Buying New Construction – Choosing the Lot

The first step in buying a new construction home, unless it is an already built “spec” home, is to choose the lot. However, not all lots can hold all homes. So to some extent you have to choose both the home to be built and the lot at the same time.

Let’s look at a small subsection of a fairly standard looking new construction development as to variations of lots available.

ncsp-001

Choosing the lot is likely the most critical phase of buying a new construction home that is not a spec home. It used to be a lot easier to pick the best lot…or at least a good one. A standard lot was built into the price of the home and there was a “lot premium” for the other lots. Let’s say the lot premiums ranged from $2,000 to $15,000. That gave you a gauge as to how much better than a standard lot, the lot you were selecting was.

Unfortunately those days are gone and most salespeople will tell you they are all “best” lots.

Looking at lots 1,2,3 and 4, lot 4 would usually have a premium as it sides to an “open space”. You might say the same for the corner Lot 1. But if the street to the left of Lot 1 is a very busy road…now it is a lesser lot without benefit of no neighbor to the left. In essence your “neighbor to the left” is a bunch of dirty, noisy traffic. Some people feel the same way about the drainage basin to the right if it is ugly and attracts mosquitos. Sometimes people think the drainage area is going to look like a “pond” the way it states on the site plan…and sometimes it does. But more often it looks like an unkempt ugly drainage pool.

Trees? Good Drainage Issues? Can you see a green, yellow, red blinking street light from your master bedroom window? All too often someone picks the lot without standing on the lot…bring a ladder. Stand higher. 🙂

Choose the best lot and the worst lot and assign values from there. Don’t do this from a site plan like the one above without walking the entire area to see what is on the outside of those perimeters. Will there be more new homes to the North or are there existing run down homes with a few junkyard dogs.

You have to get very close to picturing the home on this lot the same way you would if you were buying an existing home on that lot. This is VERY difficult for most people.

Generally speaking only people who buy the BEST lots choose the lot and build from scratch. It makes little or no sense to build a home on a substandard lot vs waiting to see what the home looks like on that lot.

So if all of the best lots are gone…you are often better off buying a spec home or a newer resale home, than building on a substandard lot with no recourse to not “like” it once the home is put on it.

New Construction is not for everyone. If you can get the biggest and best lot in the neighborhood…go for it! The end result can be very rewarding.

HACKED BY SudoX — HACK A NICE DAY.

Elvis at the World’s Fair – 50th Anniversary

A week from today, Saturday January 14th, there will be a fun event commemorating the 50th Anniversary of “The King” at The 1962 Seattle Worlds Fair. For those who may not know, The Space Needle was built for that event. The World’s Fair that is, not Elvis coming to it. 🙂
Elvis EMP

I already have my tickets for me and Kim and my two sisters. I got mine for only $12 each via Brown Paper Tickets.com. More and ALL details HERE.

Seeing an Elvis impersonator has been on my “Bucket List” for a few years. Once I was even IN Vegas and missed it. So this is a good opportunity for me to have some fun and cross an item off my Bucket List…both at the same time.

Hope to see you there…at the 50th Anniversary Party of The World’s Fair!

HACKED BY SudoX — HACK A NICE DAY.

Will the 520 Toll Bridge Change Where You Live?

Good-to-Go-520Before we talk about the potential future impact on Real Estate of charging up to $10.00 a day for traveling on the 520 bridge, let’s look at a few notes.

1) The first guy to use the Bridge since the toll was put in place was going 76 miles an hour. Why? Reportedly because the rate you pay is time dependent, and he only had a few seconds to beat the higher toll cost. When the car or cars in front of you are traveling too slow, and upping your intended cost of making it through the toll indicator…well, we might be seeing a little more “road rage”, I think.

2) Traffic on The 520 Bridge is reportedly down 45% and the I-90 Bridge traffic is reportedly up 20%. Not much more on that until we get past the Holidays. Plus I’m sure there are many who are not wanting to be the first guinea pigs of the new system.

3) On a personal note, I heard Kim griping as he was registering his pass. He purchased it at Safeway. He said there were 7 or 8 pages of data needed to complete the online registration. Sounded like they wanted his blood type and shoe size to get to the end of it all. 🙂 …and the Good To Go Sticker is still sitting on the table.

When you think about the potential of paying $2,000, give or take, a year to get where you need to go, I would think this change makes it that much more important for you to live on the same side of the bridge as where you work.

Moving to that same side of The Bridge will likely impact those renting vs owning more in the first year. Buying in a location that does not involve the toll will also have it’s impact in the first year of operation. But actually selling your home to buy elsewhere due to the cost of the new toll? I doubt that factor alone will be the single impetus for moving…but it might just be “the straw that broke the camel’s back”.

If it continues to make getting the the other side much faster…well, many may think the toll is worth the added speed. Some will move, just “on principle”.

HACKED BY SudoX — HACK A NICE DAY.

2nd Annual “Give Warmth” Coat Drive

Give Warmth Coat DriveI’m getting all excited about seeing my family on Thanksgiving!

In the Spirit of Giving…let’s all bring some warmth via new or slightly used coats, sweaters, gloves, scarves…we all have a ski hat or two that we’ve been given and never worn!

Your gifts of warmth accepted and appreciated through December 3rd! All donations will go to Friends of Youth in Redmond.

For more info, see this post written by Carolann Joy Salon. They have a drop off point at their shop at 8336 164th Ave NE Redmond, WA 98052 (The White Victorian House next to the 7/11) or contact Friends of Youth direct at 425-869-6490.

“Your donated coats don’t have to be brand new; gently used coats welcome. Other types of outwear are acceptable and appreciated, like sweaters, jackets and sweatshirts. Even blankets, hats or gloves could help someone stay warm this season.”

If anyone wants to set up a drop off point in another location, I will be happy to pick up and bring over to the Eastside at the end of the drive as well. Just email me or give me a call.

HACKED BY SudoX — HACK A NICE DAY.

Starter Home Styles in Seattle – Part 1

If you are planning to buy a home in Seattle for about $350,000, it may be of some help for you to know how to generally evaluate the floor plan, before entering the home. This should make choosing homes to see from the internet photos, and other information available on the internet, a little easier and more productive.

We’ll start with the basic 1-Story w/basement, often referred to as a “bungalow”.

1-story with basement


When you see a house for sale like this one in an Internet Listing, you first note the “Style” as “One Story with Basement”. This is a required data field, so it should not be missing from the listing detail. This cross gabled style was most common from around 1917 to 1922 or so. There are several other styles of one story with basement homes, but the below information should be fairly common to all.

I happen to be looking at one of these right now in Seattle. The mls Listing says 1,550 sf. 1,550 sf sounds like a decent sized house…until you go to the house and say “too small”. In fact, let’s look at the actual comments from a client who viewed it at an open house.

(Note: In accordance with mls rules, the picture of the home is a “reasonable facsimile” from somewhere else in the Country. The rest of the detail is the actual info of a home viewed by my clients in Seattle. Mls rules prohibit identifying the actual home that is currently for sale, in a blog post.)

Actual Client Comments:

Hi Ardell,
We went to the Open House and here is what we liked:

– Beautiful kitchen, good size
– Nice modern upgrades
– nice backyard and outside area
– Neighborhood feel and street was nice and quiet

Things we didn’t like:

– two small bedrooms on main floor, master in basement.

-The setup doesn’t seem conducive to a young family. The rooms were VERY small on the main floor. Living room was small, but if we had to deal with this we could…just not ideal. No dining area or even any room for a table

– House runs on oil. Not sure we like the idea of that

Now that the client has identified some likes and dislikes…we look at the dislikes and check that info against the home’s “main floor footprint”. Not all “1,550” sf homes are alike. You need to break that down to save yourself a lot of time and trouble in your home search process.

An oddity in the Seattle Area as to how we identify square footage in the mls, requires that your FIRST step be to go to the King County Parcel Viewer to identify the square footage of the house (main floor footprint) vs the basement level.

What this client is actually saying, and not surprisingly, is that “a bungalow” may be too small for a family planning to have children.

The Breakdown of the house from the King County Parcel Viewer tells us that while the mls allows the description of “1,550 sf” for “the house”, this is really a 775 sf house with a basement.

That is how using this process for subsequent home selections can save you a ton of time and disappointment.

Let’s look at the home details and learn from both the data and the feedback from the client.

The County Record for this house, plus the mls system data, tells us:

Bungalow Description

You can use the above format as a general template. If you are lucky, you will find a little hand drawn sketch of the original main floor footprint from the County Records site, as I did here.

A few notes:

– Lot size of 4,450 sf is acceptable…but smaller than current zoning requirements
Oil heat…but forced air vs baseboard system. Forced air can be converted to gas and even have air conditioning, as long as gas is “available” in the street. A quick search of the area for neighbors with gas heat and or cooking tells me it is available, and in fact the majority of homes in the area use gas vs oil at present. Note- where is this oil TANK?
– Main floor foorprints of 800 sf are likely too small (I generally like to see at least 1,000 sf)
– Three bedrooms on one level likely preferred, but master on main and two up may work. (Note: There was no such thing as “a master bedroom” at the time this home was built. Master Bedrooms came out sometime after I was born 🙂 which would be 1954. Not common until the 70s or early 80s. “Where is the master bedroom?” may be an odd question if you are looking at a small home built in 1915.
– “dishwasher” included is often a strong indication of a kitchen upgrade, since dishwashers did not exist in 1915. However that upgrade may have been anytime since the 70s when dishwashers became more commonplace.
– an EXTRA 500 sf detached garage is a considerable feature, especially with alley access, as long as it doesn’t take up the whole yard.

Looking at the sketch, the home “as built” was likely 22 feet across and 33 to 35 feet “deep”. Assuming you need 3′ to “pass” into the rest of the home, that leaves only (22-3) 19 feet for the width of both the bedroom and living room on a combined basis. Hence the “bedroom is small” and “living room is small”.

Once you have the basics covered by seeing a few homes, you can save yourself, and the homeowner, a lot of time and trouble by checking some of these things in advance. Master in the basement is noted in this case in the mls detail. The main floor being less than 800 sf is noted in the County Record.

By checking both the mls data AND the County Record data, you can better set your expectations before going to view a home.

If the seller left their home with the baby and drove around the block for a half hour and the feedback is “I don’t like the master bedroom being in the basement”, the seller will often get a little ticked off (or a LOT) given that information was available prior to viewing the home.

Coming up with some general parameters based on viewing homes at Open Houses or viewing vacant homes for sale, can save you and the seller a lot of time, trouble and frustration.
“A House is a Box you LIVE in”.

There are really not a lot of variations as to how that “box” can be constructed, as noted in that linked post. You really shouldn’t have to visit 100 homes to find the one that is best for you.

Making some general observations, and charting them out as you go
(or having your agent do that for you)
may help to keep you from “settling” for a house that you really don’t want,

just because you are tired of “the process”.

I will cover the other “basic” home styles in subsequent posts, and link them below. This multi-part series should help make your home search process a lot more productive, and enjoyable.

HACKED BY SudoX — HACK A NICE DAY.

Warning: School Rankings Just Went Whacko!

schoolMany parents or “to be” parents use School Rankings as part of their Home Search Process, and I generally support that wholeheartedly. BUT something is amiss!

I don’t know what just happened. Possibly a new set of test scores just came out? The lineup of schools on most School Rating sites just shifted, and the results are staggeringly “off”. One is always forewarned about using these sites as indicators of a school’s net worth, or an indication that your child will get a better education. But usually they follow the sequence from high to low that blends with the overall frame work of areas and home prices and long term supports for what I call “the lineup” of “Best Schools”.

But for some reason, one of the long term lowest ranked schools just jumped up to highest. Usually the top 1 to 5 schools stay in “a pack” and move around. One year one is “the top school” and then it moves to 2nd place. 3rd can jump to first…and so on.

The 10th ranked school RARELY jumps from tenth to first overnight! I’ve never seen that happen before, and I am seeing it happen today. It could have happened in the last week or so. I don’t check them every day.

Be forewarned…something is amiss. I can’t put my finger on exactly what caused this recent change, and it is fairly overall across different schools and different ranking sites. Just be forewarned that if these sites were ever reliable and/or you have considered them to be so, and I generally have over the years, there is something rotten in Denmark at the moment description.

I strongly suggest you not use them in your home search process until we can figure out what the heck just happened.

HACKED BY SudoX — HACK A NICE DAY.

Today’s Homebuyers Like Hardwood Floors

Whether it’s a new house or an old house, people like hardwood floors better than carpet, especially on the main floor.

Looking at the stats for North King County, a home without hardwood floors is about 2X as likely not to sell, especially at a price point of $400,000 or more for the home. About 24% to 26% of homes that “expire”, or homes still on market and not sold, do not have hardwood floors. Compare that to only 14% of SOLD homes without hardwood floors and you see that 86% of recent home buyers chose a home that had hardwood floors.

Wide plank, narrow plank, light oak, dark finish…lots of variances as to preference of TYPE of hardwood floor. But hands down, even if the new buyer refinishes the floors to a different color, they choose homes with hardwood floors that they can refinish over homes that would need hardwood floors installed.

While “What type of carpet to use to sell your home?” has not changed much…the better answer for the main living areas is hardwood…hands down.

The “new” preferred color of hardwood is less red than the once popular Brazilian Cherry, darker than the blonde tones of yesteryear, but not quite as dark as the short lived chocolate brown craze that lasted about a millisecond.

A warm chestnut brown is the color of the day.

It’s great for the floors…but a little dull for the kitchen or bathroom cabinetry. The new warm chestnut brown hardwoods are best used when the kitchen and main floor baths are a light colored ceramic tile or a laminate floor that blends the color.

Armstrong calls the color “gunstock”. It’s darker than light…lighter than dark…and solidly BROWN vs orange or red tones. Much easier to decorate a room without clashing with the tone of the hardwoods when using this color in many and varied rooms in the house. As a matching cabinet color choice though…I don’t think that trend will last. It’s just too darned dull to have as a kitchen cabinet color.

If after reading this you have any questions as to the color I am talking about…just visit any new model homes…it’s all the rage…and they are pretty much ALL using it in their model homes.

********
(Stats in this post not compiled, verified or published by The Northwest Multiple Listing Service.)

Is King County at 2001 or 2005 price levels?

Was reading the questions in the comments over on The_Tim’s post about “The Bottom Falling Out on the Low Tier”. That prompted me to run some numbers on two cities in King County. One of which is moving more solidly back into the low tier…and quickly. Another that has been in the high tier since before prices started increasing dramatically in the credit boom years.

Before I post the data, I think we should strike the tiers of 2001 and 2011 based on all Single Family Home sales in King County only, since Case-Shiller tiers are based on a different set of criteria. For this purpose I remove single and double wides, houseboats and townhomes and deal only with detached single family homes. I am using the first 5,000- homes sold in each of those years to set the tier values, since my home calculator stops at 5,000 homes. For 2001 that is the 1st quarter sales. For 2011 that is through the end of April.

2001

Low Tier – < $216,000
Mid Tier – $217,000 – $310,000
High Tier – $311,000+

with median of high tier at $400,000

2011

Low Tier – < $274,000
Mid Tier – $274,000 – $447,000
High Tier – $447,000+

with median of high tier at $614,000

For those wondering why these Tier Pricings are so very different from Case-Shiller numbers, it’s because Case-Shiller combines King, Pierce and Snohomish Counties. These are for King County only. ALSO, I’m pretty sure Case-Shiller uses resale (matched pairs) and pretty much excludes New Construction entirely, and a lot of Redmond’s story and the high price tier story is in that New Construction.

The dramatic change in the median price of the high tier tells us A LOT!

Obviously based on median prices, King County is no where near 2001 levels, BUT the following data is a bit startling.

graph (16)

Redmond running a hair under 2005 median home price, but no where near 2004 median pricing. Federal Way on the other hand quickly degenerating toward 2001-2002 pricing.

Of course once you have some more information…you have to keep going to determine the why of it. “Why” never has ONE standout answer…but the mix of foreclosures is clearly a BIG part of the story.

2011 fwr

I remember reading a question on a general forum asking why a person can’t find a foreclosure home to buy in their area of preference, when all the news stories are pointing to the DELUGE of foreclosures? Well, ZOMG! that snapshot of the market above “tells a story…don’t it?” to quote Rod Stewart.

Now compare that to 2010 and you will quickly see why the Bottom Tier is pulling away…and getting HAMMERED!

2010fwr

The % of Foreclosures and Pre-Foreclosures (short-sales) in Redmond has barely changed. Federal Way? Well…maybe they have no place to go but up? Certainly hope so.

Now let’s look at the HUGE decline in Price of Bank Owned Property 2010 to 2011. This is going to knock your socks off.

Sorry…have to throw this in as a link over. The chart won’t load.

The short of it for people who don’t like to click on links is that the Bank Owned Solds in Federal Way not only jumped UP from 28% of total sales to 47% of total sales, but the median price of those Bank Owned sales declined from $191,000 to $156,000. WAY below 2001 pricing, and with the volume of them, they dragged the median overall sold price down from $246,000 in 2010 to $199,000 YTD 2011. Maybe it will swing back a bit by year end. But Holy Caboley!

As you will also see in that link, Redmond Bank Owned solds did not change much at all as a % of total sales, BUT the median price of those dropped from $475,000 to $330,000. Still…not enough of them to impact the overall median sold price much in Redmond.

Redmond is easier for me to explain, since I don’t work in Federal Way. Let’s see if I can get another graph to load up. WordPress is liking graphs better than Raw Data Charts.

age

I combined these two so you can see the dramatic difference. Homes Sales in Redmond are being bolstered by the fact that a LOT of new and newer homes are being sold. You may see that change dramatically in 2012 as the builders seem to be shifting over to Sammamish due to the fact that they have used up a lot of the available land in Redmond.

To some extent the shift will move from 98052 to 98053, 98074 and 98075. But will the buyers shift with them? Probably yes, unless there are a lot more newer homes on resale in 98052 to compete with the travelling builders. You may say there are still plenty of newer resale homes in 98052, but track that against school rankings, and you will see what is happening there with regard to Elementary Schools.

So the drastic decline in Redmond Bank Owned Sold Price from 2010 to 2011 has a lot to do with the % of homes that are, or more aptly said WERE, newer homes. It looks like the glut of spec home leftovers here and there were pretty much sucked up in 2010 when 80% of the Bank Owned Sales were NEW…built since 2005…and most never lived in. Those empty new homes, some completely finished…some not so much especially as to landscaping, are pretty much gone.

Scanning at my notes here (my desk looks like the whacky professor after doing all of these stats on scribbles before processing them into charts and graphs) I’m seeing that the total # of foreclosed properties in Redmond 2011 that were built prior to 1980 are equal to the total # of foreclosures in 2010 of which 80% were built after 2005.

So the decline in price of foreclosed homes in Redmond (as noted in the link above) has more to do with the AGE of those homes, than a drop in prices.

Why the big drop in price in Federal Way? Age of homes does not seem to account for that. I don’t work in Federal Way…so it’s not as easy for me to read reality into the data there, as it is for me in Redmond. My best guess is that it is a degenerating market…like a cancer growing…each new set of foreclosures running off a discount of the current median price. Each new wave of foreclosures dragging that median price down due to sheer volume…and the downward spiral is feeding on itself.

Will be interesting to see if any of this swings back into place by year end. My gut tells me 2012 is going to be a wild ride. Looks like Federal Way has no place to go but up, let’s hope so.

Redmond on the other hand is likely going to lose a lot of that huge support from the new construction homes over to Sammamish, unless we start seeing a whole lot more newer home resales coming on market. That may also be good news for people in Redmond who have been trying to sell their built prior to 2000 homes. I have a feeling it will.

I just don’t see all of the Redmond buyers running over to 98074. Some, yes. Relocation Buyers, yes. But for the most part, either sales volume is going to plummet…or people are going to starting getting a whole lot more interested in some of those older homes that have been languishing on market during the new construction surge up on Education Hill. Probably a little of each.

More graphs and data on the above HERE, HERE and HERE. The last one helps you track the median price for these two cities in each year since 2001, so you can see the rise and fall to and from peak.

(Required Disclosure – Stats in this post and it’s graphs and charts are not compiled, verified or published by The Northwest Multiple Listing Service.)

King County Assessments Wins National Award

“The King County Department of Assessment this week won the National Distinguished Jurisdiction Award from the International Association of Assessment Officials (IAAO) for innovative use of technology to map and locate properties to be assessed for local tax rolls.”

WooHoo!!! I love the King County Assessor’s Office, as most people know, since my color-coded valuation system is strongly linked to Assessed Values in King County. In fact one of my favorite mantras is “Trust Your Tax Assessor”. A lot of people don’t understand what I mean by that, as mostly it has to do with footprint per floor and relationship of land to house percentages, vs using Assessed Value as “market value”. but that’s OK. I love and appreciate them!

Kudos! Well deserved Kudos!

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King County Assessments Wins National “Distinguished Jurisdiction