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St. Louis to Be Nation’s 2nd Hottest Real Estate Market in 2016

Brooklyn? It’s a joke. San Francisco? So last year.

The hottest real estate markets in 2016 are going to be Providence, St. Louis, and San Diego — in that order.
That’s according to Realtor.com, which places the St. Louis metro area at No. 2, ahead of not just San Diego but top-10 markets Sacramento, Atlanta, New Orleans and Charlotte. It shows St. Louis real estate inventory moving faster than the U.S. overall, online listings getting more views than other markets, and demand increasing as the local economy continues to improve.

“Next year looks to be the best year St. Louis has had in quite some time,” says Jonathan Smoke, chief economist for Realtor.com. “We’ve been seeing strong demand in St. Louis, and if anything, it’s stRealtor.com predicts that single-family home sales in the St. Louis area will increase by 8.6 percent compared to 2015 — with median home sale prices up 10 percent.

The website’s analysis looks at a variety of factors, including mortgage rates, household income, and new housing starts. “There is no national real estate market,” he observes. “There are 1,000 local housing markets. So we’re looking at every individual market in the country.”

St. Louis also finished third in the website’s analysis of a market’s success with “young Gen-X homebuyers,” finishing behind only Atlanta and Denver, and just ahead of Charlotte, in terms of its 2016 prospects with those between the ages of 35 and 44.

Indeed, Smoke notes that, of all mortgages made in the St. Louis area this year, 42 percent are for buyers ages 25 to 34. That’s something you’re not seeing in California or New York.

“It’s an extremely attractive market from the affordability standpoint,” he says. “It’s a great opportunity for anyone looking to start a family, or especially Gen Xers, who were most negatively influenced by the last housing downturn.” They bought their first home at the peak of the market, Smoke notes, and subsequently suffered the largest share of foreclosures.

Now, in St. Louis at least, Gen Xers are showing they’re ready to try again. And with the area poised to see job growth and household income rising at a pace faster than the national area, the housing market overall could be hot, hot, hot.

“If you’re planning to buy next year, start early,” Smoke cautions. “There’s more inventory on the market relative to the people who want to buy in January and February compared to May, June and July. That tilts the demand in your favor.” And next year in St. Louis, if the study’s projections prove right, you just might have to be that crafty. How cool is that?arting to heat up even more.”

 

King County among top places to sell your home for a big profit

People who sold their home in King County in October reaped an average 48 percent gain over their original purchase price, a new report shows.

That profit point puts King near the top of the 127 U.S. counties analyzed by RealtyTrac, a California-based housing data provider.

Only six counties — mostly in California — surpassed King in the average increase between what homeowners bought and sold their homes for.

The average King County home seller in October reaped a $136,082 profit. That’s because of sustained price appreciation: King County median home prices were up 10 percent from a year ago in October, according to the RealtyTrac data.

“The Seattle housing market remains remarkably tight and very competitive. Buyers are still fighting over any new listing which is well priced and this has led to rapid price escalation,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market.

The 127 counties analyzed were those with at least 500 sales in October and where home price data was available both on the most recent purchase and the previous purchase.

In 15 of those counties (12 percent) home sellers on average in October sold for a lower price than what they purchased for. Counties with the biggest percentage loss were Burlington County, New Jersey in the Philadelphia metro area (13 percent loss), Kane County, Illinois in the Chicago metro (9 percent loss), Shelby County, Tennessee in the Memphis metro area (4 percent loss), Guilford County, North Carolina in the Greensboro metro area (4 percent loss), and Cook County, Illinois in the Chicago metro area (4 percent loss).

When it comes to places where home sellers were raking in a lot more than what they paid, those counties included Alameda County, California in the San Francisco metro area (75 percent gain), Santa Clara County, California in the San Jose metro area (61 percent gain), San Mateo County, California in the San Francisco metro area (58 percent gain), San Bernardino County, California in the Riverside metro area (52 percent gain), and Multnomah County, Oregon in the Portland metro area (51 percent gain).

Other counties where sellers realized hefty gains in October were Denver County, Colorado (49 percent gain), Travis County, Texas in the Austin metro area (48 percent gain), Contra Costa County, California in the San Francisco metro area (48 percent gain), King County (48 percent gain), and Orange County, California in the Los Angeles metro area (46 percent gain).

Steven Goldsmith, Puget Sound Business Journal 12-3-2015

Seattle lands at No. 1 on list of top housing markets

Strong housing demand, rising home prices and healthy economic conditions pointing to future demand are some of the factors that landed Seattle at No. 1 on a list of the hottest single-family housing markets in the U.S. this fall.

That’s according to a new report released Tuesday from online real estate company Auction.com.

Auction.com ranked 50 U.S. housing markets, taking into account home pricing, sales, permit activity, economic growth and population growth.

The Pacific Northwest and Florida dominated the top spots. After Seattle came Fort Lauderdale, Orlando, Palm Beach County — and Portland, Oregon.

In Seattle, according to the report, home price growth year-over-year is at 10.9 percent, and home sales are up 12.6 percent year-over-year. A big part of the growth, of course, is tech-related.

“Seattle’s economy is seeing healthy growth as the market’s large technology sector drives employment to new all-time highs,” the report said. It also noted that home prices jumped 4.4 percent over the last quarter. The report also attributed Portland’s rank to its growing tech sector.

Long-time residents and new homebuyers alike in the Puget Sound region are feeling the impact of those rising prices here. The median sale price of a single-family house in Seattle in September was $571,000, according to the Northwest Multiple Listing Service. In King County, it was $490,250.

Those price tags are pushing people in Seattle out to the more-distant suburbs.

Many energy-dependent markets — several in the South — fell lower on Auction.com’s list this year due to falling oil prices.

Seattle and other tech hubs headed toward a housing bubble

Technology job growth in Seattle is leading to a booming housing market, but the backlash against the rising cost of home ownership may finally be taking its toll.

The percentage of Seattle residents who think now is a good time to buy a house dropped to 51 percent midway through the year, down from 57 percent at the start, according to the Zillow Housing Confidence Index.

If you’re a renter, the prospect of homeownership is likely less appealing than it was only a few months ago.

Two percent of renters in Seattle said they plan to buy in the next year, compared to 7 percent at the beginning of the year, the index said.

However, confidence didn’t slip in Seattle quite as badly as other tech hubs – such as San Francisco, Denver and San Jose – and Seattle now has the highest homeownership confidence among these cities.

Confidence plunged from 54 percent to 46 percent in Denver and 43 percent to 36 percent in San Jose. San Francisco’s drop was less extreme but with confidence already low, it hit 40 percent.

Buyers are so discouraged in tech hubs that Zillow Chief Economist Svenja Gudell is watching the market closely for signs that homes are overvalued, which could mean another housing bubble.

“I don’t think we’re in a (housing) bubble – certainly not nationally – but for San Francisco and cities like it, I think we’ll have to get some more data points before we know that. It’s something we’ll have to keep a close watch on,” Gudell said.

Seattle and other tech hubs are following similar trends, although to a less extreme degree.

The lack of home-buying confidence in these areas comes from one major root cause: tech jobs.

While growth of the tech market makes Seattle an attractive place to move for tech professionals, their influx into the city has increased demand, and driven prices up.

“Rents have been rising quite rapidly and incomes have not kept up, so you’re spending a larger and larger share of your income on rental payment, so this makes it harder for first time homebuyers to save for a down payment,” Gudell said.

Meanwhile, 67 percent of adults surveyed in Seattle said now would be a good time to sell a home, up from 57 percent in January.

The drop in confidence over the first half of the year was significant among 18 to 34 year olds in tech hubs. In San Francisco, the percentage of them planning to buy a home within a year has plunged from 18 percent last to just 5 percent, and a similar pattern was seen in Seattle, Zillow PR specialist Jordyn Lee said in a blog post.

This is a stark contrast to Philadelphia, where home values were flat over the six month period. There, the percentage of 18-34 year olds looking to buy a home within a year had increased from one percent in January to 23 percent as of July.

Jeanine Stewart, Puget Sound Business Journal

These Washington cities are considered among “most livable” in U.S.

Thanks to the great outdoors, a strong economy and diversity, Washington is teeming with some of the nation’s most livable small to mid-sized cities, according to ranking site Livability.com.  Bellevue ranked No. 2 out of 100 small to mid-sized cities on the list. Rochester, Minnesota ranked No. 1. Madison, Wisconsin, Santa Barbara, California, and Boulder Colorado, rounded out the top five spots on the list.

Other Washington cities that made the list were: Olympia (No. 20), Kirkland (No. 25), Richland (No. 64), Renton (No. 66), Bellingham (No. 72), Bothell (No. 80), Pullman (No. 91) and Issaquah (No. 95).

Livability.com cites Bellevue’s quality schools, proximity to outdoor recreation, mix of businesses and ethnic diversity as key reasons why it ranked so well.

The site collaborated with urbanist Richard Florida, assistant clinical professor Steven Pedigo from the Initiative for Creativity and Innovation in Cities at NYU School of Professional Studies, and data specialists Economic Modeling Specialists International to define the ranking methodology which looks at economics, housing, amenities, infrastructure, demographics, social and civic capital, education, and health care.

Russell Wilson buys $6.7M Meydenbauer Bay mansion

Seahawks quarterback Russell Wilson has bought a $6.7 million mansion in the Meydenbauer Bay area of Bellevue on Shoreland Drive.

While the whole transaction is shrouded in legalese and lawyers from coast to coast, the Puget Sound Business Journal has learned that the home belonged to former Microsoft manager Harish Naidu and his wife Shalini Naidu.

Harish Naidu started at Microsoft (Nasdaq: MSFT) in 1988 and rose steadily through the ranks until 2011, when he left the company to run a Bellevue unit of Scantron called GlobalScholar.

Built in 2008, the Bellevue home went on the market at $8.8 million in 2010 and has been on and off the selling block at various prices ever since.

An early listing had this description: “This Mediterranean is truly unique. Sitting above Lake Washington with 220 degree views. Spectacular finishes suited for your world class buyer, 500-year-old hand carved entry, custom crafted cabinets carved by Romanian artists, marble, granite and wrought throughout. Panoramic views from every room.”

The mansion is 10,210 square feet on 0.67 acres with 84 feet of high bank waterfront. It is extremely private, but not gated.

It has towering ceilings, Mediterranean finishes inside and out, a master bedroom with glass turret providing a 180-degree view of everything, but no one can see in. The master suite is one of the seven bedrooms in the home and there are also seven bathrooms.

The kitchen is custom-made with an enormous center island. The media room or theater has huge Tibetan doors. There is a great area for poker, and a wine cellar for 2,000 bottles of vino.

It’s a close-in walk to Old Bellevue, and not far from Bellevue High School where Russell Wilson’s sister is going, and will be playing on the girls’ basketball team.

TMZ is describing the house as “insane,” but those in the know say it is a perfect private sanctuary for Wilson who has been looking for a house for several years. Seattle’s Laurelhurst neighborhood was where folks thought he would land, close to Children’s Hospital where he is so active in helping youngsters in need.

Seattle-area banks rush to transition to new EMV credit cards as analysts warn fraud could increase

Major U.S. credit card companies will next month swap out cards with magnetic strips in favor of new, more secure Europay, Mastercard, Visa (EMV) technology. But transitioning to those little embedded chips could actually increase fraud – at least at first, according to a new report.

Visa and Mastercard set an October deadline to roll out new cards with both traditional magnetic strips and EMV chips, which create temporary payment credentials for each transaction. That’s when consumer finance website NerdWallet says credit card users will be at greater risk for fraud.

As a result, Puget Sound-area banks and credit unions are working overtime to shift to the new cards.

Sean McQuay, NerdWallet’s credit card expert, says EMV chips are more secure when it comes to a physical card. But, while the nation transitions to the new system, traditional cards will be targeted more often.

“Fraudsters will be getting while the getting’s good,” he said Wednesday.

EMV technology is used widely around the world and has been more than a decade. The United Kingdom adopted the chip in 2005, and McQuay says it’s been pretty successful. Since then, the report says counterfeit fraud – when hackers steal credit card information and add it to a physical card – has decreased 63 percent.

But it got worse before it improved. Counterfeit fraud in the UK peaked in 2008 as credit card customers used cards in areas without the infrastructure to support the new chips – especially abroad. McQuay says that will likely happen in the U.S.

Although many users will receive EMV cards this fall, it could be much longer before customers can use those cards universally. Engraved numbers have stuck around for more than 30 years after the magnetic strip was introduced.

Tukwila-based BECU has already started to mass-issue new credit cards and will begin switching out debit cards later this year. BECU spokesman Todd Pietzsch says the company thought delaying the transition would put customers at risk.

“We didn’t want to be late to the party,” he said. “We knew we could be singled out.”

McQuay says a slow transition could create hotspots for fraud, and users who swipe instead of “dip” the chip could be at greater risk. While card issuers and retailers aren’t required to make the switch, they will be liable for fraudulent transactions if they don’t. Making the switch could cost the retail industry between $20 billion and $30 billion, David French of the National Retail Foundation said.

One of the biggest risks, McQuay says, will be swiping cards at gas stations. It’s more expensive for automatic fuel dispensaries to upgrade – they can’t just replace a card reader. They have to tear out the whole pump. Self-serve gas stations will have a two-year extension before liability shifts. Owners won’t be on the hook for fraudulent purchases until 2017, and many may not make the switch until then.

Gas stations already have the most commonly hacked payment systems. McQuay says that will likely get worse as more retailers switch to the more secure system and hackers have fewer places to steal information.

 

Seattle area one of the least affordable in the U.S. for renters

We’ve heard a lot lately about rising home prices in the Puget Sound region and how difficult it can be to buy a house here. But the alternative – renting – isn’t great either.

Renters in the Seattle area pay more than 31 percent of their income toward the rent, according to new data out Friday from online real estate company Zillow.

That’s more than the national average of 30 percent, and more than residents of Chicago, Philadelphia, Atlanta and Las Vegas. It’s also up sharply from the average for Seattle over the last 30 years.

Rising rents is a major issue in the Seattle area as some push for rent control laws and changes to the way the city handles affordable housing. There’s concern that the increase in rents will send many more people outside of the city, which puts a strain on the city’s already heavily used public transportation system.

Zillow suggests the answer is simpler: Buy a home.

People in Seattle pay only 22.7 percent of their income toward their mortgages. Of course, many people who own homes make more money than those who rent, so even if the mortgage payment is significantly more than renting, the percentage of a person’s income that goes to it would be less.

It’s also just not easy to buy a home in the Puget Sound region. There simply aren’t enough homes on the market to meet demand and real estate agents are having to be creative to help their clients find a place to buy.