preliminary sketch for 5,280 square foot retail building plus 24 parking spots. Great location near recreation center; major grocery store; hotel; restaurants; offices; health club; house and farm supply stores; gas stations; banks; and I-5. New price reflects Danya Wolf Skagit County tax assessment value. MLS# 1848626 (360) 708-8294
Please help us celebrate our Award of Excellence winners: Danya Wolf and Carla Fischer Each of them achieved the GOLD Award with Danya also receiving a second GOLD award. The awards are given to Realtors with high productivity, who are also active in their communities as well as the Realtor association, and who strive for a higher standard of performance both personally and professionally.
Congratulations!
Danya Wolf Certified Residential Specialist
Suzanne Jenkins (360) 941-2983
360.424.0300
$435,000
Carla Fischer Certified Residential Specialist
Phil LaMay (360) 840-3086
Russ Lanker (360) 708-1117
Brett Tacker (360) 840-7931
Danya Wolf Designated Broker/ Owner (360) 708-8294
3780 E. College Way, Mount Vernon
www.skagittraditionrealty.com 191013-1
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