Puget Sound Real Estate Blog

Housing activity during October shows mixed results with sales up, prices down, buyers still hesitant

davidjedwards111 — Fri, 11 Nov 2011 00:45:11 +0000

FOR IMMEDIATE RELEASE: November 3, 2011

KIRKLAND, WA, November 3, 2011. Befitting October and Halloween, last month’s housing activity had both tricks and treats. Northwest Multiple Listing Service members reported solid gains in pending sales (up almost 21 percent from a year ago), consistent demand in many price ranges, a shortage of homes in a few categories, and some resurgence of move-up buyers.
Despite those encouraging indicators, prices were down almost 11 percent area-wide compared to a year ago and brokers say there is persistent “hesitancy” in the market. “All the pieces (for a recovery) exist — low interest rates, lots of choices, increasing loan availability as well as purchasing programs, yet as a whole the housing market has stalled in many places,” said Northwest MLS director Frank Wilson. “What is holding back the housing market has little to do with houses,” Wilson stated, pointing to uncertainty in the stock market and volatile global economies, along with a more complicated, prolonged transaction process and lack of job creation.
“We knew the median price would take a hit in October because the ‘temporary’ loan limit for conventional financing dropped back down from $567,500 to $506,000 after being in place for two years,” said OB Jacobi, president of Windermere Real Estate Co. As of October 1, buyers in need of a mortgage above $506,000 must now qualify for a jumbo loan which is more restrictive and comes at a higher cost than conventional financing, he explained. “With fewer financing options for buyers of higher priced homes in our metro area, it’s only natural that this would cause downward pressure on October’s median price,” added Jacobi, a member of the Northwest MLS board of directors. In King County, nearly one-third of the available inventory is priced above the new, more restrictive dollar limit.
Northwest MLS brokers added 7,235 new listings to inventory during October, almost 1,000 fewer residential properties than the same month a year ago. Sixteen of the 21 counties served by the MLS reported shrinkage in inventory. At month end, MLS members reported 33,094 active listings of single family homes and condominiums.
Any discussion about real estate has to be hyper-local, that is, specific to a geographic area and in some cases as specific as a neighborhood, Wilson suggested. “Just viewing the latest report reveals wide variation of inventory from county to county; Snohomish has 3.2 months of inventory while Okanogan has an 18 month supply of homes,” he noted.
The housing market in Kitsap County is quietly gaining strength, said Wilson, the branch managing broker at John L. Scott’s Poulsbo office. “Even though we are still seeing a settling of prices, there is good momentum in home sales, up almost 12 percent,” he noted. Northwest MLS data show inventory in that county is down to about 5.9 months of supply compared to 7.1 months at this time last year. (Five-to-six months of inventory is a neutral market, below five months favors sellers, and more than six months is considered to be a buyer’s market, Wilson explained.) “As the supply continues to decrease, we expect shorter market time, with home prices stabilizing and even beginning to appreciate again,” Wilson predicts.
Pending sales (mutually accepted offers) increased nearly 21 percent from a year ago, rising from 5,653 transactions to 6,817. In the past four months, the combination of shrinking inventory and more sales (both pending and closed) have led to a swift change in the supply of homes, remarked NWMLS director Darin Stenvers, the managing broker at John L. Scott’s Bellingham office.
Demand is remaining consistent in many price ranges and move-up buyers are returning to the market because of a shortage of homes that are not distressed, Stenvers noted. This move-up segment can list and sell their homes, then buy a better home with essentially the same payments, he explained. “Buyers know interest rates will not be at these historically low levels forever so they may pass up a short sale/fixer bank owned home for a more conventional transaction,” he remarked.
Buyers still have bargaining power, according to Stenvers. He cited a recent transaction involving a home where the appraisal was $40,000 under the asking price because of disparities with the comps used. The buyers negotiated a price that split the difference, deciding that was preferable to “losing a beautiful home altogether.”
Two key factors support a healthy real estate market — jobs and low interest rates, said J. Lennox Scott, CEO and chairman of John L. Scott Real Estate. “Interest rates are at historic lows, and here in the Puget Sound we are fortunate to have a stable employment base,” he observed.
Commenting on the selection of listings, Scott said 10 months of healthy sales activity have reduced the home inventory levels significantly in the greater Seattle area. “We have a shortage of homes for sale in the more affordable ranges throughout the region, and a healthy level of homes for sale in the mid-price range. Sellers with homes that are priced right are seeing multiple offers,” according to Scott.
Prices for last month’s closed sales of single family homes and condominiums (combined) fell 10.9 percent from a year ago, dropping from $255,932 to $228,000. While all but two counties in the Northwest MLS market area experienced declines, the drops were by single digits in 10 counties.
King County reported one of the sharpest year-over-year declines. The median price on last month’s completed transactions in the county was $287,500, which compares to a year-ago figure of $350,000 (down about 17.9 percent). For single family homes (excluding condominiums), median prices slipped 14.7 percent, dropping from $375,000 a year ago to last month’s figure of $320,000.
Pricing data should be viewed with some misgivings, said Joe Spencer, president and COO of John L. Scott Real Estate. “Headlines stating home values have fallen by double digits compared to last year don’t always reflect what is really happening,” he explained, noting factors that can influence prices.
“Not every home has dropped 15 percent in value,” Spencer insists. He attributes much of the decline to a combination of factors, including shifting demographics and the influence of distressed properties, which he said may be as high as 40 percent in some areas. More investors and first-time buyers are purchasing in the more affordable price ranges, which results in a downward shift of median prices, Spencer explained. Also, he noted, distortions caused by REO (bank- or other lender-owned) and foreclosed properties contribute to price depressions. “When you adjust for these conditions and compare ‘standard resale homes’ the change in home values is much less drastic,” Spencer emphasizes.He believes a more accurate reflection of price declines for the Seattle area is around 6 percent, citing research by CoreLogic, Wells Fargo Securities and other analysts.
Not always apparent in the raw numbers are the hurdles faced by “real live buyers and sellers who are having a harder time than in the past,” lamented Wilson. “Transactions are more complicated and have a higher chance to fail. Lenders who are involved with short sales and bank owned homes further complicate and lengthen the transaction process due to their policies and practices.” Consequently, Wilson emphasized, buyers and sellers need to be explicit about what they want to accomplish. “They also need lots of patience and should choose their team wisely, making sure to select real estate professionals who can walk them through the process.”
Comparing last year with this, Mike Grady, president and COO of Coldwell Banker Bain, noted inventory was plentiful and competition was relatively light last year. Now, he said the market “ingredients” appear to be changed: the number of buyers is increasing and there are fewer homes for sale. “While that’s a typical recipe for stable or increasing prices and quicker decisions, today’s market has some ‘less palatable ingredients,’ such as foreclosed properties and shaky consumer confidence.”
“Knowing whether these new inventory dynamics will be slow-baked or microwaved into the housing market is still anyone’s guess,” Grady suggested, adding, “It looks like more people are coming off their home buying diets only to find a reduced supply of homes for sale. That could create some welcome momentum in local markets heading into the new year.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 22,000 brokers. The organization, based in Kirkland, serves 21 counties in Washington state.
4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2000 3706 4778 5903 5116 5490 5079 4928 5432 4569 4675 4126 3166
2001 4334 5056 5722 5399 5631 5568 5434 5544 4040 4387 4155 3430
2002 4293 4735 5569 5436 6131 5212 5525 6215 5394 5777 4966 4153
2003 4746 5290 6889 6837 7148 7202 7673 7135 6698 6552 4904 4454
2004 4521 6284 8073 7910 7888 8186 7583 7464 6984 6761 6228 5195
2005 5426 6833 8801 8420 8610 8896 8207 8784 7561 7157 6188 4837
2006 5275 6032 8174 7651 8411 8094 7121 7692 6216 6403 5292 4346
2007 4869 6239 7192 6974 7311 6876 6371 5580 4153 4447 3896 2975
2008 3291 4167 4520 4624 4526 4765 4580 4584 4445 3346 2841 2432
2009 3250 3407 4262 5372 5498 5963 5551 5764 5825 5702 3829 3440
2010 4381 5211 6821 7368 4058 4239 4306 4520 4350 4376 3938 3474
2011 4272 4767 6049 5732 5963 5868 5657 5944 5299 5384

City of Newcastle City Council Notice of Public Hearing

davidjedwards111 — Mon, 07 Nov 2011 17:01:56 +0000

Notice is hereby given that the Newcastle City Council will conduct a public hearing on the Proposed 2012 Property Tax Levy and 2012 Revenue Sources: Tuesday, November 15th, 2011 at 7:00 PM. The hearing will take place in the Council Chambers at City Hall: 12835 Newcastle Way, Suite 200, Newcastle WA 98056.

Community members are invited to voice approval or disapproval on the issues during the public hearing. If you are unable to attend the public hearing, you may share personal throughts, feelings or comments in writing – until 4:00 PM on the day of the public hearing. Comments submitted to the City Clerk by 4:00 PM will be copied and distributed to the City Council in advance of the meeting.

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

Mortgage Rates

davidjedwards111 — Thu, 03 Nov 2011 18:35:49 +0000

- Mortgage rates averaged 4.69% in 2010, an all-time low since Freddie Mac started its mortgage survey in 1971.
- Mortgage rates ranged from 4.23% to 5.1% in 2010. At the end of December, rates stood at 4.71%.
- In the week ending February 10th, rates stood at 5.05%.
In light of the risks associated with developments in Europe (i.e. Euro debt crisis), household and business deleveraging, businesses’ reluctance in hiring and the slowly recovering housing market which could restrain growth going forward, the Federal Reserve maintained its commitment to all of its accommodative policy programs.
The U.S. economy’s sluggish recovery set the Fed to purchase Treasury securities in an effort to rejuvenate that growth in early November, a $600-billion quantitative easing plan known as QE2.
The Fed’s assessment that inflation will remain below the level consistent with its mandate “for some time“ sends signals that the Fed is unlikely to be in a position to raise interest rates in the near term.
However, should the economy’s momentum accelerate as the government’s tax package bolsters consumer activity and businesses keep investing in capital goods, the Fed is expected to start the process of reducing policy stimulus, beginning with the expiration of the asset purchase program, followed by the ending of the program to reinvest the proceeds of maturing holdings and eventually the sale of bonds held by the Fed.
Assuming that the unwinding of these measures does not jar the economy from its growth path, rate hikes are likely to follow in late 2012.

Source: KW Vision Speach 2011
To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

Distressed Properties and What They Mean to You

davidjedwards111 — Mon, 31 Oct 2011 16:30:43 +0000

Since affordable pricing tops the list of motivation and criteria for buying, it is no surprise that many first-time home buyers purchase distressed properties, which can be up to 30% below market value. Cost-conscious buyers are the most interested in distressed properties, but it is important for them to take into consideration the additional costs and expenses related to damage or neglect that occurred during the foreclosure process. On average, distressed property prices for first-time home buyers are $185,971 with a median of $153,000.

Another consideration for buyers is the transaction time. Short sales and foreclosures typically take considerably longer to close because buyers deal with institutions rather than individual sellers. Yet buyers who are patient can benefit by paying less

As a seller, it is important to understand the current real estate market, and a real estate agent is there to guide sellers every step of the way. Agents can help sellers understand what the level of distressed sales and competition look like in their area. This way, they will be able to price their home right and will more than likely be able to attract attention from potential home buyers.

Sources: KW TMIR October 2011

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

2.3 Million Refinance Candidates Denied

davidjedwards111 — Tue, 25 Oct 2011 23:15:35 +0000

Policymakers for the past two years have been encouraging homeowners to refinance their homes and take advantage of record-low interest rates; however, their efforts are continually frustrated by today’s tough lending standards. A study released by the Federal Reserve found that out of 6.8 million applicants to refinance their mortgages, 2.3 million were denied due to current lending standards and the decline in the value of their home. The study also revealed that many of these candidates would have qualified for a refinance prior to the housing bubble burst, which as of the end of June has left 10.9 million borrowers, or 23% of mortgage holders, owing more on their house than it is worth.

Despite banks’ continuing reluctance to relax lending requirements, in some cases it may still make sense to sell a home for a small loss rather than refinance. With record-low interest rates, which dropped again in September to 4.01%, the savings realized from a low interest 30-year fixed mortgage on a new home may eclipse any loss incurred in selling the current one.

Sources: The Wall Street Journal, National Association of Realtors

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

Senate Subcommittee Brainstorms Foreclosure Solutions

davidjedwards111 — Mon, 24 Oct 2011 23:51:55 +0000

Just Sold! Two Bedroom Condo in Auburn at Versaille Estates

davidjedwards111 — Fri, 21 Oct 2011 01:57:05 +0000

1120 8th St NE #2, Auburn 98002-4456

Closing Date: 10/19/11
Listing Price: $35,000
Sold Price: $30,000
Bedrooms: 2
Bathrooms: 1
Year Built: 1981
Square Feet: 744
Lot Size: 0 Square Feet
MLS: 255427

NOT a Short Sale! This ground floor, two bedroom, 1 bathroom condo is located at Versaille Estates in Auburn’s Jovita neighborhood. There is a patio off the living room with access to a large storage closet and private backyard. The bathroom can be accessed from the hallway as well as from the master bedroom. All of the appliances are in place and there is a washer and dryer in the unit. With some new carpet and fresh paint, this condo will be ready for you to call home.

Driving Directions: From WA-167 S, Take the 15TH ST NW exit., Turn LEFT onto 15TH ST NW., Turn RIGHT onto 8TH ST NE., 1102 8TH ST NE is on the LEFT.

This home is no longer available. However, if you would like to preview homes similiar to this, please contact me to arrange for a free buyer’s consultation.

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

Congressional Loan Limit Guarantees Set to Fall

davidjedwards111 — Thu, 20 Oct 2011 04:26:31 +0000

On October 1 the loan amounts that can be guaranteed by the agencies Freddie Mac, Fannie Mae, and the Federal Housing Administration dropped in higher-priced markets from $729,750 to $625,000, or a -14.35% reduction. While $625,000 is far above the national median price of $168,300, affecting only 1.3% of loans, this reduction can have an impact on the overall prices of homes by creating even tighter mortgage lending standards and cause some sellers to reduce their asking prices.

Source: The Wall Street Journal

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

Average Mortgage Rates Continue to Fall

davidjedwards111 — Tue, 18 Oct 2011 23:16:39 +0000

Home ownership became even more affordable, with the average rate for 30-year fixed mortgages falling to 4.01% the last week in September. This drop came as a result of the Federal Reserve extending the average maturity of its holdings as a part of the Maturity Extension Program, an effort designed to put downward pressure on interest rates and yields on treasury bonds in order to stimulate the economy. It is hoped that this action will encourage banks to loosen lending conditions, as it becomes more attractive to loan money to home buyers, rather than invest in treasury bonds.

30 Year Fixed 4.01%
15 Year Fixed 3.28%
5/1 ARM 2.83%
Historical Average 8.9%

Source: Freddie Mac; September 29, 2011

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp

The supply of homes is down

davidjedwards111 — Thu, 13 Oct 2011 20:07:13 +0000

The supply of homes measured in months on the market at their current pace of sales fell 10.5% in the month of August, to an 8.5 month supply of inventory, down from a 9.5-month supply in July. With homes being more affordable than they have been in a generation and the lowest levels of new home construction since World War II, this inventory is projected to continue to fall, which will eventually result in the appreciation of home prices and a move toward a balanced market.

Source: National Association of Realtors Latest Data Release: September 21, 2011

To find the value of your home, visit: http://www.davidjedwards.com/free-home-evaluation.asp
To search the MLS database of homes for sale, visit: http://www.davidjedwards.com/search-for-homes.asp