As I end the third week at with my kids and begin to live with what appears to be the new normal for a while — I can finally wrap my head around what we’re up against — okay not totally — however, I can tell where we are today! This week we entered a new realm — a new state of the Real Estate market that I’m not sure has ever been experienced before ( at least not in the 10 years that’s I’ve been working in this industry). Up until this week things had been seemingly “normal” — We could at least take our clients too homes, and proceed with the marketing plans for our listings (including pre-inspections, photos, staging) — now we are no longer able to conduct business as usual.
With so much information flying around regarding our current state of affairs, I thought it might be helpful for you to know what’s happening on the real estate scene. We continue to receive many questions regarding whether or not it’s a good time to buy or sell, and quite frankly there is neither a right or wrong answer.
For many, transacting real estate is a voluntary action. But for others, the need to buy or sell isn’t so optional. Relocations, changes in life circumstance, and a host of other reasons may or may not influence this.
Regardless of which situation you happen to find yourself in, I will continue to provide insight on what to do — over the next few weeks as things begin to unfold I will provide a weekly updates in my Facebook Live’s. You can like my page at https://www.facebook.com/deniseperkinshomes/ to see these weekly updates.
I will provide weekly updates and offer tips and tricks of how to get through this wild ride that we are on. Buyers Tips, Sellers Tips, discussion regarding whether or not we should be remodeling or selling.
To Your Health!
If you haven’t been to one of my Community Connect Events at First & Main Design Market in Downtown Bothell you will want to put it on your calendar! WHY you may ask? Well it’s simple really — We always have fun, there is wine, charcuterie and prizes (you can win a gift certificates to the store). But that’s just 4 reasons.
You can Shop! First & Main Design Market doesn’t just have vintage and custom furniture — they have great gifts and home accessories as well. You can also meet the owner and creative genius Chelsea Coryell who is always on hand with a smile and LOTS of great ideas.
My favorite part is to fantasize that my home would always looks like this! Here — vintage meets new and amazing to create such a warm an inviting space. There is so much to look at, and get inspiration from. Also, the designers are always on had to ask questions and talk about your design woes! And even to help figure out how to make your space one you’ve been dreaming of. AND truly the best part — You are also able to support a LOCALLY WOMAN owned business — a twofer!! Whoot!
We are on hiatus in March & April — but plan on coming back in May in conjunction with the Bothell Art Walk on the second Thursday of the month. In the meantime be sure to check out this great store and while you’re there ask any of the great designers to help you reach your home design dreams!!!
Whether you bought a home in 2019 and are filing as a home owner for the first time… how exciting! Or you just need a refresher, these tax breaks may be beneficial to you.
This complete guide to the tax benefits of owning a home, where Realtor.com breaks down all the tax breaks homeowners should be aware of when they file their 2019 taxes in 2020. Read on to make sure you aren’t missing anything that could save you money!
Tax break 1: Mortgage interest
Homeowners with a mortgage that went into effect before Dec. 15, 2017, can deduct
interest on loans up to $1 million.
“However, for acquisition debt incurred after Dec. 15, 2017, homeowners can only deduct the interest on the first $750,000,” says Lee Reams Sr., chief content officer of TaxBuzz.
“The way mortgage payments are amortized, the first payments are almost all interest,” says Wendy Connick, owner of Connick
Note that the mortgage interest deduction is an itemized deduction. This means that for it to work in your favor, all of your itemized deductions (there are more below) need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly
doubled to $24,400 for a married couple. For individuals the deduction is $12,200, and it’s $18,350 for heads of household.
Tax break 2: Property taxes
This deduction is capped at $10,000 for those married filing jointly no matter how high the taxes are.
Just note that this year, property taxes are on that itemized list of all of your deductions that must add up to more than the standard deduction ($24,000 for a married couple) to be worth your while.
And remember that if you have a mortgage, your property taxes are built into your
Tax break 3:
Private mortgage insurance
If you put less than 20% down on your home, odds are you’re paying private mortgage insurance, or PMI, which costs from 0.3% to 1.15% of your home loan. But here’s some good news for PMI users: You can deduct the interest on this.
“These include the deduction for PMI,” says Laura Fogel, CPA at Gonzalez and Associates in Massachusetts. (This credit is retroactive for 2018, so talk to your
accountant to see if it makes sense to amend your 2018 tax return.)
Why it’s important: The PMI interest
deduction is also an itemized deduction. But if you can take it, it might help push you over the $24,000 standard deduction. And here’s how much you’ll save: If you make $100,000 and put down 5% on a $200,000 house, you’ll pay about $1,500 in annual PMI premiums and thus cut your taxable income by $1,500. Nice!
Tax break 4:
Energy efficiency upgrades
The Residential Energy Efficient Property Credit was a tax incentive for installing
alternative energy upgrades in a home. Most of these tax credits expired after December 2016; however, two credits are still around. The credits for solar electric and solar water heating equipment are available through Dec. 31, 2021, says Josh Zimmelman, owner of Westwood Tax & Consulting, a New
York–based accounting firm.
The Secure Act also retroactively reinstated a $500 deduction for certain qualified energy-efficient upgrades “such as exterior windows, doors, and insulation,” says Fogel.
Why it’s important: You can still save a tidy sum on your solar energy. And this is a
credit, so no worrying about itemizing here. However, the percentage of the credit varies based on the date of installation. For
equipment installed between Jan. 1, 2017, and Dec. 31, 2019, 30% of the expenditures is eligible for the credit. That goes down to 26% for installation between Jan. 1 and Dec. 31, 2020, and then to 22% for installation between Jan. 1 and Dec. 31, 2021.
Tax break 5: A home office
Good news for all self-employed people whose home office is the main place they work: You can deduct $5 per square foot, up to 300 square feet, of office space, which amounts to a maximum deduction of $1,500.
Understand, however, that there are strict rules on what constitutes a dedicated, fully deductible home office space. Here’s more on the much-misunderstood home office
The fine print: If you work from home
occasionally but have an office to go to,
you can’t take this deduction.
Tax break 6:
Home improvements to age in place
To get this break, these home improvements will need to exceed 7.5% of your adjusted gross income. So if you make $60,000, this deduction kicks in only on money spent over $4,500.
The cost of these improvements can result in a nice tax break for many older homeowners who plan to age in place and add
renovations such as wheelchair ramps or grab bars in slippery bathrooms. Deductible improvements might also include widening doorways, lowering cabinets or electrical fixtures, and adding stair lifts.
The fine print: You’ll need a letter from your doctor to prove these changes were
Tax break 7:
Interest on a home equity line of credit
If you have a home equity line of credit, or HELOC, the interest you pay on that loan
is deductible only if that loan is used
specifically to “buy, build, or improve a
property,” according to the IRS. So you’ll save cash if your home’s crying out for a kitchen overhaul or half-bath. But you can’t use your home as a piggy bank to pay for college or throw a wedding.
The fine print: You can deduct only up to the $750,000 cap, and this is for the amount you pay in interest on your HELOC and mortgage combined. (And if you took out a HELOC before the new 2018 tax plan for anything besides improvements to your home, you cannot legally deduct the interest.)
For most of the schools in my area Mid-Winter Break is NEXT WEEK! What are you all doing? We are staying close to home so of course I am loving this article from RedTri.com with fun activities in the area to do in the evenings, just because the kids are off does not mean the parents are. If you don’t have a vacation planned… warm sunshine and sand would be amazing right now… try racing around go-carts, carving the mountain or try indoor sky diving. Yes I said indoor skydiving! I want to hear about this if you do it!
K1 Speed has go cart racing and is open till 10pm during the week. Makes it easy if you are taking the kids after work it will give you a good amount of time to get some racing in. Getting on the track is as easy as walking in, signing the waiver and lining up for your turn. You may want to call ahead just to see how long the wait is.
Check out the night skiing at The Summit at Snoqualmie, if you usually go during the day this is a great new experience for the kids. And the lift ticket prices… are pretty amazing!
iFLY Seattle is pretty amazing, have you been there? You are actually sky diving but you are indoors. I have heard it is a have to try experience. They are open till 9 so there is plenty of time to catch some air!
See the full article from RedTri.com – Bye-Bye Bedtime: Nighttime Activities to Try Over Mid-Winter Break
Looking for some fun fresh ways to update your kiddos rooms or play areas? Maybe your own room? How about indoor swings, climbing walls for those PNW rainy days, or cozy reading nooks? Check out these creative ways to add some kid approved, “fun”ctional and affordable ideas to your home.
There are so many different swing ideas… from your traditional back yard swing to these Hanging Pod Canvas swings, cozy for reading. What a fun addition to your kids room… or maybe your room. If you are not sure how to hang in indoor swing check out this article.
Check out this video for a quick tutorial on how to create an indoor climbing wall. Again there are so many different options on how to incorporate based on your kids age, size of room, ceiling height… the skys the limit!
Adding a reading nook just makes me smile… Cooking Ruthie has some great ideas! Creating cozy spots for the kids to read is a great way to encourage them and keep them focused. Try a bean bag chair from Wayfair, this faux fur rug from World Market and these floating shelves from Target. You can also transform a little-used closet, a space under the stairs or even a large wardrobe into a quiet place for a good page-turner.
Photo: Cooking Ruthie
To view the inspiration for my blog check out 8 Fun, Kid-Forward Home Décor Ideas
The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist, Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.
Employment in Washington State continues to soften; it is currently at an annual growth rate of 1.7%. I believe that is a temporary slowdown and we will see the pace of employment growth improve as we move further into the new year. It’s clear that businesses are continuing to feel the effects of the trade war with China and this is impacting hiring practices. This is, of course, in addition to the issues that Boeing currently faces regarding the 737 MAX. In the fourth quarter of 2019 the state unemployment rate was 4.4%, marginally lower than the 4.5% level of a year ago. My most recent economic forecast suggests that statewide job growth in 2020 will rise 2.2%, with a total of 76,300 new jobs created.
- There were 18,322 home sales registered during the final quarter of 2019, representing an impressive increase of 4.7% from the same period in 2018.
- Readers may remember that listing activity spiked in the summer of 2018 but could not be sustained, with the average number of listings continuing to fall. Year-over-year, the number of homes for sale in Western Washington dropped 31.7%.
- Compared to the fourth quarter of 2018, sales rose in nine counties and dropped in six. The greatest growth was in Whatcom County. San Juan County had significant declines, but this is a very small market which makes it prone to extreme swings.
- Pending home sales — a barometer for future closings — dropped 31% between the third and fourth quarters of 2019, suggesting that we may well see a dip in the number of closed sales in the first quarter of 2020.
- Home price growth in Western Washington spiked during fourth quarter, with average prices 8.3% higher than a year ago. The average sale price in Western Washington was $526,564, 0.7% higher than in the third quarter of 2019.
- It’s worth noting that above-average price growth is happening in markets some distance from the primary job centers. I strongly feel this is due to affordability issues, which are forcing buyers farther out.
- Compared to the same period a year ago, price growth was strongest in San Juan County, where home prices were up 41.7%. Six additional counties also saw double-digit price increases.
- Home prices were higher in every county contained in this report. I expect this trend to continue in 2020, but we may see a softening in the pace of growth in some of the more expensive urban areas.
DAYS ON MARKET
- The average number of days it took to sell a home dropped four days compared to the third quarter of 2019.
- For the second quarter in a row, Thurston County was the tightest market in Western Washington, with homes taking an average of 29 days to sell. In nine counties, the length of time it took to sell a home dropped compared to the same period a year ago. Market time rose in four counties and two were unchanged.
- Across the entire region, it took an average of 47 days to sell a home in the fourth quarter. This was up nine days over the third quarter of this year.
- Market time remains below the long-term average across the region, a trend that will likely continue until we see more inventory come to market — possibly as we move through the spring.
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. The housing market ended the year on a high note, with transactions and prices picking up steam. I believe the uncertainty of 2018 (when we saw significant inventory enter the market) has passed and home buyers are back in the market. Unfortunately, buyers’ desire for more inventory is not being met and I do not see any significant increase in listing activity on the horizon. As such, I have moved the needle more in favor of home sellers. As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K. In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics. This post originally appeared on the Windermere.com Blog.
Thanks to our lending partner Cheryl Gennaios for providing us the great in depth narrative about the NEW 2020 Real Estate Excise tax changes. It still took me a minute to wrap my brain around it….but I think I get it now.
2020 is here, and so are changes to our local tax code. Here’s the highlights:
- We’re moving from a state-wide flat real estate excise tax (REET) of 1.28% to a graduated system.
- STOP TRAFFIC! If the current excise tax is 1.28%, why did my clients just pay 1.78% when they sold their home? That’s because all cities are allowed to levy an additional .25% tax on property sales (REET 1). And cities and counties that are planning under the Growth Management Act are allowed to levy a second quarter percent tax if they want (REET 2). Therefore, King County’s Real Estate Excise Tax in 2019 was 1.28% + .25% + .25% = 1.78%, and not just the 1.28%.
- For the record, counties may also submit a ballot for ANOTHER 1% REET to be used for the acquisition and maintenance of conservation areas. The buyer pays this one though, and the only county that pays this tax is San Juan County (Soooo Oprah just paid $827,500 for conservation of the San Juan Islands natural beauty? YES! Damn, I love her).
- The REET that’s changing is the state level portion. The new rates will be:
- 1.1% on the first $500,000 of the selling price
- 1.28% on the portion of the selling price between $500k and $1.5m
- 2.75% on the portion of the selling price between $1.5m and $3m
- 3% on the portion of the selling price over $3m
- Great! Now that I know the state-level REETs, what’s MY excise tax owed if I decide to sell? Check out your local REET rate HERE
- $600,000 sale price example: 1.1% state REET on the first $500,000 + 1.28% state REET on the remaining $100,000 = blended state REET rate of 1.13% = savings of .15% (or $900) on a $600,000 sale price compared to previous REET rate.
- $3,250,000 sale price example: 1.1% state REET on the first $500,000 + 1.28% state REET on the portion between $500,000 and $1.5m + 2.75% state REET on the portion between $1.5m and $3m + 3% on the last $250,000 = blended state REET rate of 2.063% = additional tax of .783% (or $25,447.50) on a $3.25m sale price compared to previous REET rate.
- So that’s a lot of additional tax revenue on more expensive homes… What does this money go towards anyway?
- State Level: 1.3% of the state tax collected by counties is retained to cover administration costs. Of the net proceeds to the state, 2% goes into the public works assistance account, 4.1% to the education legacy account, with remaining amounts going the general fund.
- City Level: In Seattle (for example), the additional REET 1 and REET 2 funds discussed above go towards: Parks/Trails, Streets/Highways, Sidewalks, Street Lighting, Traffic Signals, Bridges, Water Systems, Sewer Systems, Judicial Facilities, Administrative Facilities, Law Enforcement Facilities, Fire Protection Facilities, Recreational Facilities, Libraries
- I heard there’s a Controlling Interest thing too? What’s that? Under current law, REET is imposed on the transfer or acquisition of a controlling interest (50% or more) in an entity that owned real property in Washington within any 12-month period. The new REET legislation expands the period for measuring whether a controlling interest has been transferred or acquired to 36 months. I don’t understand… Fear Not! Perkins Coie can explain:
- For example, in January 2020, Member A sells her 25% interest in an LLC that owns $10 million of real property in Seattle to Member C for $2.5 million. No REET applies because Member A has not sold 50%+ and Member C has not purchased 50%+ of said LLC. Two years later, Member B sells his 25% interest in the LLC to Member C for $2.5 million. UH OH! Now REET applies because Member C acquired a combined 50% of LLC within a 36-month period (25% from Member A in 2020, and another 25% from Member B in 2022). Members A and B would be liable for $319,050 in REET— 6.39% of the consideration received for their membership interests.
It now costs slightly less to sell a cheaper home, and quite a bit more to sell an expensive home. But because the REET is marginally dependent on the sale price, and moving up the graduated scale doesn’t change the effective tax rate for the entire sale, sellers will still try to maximize their sale price; which means I don’t see any downward pressure on prices. If anything, higher end list prices could increase ~$20,000 – $30,000 to accommodate the higher excise tax they pay. Sorta like how soda simply got more expensive at McDonalds when we enacted the soda tax.
With 3 kids, 2 girls and a boy, we have a rough time deciding on what moves to see… looks like this year we will have quite a few good ones to chose from. So get ready to read through the most buzzed about new movies that are headed our way for 2020!
Dolittle: Jan 17th
This is the third adaptation based on the Doctor Dolittle character since the classic 1967 film that starred Rex Harrison and 1998’s version with Eddie Murphy. This time it’s Robert Downey Jr. who talks to the animals in a reimagining of the story.
Sonic the Hedgehog: Feb 14th
Based on the Sonic video game, Sonic has traveled to earth to hide from Dr. Robotnik (Jim Carrey) and asks a small-town sheriff (James Marsden) for help.
The Call of the Wild: Feb 21st
This film brings to the screen the story of Buck, a big-hearted dog whose blissful domestic life is turned upside down when he is suddenly uprooted from his California home and transplanted to the exotic wilds of the Alaskan Yukon during the Gold Rush of the 1890s.
Onward: March 6th
This new adventure is set in a suburban neighborhood in a fantasy world where modern-day fairies, unicorns, mermaids, dragons and more live together in a land with no magic. But that’s about to change for one family when two teenage elves, Ian and Barley Lightfoot, embark on a quest to find magic that will allow them to see their deceased father one more time. Disney and Pixar have a good track record for providing entertaining family fare, and we don’t expect anything less with this new movie.
My Spy: March 13th
My Spy follows JJ, a hardened CIA operative (Dave Bautista) who has been demoted and finds himself at the mercy of a precocious 9-year-old girl named Sophie (Chloe Coleman) when he has been sent undercover begrudgingly to monitor her family.
Mulan: March 27th
Disney’s new live-action version of Mulan appears to be a faithful adaptation of the animated film. It features a fearless young woman who risks everything out of love for her family and her country to become one of the greatest warriors China has ever known.
Oh, that lovable rogue is back. Like the first film, this sequel doesn’t have the same tone that the original Beatrix Potter’s book did, but kids love him. In the new movie, Bea, Thomas, and the rabbits have created a makeshift family, but despite his best efforts, Peter can’t seem to shake his mischievous reputation. Adventuring out of the garden, Peter finds himself in a world where his mischief is appreciated, but when his family risks everything to come looking for him, Peter must figure out what kind of bunny he wants to be. If you liked the last film, you’ll probably like this one too but expect some rude humor.
Trolls World Tour: April 17th
Trolls may not be everyone’s cup of tea, but the first movie was popular enough to warrant a sequel and at least the music is catchy. This time around, Poppy (voiced by Anna Kendrick) and Branch (Justin Timberlake) discover that they are one of six different types of Troll tribes located in six different lands and of course, they each prefer their own brand of music. Ozzy Osburne (we’re not kidding) is the villain this time playing the role of King Thrash who is bent on destroying all other kinds of music. This film will introduce little ones to different styles of music including funk, country, techno, classical, pop and rock in this animated adventure.
Scoob: May 15th
Scooby-Doo is back, and this time the movie promises to be a lot more family-friendly. The movie is sort of a hybrid showing how Scooby and Shaggy first met, how they met Fred, Daphne and Velma, and how they solved their first case.
Wonder Woman 1984: June 5th
The new adventures of Wonder Woman happen in 1984 with Diana Prince facing two new foes: The Cheetah (Kristen Wiig) and Maxwell Lord (Pedro Pascal). Plus, Steve Trevors is back, but we’re not entirely sure how that happened. Truth? This is about all we know about the movie as of yet. Though many DC Comics movies are dark, the first Wonder Woman didn’t follow suit, and this one looks to be just as uplifting.
SOUL: June 19th
Ever wonder where your passion, your dreams and your interests come from? What is it that makes you… YOU? This new film by Pixar Animation Studios promises to take the viewer on a journey from the busy streets of New York City to the cosmic realms to discover the answers to life’s most important questions. Directed by Pete Docter, who also directed Up and Inside Out and because of that, we know that Soul will have lots of “heart.”
Jungle Cruise: July 24th
The movie stars Dwayne Johnson as a riverboat captain/ tour guide offering super cheap cruises along the Amazon rivers and providing special effects to elevate the experience. Although his fake adventures turn real when an explorer (Emily Blunt) hires him to help her locate a rare plant that offers special healing powers.
Check out Red Tricycle for full details.
Happy New Year! Hope you all had a relaxing holiday!
To start 2020 I am super excited about this January organization calendar I found a few years back. There are different calendars for each month, pinterest has lots of options, but I thought I would share this one. It has a task each day to help clean out, organize, and declutter your house (and life). I feel like the tasks are less intimidating and super easy to fit in each day, maybe 15 to 20 minutes, and I bet you could get your kids or to help too! Each week is focused on a different room, thought that was pretty cool too. Even if you do every other day, it will still feel really good!
I also found lots of great home organization ideas at easyorganizedhome.com – check it out.
Favorable interest rates and soaring rents boosted activity in the housing market in November. More buyers competing for less inventory kept home prices strong. With the supply of homes far short of demand, sellers can expect well-priced properties to sell quickly this winter.
With just over a month of available inventory, demand on Eastside remains very strong. Sales are brisk, with 45% of single-family homes selling in 15 days or less and 20% of homes selling for over list price. The median single-family home price in November rose 2% from a year ago to $900,000 and was unchanged from October.
With more buyers vying for fewer homes, King County remains a solid seller’s market. While inventory traditionally shrinks in the winter, this November saw the number of new listings at historic lows. Demand was strong, with the number of closed sales up 12% over the same time last year. The median home price ticked up 3% over the prior year to $661,000 and was unchanged from October. The strong market sent prices higher in the more affordable price ranges, with some areas in South King County seeing double-digit increases.
Activity in Seattle was very strong in November. The number of closed sales was up 29% over the same time last year. With just over one month of homes available for sale, the city is starved for inventory. Seattle homes prices have ebbed and flowed slightly from month to month for much of this year. The median price of a single-family home sold in November was off 3% from a year ago to $735,000.
With an increasing number of buyers driving to affordability, the Snohomish County housing market remains robust. Inventory is very tight and continues to fall. The county finished November with just over one month of supply. The median price of a single-family home rose 5% over a year ago to $495,000. That figure is unchanged from October.
This post originally appeared on GetTheWReport.com