How Smart is Your Home?

technology2

flickr/ebaylink

I was recently  approached for an         on-the-street survey conducted by a major local tech company regarding smart houses, asking if I would value “smart house” features in the future for comfort, convenience, energy conservation and security.

The growth of  “smart homes” has exploded worldwide. According to a recent article in Realtor® Magazine, approximately 100 million households will be “smart” by the end of the year and that number is expected to grow to 300 million in the next ten years. Obviously tech companies are banking on this trend, as the market for products regulating home automation, appliances, energy use, security and data analytics is growing. The big question is consumer need and acceptance . . .

  • will a smart home factor in a buyer’s decision to purchase one home over another
  • with prices still relatively high and technology still fairly complicated, will the average homeowner embrace the technology
  • is this just a passing fad, or could the technology eventually take off (solar panels took years) and demonstrate a return-on-investment

Consumers are increasingly tech savvy and showing more interest in smart home technology. While these products are growing in popularity (thermostats, alarms, cameras, auto-locking doors, etc.) and can be controlled from a smart phone or tablet from just about anywhere, how many buyers will be more likely to buy a home if smart products are installed? Is smart home technology an upgrade the average homeowner would consider instead of making cosmetic updates? It will be interesting to see how long it takes for smart home technology to be the new norm.

Seattle vs. San Francisco – Affordability and Lifestyle

Seattle SkylineSan Francisco

Both San Francisco and Seattle have an abundance of tech jobs. Anyone in the tech industry casting a wide net in their job search could expect to find job opportunities in both cities. While both locations would provide career growth opportunities and an interesting lifestyle, where would you move and how would you make that choice.

San Francisco is a fabulous city and salaries in the Bay area can easily be 20% higher, or more, than the Seattle marketplace, but many tech workers are choosing Seattle over the Bay area and Silicon Valley’s higher paying jobs. No question the cost of living here is on the rise, but the Seattle area has a significantly lower cost of living when it comes to renting or purchasing housing, parking, dining out, entertainment, groceries, etc. Locating where the employment base is, and where living is more affordable, could explain why Google expanded its campus in Kirkland and Facebook, Twitter, Uber and Dropbox have located offices here.

Friends who recently left San Francisco and moved back to the Eastside were renting a small studio in downtown San Francisco for $3,000/month + $300/month for parking. While the opportunity to return to the Eastside was key in their relocation decision, the difference in living expenses was also attractive. Renting a luxury one bedroom condo on the Eastside at $2,000/month, parking included, definitely made up for any difference in salary. While home prices and rents have increased in Seattle and on the Eastside, our prices still pale in comparison to San Francisco.

A higher paying job is enticing, and San Francisco is definitely a desirable place to live, but when adding up the list of basic items that can be as much as 30 percent cheaper here than in San Francisco, maybe the city on the bay is better as a great place to spend a weekend.

 

Condo Financing and FHA Restrictions

11942855114_79a3d587dc_m (1)Condominiums offer a great opportunity for first time buyers to enter homeownership and begin to build wealth, equity and credit. FHA (Federal Housing Administration) loans were a popular option for financing as they often offered favorable interest rates and lower down payment options than conventional loans.
In recent years FHA has placed significant restrictions on the purchase and sale of condominiums, preventing some buyers from purchasing condos, harming homeowners who want to sell and limiting the ability of condominium communities to attract buyers. In order to obtain FHA financing on a condominium, the community must meet a strict list of requirements and obtain FHA certification (a labor intensive process and expensive for the HOA) and re-certification is required every several years. As a result, many communities have allowed their FHA certification to lapse and FHA insured condo mortgages have plummeted in recent years.

Lawmakers are urging FHA to review their guidelines and ease restrictions on condominium community certification requirements in an effort to make FHA financing an easier process and promote affordable homeownership opportunities. The National Association of Realtors (NAR) has been pushing FHA on many of these proposed changes for over three years.

Condos are a critical part of the natural progression of homeownership. Reducing the current restrictions impacting FHA condo financing will go a long way in assisting first time buyers who are entering the market, current condo owners who are ready to sell and move up to a larger home and seasoned homeowners who are ready to downsize to a lower maintenance lifestyle.

Older Condo Rentals May Need to Upgrade to Compete

for rent signThis fall two new apartment communities (Alley 11 and Main Street Flats) opened adding 500+ new rental units to the downtown Bellevue marketplace. Early next year the second tower at SOMA and two communities under construction at Main Street & Bellevue Way will be ready for occupancy adding nearly 1,000 rental units. With more apartment communities in design review or under construction, several hundred more rental units will be added downtown in the next 2-3 years.

Demand for rentals is high in downtown Bellevue. If you’ve advertised a condo for rent in recent months its likely multiple renters were ready to sign on the dotted line. New communities command lofty rents, and while its tempting to cash in on that trend, bear in mind that those newer communities also offer high end finishes and luxury amenities and services. Renters are willing to pay top dollar for high tech, upscale finishes and fixtures, stainless appliances and granite, security, garage parking, concierge service, fitness and business centers, dog walking/grooming areas, electric car charging stations and well appointed resident lounges and view terraces for gathering and entertaining. Condo owners who previously found it easy to secure tenants and demand top rental dollars may find its difficult to rent an older condo with tired oak cabinets, laminate counters, dated appliances or fixtures and a common hallway laundry room. Improvements may be required to compete with newer, sexier apartments.

On the other hand, it’s definitely a challenge to find quality, affordable rentals in and near downtown. While not all renters demand rooftop terraces or 24/7 concierge service, what they won’t accept is a unit in poor condition that isn’t clean, well maintained, somewhat updated, safe and secure. While these are two different markets, each has its own market demand. Major upgrades will compete with new construction and provide a significantly higher rental return, but are expensive. Minor improvements may result in a modest bump in rental income but equally high demand for a quality. affordable option.