Pierce County 3rd Quarter Market Update

Now that the 3rd quarter is done, we're back with our quarterly Pierce County real estate market update. Things are looking strong in our local market this year.

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With the 3rd quarter in the books, I wanted to give you our quarterly Pierce County market update. We've seen some great things happening the local market.

Typically, the main factors we look at are how many homes sold in comparison to the 3rd quarter of 2015, the average and median asking price versus the average and median sold price, and finally, the days on market.

This year in the 3rd quarter, we saw sales go up to 4,242 compared to 3,852 last year, good for a 10% increase, which is great to see. We also saw the median list price go up this year. In the 3rd quarter of 2015, median list price was $250,000, and when you fast forward to this year, it was $279,950, which is an 11% increase.

We saw list price and sales price both increase by 10% or more.

The number I'm usually most interested in is sold price. We can ask whatever we want for a house, but the price that somebody is willing to pay for it is what really counts. The median final sale price in Pierce County last year was $253,475, which was on average 1.3% over asking price. Looking at this year, the median sale price was $282,250 and 0.8% over asking price on average.

Looking back at last year, the average days on market was 21 in the 3rd quarter, and it has actually shrunk down to 13 days in the same time frame this year.

Here at the Hauer Real Estate Group, our listings sold for an average of 3% over asking price, which is definitely outperforming the market as a whole. Our listings also have an average of nine days on market compared to 13 days for the area as a whole.

As always, we're here to be a resource for you, so give us a call with any questions you have. We'd love to hear from you!

Why Real Estate Is Your Best Investment

I always like to ask financial planners what their best clients did to become as wealthy as they are and 9 times out of 10 the response I get is that they're heavily invested...in Real Estate!

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We've recently been car shopping, and it blows my mind how much people are paying for vehicles!

I saw someone paying $80,000 for a Cadillac Escalade (and hey, if they can truly afford it then more power to 'em!).  Regardless, all I could think about is how that's a LOT of money for something that goes DOWN in value because for that same $80,000 one could buy TWO investment properties that would go UP in value.

In the greater Tacoma area you can buy a rental property for around $200K with 20% down.  That comes out to a $40K down payment. From there, you're using other people's money.

The mortgage you get will be around $1,100/month, but you can charge that same $1,100 for rent in the home + more!  Historically speaking, home values have increased by an average of 5% per year since World War II.  Based on that, the fourth year you own the home, the value would likely rise to about $243,000.  By year 10, the home would likely rise to $325,000!

You can greatly increase your net worth.

So you purchased the home for $200,000.  It has appreciated by $125,000 and your tenants have simultaneously been paying down your mortgage by $30,000 over 10 years.  Based on that, between the appreciation and the debit that is paid off by your tenants, your net increase is $155,000 in 10 years!

But wait...there's more!  You'll save even more money with TAX ADVANTAGES!  You can write off the property tax and mortgage interest that your tenants have been paying for you, which will add up to nearly $100,000 in tax write offs over 10 years!

You've now got the $155,000 increase in equity from the property plus another $100,000 in tax savings.  That's $225,000 of value in just 10 years!  That's over $25,000 per year of other people's money that you are making off of your initial $40K investment.  And that doesn't even include the full extent of tax advantages, but I promised I'd keep things simple so we'll leave it at that.  You'll continue to enjoy increase in values over time and passive income until the day you decide to sell.

Oh, and as a reminder, the above example is only based off of ONE rental property, so if you want to really set yourself up for financial success...why not buy TWO!?

You decide...$80,000 for a Cadillac Escalade OR Two Rental Properties.

This is a simplistic approach to the secret behind real estate investing, and we hope it was eye opening.  If you have any questions, feel free to give me a call or send me an email.  My team & I look forward to hearing from you!