All The Single Ladies: Female Homebuyers The New Norm

As a broker for the past eight years, and as a woman with quite a few female friends who are single into their 30s and 40s, I have noticed a growing phenomenon. The Single Female Buyer.

With women more employed than ever, and with the average couple marrying later and bringing their own assets and properties to the relationship, women are not waiting until marriage to buy their first home.

According to the State of the Nations Housing: 2009 report, compiled by the Joint Center for Housing Studies of Harvard University, “social and economic trends have given women a more powerful presence in housing markets. Between 1980 and 2000, the number of households headed by unmarried women increased by almost 10 million.” The same study, however, also states that, “because women still earn less on average than men do, they are more likely to face housing problems than either married-couple households or households headed by unmarried men.”

Statistics on Women and Homeownership

  • Interestingly, single female buyers accounted for nearly twice as large a share as single male buyers for both first-time buyers (23 and 15 percent) and repeat buyers (17 and 9 percent).
  • Twenty percent of recent home buyers were single females, and 10 percent were single males.
  • More women (15.5 million) than men (11.8 million) lived alone. Among these, women were more likely than men to own their homes (56% vs. 47%).
  • About one-quarter of the nation’s nearly eight million single mothers spend more than half of their incomes on housing, compared with one-tenth of households headed by single fathers.
  • Over the time period of 1994-2002, the number of unmarried females owning homes climbed from 13.9 million to 17.5 million.

Below is a slew of articles chronicling this rapidly growing phenomenon and suggesting to you, the Single Female Buyer, what you ought to do in terms of real estate investment. My advice is from the heart: buy a home. If you can find a way to do it, especially now that we have gotten through the slump and are in a healthier economic climate, do it.  Nobody can evict you, raise your monthly housing cost, tell you not to paint the kitchen yellow, restrict your pets, etc. Because land ownership has not historically been a woman’s place, it was hard for me to find a great quote by a woman pertaining to this. But as a wise man once said, “Buy dirt, they aren’t making any more of it”. Ownership of one’s home is powerful, both financially and personally. There is nothing I love more than seeing someone become more empowered. Unless that person is trying to take my parking spot.

Sources: 2011 NAR Profile of Home Buyers and Sellers, (Chicago, IL: National Association of REALTORS®, 2010) and The State of the Nation’s Housing: 2012, (Joint Center for Housing Studies at Harvard University, 2012).

Single, female and shopping for a home, (MSN Real Estate, Jan. 29, 2013).

Guess Who’s Driving the Demand for Rental Apartments?, (CNBC, Jan. 29, 2013).

Here’s Some Advice For All The Single Ladies Flooding The Housing Market, (Business Insider, May 16, 2012)

Singles dive into the real estate market, (MSNBC, July 12, 2011).

What Women Home Buyers Want, (Builder, Jan. 14, 2011).

Women Home Buyers, a Major Economic Force in the Industry, Have a Language All Their Own, (NAHB, Aug. 23, 2010).

Single Women Home Buyers: Key to the Housing Recovery?, (AOL Real Estate, May 14, 2010).

Wanted: Single Women Home Buyers, (SmartMoney, Apr. 9, 2010).

Singles, especially women, a growing share of homebuyers, (Chicago Tribune, Feb. 28, 2010).

Women make up their mind faster when buying a home, (Inside Tucson Business, Sept. 11, 2009).

Gender differences abound in the home-buying process, (RISMedia, Sept. 1, 2009).

Single women skilled in house buying, (Washington Times, July 11, 2008).

Women homebuyers growing in number, (Ventura County Star, Jan. 27, 2008).

They’re buying solo, (Newsday.com, Mar. 15, 2007).

Singles taking stride in the home buying market, (The Hammond Times,Feb. 17, 2007).

As the Nation Changes, So Do Home Buyers, (RISMedia.com, Feb. 13, 2007).

Rent or Buy? How To Decide

Is it better to buy or rent? Whether renting is better for you than buying depends on many factors. The information and variables listed here will help answer this question. Included are statistics and studies on home owners and renters as well as financing options and tips. (M. Glick, Senior Information Specialist, National Association of REALTORS)

Buy vs. Rent Comparison

The chart below shows a cost comparison for a renter and a homeowner over a seven year period.

The renter starts out paying $800 per month with annual increases of 5% The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000

After 6 years, the homeowner’s payment is lower than the renter’s monthly payment

With the tax savings of homeownership, the homeowner’s payment is less than the rental payment after 3 years.

Comparison of renting vs. homeownership over seven year period

Rent vs. Buy

4 ways to pay off your mortgage early

If you can manage it, paying down your home loan ahead of schedule can save you a LOT of money. Here’s how-

Because Americans are coming from a season of incredible risk and disaster on many levels, fewer homeowners are refinancing to take money out of their homes. Having lived through the foreclosure crisis, more people want the financial security and the psychological benefit of owning their home free and clear.

If you want to pay off your mortgage early, plenty of experts recommend ways to do it. They all work, but you’ll find some methods of paying down your mortgage are safer, faster and more painless than others. Here I compare four ways you can pay off your mortgage early, starting with the simplest and moving toward the most complex.

Just pay more

If you want to see magic, start playing with mortgage calculators and see how adding a little payment to your principal here and there can shorten the length of your loan. You can use Bankrate.com’s mortgage loan payoff calculator to see how $100 or any other amount added to your payment reduces your interest and shortens the length of your loan.

If you pay a little more principal, you get a bonus. The lower your principal gets, the more every payment from then on is applied to principal, as less goes to cover interest expense.

If nothing else, round your payments up. When people have a payment for $644, they think of it as $650. Why not just pay $650 then? An extra $6 a month on a $200,000, 30-year loan can save you four payments at the end of the mortgage loan.

When you pay extra, make sure the extra is applied to the principal balance, not just set aside for the next payment. And before you make extra payments, read your contract and make sure you won’t have to pay prepayment penalties.

Refinance to a shorter-term loan

You can refinance into a mortgage for 10, 15 or 20 years, but 15-year mortgages are the most common. Your payments will be higher on a 15-year loan, though maybe not as high as you think, especially since they often offer lower interest rates.

One advantage of a 15-year loan is that you’re committed to the higher payment. There’s no messing around about whether you’ll pay extra this month. So if you have an unsteady income or a high likelihood of other expenses rising, consider this: to get the effect of a shorter-term mortgage without the risk, take out a 30-year loan, but make payments as if you had a 10- or 15-year loan.  You just make increased payments. You’re in control, not the bank.

With a 30-year, $100,000 loan at 5 percent, your principal and interest payments are $537. At the same rate, but on a 15-year payoff schedule, your principal and interest payments are $791. That’s $254 more a month.

Bankrate.com’s 15- or 30-year mortgage calculator can help you compare loans.

Switch to biweekly payments

Biweekly payments take advantage of the fact that there are 52 weeks in the year and 12 months. If you pay half your regular mortgage payment every other week, you’ll have made 26 half-payments, or the equivalent of 13 full monthly payments, at year’s end. See how it works with Bankrate’s biweekly mortgage calculator. The extra annual payment can chop off about six years from a 30-year mortgage.

You shouldn’t have to pay an outside company to set it up for you. I hate the idea of having to pay a third party for something the consumer can do on their own.  Check on whether your bank will set up a biweekly payment plan. Some banks do it for free; others charge.  Ask the bank to credit extra payments toward principal so you save more on interest expense. Some banks set aside extra payments until the end of the year.

Use a money merge account (the Australian method)

In Australia, mortgages are generally set up like home equity lines of credit, or HELOCs. They double as checking accounts, thus the term “money merge.” When you get paid, you deposit your check into the account, and as you spend money you take it back out again. You hope to put more money in every month than you take out.

With a mortgage using the Australian method, interest is calculated daily instead of monthly, and because the money spends as much time as possible in the account before you take it back out to pay bills, you save on interest expense.

Some money merge programs require you to buy software for thousands of dollars. However, there’s no magic formula for shifting your money around.  You don’t need software to do that. The biggest downside to the money merge plan is that it requires discipline; you shouldn’t do it unless you understand cash management.

Buying Equestrian Property Requires More Than Horse Sense

One constituent of the Seattle-area real estate market is equestrian property. And in fact all around the Puget Sound, beautiful locations minutes from urban hubs offer the chance to live the ‘country’ lifestyle without trading briefcase for pitchfork. One of my favorite things about the greater Puget Sound area is the abundance of natural beauty, within close proximity to major centers of commerce, like Seattle, Redmond, Bellevue, Olympia, and Everett. If you work in one, you may want to live close enough to drive in but far enough away to keep your children more connected to the simpler things, or perhaps you got a taste of urban farming and decided chickens weren’t good enough for you.  But right now in the market, low inventory means those looking in such a specific property niche may have trouble finding the right property ready and waiting.  As a result, many people are instead building what they wish they could find for sale. It’s a thrilling process for some, a stressful one for others. Only you can weigh the benefits and pitfalls of choosing to buy land and build exactly what you want. And if what you want is equestrian property, there are some finer points to consider. 

Purchasing an equestrian property involves a lot more than simply finding enough land to keep a horse on–zoning restrictions, property drainage, trail access, land clearing, building setbacks for structures specific to the animals, etc. When looking for property, bear in mind that there are sides of mountains, zoned for horses, that are more suitable for mountain goats. And inside city limits, horsekeeping may be prohibited by statute. Even if you see horses in the area, they may be grandfathered in, so make sure livestock are actually allowed. 

What you know from previous building experience may or may not apply. According to the King County Department of Permitting and Environmental Review, barns are classified as agricultural buildings.  In fact, many aspects of an equestrian property fall under the jurisdiction of the agricultural zoning- drainage and manure management, for example. In King County’s horse-keeping regulations, you will need an approved manure management plan (it must be hauled off site for disposal in most cases or you will need to install a 3-stage composting system). 

Always research the specific regulations and land use law in the county you’re planning to buy in. To build a barn and outdoor arena, you’ll need all the usual building permits, and your county planning department can tell you what permits are required if you submit a site plan. There are setbacks to consider that you should take note of prior to purchasing a parcel of land, since your plan to build a covered riding arena, for example, may require such a large setback that you find yourself looking for a larger piece of property than you had originally thought you’d need. Covered riding arenas are difficult to permit in King County these days, a little less so in Snohomish and Pierce, because quite a bit of land and a means to mitigate the environmental impacts is needed. Barns and pastures are easier to get a permit for, as are outdoor riding arenas, as they create less impervious surface/runoff. You will need a clearing and grading permit to do the groundwork, and a WA state DNR Forest Practices permit to clear any significant quantity of trees. The real cost in tree removal (if they are marketable timber) is not the timber removal, but it’s the destumping and disposal costs. In most cases the stumps can’t be burned, and so must be loaded and hauled to a composting facility/landfill. 

Barns can cost from $1-2,000 per stall for Noble panel sheds/modular barns to $1,000,000 or more for a custom, state of the art facility with heat/bathrooms/living quarters, wash & veterinary bays, etc.  Much like houses, barns are a matter of individual taste and budget. 

What you should do, (wink) is look for a beautiful custom home on good acreage (cough) which borders the 30-plus miles of Snoqualmie Valley trail (perfect for riding), and then build a great stable.  You should look at….something like my beautiful new listing in Fall City!

Happy trails, househunters.  Whatever your wishes for your dream property, share them with your realtor. Make sure they know enough to help you navigate the murky waters of land use regulation. There are an abundance of great locations close to your chosen Seattle-area metropolis, waiting for you to saddle up and ride. I mean buy.

What kind of a market is this, anyway?

With news headlines that are no less constant than they are sensational focusing on housing starts, inventory, home prices, and foreclosures, it’s hard for most people to decipher just where we are on the roller coaster.  I don’t like the roller coaster mentality, because it suggests the ride has an end. Since the dawn of time, man has tried to own and control the land on which he dwells. It’s obvious there will continue to be only the same amount of that dirt which we already have, and a growing number of people to inhabit it. It doesn’t take Mark Twain to tell anyone, “Buy land, they aren’t making any more of it”. In this way, I have a hard time with the myopic attitudes of many people during what is surely a historically affordable time in the housing market. Interest rates haven’t been this low since World War 2, and many of the world’s richest men have gotten there at least in part by their investments in real estate. There are still really wonderful lenders working with buyers who have been through the credit wringer, and who have very little to no money to put down (these are private porftolio loans but they come with the same kind of amazing rates- Key Bank is a great source).  Let’s celebrate! Right? 

Actually the unfortunate thing is that this housing market came yoked to a bad economy–what economists say is the worst since the Great Depression, and in some ways even comparable.  Life circumstances often outweigh market circumstances, and many people are forced to sell low after having bought higher.  Many people would buy, if they could just get a decent job. Are those people apt to look through Mark Twain’s long lense of history and feel like this downturn is a blip on the radar? Probably unlikely. Enter wave after wave after wave of short sales and foreclosure properties. We’ve seen years of this, and are we near the end? The numbers suggest a slowing but not an end anytime soon- technically and broadly speaking, property values have to return to their previous levels in order for these homes to be worth what most homeowners still owe on them.  How long will that take? Call me when you find a crystal ball.  I am already seeing prices edging back up here and there, by small increments, in select areas around Seattle (Ballard, Phinney Ridge, Bryant, View Ridge, Queen Anne, Ravenna, Greenlake, and Maple Leaf are a few locations where I’ve recently pulled information for a specific property and seen values adjust higher than last year). My guess is a few more years for us, longer for more depressed areas in the state and the country.  Because this looks to be the case, What’s called ‘Strategic Default’ (and is technically classified by the FBI as fraud) now comprises a huge portion of these foreclosures and short sale files. People who were ‘A paper’ loans (the good e credit, steady financials buyer), who are not in financial trouble necessarily, but feel that it’s a better business decision to walk away from this debt than to continue paying, not knowing how long it will take the property to regain its previous value.  Lienholders are glutted with delinquent files. It’s a mess.

My point? Buy when there’s blood in the street, as one notoriously rich real estate investor has said. If you can find a way to capitalize on this time of opportunity and focus on the options available to you as a buyer (even you, previous short-salers– if you wait 3 years post close), you will be tickled pink that we’re all sitting around talking about this being the ‘bottom’. The ground floor is always the best place to get in on something good!  What little inventory there is, is really flying off the market here in Seattle, most often with multiple offers.   The low number of homes for sale creates a strong competition among the buyers out seriously looking for a home to purchase, causing many to lose out multiple times to other higher offers. Bidding wars are de rigueur on reasonably priced homes in high-demand areas like Seattle proper. 

So is it a Buyer’s Market? In the way of you getting a great deal as a buyer, yes. In the way of being able to boss the seller around and come in swinging with a really low offer- no.  These days, I like to call it a ‘Buying Market’.