The Eide Real Estate Group

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2010-03-15T15:06:00.000-07:00

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National Real Estate News

2010-03-08T11:08:00.000-08:00

Last week's one housing report gave us the National Association of Realtors Pending Home Sales index, down 7.6% for January. Year over year, the NAR index is up 12.3%. Also, it's now at 90.4 and a score of 100 equals the average level of contract activity for 2001, the base year, when activity was at a then record high. Pending sales are still in pretty good territory.

Meanwhile, a quarterly report from a builders group and a major bank revealed that home prices are at near record levels of affordability. In the last three months of 2009, a family making the median income of $64,000 a year could afford to buy 70.8% of all homes sold during that time! According to this report, a home is affordable if a family making the metro area's median income would have to spend no more than 28% of their take-home pay for housing. Of course, there are variations in affordability around the US, but this is a great overall trend.

Buyers, however, shouldn't expect great affordability to last forever. According to a Freddie Mac index, in the last quarter of 2009 four out of nine regions showed home price gains! The NAR's monthly market forecast, out last Thursday, projected the median price of existing homes UP 2.8% for 2010 with the new home median price UP 2.0%. In addition, no one knows what will happen to mortgage rates once the Fed stops buying mortgage bonds at the end of this month. Smart buyers shouldn't drag their feet, especially those wanting the tax credit, which requires a signed contract by April 30.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Eastside Statistics - February, 2010

2010-03-08T08:38:00.000-08:00

Current Residential & Condo listings - 3,944 (down 16.72% from last year)
New listings taken this month - 1,303
Pending sales this month - 835 (up 93.74% from last year)
Percent of listings that sold this month - 21.17%
Median closed sales price - Feb. ‘09, $435,000
Median closed sales price - Feb. ‘10, $437,500
Rate of appreciation = 0.57%

~ Courtesy of NWMLS

King County Statistics - February, 2010

2010-03-08T08:37:00.000-08:00

Current Residential & Condo listings - 11,539 (down 9.76% from last year)
New listings taken this month - 4,122
Pending sales this month - 2,621 (up 62.69% from last year)
Percent of listings that sold this month - 22.71%
Median closed sales price - Feb. ‘09, $348,000
Median closed sales price - Feb. ‘10, $343,500
Rate of appreciation = -1.29%

~ Courtesy of NWMLS

Snohomish County Statistics - February, 2010

2010-03-08T08:35:00.000-08:00

Current Residential & Condo listings - 5,177 (down 9.13% from last year)
New listings taken this month - 1,759
Pending sales this month - 1,133 (up 70.89% from last year)
Percent of listings that sold this month - 21.89%
Median closed sales price - Feb. ‘09, $301,750
Median closed sales price - Feb. ‘10, $269,000
Rate of appreciation = -10.85%

~ Courtesy of NWMLS

Northwest MLS brokers say housing market in Washington State indicates recovery

2010-03-08T07:32:00.000-08:00

Northwest Multiple Listing Service members reported strong gains in home sales during February, with brokers pointing to several encouraging signs for a busy spring season. Improving consumer confidence and a looming deadline for homebuyer tax credits are helping to boost activity, according to NWMLS officials.

"We are entering what is traditionally our busiest home selling season," said NWMLS director OB Jacobi, general manager of Windermere Real Estate Company. "With the first job increase since 2008 and closed sales in King County up about 45 percent, there is every indication that our market is in recovery," he added. Jacobi reported "significant traffic" at open houses, which he attributes to the first-time homebuyer tax credit and rising consumer confidence.

Pending sales (offers made and accepted, but not yet closed) jumped nearly 45 percent last month compared to a year ago, marking the 11th straight month of month-over-month increases. Twelve of the 21 counties in the MLS market area reported double-digit gains in pending sales, led by San Juan County (up 85.7 percent), Snohomish County (up nearly 71 percent) and King County (up nearly 63 percent).

Closed sales also outperformed year-ago totals, rising 33.5 percent. Members tallied 3,214 completed transactions last month, up from the 2,407 closed sales for February 2009.

Prices, while showing signs of stabilizing, still lagged year-ago figures. Area-wide, the median price for last month’s closed sales of single family homes and condominiums (combined) was $260,000, down about 6.5 percent from a year ago. The median price for single family homes (excluding condos) dipped 4.6 percent, while condo prices declined nearly 9 percent.

In the four-county Puget Sound region, the median price for single family homes that sold and closed last month was $297,000, down about 2.6 percent from the year-ago figure of $305,000. Condo prices in the area fell 7.7 percent, from the year-ago selling price of $253,000 to $233,500 for last month’s sales.

MLS members added 10,663 new listings to inventory last month, bringing the total number of active listings in the system to 36,350. That total is down 7.5 percent from the same month a year ago, creating a more balanced market that favors neither buyers nor sellers.

Move-up buyers are accounting for some of the surge in activity. Brokers credit the combination of a $6,500 tax incentive for qualified repeat buyers and thawing jumbo loan market as factors in spurring activity for this segment.

"Over the past 90 days there has been a buildup of positive momentum in the housing market and we continue to see evidence that the tax credit extension/expansion is working," remarked J. Lennox Scott, chairman and CEO of John L. Scott, Inc.

Scott noted higher priced areas, such as Mercer Island, Redmond, and Issaquah, are seeing an uptick in home sales – suggesting more move-up buyers are engaging in the market. "Historically low interest rates continue to be a motivating factor which when combined with the tax credit give buyers a significant purchasing power advantage," he commented.

Interest rates on jumbo loans (more than $567,500 in King, Snohomish and Pierce counties) fell to 5.79 percent on a 30-year fixed-rate loan in the past few weeks. That’s a five-year low, according to Informa Research Services, whose clients include the nation’s top 25 banks.

Noting the peak real estate season is approaching, MLS director Meribeth Hutchings, pointed to several encouraging signs. "Homes are more affordable, mortgage rates are at all-time lows, and employment in the state appears to be on the rise," said Hutchings, the broker at Windermere Real Estate/Lake Stevens. "All signs point to a strong spring," she added.

Earlier in the week, the state Employment Security Department reported the state’s economy "picked up some steam in January," adding an estimated 12,400 jobs – the first monthly gain since November 2008.

NWMLS Dick Beeson, broker/owner of Windermere Real Estate/Commencement Associates in Tacoma, attributes the lift in activity to lower prices and a hopeful jobs picture. He said the price point of new listings in some areas is 10-to-15 percent lower than the asking price of new listings added at this time a year ago, which is opening up opportunities for more buyers.

"The plethora of shorts sales and foreclosures has diluted the price point of many homes that are selling, making appraisals more challenging," Beeson reported. He believes the tax credit has "helped only marginally." The real potential of a recovered housing market, according to Beeson, will come with new employment for many displaced workers. Recent employment gains and reports of rising consumer confidence are encouraging, he noted.

"We can see and hear the rumblings of pent-up demand from buyers," Beeson commented, adding he expects spring and summer sales to outpace last year because there are such good price values in the market. He said they are reminding buyers of the possibility of rising mortgage interest rates due to the Federal Reserve’s plan to stop buying mortgages by the end of March.

~ Courtesy of NWMLS

National Real Estate News

2010-03-01T08:14:00.000-08:00

New home sales fell 11.2% in January to a record low level. Existing home sales weren't very pretty either, down 7.2%, though they're UP 11.5% over a year ago. Let's remember that last Fall we all thought the tax credit was going away at the end of November. Many sales got pushed into October and November, causing sales drops the next two months. The median new home price is down just 2.4% year over year and the average price is now UP 3.7%. For an existing home, the median price is unchanged from a year ago and the average price is UP 2.6%. More evidence home prices are stabilizing, with some analysts expecting modest gains for the year. Supporting this, the Case-Shiller home price index was UP 0.3% in December, its seventh straight monthly rise.

Even more interesting was the news that this has actually been a very good decade for home prices. From January 2000 to December 2009, prices were UP 46%, making residential real estate a clearly profitable investment. That's not even factoring in the mortgage interest and real estate tax deductions homeowners get!

Finally, we've reported that the Fed will stop buying mortgage bonds at the end of this month and experts feared rates may edge up. Now analysts say mortgage rates might not move much at all. This stems from the fairly calm market reaction to last week's hike of the Fed's discount lending rate (which is NOT the key Fed funds rate). Seeing little or no move in today's low mortgage rates is good news for the near term.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

A leading indicator for home prices? Follow the rents!

2010-02-24T15:33:00.000-08:00

The big question for home buyers and sellers today is: "Where are home prices headed?" People want to know if now is a good time to buy or sell, or if they should wait. We all need to stay on top of trends in real estate values -- so what's a good way to analyze the situation?

Yale economist Robert Shiller states it bluntly: "If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure." Shiller is the co-developer of the S&P Case/Shiller Home Price Indices that monthly track residential real estate values nationally and in 20 metro areas.

Traditionally, people have been willing to pay a modest premium to own a home rather than rent it. Recent studies report that in 1999, rents averaged 87% of the after-tax mortgage payment for houses and condos of similar size in the same neighborhood.

When home prices took off, this percentage changed. By mid-2006, rents had fallen to less than 60% of after-tax mortgage payments. In some markets, owners were paying twice as much as renters for a similar property in the same neighborhood. In a few places, owner monthly payments were three times average rents.

The 87% ratio of rent to ownership cost for 1999 is a good benchmark because it stayed around that level throughout the 1990's and the steep rise in home prices hadn't really begun.

With that as our guide, we can conclude that home prices at last appear to be stabilizing. By the end of October 2009, rents on average were up to 83% of ownership costs!

Conditions vary from market to market, so check your own area. But with historically low mortgage rates, plus the homebuyer tax credit, this is a great time to be buying or selling.

National Real Estate News

2010-02-22T08:18:00.000-08:00

Builders are jumping on the recovery bandwagon, as January Housing Starts beat consensus estimates, heading UP 2.8% to an annual rate of 591,000 units. Single-family starts are now 35.6% up from their low a year ago. Total new building permits dropped a tad in January, but single-family permits were up 0.4% for the month and UP 48.2% from a year ago.

The trend indicates more improvement ahead. Permits for single-family homes are 7.4% higher than starts in states requiring building permits, well above the historical norm. Many observers feel home building is in the early stages of a serious rebound. Supporting this, the National Association of Home Builders reported builder confidence higher in February, going from 15 to 17 points, 8 points up from a year ago.

Although the Fed will stop buying Mortgage Backed Securities (MBS) at the end of March, some analysts now feel this may not cause mortgage rates to rise much, if at all. That's because Fannie Mae and Freddie Mac recently announced their plan to buy up to $200 billion in delinquent loans from their own MBS and pass-through pools. Friday, the Mortgage Bankers Association (MBA) reported the percentage of delinquent home loans shrank in Q4. MBA chief economist Jay Brinkmann feels that fewer new problem mortgages could be signaling the "beginning of the end" of the foreclosure crisis. Let's hope so...

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Inflation Concerns in the Future

2010-02-19T15:51:00.000-08:00

The Consumer Price Index is a very closely watched report as it is one of the leading indicators of inflation. In January the CPI rose by .2%, less than the .3% expected. This left the year over year CPI at 2.6%, below expectations of 2.8%. The more closely watched Core CPI fell by .1%, below expectations of a .1% rise. The last time the Core CPI showed a negative monthly reading was 28 years ago.

While inflation is virtually non-existent right now, things can change down the road. There is much talk about inflation amongst Fed officials, economists and the media. There are many different opinions surrounding the topic. Whenever there is an abundance of money being pushed into the system, one must worry about inflation resulting.

Fed President Thomas Hoenig has recently expressed much concern over future inflation. He is so passionate about it, he has in his office a framed picture of a 500,000 German mark bill – which would have purchased a home in 1921, but due to sudden inflation, wouldn’t purchase a loaf of bread just two years later.

Real estate is an investment that has been utilized as a hedge against inflation. With future inflation concerns, low home prices, homebuyer tax credits, and historically low interest rates, now represents one of the best opportunities in history to purchase real estate!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2010-02-16T20:40:00.000-08:00

The National Association of Realtors last Thursday reported existing home sales UP 27.2% for the last three months of 2009 versus a year earlier. This amounted to a seasonally adjusted annual rate of 6 million homes. -- a 13.9% increase over the third quarter's annual rate of 5.29 million homes. Clearly, buyers are taking advantage of the low mortgage interest rates and the tax credit that was extended and expanded by Congress.

The existing home sales increase from Q3 to Q4 occurred in 48 states and D.C., with 32 of those states showing double-digit gains. Year-over-year, sales were higher in 49 states and D.C., up by double digits in all but 3 states. Distressed property made up just 32% of Q4 sales versus 37% of sales a year ago.

The national median price of an existing single-family home, at $172,900, was down 4.1% year-over-year -- but that was the smallest price decline in over two years. Even better, out of the 151 metropolitan statistical areas studied, 67 of them showed a RISE in the median home price!

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Eastside Statistics - January, 2010

2010-02-08T14:38:00.000-08:00

Current Residential & Condo listings - 3,742 (down 15.09% from last year)
New listings taken this month - 1,462
Pending sales this month - 723 (up 68.93% from last year)
Percent of listings that sold this month - 19.32%
Median closed sales price - Jan. ‘09, $447,500
Median closed sales price - Jan. ‘10, $445,000
Rate of appreciation = -0.56%

~ Courtesy of NWMLS

King County Statistics - January, 2010

2010-02-08T14:36:00.000-08:00

Current Residential & Condo listings - 10,679 (down 11.27% from last year)
New listings taken this month - 4,312
Pending sales this month - 2,211 (up 47.40% from last year)
Percent of listings that sold this month - 20.70%
Median closed sales price - Jan. ‘09, $364,137
Median closed sales price - Jan. ‘10, $350,000
Rate of appreciation = -3.88%

~ Courtesy of NWMLS

Snohomish County Statistics - January, 2010

2010-02-08T14:35:00.000-08:00

Current Residential & Condo listings - 4,901 (down 12.40% from last year)
New listings taken this month - 1,924
Pending sales this month - 949 (up 42.07% from last year)
Percent of listings that sold this month - 19.36%
Median closed sales price - Jan. ‘09, $295,000
Median closed sales price - Jan. ‘10, $267,995
Rate of appreciation = -9.15%

~ Courtesy of NWMLS

Northwest MLS members report a 28 percent increase in pending sales from last year

2010-02-08T14:33:00.000-08:00

“More certainty” and “more stability” in the market contributed to a boost in activity during January, according to officials from Northwest Multiple Listing Service (NWMLS). Brokers reported an increase of nearly 27% in pending sales (purchase offers made and accepted, but not yet closed) from December and a 28% jump from twelve months ago.

Two other indicators of activity fell -- inventory and sales prices. There were 3,915 fewer active listings of single family homes and condominiums in the NWMLS system compared to a year ago, a drop of about 10.3%. Sales prices area-wide for January’s closed sales declined about 4.8% from year-ago figures. (The NWMLS service area covers 21 counties.)

“We anticipated there would be improved sales in the first-time buyer market and are encouraged to see activity gaining ground in the higher price ranges as well,” observed NWMLS director Joe Spencer, the president and COO of John L. Scott Real Estate. He cites historically low interest rates, great affordability, and the home buyer tax credits as factors for “helping push us into a more stable market,” and noted he expects to see this momentum continue in the coming months.

Currently, there is about a 6.1 months supply (ratio of houses for sale to houses sold). Economists consider a supply of 3-to-6 months to be a balanced market.

“The market has definitely picked up, with more interest and action by buyers,” reports Dick Beeson, broker/owner of Windermere Commencement Associates in Tacoma and a member of the NWMLS board of directors. “Sellers are expecting better results this year than last year, but not necessarily higher prices,” he remarked.

Short sales and tax credits may be skewing some of the data, according to industry insiders. “The short sale inventory continues to climb yet many banks are starting to get their act together and actually making it easier for agents and buyers to get faster answers to their offers,” Beeson said. “Shorter closing times are good for everyone,” he stated.

Lawrence Yun, chief economist for the National Association of Realtors (NAR), believes the tax credit is skewing market data. Commenting on NAR’s report of December activity, which showed a 10.9 percent jump in pending sales from December 2008 and 1.0 percent increase from November, Yun said “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded.” Noting December was the fifth highest monthly tally in two years, Yun stated “These swings are masking the underlying trend, which is a broad improvement over year-ago levels.”

Beeson said the fast-approaching tax credit deadline is expected to boost activity in the next few months. “This year will be better than last because of more certainty in the market,” he remarked.

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30 to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

National Real Estate News

2010-02-08T12:00:00.000-08:00

The Pending Home Sales Index recovered from its November slump, increasing 1.0% in December, putting it 10.9% over its level of a year ago. National Association of Realtors (NAR) chief economist Lawrence Yun sees "...a broad improvement over year-ago levels. December activity was the fifth-highest monthly tally in two years." The slump was attributed to the rush before November to grab the tax credit set to expire at the end of that month.

We now know the tax credit was extended to buyers who can sign a contract by April 30 and close on the home by June 30. It's also been expanded, adding a $6500 credit for repeat buyers to the $8,000 credit for first timers. The NAR's Yun estimates 2.4 million households should take advantage of the credit this year.

The NAR also released their adjusted overall outlook for this year and next. They estimate existing home sales will grow from 5.19 million in 2009 to 5.66 million in 2010 and 5.7 million in 2011. They see new home sales growing from 375,000 in 2009 to 446,000 in 2010 and 637,000 in 2011. They believe prices have bottomed, projecting a 3.4% hike in the median price for existing homes to $179,800 this year and then a 4.3% rise to $187,500 in 2011. New homes should go up 3.7% this year to a $221,300 median price and then 4.7% in 2011 to $231,700.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Unemployment Reports Cause Major Volatility

2010-02-05T17:51:00.000-08:00

The jobs reports were released today and the numbers were both good and bad… depending on which survey you are looking at!
Analysts were expecting to see a gain of 15,000 new jobs created. Instead, the report showed a loss of 20,000 jobs. At the same time, the unemployment report was released at 9.7%, down from 10.0% just a month ago. Unemployment numbers for both October and December have been revised considerably worse as well.

Both the stock and bond markets have been trying to make up their mind as to how to react to this information, causing great volatility in the markets today. On January 19th, the Dow was at 10,725, and is currently down to 9,974. Mortgage bonds started out the day down 25 basis points and have since turned around and at one point were up by 19 basis points…a nearly 50 point swing in one day!

Volatility may be more prevalent in the weeks ahead as the Fed purchasing of mortgage backed securities comes to an end. We have been warning for several weeks now that higher rates are likely on the horizon. If you or someone you know is in the market to purchase or refinance, don’t miss out on these rates!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2010-02-05T17:28:00.000-08:00

The week began with December Existing Home Sales dropping 16.7%. Some observers felt this was the result of uncertainty over the homebuyer tax credit, scheduled to expire at the end of November. The tax credit was, as we now know, extended into this year, but it wasn't announced soon enough to help December sales. Nonetheless, Existing Home Sales are UP 15.0% over a year ago. And the median price of an existing home is now $178,300, UP 1.5% over a year ago and the best year-over-year comp since 2006. Finally, inventories are now down to 3.29 million, their lowest reading since March 2006.

Wednesday, New Home Sales were reported at a 342,000 annual rate, down 7.6% for December. But inventories are now at 231,000, 59.6% below their mid-2006 peak and at their lowest level since 1971, when the population was two thirds its size today. The Case-Shiller index of home prices in the 20 biggest markets went up a seasonally-adjusted 0.2% in November. This was the sixth month in a row the index gained and prices increased in 14 of the 20 markets. The FHFA price index for homes bought with conforming mortgages went up 0.7% in November, its fifth advance in the last seven readings.

According to Freddie Mac's weekly Primary Mortgage Market Survey, mortgage rates inched down for the fourth week in a row. Prospective homebuyers and owners looking to refinance should note that the Fed reiterated its intention to end mortgage bond purchases on March 31. Many experts feel this will make rates head up a bit.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Upcoming FHA Changes Announced

2010-02-05T17:22:00.000-08:00

The Federal Housing Administration (FHA) has announced details of changes intended to strengthen its capital reserves which were reported to be headed into dangerously low territory late last year. The changes are designed to increase FHA’s income from borrowers while reducing its portfolio’s risk. The increased popularity of FHA in the absence of alternative products has resulted in FHA funding 30% of real estate transactions today.

Policy changes go into effect for case numbers assigned as of April 5th, 2010:

Upfront Mortgage Premium to be raised from 1.75% to 2.25%.

On a $300,000 loan, the .5% increase is equivalent to an extra $1,500 financed into the loan amount which will increase the borrower’s payment by roughly $8 month.

Allowable Seller Concessions reduced from 6% to 3%.

The current level exposes FHA to excess risk of inflated values.

Increased Enforcement of FHA Lenders.

Enhanced monitoring of lender performance and compliance with FHA guidelines and standards. HUD is pursuing increased legislative authority for enforcement.

Consumers with FICO scores below 580 must put 10% down.

Nothing lost here as most lenders already require a 660 minimum credit score for all borrowers. FHA is continuing to review its overall response to housing market conditions and evaluating lending standards.

If you have specific questions about the upcoming changes, please contact LoanCentral.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2010-01-11T07:53:00.000-08:00

It was reported last week that Pending Home Sales (contracts on existing homes) fell 16% in November, not at all surprising since buyers expected the $8,000 tax credit to expire at the end of October. This artificially boosted contract signings for August-October and artificially depressed them for November. Still, November pending sales were higher than at any time from mid-2007 to mid-2009.

Wednesday, the minutes from the Fed's December 15–16 meeting were released, revealing some debate over the future of their purchases of Mortgage Backed Securities (MBS), which helped keep interest rates at record lows. The Fed said it would end MBS purchases March 31, but according to the minutes, "a few" of the Fed's 12 members are in favor of expanding and extending the program. On the other side, one member felt "improvement in...the economic outlook suggested that...(MBS purchases) could be scaled back."

Who knows what will happen. Most experts feel the rates on 30-year fixed-rate mortgages will head up during the next two years, so smart homebuyers are focusing on taking advantage of the present very favorable rate situation along with the tax credit still available.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Eastside Statistics - December, 2009

2010-01-07T13:43:00.000-08:00

Current Residential & Condo listings - 3,460 (down 18.30% from last year)
New listings taken this month - 612
Pending sales this month - 573 (up 79.06% from last year)
Percent of listings that sold this month - 16.56%
Median closed sales price - Dec. ‘08, $470,000
Median closed sales price - Dec. ‘09, $465,000
Rate of appreciation = -1.06%

~ Courtesy of NWMLS

King County Statistics - December, 2009

2010-01-07T13:40:00.000-08:00

Current Residential & Condo listings - 9,652 (down 17.05% from last year)
New listings taken this month - 1,986
Pending sales this month - 1,767 (up 51.41% from last year)
Percent of listings that sold this month - 18.31%
Median closed sales price - Dec. ‘08, $370,700
Median closed sales price - Dec. ‘09, $350,000
Rate of appreciation = -5.58%

~ Courtesy of NWMLS

Snohomish County Statistics - December, 2009

2010-01-07T13:38:00.000-08:00

Current Residential & Condo listings - 4,436 (down 17.49% from last year)
New listings taken this month - 935
Pending sales this month - 719 (up 31.44% from last year)
Percent of listings that sold this month - 16.21%
Median closed sales price - Dec. ‘08, $307,000
Median closed sales price - Dec. ‘09, $280,000
Rate of appreciation = -8.79%

~ Courtesy of NWMLS

Western Washington pending home sales mark best December since 2006

2010-01-07T13:36:00.000-08:00

“Home for the holidays" took on special meaning for 4,399 buyers whose purchase offers were accepted during December, according to the latest report from Northwest Multiple Listing Service. That volume of pending sales was up more than 35 percent from a year ago and marked the best December since 2006.

Brokers say it's a tough market, but point to several indicators for good activity during this year's first quarter. "The distance seems great, but the direction is a good one," observed NWMLS director Dick Beeson.

"With what our agents already have in the pipeline, I'm optimistic about a positive first quarter," said NWMLS director Meribeth Hutchings, the broker at Windermere RE/Lake Stevens. "We had a very strong December and the momentum seems to be there to keep things moving," she remarked, noting three agents were in the office on New Year's Eve writing offers.

Shrinking inventory, the extension of the first-time home buyer tax credit, and favorable interest rates are among factors brokers believe will sustain activity.

"Affordability has never been better," said Dick Fulton, a past chairman of the NWMLS board of directors whose career spans more than two decades. Fulton, the executive vice president at Coldwell Banker Bain, suggests would-be sellers list their property soon, rather than wait until spring, to take advantage of favorable conditions. With inventory much smaller than a year ago, sellers should benefit from more exposure to a good pool of buyers, he suggests.

Inventory area-wide is down about 15.6 percent from a year ago. For the four-county Puget Sound region, the number of active listings is down more than 18 percent.

NWMLS members reported 4,711 closed sales during December, up 54.7 percent from the year-ago total of 3,045 when the holiday slowdown was compounded by record low temperatures and snow.

Dick Beeson, owner/broker of Windermere Commencement Assoc. in Tacoma, said the market is "chugging along," despite hurdles associated with the lending market, appraisals and foreclosures. "The hardest part of the process still remains the uncertainty of the lending market as banks continue to ratchet up the qualifications and criteria for borrowers. Appraisals are difficult because even if the value comes in at the purchase price many lenders do a second review of the appraisal and find fault with the outcome, therefore creating a problem for buyers and sellers." He also noted the large volume of foreclosures has driven down prices – something he believes will persist throughout much of this year.

National Real Estate News

2010-01-04T10:48:00.000-08:00

Last Tuesday the Case-Shiller Home Price Index for 20 cities came in UP a seasonally adjusted 0.4% for October. This was the fifth consecutive monthly increase for the index. Year-over-year, prices are still down 7.3%, but that's a less steep rate of decline than we've been seeing.

It looks like home prices could be stabilizing, though well below their peaks in most markets. This price decline, plus the dramatic drop in mortgage rates, have made homes more affordable than they've been in a long time. A writer for the Wall Street Journal compared home price index values, mortgage rates and average weekly earnings going back to 1987. The finding? On average, housing is as affordable now as it was in the mid-1990's, when homes were a real steal. Of course, this conclusion is based on average prices, so affordability may be greater or less in individual markets.

Christmas Eve, the Treasury lifted the limit on the money it can put into Fannie Mae and Freddie Mac to keep their net worth positive over the next three years. Some economists point out that Fannie and Freddie could now replace the Fed as a big buyer of mortgage-backed securities to help keep mortgage rates down after March 31. That would be great, but nothing is certain. Smart buyers are taking advantage of TODAY'S low mortgage rates AND the expanded tax credit that requires a signed contract by April 30 and a closing by June 30!

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

New Good Faith Estimate and HUD-1 Regulations Start January 1st!

2009-12-30T06:49:00.000-08:00

Beginning with new loan applications taken January 1st, there will be a new Good Faith Estimate form that all mortgage lenders will now be required to use. And it’s not just a new form that’s being released…but a whole new set of regulations that accompany this new form.

The Government will now regulate when a Good Faith Estimate can be provided to a consumer. A lender must have ALL of the following 6 pieces of information before issuing a Good Faith Estimate: borrower’s name, income, social security number, estimated property value, loan amount, & property address. In addition, some of the closing cost estimates provided on the GFE are now binding figures…meaning they cannot change by more than 10% from the original quote.

Since the information contained in the new GFE is drastically different from what consumers are used to seeing, the new form will take on a different role than it has traditionally served. Per the new law, the GFE no longer provides the consumer with their total monthly payment or total cash to close; rather it is intended to be more of an accurate & binding disclosure of closing costs.

At LoanCentral, we have created new worksheets to ensure the consumer is aware of their total monthly payment and total cash to close. This is important information borrowers need at their fingertips to assist them in making financial and buying decisions regarding their new home purchase.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-12-30T06:47:00.000-08:00

Last week presented us with divergent housing news. First, November Existing Home Sales came in UP 7.4%, at an annual rate of 6.54 million. This was way ahead of estimates and a 44.1% sales jump over a year ago. We had increases in all regions of the country, all due to single-family homes.

The median price went up to $172,600, down 4.3% from a year ago, but a big improvement from January, when prices were off 17.5% from the prior year. The supply declined to 6.5 months, as inventories fell to 3.52 million, their lowest level since December 2006. In the past three months, Existing Home Sales are up 28.5%. One more sign of housing market recovery came in a report that prices for homes financed with conforming mortgages increased 0.6% in October.

Now for the news in the other direction. November New Home Sales fell 11.3%, to an annual rate of 355,000. But November was an unusual month, with uncertainty over the tax credit slowing things down. New Home Sales are still UP 7.9% from January and inventories dropped in November to 235,000. This is the lowest level since 1971 and a 58.9% decline from the mid-2006 inventory peak. So even at this slower sales pace, experts feel home building will have to increase over the next few months to meet the demand that's out there.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

National Real Estate News

2009-12-21T07:13:00.000-08:00

We saw strong evidence last week that homebuilders are well on their way to recovery. Housing starts for November were UP 8.9%, to an annual rate of 574,000 units. Single-family starts were 35.0% higher than their January and February lows. The very volatile multi-units starts were UP 67.3% from the previous month's cyclical low. And get this -- starts were UP in every major region across the country!

Building permits are the future of homebuilding and guess what. They were UP 6.0% for November, to an annual rate of 584,000 units. This was above expectations and the fastest rise in a year. Single-family permits were UP 5.3%, registering their best pace since September 2008, when the economic mess began. Overall, homebuilding is UP in Q3 and many experts anticipate another gain in Q4 and even bigger increases in 2010-2011.

Mortgage rates continue at attractive levels, though they're creeping up. Fannie Mae's survey for the week ending last Thursday showed 30-year fixed-rate mortgages averaging 4.94% with an average 0.7 point (including the origination fee) for 80% loan-to-value (LTV) ratio loans. Last week the Fed confirmed they would end their purchase program for Mortgage Backed Securities on March 31, 2010. This is expected to cause mortgage rates to keep inching up. One more reason for buyers to act now!

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

National Real Estate News

2009-12-14T08:13:00.000-08:00

Last week gave us more proof the country's housing market is heating up. According to Freddie Mac's quarterly national Conventional Home Price Index (CMHPI), home prices were UP 0.9% in Q3 for their second quarterly increase in a row! And the Q2 number was revised upward to 2.0%! These rises have taken back about two-fifths of the price declines seen in Q4 of 2008 and Q1 of this year.

Freddie Mac's chief economist said, "the home-price gains of the past two quarters reflect improving existing-home sales.... Sales volume was up 15% between the first and third quarters of this year." He also added: "The lowest average fixed-rate mortgage rates in a half-century, lower house prices, incentives to encourage first-time buyers, and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes." The Standard & Poor's/Case-Shiller Home Price Index also reported a second consecutive quarterly price increase, theirs at 3.1%!

A separate study came in with inventory declines for the 17th straight month, showing listings down 2.42% for November versus October and down 27.64% from last year! A monthly Foreclosure Market Report showed an almost 8% decrease for November, down 15% from the July peak. We're still above last year's numbers, but finally trending in the right direction!

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Changes to the Homebuyer Tax Credits To Know About

2009-12-11T12:03:00.000-08:00

The IRS has issued formal guidelines for those applying for the new $6,500 homebuyer tax credit and the extended version of the $8,000 first-time homebuyer tax credit. Legislation known as the Worker, Homeownership, and Business Assistance Act of 2009 implements these credits until April 30, 2010.

At the top of the list of changes is that all home purchases after November 6th must use the new version of IRS Form 5405 to claim the credit. This revised form is not yet available from the IRS. If your purchase closed after November 6th, wait to file for your credit until the new form is available or your request may not be processed. Other highlights of the changes:

• Income limit has been raised to $125,000 for single filers and $225,000 for joint returns

• Single filers with income up to $145,000 or joint filers with incomes up to $225,000 may be eligible for a partial tax credit

• $800,000 is the new maximum purchase price

• No one under 18 can claim the credit under any circumstances

• Anyone who is considered a dependent on another’s federal taxes is ineligible

For more information visit www.irs.gov, contact your tax professional, or call LoanCentral!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-12-09T15:39:00.000-08:00

Positive economic reports on housing continue, with October Pending Home Sales UP 3.7%. This was the ninth month in a row Pending Home Sales rose and the index is now 31.8% over October last year. Since this tracks the level of contracts on existing homes, Existing Homes Sales should continue their impressive rise for the next couple of months.

The National Association of Realtors also predicted sales of previously owned homes would go UP 4.8% this year, reversing the downward sales trend of the previous two years. For 2010, the NAR projects existing home sales UP 10.8%, with a 3.6% hike in the median price. For new homes, the median price is expected to rise 3.9%. Of course, smart homebuyers will act now to avoid these anticipated price increases AND take advantage of the newly extended and expanded tax credits. High net worth individuals are already showing up--in a recent survey, 35% said they planned to increase their investments in real estate. 45% of them contend there are significant opportunities in residential markets, with many bargains to be had.

Anyone need further incentive? Freddie Mac reported mortgage rates down for the fifth straight week, now at record lows! The 30-year fixed-rate mortgage averaged 4.71%, with an average 0.7 point, for prime borrowers with 20% down payments. That's a new low for the survey which has been tracking rates since 1971.

~ Courtesy of Chuck Chrobak, 425.330.9657, CChrobak@GolfSavingsBank.com

Eastside Statistics - November, 2009

2009-12-06T17:58:00.001-08:00

Current Residential & Condo listings - 4,156 (down 14.85% from last year)
New listings taken this month - 854
Pending sales this month - 643 (up 50.59% from last year)
Percent of listings that sold this month - 15.47%
Median closed sales price - Nov. ‘08, $489,500
Median closed sales price - Nov. ‘09, $445,000
Rate of appreciation = -9.09%

~ Courtesy of NWMLS

King County Statistics - November, 2009

2009-12-06T17:56:00.000-08:00

Current Residential & Condo listings - 11,474 (down 15.50% from last year)
New listings taken this month - 2,571
Pending sales this month - 1,984 (up 37.40% from last year)
Percent of listings that sold this month - 17.29%
Median closed sales price - Nov. ‘08, $365,000
Median closed sales price - Nov. ‘09, $337,000
Rate of appreciation = -7.67%

~ Courtesy of NWMLS

Snohomish County Statistics - November, 2009

2009-12-06T17:55:00.000-08:00

Current Residential & Condo listings - 5,063 (down 21.05% from last year)
New listings taken this month - 1,128
Pending sales this month - 787 (up 38.80% from last year)
Percent of listings that sold this month - 15.54%
Median closed sales price - Nov. ‘08, $310,000
Median closed sales price - Nov. ‘09, $274,950
Rate of appreciation = -11.31%

~ Courtesy of NWMLS

Move-up buyers, extended/expanded tax credits boost home sales; Northwest MLS brokers expect momentum to continue in 2010

2009-12-06T17:51:00.000-08:00

Home sales continued to outperform year-ago totals and prices continued to show signs of stabilizing, according to the latest report from Northwest Multiple Listing Service. Brokers credit move-up buyers as one factor for the positive activity.

"This winter will not be 'business as usual' for the housing market," proclaimed the CEO of one brokerage while expressing optimism for 2010.

Pending sales for November tapered off from October's surge during the rush to beat a looming tax credit deadline, but compared to November 2008, home sales jumped more than 31 percent. Members notched 4,888 pending sales (mutual acceptance of an offer) last month, which compares to 3,727 pendings for the same period a year ago.

Pat Grimm, a member of the NWMLS board of directors, said the strength of the first-time buyer market is no surprise. "What has been surprising is the strength in the move-up market," he remarked. First-time buyers led the market recovery, according to Grimm, the designated broker at Windermere RE/Capitol Hill, Inc. "Move-up buyers have definitely picked up the baton," he exclaimed.

Closed sales of single family homes and condominiums (combined) for November outgained year-ago totals by an impressive 76 percent, rising from 2,937 completed transactions to 5,168 closings across the NWMLS service area. Last month's total number of closings (5,168) exceeded the number of pending sales (4,888), a ratio that had not occurred since October 2008.

The median sales price area-wide was down about 7 percent from a year ago, the lowest percentage decline all year. Prices had been off every month this year by double digits until June (down 9.5 percent) and August (down about 8.8 percent), but for past three months the decline has been under 7.5 percent.

Grimm described the market within Seattle as "strong," noting stable prices during much of the year and a brisk pace of activity. "The shift was made away from a buyer's market early this year into a balanced market, and in some areas close to the city core, it's a seller's market," he commented.

Inventory for the MLS map areas encompassing Seattle is down more than 16 percent from a year ago, while pending sales jumped about 33 percent. For single family homes (excluding condos) within the Seattle map areas, inventory declined 20.6 percent from a year ago. The median selling price of $399,995 is 3.6 percent less than twelve months ago.

Inventory area-wide is at its lowest level in nearly two years. At the end of November, brokers reported 36,266 active listings (30,084 single family homes and 6,182 condominiums) across the NWMLS market area. That's down from 43,584 active listings in the system twelve months ago, a drop of nearly 17 percent. Not since January 2008, when brokers represented 34,950 home sellers, has inventory been that low.

"This winter will not be 'business as usual' for the housing market," said Lennox Scott, chairman and CEO of John L. Scott Real Estate. "Thanks to historically low interest rates, adjusted home prices, and the passage of the extended/expanded tax credit, we are getting a running start on the New Year," he added.

Last month, Congress passed new legislation that extends the first-time home buyer tax credit of up to $8,000 to buyers who purchase by April 30, 2010. The legislation also authorized a tax credit of up to $6,500 for qualified repeat home buyers.

Holidays can be favorable time to buy, sell

Although seasonal slowdowns are typical for housing activity, industry experts say now can be a good time for both sellers and buyers. Buyers tend to encounter less competition for the most desirable homes. Also, qualified buyers can expect above-normal attention from service providers who are experiencing a slowdown in their business, including lenders, home inspectors, appraisers and title companies. Lenders may even be willing to extend very favorable mortgage terms or forgo some fees as they vie for business.

Agents are able to devote more time to clients and the smaller selection of homes on the market. Sellers can also benefit from showcasing their homes with tasteful holiday decorations, although home stagers caution them to show restraint and not overdo the décor.

~ Courtesy of NWMLS

Rates Increase This Week

2009-12-05T14:50:00.000-08:00

We have been warning of increasing mortgage rates for awhile now, and this week we have started to see it happening! This week marks the worst week for mortgage rates in months.

The Labor Department reported this morning that only 11,000 jobs were lost in November, which is much lower than the 125,000 expected. In addition, the Unemployment Rate improved to 10% when expectations were for 10.2%. While all of this is good news for the economy, it’s not such good news for mortgage rates which rose in reaction to the reports.

It’s not time to panic yet…rates are still at historically low levels. It is, however, time to take advantage of these rates if you haven’t done so already.

With the government stimulus programs (tax credits for purchases & expanded lending guidelines for refinances) there are numerous opportunities both for those looking to purchase or those looking to refinance. Don’t miss out on this opportunity!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Long-term appreciation among best in country for Seattle-Bellevue-Everett real estate

2009-11-30T13:25:00.000-08:00

The Puget Sound region continues to show it's strength for long-term real estate appreciation. Over a five year period, FHFA statistics ranks the Seattle-Bellevue-Everett area #2 amongst the top 25 metropolitan areas in the country (based on population). Over an eighteen year period, only regions in New York and Denver surpass the Seattle areas #4 ranking for retaining property value.

These long term gains become more impressive given that the Seattle area real estate prices lost nearly 12% over the last year (ranks 20th) and close to 3% since the second quarter of 2009 (also ranks 20th). These statistics suggest that the Puget Sound area is settling close to it's long term real estate values and now could be the best time to jump in the market.

The current tax credits offered by the Federal Government can protect against slight dips in appreciation as this area finds it's equilibrium. Using a $250,000 home as an example, the $6,500 tax credit for repeat home buyers represents a 2.6% hedge against further depreciation. A first time home buyer credit calculates to 3.2%. Combining these tax credits with historically low interest rates creates a pretty good argument for those considering a home purchase to get in the game!

~ Courtesy of The Talon Group - Escrow & Title Services

National Real Estate News

2009-11-30T09:34:00.000-08:00

The economic reports before Thanksgiving were packed with housing market data and, guess what, they were all extremely positive! Monday saw Existing Home Sales UP 10.1% to an annual rate of 6.10 million, the highest since February 2007. Sales are now UP 20% in the past two months and UP 36% from their January lows. Even better, the supply of existing homes was down to just 7 months, with inventories down to 3.57 million, the lowest level in almost three years. This puts existing homes very close to the 6-month supply level of a healthy housing market. The Case-Shiller 20-City Composite Home Price Index rose 0.3% in September. The index also showed its second consecutive quarterly increase, UP 3.1% for Q3, returning to August 2003 levels.

Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%.

Freddie Mac reported mortgage rates down for the fourth straight week, reaching historic lows well below 5%, with an average 0.7 point, for prime borrowers with 20% down payments. Freddie Mac's chief economist said, "Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage."

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Tax Credit Expands Home Buyer, Economic Opportunities; On Pace to Help 70% of Potential Home Buyers

2009-11-22T08:44:00.000-08:00

The National Association of Home Builders (NAHB) is spreading the word to consumers about an important new law that extends and expands an attractive tax incentive for potential home buyers. The Worker, Homeownership, and Business Assistance Act of 2009, signed into law by President Obama on Nov. 6, extends the deadline for the first-time home buyer tax credit and gives a larger group of home buyers the chance to take advantage of this government program.

“The tax credit has already proven to be an effective means of boosting economic activity,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We hope that the government’s action to enhance it will have the intended additional stimulative effect that will help get housing and the economy back on solid ground.”

The new law extends the $8,000 first-time home buyer credit through April 30, 2010, giving buyers who have signed a sales contract by that deadline until June 30 to close their deal. A new credit of up to $6,500 was created for repeat home buyers who buy a principal residence if they have been residing in the home they currently own (or previously owned) for five consecutive years out of the eight years preceding the purchase of the new home.

“It’s not just a first-time buyer tax credit anymore,” Robson said. “Move-up buyers, move-down buyers, and others who have previously owned a home can now qualify as well. In fact, close to 70 percent of all potential home buyers should now qualify for some form of the credit.”

Income limits for eligible buyers have also been increased to allow more consumers to qualify, particularly those in markets with a higher cost of living. Now single taxpayers with incomes up to $125,000 and married couples earning up to $225,000 may be eligible. Partial credits are available to home buyers who earn up to $20,000 more than the limits.

A leading source of consumer information on the tax credit is NAHB’s website at www.federalhousingtaxcredit.com, which saw a huge increase in visits in the days after the new law was signed. It provides basic information about the first-time and repeat buyer credits, detailed question and answer sections, and links to additional home-buying resources for consumers.

“The federalhousingtaxcredit.com website had more than 70,000 visits on the Monday after the President enacted the law,” said Robson. “Since the site was established in mid-2008, there have been more than 6 million visits by people seeking information about the home buyer tax credits. That tells you how hungry consumers are for easy-to-understand information on this great opportunity that has been opened to them.”

NAHB estimates that the home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes.

~ Courtesy of RISMedia

Rates Are Going To Go UP!

2009-11-22T08:35:00.000-08:00

For one of the first times in history, we have the clarity to see that right now likely marks the bottom of mortgage interest rates. We typically never know we have hit the bottom until rates have gone back up. Why the clarity now?

Mortgage rates were hovering in the 6% - 6.5% range a year ago. When the Fed launched its program of purchasing mortgage-backed securities in the first quarter of 2009, we saw mortgage rates suddenly dip to around 5%.

The Fed is now in the process of backing out of buying additional mortgage-backed securities. They have begun to lessen the quantities purchased, and will be completely finished purchasing by the end of first quarter 2010. Most experts believe we will start to see a gradual increase in rates between now and March, with rates ultimately settling back in the 6% - 6.5% range they were in before the Fed stimulus program.

What does this mean in terms of buying power? For a client who can afford a payment of $2,150 per month based on a rate of 5%, this would provide them a loan amount of $400,000. At 6.5%, this same payment would get them a loan of $340,000…a $60K difference!

We may never see rates this low again in our lifetimes! Now is the time to act before rates go UP!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Yun: 2010 Sales to Rise 15 Percent

2009-11-14T09:05:00.000-08:00

Home sales will increase 15 percent to about 5.7 million units, NAR Chief Economist Lawrence Yun told a packed room of REALTORS® today in a residential economic update at the 2009 NAR Conference & Expo.

Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time buyers into the market who wouldn't have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households' fear over continuing price drops.

This virtuous cycle will continue now that the federal government has extended the credit to mid-2010 and expanded it to make a smaller credit available to repeat buyers and to households with higher incomes. “The key is stabilizing prices and preserving household wealth,” he says.

Yun predicts the supply of homes to stabilize at the historic norm of six to seven months. Homes above $500,000 will remain elevated in the near-term, but that weakness will be offset by a hefty drop in starter-home inventories, which are running at about a five months supply.

The tightening inventory at all price points will help improve market performance by bringing supply into better balance with demand, but the added sales, particularly on the higher end, will also increase the number and quality of the market comparables used by appraisers to assign valuations. Once appraisals improve, foreclosures will ease, blunting their drag on the market and making it less likely that Fannie Mae, Freddie Mac, and even FHA will need help from the taxpayer.

“Then we’ll be set for a durable economic expansion,” he said.

New-home sales, which comprise about 10 percent of the market, will continue at suppressed levels--about 550,000 units, down from more than a million during the boom--mainly because builders have scaled projects way back, in part because financing isn't available.

"Weakness in new-home sales shouldn’t be viewed as tepid demand," he said.

Even under the most positive economic scenario, unemployment will remain elevated through 2010. Yun is predicting unemployment to stay near double-digits going into 2011, qualifying this recession, as some economists have, as the "Great Recession.”

For the longer term, the huge deficit run up by the federal government to shore up the economy remains the big question mark. Although the deficit is expected to improve each of the next three years, it will remain at historic highs. Unless the federal government releases a credible plan for shrinking it, investors will start to balk and interest rates will need to rise to bring them back. Should inflation be the result, the housing recovery will be set back.

Source: Robert Freedman, REALTOR® magazine

Homebuyer Tax Credit Extension and Expansion

2009-11-14T09:00:00.000-08:00

On November 6, 2009 President Obama signed a bill extending the First Time Homebuyer Tax Credit into the first half of 2010. Additionally, the bill has provisions to offer credits to current homeowners purchasing new homes.

The “First Time Homebuyer Tax Credit” remains $8,000, with income restrictions being raised to $125,000 for single buyers and $225,000 for married couples. First Time Homebuyers are defined as those who have not owned a home within the last 3 years.

The new “Current Homeowners Credit” grants a tax credit of up to $6,500 to current homeowners purchasing a new primary residence. Current Homeowners are defined as those who have owned a home for five of the previous eight years. The income restrictions are the same for this program as the “First Time Homebuyer Tax Credit”.

To be eligible for the credits borrowers must have a signed purchase agreement by April 30, 2010 and must close by June 30, 2010.

For those in our armed forces stationed outside the United States for 90 days from January 1st, 2009 and April 30th, 2010, their eligibility will be extended until June 30th, 2011.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Tax credit spurs big surge in Western Washington home sales

2009-11-10T16:34:00.000-08:00

Credit the tax credit and its impending expiration deadline for a surge in home sales last month. Members of Northwest Multiple Listing Service reported a 63 percent jump in pending sales during October compared to the same month a year ago, a gain many brokers attribute to a tax credit that is set to expire at midnight on Nov. 30.

The new figures from Northwest MLS show continued signs of some stability in the market and improving consumer confidence. Inventory is at its lowest level since December 2008, and the year-over-year price decline, at 7.2 percent area-wide, is the smallest drop since June 2008.

For the four-county Puget Sound area (King, Snohomish, Pierce and Kitsap), inventory has shrunk 20 percent since twelve months ago. The selection of single family homes (excluding condominiums) in the four-county area is down 22 percent.

Northwest MLS directors who commented on October activity support extension of the tax credit that allows first-time home buyers who purchase a principal residence between Jan. 1, 2009 and Dec. 1, 2009 a credit of up to $8,000.

"I believe the $8,000 homebuyer credit set off a great chain reaction. The first-time homebuyer creates a move-up buyer," explained MLS director Meribeth Hutchings, the broker/owner of Windermere Real Estate/Lake Stevens. "The tax credit was the engine that started driving the market again," she remarked, adding, "It was a great October; hopefully the tax credit extension will be approved and the market will stay strong through the winter."

NWMLS director Kathy Estey, managing broker at John L. Scott's Bellevue office, cites a combination of factors for boosting activity, including the tax credit, stabilizing prices for entry level homes and diminished inventory. "Sales are not just fueled by the first-time buyer stimulus," she said, noting it prompted procrastinators to jump into the market and others to bail out of short sales that had not yet been accepted by lenders, opting instead to purchase homes that are not in the "distressed" categories.

"The fourth quarter is one of the best times for buyers, so we expect the positive activity to continue," Estey remarked, noting sales in her office were up again in October, "a month when we expect to see a slight decline."

Estey credits soft prices for contributing to the uptick in sales for homes priced at a million dollars or more. Her office participated in 10 sales priced at over a million dollars last month, calling that volume a "great improvement" from earlier in the year. In King County, 86 homes and condos fetched prices of $1 million or more, up from the year-ago total of 62 such transactions, according to NWMLS data.

"The compression of prices has created great values in that price range, the stock market has replaced much of what was previously lost, and there is reasonable financing for jumbo loans (20 percent or more down and good credit required)," Estey observed, while voicing hope for an extension of the tax credit.

Eastside Statistics - October, 2009

2009-11-10T16:26:00.000-08:00

Current Residential & Condo listings - 4,441 (down 16.19% from last year)
New listings taken this month - 1,141
Pending sales this month - 926 (up 95.77% from last year)
Percent of listings that sold this month - 20.85%
Median closed sales price - Oct. ‘08, $465,000
Median closed sales price - Oct. ‘09, $433,750
Rate of appreciation = -6.72%

~ Courtesy of NWMLS

King County Statistics - October, 2009

2009-11-10T16:25:00.000-08:00

Current Residential & Condo listings - 12,321 (down 15.93% from last year)
New listings taken this month - 3,764
Pending sales this month - 2,951 (up 70.87% from last year)
Percent of listings that sold this month - 23.95%
Median closed sales price - Oct. ‘08, $358,500
Median closed sales price - Oct. ‘09, $349,950
Rate of appreciation = -2.38%

~ Courtesy of NWMLS

Snohomish County Statistics - October, 2009

2009-11-10T16:23:00.000-08:00

Current Residential & Condo listings - 5,171 (down 23.51% from last year)
New listings taken this month - 1,474
Pending sales this month - 1,197 (up 91.21% from last year)
Percent of listings that sold this month - 23.15%
Median closed sales price - Oct. ‘08, $317,000
Median closed sales price - Oct. ‘09, $280,000
Rate of appreciation = -11.67%

~ Courtesy of NWMLS

National Real Estate News - Homebuyer Tax Credit Extended!

2009-11-09T08:27:00.000-08:00

Big news for the housing market came Friday when the President signed a bill extending and broadening tax credits for homebuyers. Major points were first reported in an Inside Lending Bulletin last Thursday. The tax credits apply to contracts signed by April 30, 2010, that close by June 30. Income limits for eligibility have been increased to $125,000 per year for individuals and up to $225,000 per year for couples. Credits up to $8,000 continue for first-time buyers but there is now a $6,500 tax credit for buyers who've owned their current home at least five of the last eight years. However, homes selling for more than $800,000 are not eligible.

The week began with September Pending Home Sales coming in UP for the eighth month in a row. The National Association of Realtors index was UP 6.1% for the month, and UP 21.2% over September a year ago! The index hit 110.1, with 100 equaling the average level of sales contracts in 2001, the first year measured by the index.

And, yes, the Mortgage Bankers Association once again reported the average contract interest rate for 30-year fixed-rate mortgages dropped. This time it hit 4.97% with points sinking to 1.01 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

Do’s & Don’ts for a Smooth Loan Process

2009-10-24T09:19:00.000-07:00

To ensure a smooth loan process from pre-approval to closing, beware of these common mistakes:

Don't make expensive purchases. It may be tempting to order a new sofa for your soon-to-be living room, but its best to avoid making major purchases until after closing. Financing with a store credit card or even existing credit cards could jeopardize credit scores or debt to income ratios. Even using cash to purchase big ticket items can create issues as many lenders take cash reserves into consideration when approving a loan.

Don't switch banks or transfer money around. To avoid a lot of extra paperwork and explanation, don’t move money around during the loan process. The lender will ask for 2 months bank statements to document funds for closing and cash reserves. If there are any transfers or non payroll deposits, a paper trail must be provided to show the source of funds.

Don't Change Jobs. Lenders like to see a consistent job history. Generally, changing jobs will not affect a borrower’s ability to qualify for a loan, especially if income is increasing. However, if the pay contains commissions, bonus or overtime, likely this portion of income will not be used for qualifying as there is not sufficient history of receiving the income.

Don't disregard lenders requests. Pre-approved may have been granted, but the work on the loan is far from over. Prior to closing, the lender may ask for updated documents such as pay stubs, bank statements or even a new credit report. Keep records handy and credit in good shape while your loan is in process and always respond quickly to lender requests!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-10-19T19:29:00.000-07:00

For the third week in a row, rates on 30-year fixed-rate mortgages remained below 5% in Freddie Mac's Primary Mortgage Market Survey. The average for conforming mortgages was 4.92% with an average of 0.7 point (including the origination fee) for 80% loan-to-value ratio loans to borrowers with good credit.

The Mortgage Bankers Association reported applications down 1.8% for the week, although re-financings were up, as more people took advantage of historically low mortgage rates. The MBA also projected double-digit growth for home sales next year. They see 2010 existing home sales up 11.2% to 5.57 million and new home sales up a healthy 21% from 2009 levels. Another encouraging stat came from the National Association of Realtors which reported 3.6 million existing homes for sale at the end of August, nicely down from 4.3 million 12 months ago.

First time buyers may still be able to get the $8,000 tax credit expiring at the end of November. That's six weeks away, which is not a lot of time, but not impossible. Fence-sitters should get pre-qualified now.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Last Chance for Low Rates?

2009-10-17T10:26:00.000-07:00

According to Freddie Mac, interest rates recently dropped to all-time lows in some categories, and within a hair of all-time lows in others. We will likely never see rates at these levels again. If you missed the chance to purchase or refinance earlier this year, you just got a do-over. Don't miss out a second time!

The Federal Reserve implemented a mortgage-backed securities buying program to artificially lower rates and that program is nearing its end. The originally scheduled end date was December 31, 2009. While this deadline has been extended, the amount of purchases remains the same, which means the level of participation will wane, decreasing by half as much. It is expected that mortgage rates will soon return to levels seen before the program started, near 6.50%.

Inflation, while currently contained, is likely to show its ugly head as all the stimulus from Washington continues to pour into the system. The end result will be increasing inflation pressure across the board, which will cause all interest rates to rise.

It is likely that interest rates at these levels will never be seen again in our lifetime. Take advantage of them today while you still can so you'll never have to look back and say, "I wish I had...."

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Eastside Statistics - September, 2009

2009-10-13T18:17:00.000-07:00

Current Residential & Condo listings - 4,780 (down 13.58% from last year)
New listings taken this month - 1,224
Pending sales this month - 908 (up 32.36% from last year)
Percent of listings that sold this month - 18.99%
Median closed sales price - Sep. ‘08, $481,950
Median closed sales price - Sep. ‘09, $468,500
Rate of appreciation = -2.79%

~ Courtesy of NWMLS

King County Statistics - September, 2009

2009-10-13T18:16:00.000-07:00

Current Residential & Condo listings - 12,912 (down 16.36% from last year)
New listings taken this month - 4,052
Pending sales this month - 2,927 (up 27.54% from last year)
Percent of listings that sold this month - 22.67%
Median closed sales price - Sep. ‘08, $380,315
Median closed sales price - Sep. ‘09, $349,000
Rate of appreciation = -8.23%

~ Courtesy of NWMLS

Snohomish County Statistics - September, 2009

2009-10-13T18:14:00.000-07:00

Current Residential & Condo listings - 5,445 (down 22.98% from last year)
New listings taken this month - 1,551
Pending sales this month - 1,222 (up 50.31% from last year)
Percent of listings that sold this month - 22.44%
Median closed sales price - Sep. ‘08, $318,000
Median closed sales price - Sep. ‘09, $282,000
Rate of appreciation = -11.32%

~ Courtesy of NWMLS

Northwest MLS brokers agree "there's a lot to be optimistic about"

2009-10-13T18:12:00.000-07:00

"There's a lot to be optimistic about," according to one director of the Northwest Multiple Listing Service upon reviewing summary statistics for September's housing activity. The report shows a big jump in pending sales compared to a year ago (up almost 27 percent), continued drops in inventory (down 17.7 percent versus a year ago) and brisk demand for homes at the lower end of the price spectrum.

Distressed properties in the system continue to be a drag on prices – median prices for last month's sales were down about 7.5 percent from a year ago – and brokers continue to voice frustration with slow response time by lenders. (Banks are taking 9.5 weeks to respond to short-sale requests, versus 4.5 weeks a year ago, according to research by Campbell Communications of Washington, D.C.)

Joe Spencer, president and COO of John L. Scott Real Estate, estimates up to 10 percent of pending sales do not close because they're caught in the short sale cycle. Still, he comments, "There is a lot to be optimistic about." He cites interest rates that are now in the high four percents as bordering "on being epic" and the federal tax credit as stimulants to the market.

Northwest MLS brokers reported 7,581 pending sales (offers made and accepted but not yet closed) during September, outgaining the same period a year ago by 1,599 transactions for a 26.7 percent increase. Last month's condominium sales surged, with pending sales up nearly 25 percent from a year ago after languishing in negative year-over-year figures for the first five months of 2009 and only modest gains over the past three months.

"Our market has certainly come a long way since this time last year," said Ron Sparks, managing vice president of Coldwell Banker Bain, who said demand is at its highest level in two years. "For all the challenges that remain, it would be difficult to not appreciate the reemerging market vitality that continues to build even as the summer buying season closes," he added.

Brokers also credit improved affordability, incentives and the looming deadline for the $8,000 tax credit for first-time home buyers as boosting activity. "Because there are so many short sales and bank owned property sales, it was inevitable that prices would fall slightly," explained NWMLS director Dick Beeson, the broker/owner of Windermere Commencement Associates in Tacoma. Beeson described the price drops as "a necessary adjustment given the number of short sales and bank owned property sales in the mix. (A survey by the National Association of REALTORS indicates distressed homes accounted for 31 percent of transactions in August and July.)

On a brighter note, Beeson said activity is brisk for lower priced homes in many areas. "Multiple offers are occurring on a regular basis and many buyers have to make two or three offers on different properties just to secure one," he reports.

Sparks echoed that report, saying, "Describing much of the current market as 'lively' is probably a bit of an understatement," adding, "I've heard agents describe open houses as 'mayhem' and 'chaos." Modestly priced homes in good condition and in popular neighborhoods can certainly draw more than one offer, according to Sparks, who also noted, "This is not to say that all neighborhoods and price points are rebounding at the same pace, but there is an awful lot of economic momentum in our region, including our housing market, that can't be ignored."

Emphasizing recovery comes in stages, Beeson acknowledged some "hard adjustments" are being made in higher priced homes where inventories remain high, but expects that segment to recover.

~ Courtesy of NWMLS

National Real Estate News

2009-10-12T08:22:00.000-07:00

At the end of September, the supply of homes for sale was reported down 1.8% from the previous month in 27 major metropolitan areas. We all know the factors. Home prices are very affordable, mortgage rates are very favorable and first-time homebuyers are taking advantage of the $8,000 tax credit set to expire at the end of November, now just seven weeks away.

The Mortgage Bankers Association saw loan applications for home purchases rise 13.2% last week, as the MBA's Purchase Index hit its highest level since last January. The average rate on 30-year fixed rate mortgage slid to 4.89% with an average 1.13 points (including the origination fee) for 80% loan-to-value ratio loans to borrowers with good credit. Freddie Mac's weekly survey of conforming mortgage rates put the average 30-year fixed rate mortgage at 4.87% with an average 0.7 point for 80% loan-to-value ratio loans to borrowers with good credit.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Bernanke’s Words Cause Rates to Rise

2009-10-10T08:58:00.000-07:00

The power of Fed Chairman Bernanke’s words was felt on Wall Street this morning as mortgage bonds sold off in reaction to his speech on Capitol Hill Thursday evening. He said that the low interest rate environment will likely be needed for a while. However, he went on to say that as the economy heals, the Fed will hike rates quickly to ward off inflation. There is no doubt that rates will rise in the future, the question is not if but when.

It is unlikely that rates will be able to move any lower than levels seen in the past 2 weeks. Over supply of bonds continues to be an issue as yesterday's 30-year Treasury Bond auction was poorly received, as investors are searching for more yield. The Fed won’t be able to “sop up” this over supply much longer as their program for purchasing Mortgage Backed Securities winds down in 2010.

Next week brings us the release of a couple of very important economic reports and the release of the minutes from the last FOMC meeting. The bond market will be closed Monday in observance of Columbus Day, but the stock markets will be open for trading.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-10-05T18:18:00.000-07:00

Another good week for the housing market. The S&P/Case Shiller home price index was up for the third month in a row and the rate of annual decline fell for the sixth month in a row! Price increases were reported in 18 of 20 metro areas measured. Many now feel this data indicates the worst of the price declines are behind us. D avid M. Blitzer, chairman of the index committee at Standard & Poor's, said: "These figures continue to support an indication of stabilization in national real estate values."

Later in the week, Pending Home Sales came in UP 6.4% for August, their seventh straight monthly gain, UP 12.4% from a year ago and at their highest level since March 2007. Many see this boost in sales coming from first-time homebuyers rushing to make the deadline for their $8,000 tax credit which expires at the end of next month!

On the mortgage front, Freddie Mac's weekly survey showed the 30-year fixed-rate mortgage below 5% for the first time since May. The average rate was 4.94% with an average 0.7 point (including the origination fee) for 80% loan-to-value ratio loans to borrowers with good credit. Finally, residential construction spending also rose in August, UP 4.7%!

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Rates Take Another Dip!

2009-10-05T08:26:00.000-07:00

The Labor Department reported today that 263,000 jobs were lost in September. This is much worse than the expectations of 175,000. Unemployment is now at 9.8%...the highest level in 26 years. Analysts are concerned the recession will be much slower to recover from than many previously thought.

All of this has led to lower mortgage rates for the week. These low rates may not stay around for long though. The Fed has recently announced they will be backing out of buying mortgage backed securities in the first quarter of 2010. The Fed purchasing of mortgage backed securities has been one of the biggest forces keeping mortgage rates down at record low levels over the past year. Most analysts agree that when the Fed stops buying mortgages, rates will go up.

Next week the Fed is auctioning off a record level of Treasury notes. Since Treasuries compete for the same investment dollars as mortgage backed securities, this can cause an oversupply in the market, which ultimately can lead to higher mortgage rates.

Now is the time to lock into a great long term interest rate. Don’t miss out!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-09-28T08:28:00.000-07:00

Well, it had to happen. After a four-month winning streak, Existing Home Sales dropped in August by 2.7% to an annual sales pace of 5.10 million. This offsets the big sales increase we had in July but the overall trend is still up by 3.4% over a year ago and the supply of existing homes is now down to 8.5 months.

Good news came from the Federal Housing Finance Agency, which monitors prices of homes financed with conforming mortgages. They reported prices UP 0.3% in July, their third straight monthly rise. The week ended with single-family New Home Sales for August UP 0.7%. This was slightly less than expected, but 30% above their January low. Best of all, the supply of unsold new homes, down five months in a row, is now at just 7.3 months!

Mortgage applications for purchase loans were up 5.6% from the week before. Applications for government-backed purchase loans were at their highest level ever. It seems many first-time homebuyers are making sure they get that $8,000 tax credit before it expires on November 30! All this was happening as the average interest rate for prime borrowers went below 5% on 30-year fixed-rate mortgages for the first time since May. Average points inched up to 1.12 (including the origination fee) for 80% loan-to-value ratio loans.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

What Are Points and When Should You Pay Them?

2009-09-28T07:27:00.000-07:00

Points are upfront fees paid to obtain a better interest rate on a loan. One point equals one percent of the loan amount. While a lower interest rate may result in a lower monthly payment, it is important to consider how long you intend have the loan and to compare current interest rates to historical trends. This will help you determine whether paying points is a worthwhile investment.

It’s also important to remember that interest rates run in cycles. When rates are at historical lows, it makes more sense to pay points if you plan to live in the home for an extended period of time. If it’s unlikely rates will go down in the near future, then there will be no need to refinance. When interest rates are high, however, there is a strong likelihood they will come down again before too long. Therefore, this is not a good time to pay points.

Tax deductibility is another thing to consider when choosing whether or not to pay points. Points paid on a purchase transaction are tax deductible upfront in the year of the purchase. The tax deduction for points paid on a refinance must be spread out over the term of the loan (unless the entire loan is paid off early), making points more costly in comparison to a purchase transaction.

Ultimately, there is much to bear in mind when considering points. At LoanCentral, we will work with you to determine the best course of action based upon your specific situation and needs.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Fence Sitter Alert: Don't expect mortgage rates to stay this low forever!

2009-09-21T22:43:00.000-07:00

Are you, or someone you know, sitting on the fence about buying a home or refinancing the one you're in, waiting to see if mortgage rates drop even further?

Well, here's why smart home buyers and homeowners looking to refinance are taking advantage of today's attractive mortgage rates right now.

First off, rates are already at historically low levels. The reason they got there is the Federal Reserve, our country's central bank, has been purchasing huge amounts of Mortgage Backed Securities. This keeps their prices up... and mortgage rates DOWN! In fact, ever since the Fed's buying program began in January, mortgage rates have stayed in the historically low range everyone's excited about.

The Fed is doing this to help the housing market recover by making mortgages more affordable. But they committed to buying over $1 trillion worth of Mortgage Backed Securities only through the end of this year. So please note: the Fed has already spent over $700 billion of that money and the end of the year is only four months away!

One more thing. The Fed is also buying Treasuries to keep their prices up and yields (rates) down. This keeps mortgage rates low because Treasury rates need to stay below mortgages. But the Fed will stop buying Treasuries at the end of October! After that, the yields (rates) on Treasuries could go up, which could send mortgage rates up the last two months of the year.

Bottom line? There is now an unprecedented opportunity to buy or refinance a home at exceptionally low mortgage rates. But these rates are not likely to go lower... AND, because of the Fed's publicly stated policies, the rates we're seeing now may hold just a few more months!

Please let me know if I can be of help.... and have a great day!

~ Courtesy of Tim Lucas, Golf Savings Bank, TLucas@GolfSavingsBank.com, 425.681.3859

National Real Estate News

2009-09-21T08:21:00.000-07:00

Housing starts for new single-family homes and apartments continued their steady rise, up 1.5% for August, their strongest pace in nine months. This puts housing starts at a seasonally adjusted annual rate of 598,000, their highest level since November of last year. This sign of steady improvement in home building made economists even more confident Q3 growth will be positive, signaling the recession is over.

Mortgage rates continue to remain at three-month lows. Freddie Mac's weekly Primary Mortgage Market Survey showed average long-term mortgage rates down for the third week in a row! The 30-year fixed rate mortgage is just above 5% with an average 0.7 point (including the origination fee). The average rate for 15-year fixed rate mortgages hit a new record low in the Survey. These rates are for prime borrowers with an 80% or lower loan-to-value ratio on loans eligible for purchase by Freddie Mac.

Finally, please remember the $8,000 tax credit for first-time homebuyers is set to expire in just over two months. Those eligible need to close by November 30!

Credit Myths, Mistakes & Misconceptions

2009-09-20T20:57:00.000-07:00

If you have good credit, the following tips will help you keep it that way. If you are looking to improve your credit, now is the time to get started!

Don’t Fall Behind on Existing Accounts

One 30-day late can cost you anywhere from 30 to 80 points or more on your credit score.

Don’t Pay Off Old Collections or Charge-Offs During the Loan Process

Paying collections will decrease your credit score immediately due to the “date of last activity” becoming recent. Consult your mortgage advisor for recommendations on paying these accounts off.

Don’t Close Credit Card Accounts

Closing accounts can affect many factors of your score, such as the length of your credit history.

Don’t Max Out or Overcharge Credit Accounts

This is the fastest way to bring an immediate drop of 50-100 points in your credit score. Try to keep credit card balances below 30% of the credit limit.

Don’t Consolidate Your Debt Onto 1 or 2 Credit Cards

It seems like the smart thing to do, however, when you consolidate all debt onto one card, it appears you are maxed out on that card and the system will penalize you as mentioned above.

At LoanCentral we work together with you to get your credit in the best shape possible for your upcoming mortgage. Give us a call to review your credit and find out exactly where you stand.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Economic Update

2009-09-14T07:42:00.000-07:00

The University of Michigan posted their Index of Consumer Sentiment late this morning, announcing a reading of 70.2. This was a sizable increase from the August final reading and higher than what analysts had expected. This means that consumers are more optimistic about their own financial situations than many had thought. That can be considered bad news for mortgage rates because it hints that consumers are more apt to make large purchases in the near future. However, it appears the data is of no concern to traders at this time.

The drop in mortgage rates today can partly be attributed to a good Treasury Auction yesterday. The willingness of global investors to purchase huge amounts of US debt speaks to the lack of alternatives available in the current low interest rate environment around the globe. If interest rates around the world begin to move higher it may offer investors a more attractive place to put their money, which would force the US to offer higher rates on our Treasuries to compete. When this happens it will cause long term mortgage rates to rise as a result.

This week brings us the release of several important reports including two key inflation readings and an extremely important measurement of consumer spending.

Rates are approaching historical lows once again making this an amazing time to purchase or refinance a home!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-09-14T07:39:00.000-07:00

We had more good news for housing last week with Pending Home Sales UP 3.2% for July, gaining ground for the sixth month in a row! This positive number should point to yet another hike when August Existing Homes Sales numbers come out. There was also encouraging construction data, as July single-family home building was UP 7% – the largest monthly increase since 1983, when housing boomed coming out of the 1981–1982 downturn. The combination of affordability, low mortgage rates and the $8,000 tax credit for first-time homebuyers is having a terrific effect on the housing market. Unfortunately, that tax credit will expire November 30 unless Congress elects to extend it. Let's hope they do.

Speaking of mortgage rates, these dropped nicely last week, according to Freddie Mac's Primary Mortgage Market Survey. Nationally, the 30-year fixed rate mortgage averaged 5.08% with an average of 0.7 point. That was down from 6.35% a year ago! These rates are for prime borrowers who can put 20% down and who qualify for loans eligible to be purchased or guaranteed by Freddie Mac or Fannie Mae.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

Eastside Statistics - August, 2009

2009-09-08T15:12:00.001-07:00

Current Residential & Condo listings - 4,920 (down 13.62% from last year)
New listings taken this month - 1,178
Pending sales this month - 948 (up 35.82% from last year)
Percent of listings that sold this month - 19.27%
Median closed sales price - Aug. ‘08, $519,495
Median closed sales price - Aug. ‘09, $459,002
Rate of appreciation = -11.64%

~ Courtesy of NWMLS

King County Statistics - August, 2009

2009-09-08T15:10:00.000-07:00

Current Residential & Condo listings - 13,145 (down 17.20% from last year)
New listings taken this month - 3,791
Pending sales this month - 2,893 (up 25.08% from last year)
Percent of listings that sold this month - 22.01%
Median closed sales price - Aug. ‘08, $388,350
Median closed sales price - Aug. ‘09, $349,995
Rate of appreciation = -9.88%

~ Courtesy of NWMLS

Snohomish County Statistics - August, 2009

2009-09-08T15:08:00.000-07:00

Current Residential & Condo listings - 5,559 (down 24.47% from last year)
New listings taken this month - 1,587
Pending sales this month - 1,189 (up 27.99% from last year)
Percent of listings that sold this month - 21.39%
Median closed sales price - Aug. ‘08, $320,000
Median closed sales price - Aug. ‘09, $285,000
Rate of appreciation = -10.94%

~ Courtesy of NWMLS

Northwest MLS brokers report brisk activity, multiple offers, "irrational delays" by lenders

2009-09-08T15:05:00.000-07:00

Pending sales around Western Washington during August jumped nearly 21 percent from a year ago and inventory dropped more than 18 percent, according to new figures from Northwest Multiple Listing Service. MLS member-brokers say those indicators, along with signs of stabilizing prices, set the stage for brisk activity in the next few months as first-time buyers try to take advantage of the Nov. 30 deadline for tax credits.

"The typical August cool down in the market did not happen this year," observed NWMLS director Kathy Estey, managing broker at John L. Scott's office in downtown Bellevue. She said agents are busy with both first-time and move-up buyers and they're reporting multiple offers on homes priced up to $700,000.

Brokers reported 7,539 pending sales (offers made and accepted but not yet closed) for August, up 20.7 percent from a year ago. That volume outgained July's total by 260 transactions. In the four-county Puget Sound region, pending sales of single family homes and condominiums (combined) surged 25.7 percent from a year ago.

Within King County, pending sales activity improved 25.1 percent from a year ago, and was especially robust in the North King County area (up 38.7 percent) and on the Eastside (up nearly 36 percent). Excluding condos, two sub-areas of King County notched gains of more than 40 percent for pending sales of single family homes – Southeast King County (up 40.4 percent) and the Eastside (up 42.5 percent).

On the downside, Estey said many transactions are missing their closing date "for seemingly irrational reasons." Last minute demands from lenders are common and final underwriting reviews are causing delays, she noted, adding, "Inexperienced appraisers are gumming up the works as well." She urges first-time buyers who want to capture the $8,000 tax credit to plan ahead and allow for delays.

Another MLS director, Dick Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, said stabilizing prices "bode well for the near term."

For the 19 counties in the Northwest MLS service area, the median price for single family homes and condominiums that sold and closed last month was $$275,945, down about 8.8 percent from the year ago sales price of $302,500. Since January, however, prices area-wide have edged up about 1.1 percent, with seven of the 19 counties notching increases.

Prices for single family homes (excluding condos) that sold throughout the NWMLS area are up about 3.3 percent since January, although down about 9.2 percent from twelve months ago. In the four-county Puget Sound region, the median sales price for single family homes that closed last month was $310,000, down about 11.4 percent from twelve months ago, but back up to match January's figure of $310,000.

Condo prices remain depressed. For last month's completed transactions, the median sales price was $235,000, off 5 percent from the year ago figure of $247,500. Compared to January's sales, condo prices have dropped about 6 percent

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, expects strong activity in the coming months. "It's exciting to see that home sales continue to be brisk in the more affordable and mid price ranges," he remarked. "I anticipate that September will see a surge of sales activity because of the tax credit's impending deadline which, when combined with historically low interest rates and increased affordability, provides a rare opportunity for first time homebuyers," Scott stated.

Current house-hunters have fewer listings to consider than a year ago: 41,528 active listings at the end of August compared to 50,772 for same month a year ago, a decline of 18.2 percent. Prices on current offerings, which include single family homes and condominiums, range from $13,000 to $32 million.

Northwest MLS members added 10,132 new listings to inventory during August, nearly 1,300 fewer than twelve months ago. Inventory shrunk in 16 of the 19 NWMLS counties, with twelve counties reporting double-digit drops.

Lower listing inventory is one of the building blocks of a housing recovery, according to Ron Sparks, managing vice president of Coldwell Banker Bain. "With fewer homes for sale, better affordability and buyer incentives like the $8,000 first-time buyer tax credit, we are seeing supply and demand become much more balanced in many areas, and this will help support more stable prices," he explained.

Sparks also commented on the momentum reflected in last month's activity. "It's very good to see that the number of pending sales is still rising in most areas, especially when we might typically expect a seasonal slowdown in demand." He called the nearly 21 percent overall improvement in last month's pending sales "particularly impressive."

Open house traffic has been steady with high interest among first-time buyers being the driver, reports NWMLS director Beeson. Despite high interest, he said many potential buyers are still confused about how the tax credit program works.

On a cautionary note, Beeson expects a new round of bank owned properties to come on the market later this year and into next year. "This inventory will have to be absorbed over time and no one knows for sure just how this will influence prices," he acknowledged, adding, "The best guess is it will be negative, although we have experienced many foreclosures already on the market. . .with no appreciable drop in prices since the beginning of the year."

Summing up last month's activity, Sparks of CBB, said, "A healthy, balanced market is in everyone's best interest, and the August report tells us we're definitely getting closer."

~ Courtesy of NWMLS

The Last Great Zero Down Program!

2009-09-08T06:55:00.000-07:00

When the sub-prime meltdown hit, so-called “exotic” loan programs became extinct. Included in these were zero down programs which helped many first time homebuyers jump into the market. Today, there remains one great zero down program that few people realize can benefit them.

The government sponsored USDA Rural Housing Program offers the ability for a homebuyer to purchase with no down payment and NO PMI! The program is limited to properties defined as “rural” by the program.

These “rural” areas typically lie just outside of the greater metropolitan areas. East King County such as parts of Maple Valley, Enumclaw, Duvall, Carnation, Fall City, Snoqualmie & North Bend have properties that fall under this program. North of King County, South of King County, much of Pierce, Jefferson and Kitsap County all have many areas that qualify. The program also contains restrictions on household income as well.

While not limited to first time homebuyers, this program is currently helping thousands of first time homebuyers across the country enter the housing market. Combined with the first time
homebuyer tax credit, this is a great program to help boost our home sales!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-08-31T17:19:00.000-07:00

We continue to see signs of improvement in the housing market and last week showed us a surprising 9.6% increase in new single-family home sales for July. This was their steepest percent rise since 2005. New home sales are now at a 433,000 annual rate, up 31.6% from their January low. Even more significantly, inventory of unsold new homes plummeted to a 7.5 month supply from their 8.5 month level in June. This put inventories at 271,000, down over 52% from their mid-2006 peak, and at their lowest level since 1993. New home sales have now been up 4 months in a row, increasing since March at an annualized rate of more than 121%!

Prior to this good news, the Case-Shiller home price index reported a quarterly rise in prices for the first time in three years. The index also posted its second straight monthly increase, up 1.4% for the 20 metro areas it tracks. The Federal Housing Finance Agency's purchase-only index had home prices up 0.5% in June following a 0.6% rise in May. The FHFA index is up 0.5% for the first six months this year. Agency chief Edward J. DeMarco said: "This is further evidence that prices may be stabilizing for the nation as a whole."

Finally, the Mortgage Bankers Association reported mortgage applications for home purchases were up 1.0% last week over the week before. This was the fourth consecutive weekly gain for home-purchase applications.

Economic Update

2009-08-30T21:30:00.000-07:00

For the first time since April of 2007, the Dow closed in positive territory for eight consecutive days. The winning streak ended Friday with the Dow closing down 36 at 9544.

Inflation remained tame last month, as the Federal Reserve's favorite gauge of inflation; the Core Personal Consumption Expenditure Index, came in at 1.4% year-over-year, the smallest rise since September 2003. The monthly Core PCE was 0.1%, just below June's reading of 0.2%. Inflation is essentially non-existent currently but it will certainly return when the economy picks up.

Contained in the PCE report was data on consumer spending, which revealed an increase for the past three months. Interestingly, the boost appears to be from auto sale increases resulting from the Government's "Cash for Clunkers" program. Until the labor market stabilizes, we may not see a more meaningful pickup in consumer spending.

Next week is a big week for economic reports as FOMC Minutes will be released, ADP Employment Report and on Friday the government payrolls report. There are no Treasury auctions scheduled aside from the usual offerings.

Lock in your purchase or refinance now while rates are still historically low!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-08-25T17:27:00.000-07:00

Last week began with somewhat tepid housing news, as starts were reported down 1.0% for July. But once again, the decline was all due to a drop in the volatile multi-family part of the market. In fact, single-family starts actually increased 1.7%, gaining for the fifth month in a row and now up 37.3% since February! Likewise, building permits for single-family homes were UP 5.8% for July, gaining for the fourth month in a row! The National Association of Home Builders chimed in with their builders' confidence index at a new high of 18.

We ended the week with existing home sales UP 7.2% in July to a 5.24 million annual rate. This is the fourth month in a row of gains and the biggest one since the mid-1990's. Sales are now HIGHER than a year ago and that's the first time we've seen that since 2005. Since the January low, overall sales are UP 17%. Experts say housing will recover when there's a bottom in sales, a bottom in building and a bottom in prices. Well, sales and starts have now been UP for several months. Some observers estimate national average home prices are at or even below fair value and should therefore bottom by year end, with many areas likely to see prices inch upward very soon.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657

Housing Market Shows Signs of Improvement!

2009-08-22T10:40:00.000-07:00

National existing home sales were reported today at 5.24 million, better than the expectations of 5 million. The inventory of unsold homes remained at a 9.4 month supply, the best level in a year but still indicates a huge over-supply.

The housing market continues to show signs of stabilization, and although home prices are not about to move higher, the decline certainly seems to have subsided.

Locally we are seeing the purchase market picking up steam as well. Pending sales are up approximately 23% over last year in the King /Pierce / Snohomish county area.

An increasing number of first time homebuyers are moving into the market to take advantage of record low interest rates along with the $8,000 first time homebuyer tax credit. Only 71 business days remain to close in time to qualify for the tax credit!

The economy is currently in a bottoming process. Fed Chairman Bernanke declared this week that the global recession is officially over. Our current housing opportunities will not last forever. Rates will rise. Housing prices will rise. Tax credits will go away. Will you be the one who capitalized on this amazing opportunity…or missed it?

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-08-17T07:39:00.000-07:00

Home prices could be stabilizing. Zillow.com reported the annual decline in home prices in Q2 was smaller than in Q1. Most significantly, this was the first decrease in the rate of annual decline since the fall of 2007. In addition, the volume of home sales rose 3.8% in June.

Unfortunately, foreclosure-related filings grew 7% in July over June, according to RealtyTrac. However, we need to remember that foreclosure activity is concentrated in just a few areas. RealtyTrac reported that for the first six months of this year, 43% of the foreclosure filings occurred in just two states.

Fed Statement Could Mean Rates on the Rise

2009-08-15T08:22:00.000-07:00

Federal Reserve officials met yesterday and issued a statement saying that their program to purchase $1.25 trillion of mortgage-backed securities will be winding down by the end of year. The Fed is the single largest buyer of mortgage bonds in the market today. The way mortgage companies set their interest rates is by figuring out the price that Fannie Mae and Freddie Mac are willing to pay them for the mortgage. Fannie and Freddie set their price by figuring out what investors on the bond market are willing to pay them for the Mortgage-Backed Securities (mortgage bonds) that they issue. When the Fed stops buying mortgage-backed securities, the demand for these bonds will be much less, and mortgage rates will go higher.

Since the Fed began purchasing mortgage bonds and intervening in the mortgage markets, interest rates on fixed rate mortgages have dropped a full percentage point below where they would be otherwise. A one percent increase in mortgage rates- from 5.25% to 6.25% -would cost an extra $250 per month on a $300,000 30 year mortgage. This is exactly what could happen in 2010 once the Fed stops buying mortgage bonds.

Fed officials have been signaling for some time that their unprecedented interventions in the mortgage markets may come to an end or even be reversed once the economy begins to improve. Homeowners and buyers should really consider acting now to take advantage of this window of opportunity to refinance or buy a home while rates are historically low.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National Real Estate News

2009-08-13T20:52:00.000-07:00

We got another positive housing report last week, this time with Pending Home Sales shooting up a surprising 3.6% after a mere 0.7% was expected by the experts. This makes five consecutive months of gains for Pending Home Sales and that's the first time that's happened since July 2003. Low mortgage interest rates and affordable home prices are what's moving things upward.

The affordability is amazing. The median existing home price in June was $181,600. But a family earning the median income – $60,700 – could actually afford a home costing $289,100. With 20% down, they would spend about 25% of their gross income on the mortgage payment! And rates dropped again last week, keeping things very affordable indeed.

The Wall Street Journal reported inventories of homes for sale fell again in many U.S. cities last month. In 28 major metro areas, the supply of homes for sale at the end of July was down 2.5% from June, including single-family homes, condominiums and town houses. This compares to an average drop for July of just 1.0% over the last 25 years. Compared to July 2008, inventory in these 28 metros was down a whopping 27%!

Snohomish County Statistics - July, 2009

2009-08-12T18:11:00.000-07:00

Current Residential & Condo listings - 5,659 (down 24.13% from last year)
New listings taken this month - 1,711
Pending sales this month - 1,164 (up 31.82% from last year)
Percent of listings that sold this month - 20.57%
Median closed sales price - July ‘08, $332,500
Median closed sales price - July ‘09, $292,000
Rate of appreciation = -12.18%

~ Courtesy of NWMLS

King County Statistics - July, 2009

2009-08-12T18:09:00.000-07:00

Current Residential & Condo listings - 13,589 (down 16.70% from last year)
New listings taken this month - 4,261
Pending sales this month - 2,777 (up 17.42% from last year)
Percent of listings that sold this month - 20.44%
Median closed sales price - July ‘08, $401,500
Median closed sales price - July ‘09, $350,000
Rate of appreciation = -12.83%

~ Courtesy of NWMLS

Eastside Statistics - July, 2009

2009-08-12T18:07:00.000-07:00

Current Residential & Condo listings - 5,190 (down 10.64% from last year)
New listings taken this month - 1,465
Pending sales this month - 872 (up 19.45% from last year)
Percent of listings that sold this month - 16.80%
Median closed sales price - July ‘08, $525,000
Median closed sales price - July ‘09, $458,750
Rate of appreciation = -12.62%

~ Courtesy of NWMLS

Is Housing Still Overvalued?

2009-08-07T20:59:00.000-07:00

It’s no secret that housing prices have declined dramatically in many parts of the country. Yet some people are still arguing that prices still have a long way to fall before they become affordable. Are they right?

Data compiled through the Housing Affordability Index (HAI), an index created by the National Association of Realtors® shows that owning a home today is 59.48% more affordable than it was in 2006, although the median home prices have only fallen by about 18.1% over that same time frame. Why the huge difference? Mortgage rates are lower today than they were in 2006! This means that an 80% mortgage based on today's interest rates and home values is much more affordable than an 80% mortgage based on 2006 interest rates and home values.

Therefore, housing could actually become less affordable even if house prices decline slightly from their current levels! This is because mortgage rates could increase, driving up your monthly payments and the costs of owning that home over time. Further, once house prices stabilize and/or go up, mortgage rates will likely be higher as well due to less government intervention in the mortgage markets. This will significantly drive down the affordability index. So, if affordability is your measurement, housing is NOT overvalued. In fact, housing might even be dramatically undervalued based on these measurements of historical affordability!

~ Courtesy of Wendy Charles, CMPS, LoanCentral LLC, WendyC@LoanCentral.com, 425.468.9321

Northwest MLS brokers say housing market is recovering, but still "spongy"

2009-08-06T08:17:00.000-07:00

Most numbers are "moving in the right direction," close-in Seattle neighborhoods are definitely coming to life and move-up buyers are re-entering the market were among observations by brokers when asked to comment on the latest activity report from Northwest Multiple Listing Service (NWMLS).

The report shows July's pending sales increased from a year ago, as did closed sales, and inventory continues to shrink. Prices on sales that closed during July still lagged figures of a year-ago (down about 10 percent area-wide) and NWMLS members said last month's record-setting temperatures "absolutely impacted showings and sales."

July's unseasonably hot weather curtailed activity for several showings and open houses, as brokers and agents said buyers and sellers postponed tours, saying it was just too hot.

"The hot July weather aside, the variable results we saw in July reflect what we'd typically expect from a recovering housing market – a few steps forward for some areas, a step back in others," said Ron G. Sparks, managing vice president of Coldwell Banker Bain. Whereas comparisons to a year ago reflect some substantial gains, on a month to month basis we're probably going to experience some "spongy" results for a while, he explained.

For example, brokers reported 7,279 pending sales (mutual acceptance of a purchase and sale agreement) last month, up from the year-ago total of 6,350 sales for a 14.6 percent gain. Compared with June, the volume slipped about 5.9 percent, dropping from 7,733 to 7,279 transactions.

In the four-county Puget Sound region (King, Kitsap, Pierce, and Snohomish), July's pending sales of single family homes and condominiums jumped 21.2 percent from twelve months ago, but dipped 6.9 percent from the previous month. Nonetheless, last month's 5,551 pending sales for the region marked the second-highest monthly total since August 2007.

Pending sales of condos (excluding single family homes) rose nearly 12.5 percent last month from a year ago. That continued June's modest gain of 1.3 percent, when 22 months of negative year-over-year comparisons ended. Last month's increase was the first double-digit gain since February 2007. "I'm excited to see the continued increase of pending sales because these figures are the lead predictor of buyer behavior," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "The rise of pending sales over the past few months is the best indication we have of what's to come and I am encouraged by what we're seeing," he added.

Brokers say first-time buyers who are motivated by a looming deadline for the tax credit are propelling activity. "There seems to finally be a feeling of urgency to take advantage of this program before it goes away," remarked NWMLS director Meribeth Hutchings, broker/owner of Windermere Real Estate/ Lake Stevens.

In an effort to keep agents and their clients focused on the time remaining for the $8,000 tax credit opportunity, Sparks said his company has a clock prominently displayed on its internal website that ticks down the days, minutes and seconds until the midnight deadline on Nov. 30. He also commented on the secondary benefits of the credit. "My daughter just closed on her first home, and she intends on using the tax credit for household items she'll need as a new homeowner. She's excited to buy her first lawn mower…good for her, good for housing, and good for the economy," he stated.

Commenting on the tax credit, NWMLS director Dick Beeson said first time homebuyers are "getting it. All they talk about is the $8,000 tax credit and how good interest rates are."

Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, said with the exception of prices, the numbers are all moving in the right direction. "Inventory is adjusting down, even though it is summer, pending sales are moving up, and even more importantly, closed sales are above last year." Those numbers are a sign of a "modest, modest recovery," according to the 30-year veteran of the real estate profession.

NWMLS members added 11,481 new listings to inventory during July, 1,612 fewer than during the same month a year ago. At month end, there were 42,310 active listings of single family homes and condominiums in the MLS database, down 18 percent from a year ago. Twelve of the 19 counties in the MLS reported double-digit shrinkage in inventory.

MLS brokers reported a system-wide total of 5,527 closed sales for the month of July, an increase of 256 transactions from a year ago for a 4.9 percent gain. The median selling price for those closings was $279,000, down 10 percent from the year-ago price of $310,000. Among the 19 counties served by NWMLS, the price changes from a year ago ranged from a 25.1 percent increase in Okanogan County to a 17.8 percent decline in Cowlitz County.

For the four-county Puget Sound region, the median selling price for last month's completed sales of single family homes (excluding condos) was $314,000, about 13.5 percent less than the year-ago price of $363,000.

"After almost two years of relative calm, the close-in Seattle neighborhoods have definitely come to life in a major way," remarked Mike Skahen, owner/broker at Lake & Co. Real Estate, Inc., in Seattle and a member of the NWMLS board of directors. He described open house traffic as "very strong" with a typical home drawing 20 to 50 buyers.

Multiple offers are once again becoming common on well-priced quality listings, according to Skahen. Although noticeable during the past few months for homes priced under $450,000, he said there are now instances of competition at higher price ranges. A recent listing of a Wallingford bungalow priced at $550,000 drew eight offers, which Skahen said is a "good indication the trade up buyers have finally decided that prices have bottomed out, so after waiting too long they are now competing for fewer listings."

Skahen also said the tax credit has created such strong demand for starter homes that those sellers now realize they actually gain more by trading up in this market because they save more on their trade-up home and there is good demand for the home they're selling.

On a cautionary note, Skahen said there is very likely to be a shortage of homes and townhouses in some Seattle neighborhoods by next year. "New construction has almost ground to a halt because builders can't get prices that even cover construction costs," he reported.

Hutchings, whose office is in Snohomish County, said they're also seeing move up buyers re-entering the market. "They understand even if their current home has lost value, their new home will also offer them a greater savings. That, along with low interest rates, make it a great time to buy up," she emphasized.

Beeson said the transition from a buyers' market to a sellers' market is occurring in, "of all places," the foreclosure market. "Banks are pricing many homes slightly under market value and watching multiple offers come in, bidding up the price. What a change that is," he exclaimed, while noting he hopes the next wave of foreclosure homes coming on the market later this year will finally flush out the remaining inventory and "we'll get back to a more normal market."

~ Courtesy of NWMLS

National Real Estate News

2009-08-04T20:17:00.000-07:00

Last Monday we heard the good news that New Home Sales blasted UP 11% in June, their largest one-month gain in almost nine years! The annual rate of 384,000 came in higher than any of the 63 economists making a forecast predicted. After bottoming in January, new home sales are UP 17%, while existing home sales are UP 9%. New home inventory figures were even better, down to 8.8 months from their 12.4 month high in January. Experts now say some growth in home construction should begin later this year. And remember, new home sales are still well below their long-term trend of around 950,000 per year, so they should continue to move up for the next few years.

But here's our favorite news of all. Tuesday the Case-Shiller index reported US home prices rose in May on a month-to-month basis for the first time since July 2006. Prices were up an average of 0.5%, thanks to increases in 13 of the 20 selected cities in their index. So, this most pessimistic of the home price indexes is finally showing that prices may be turning around! Excellent. Finally, loan workouts done in the HOPE NOW alliance were up by 25% for June, exceeding the number of foreclosure starts for the first time since April.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657

Factors Influencing Mortgage Rates

2009-08-01T08:45:00.000-07:00

Rates moved lower at the end of this week as traders were pleasantly surprised by foreign participation in Thursday’s Treasury Auction. It used to be the economic reports were the most
dominant factor impacting the direction of mortgage rates. However, this has changed in the past few months with a tremendous increase in the size of government auctions of Treasury Bonds. This added supply weighs on all bonds which includes mortgage bonds and causes interest rates to rise. While this week’s Treasury Auction went well and rates went down, there is another huge Auction scheduled for August 11,12, 13th. The size of this auction will be announced on August 5th and will likely cause volatility for mortgage rates as a result.

Another factor influencing rates this week was the announcement of the GDP numbers which fell 1% last quarter. This is the fourth straight quarter that GDP has fallen, which is the first time this has occurred since the government began keeping records in 1947.

Finally, consumer spending, which accounts for two thirds of the US economic activity, dropped by 1.2% in the 2nd quarter after it had improved by .6% the previous quarter.

All of this data is good news for home buyers as rates remain historically low.

~ Courtesy of Wendy Charles, LoanCentral LLC, WendyC@LoanCentral.com, 425.468.9321

National Real Estate News

2009-07-27T16:46:00.000-07:00

Last Thursday Existing Home Sales for June were reported UP 3.6%, to a 4.89 million annual rate, increasing for the third straight month! Sales are now up 8.9% from the low set in January. Inventories were down 0.7%, to 9.4 months, their lowest reading in more than a year. Even better, the inventory of homes priced under $250,000 is now at a 6 months supply, as reported by CNBC. 29% of all sales were to first-time buyers taking advantage of the up to $8,000 tax credit, set to expire on December 1 this year. Another encouraging sign: distressed sales fell to 31% of the total, indicating that this part of the inventory is getting cleared out as well.

The median price of an existing home also increased in June, to $181,800 – going in the right direction, but still down 15.4% from a year ago. The FHFA home price index increased 0.9% for May, showing slightly higher prices than six months ago. This index tracks prices of homes bought with conforming mortgages. Some observers say average home prices may now be very close to fair value and could edge upward by year end in many areas of the country.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

New Government Regulations for Loan Disclosures

2009-07-27T16:40:00.000-07:00

Recent Federal legislation will impact how quickly loans can now be closed. When completing your purchase agreement, even if you are prepared to move forward and close quickly, a more conservative timeframe of 30-45 days from the time of the contract acceptance might be a more realistic expectation.

HERA (Housing & Economic Recovery Act) was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance.

Under HERA:

No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees (such as appraisal fees) may be collected only after four business days.

Should the APR change by more than .125% on a fixed rate loan or .25% on an ARM, the lender must disclose the new APR and the borrower must have a minimum of 3 business days to review the information before the transaction may proceed.

Items that can trigger re-disclosure requirements include changes to the loan amount, closing date, loan program, or any fees that impact the APR or interest rate.

In cases where re-disclosures documents are sent by mail to the borrower, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.

These new regulations go into effect on July 30th so it is important to plan accordingly to ensure smooth and timely closings.

National Real Estate News

2009-07-20T08:00:00.000-07:00

We may finally be seeing the end to the home building bust and the start of what some believe will be a sizable recovery in residential construction over the next few years. Friday morning, housing starts for June came in UP 3.6%, at an annual rate of 582,000 units. With volatile multi-family starts down for the month, the gain all came from a 14.4% boost in single family units, which have risen four months in a row, UP 31.7% since February. April and May starts were also revised UP considerably.

June Building Permits were UP 8.7%, at an annual rate of 563,000 units, increasing for the second straight month, resulting in a 13.1% boost since April. Although there are still excess inventories, experts feel the rate of home building had been so low, inventories will continue to fall rapidly even as new building activity picks up.

The week began with a report from Freddie Mac saying they believe home sales bottomed in Q1 at a 4.46 million annual rate. They project sales will grow every quarter, to an annual rate of 5.85 million by Q4 next year. Their turnaround evidence includes nine straight months of sales growth for Florida and 14 straight months for California. Admitting that home price bottoming tends to lag, the report did say they saw signs of "the seeds of turnaround" in prices as well. All good news.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657

Close Early to Avoid Thanksgiving Rush when $8,000 Tax Credit Expires

2009-07-19T17:33:00.000-07:00

November 30th is the drop dead date for closing purchases that qualify for the First Time Homebuyer Tax Credit. Scheduling closing dates in November, however, will be a real challenge as buyers must navigate around all of the County furlough closure days and holidays before the deadline. Below is a list of County closures to keep in mind.

King County’s recording department will be closed on the 25th (furlough day), 26th and 27th for the Thanksgiving Holiday, and the weekend eats up the 28th and 29th.

Snohomish County’s recording department closes early on the 25th (purchase documents need to be at excise desk no later than 1:30 PM), closed the 26th and 27th for the Thanksgiving Holiday and closed for the weekend of the 28th and 29th.

Pierce, Kitsap and Mason County recording departments will be closed for Thanksgiving on the 26th and 27th while enjoying the weekend for the 28th and 29th.

You can bet that November 30th will be absolutely nuts with people trying to beat the tax credit deadline! Our advice is to close before November if at all possible. If you must close during the month of November do so early or near the middle of the month to avoid any "Thanksgiving indigestion".

Rates Are Dropping Again!

2009-07-10T21:44:00.000-07:00

After a rather unexpected rise in mortgage rates over the past several weeks we are starting to see rates inch back downward. Worse than expected economic news is the driving force for the lower interest rates. Furthermore, consumer confidence was released this morning and was much lower than anticipated, indicating consumers continue to feel concerned about the economy.

Most experts agree that we are currently in the bottoming process of the recession. It is unknown how long it will take to bottom out and when we will start seeing growth in the economy.

What we do know is that right now represents one of the best opportunities in our local housing market in history. First time homebuyers are starting to step up and take notice as evidenced by increasing home sales in the past 60 days.

With time running out on the first time homebuyer tax credit, and uncertainty about how long interest rates will remain at these low levels, now is the time to get into the market!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

“Aware and prepared” buyers help boost Western Washington home sales during June

2009-07-07T20:10:00.000-07:00

"Encouraging" seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service (NWMLS). The report shows inventory continues to shrink, pending sales increased more than 19.5% from a year ago, and median prices system-wide are up 4.4% since January.

"The positive movement in our real estate market year over year is really very encouraging," remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, "In anyone's book, that's substantial improvement."

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. "It's encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago," he stated. While the median home price is down approximately 10% from a year ago, median prices have flattened over the past 7 to 9 months, he noted. "This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges," Scott believes.

Pending sales (offers made and accepted) in the four-county Puget Sound region (King, Kitsap, Pierce and Snohomish) rose more than 25 percent in June compared to the same month a year ago.

"There is a definite upsurge in sales activity, from a pending sales perspective and a "lookers becoming buyers" perspective," observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.

Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act. He said the “word” on the $8,000 tax credit has finally reached the streets, as more buyers come in aware, prepared and excited about taking advantage while the advantage is available. (The federal tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence before December 1, 2009.)

Data show some neighborhoods are rebounding faster than others, Sparks observed. "In what appears to be a transitional market, accurate neighborhood information is more critical than ever, so buyers, sellers and their agents really need to do their homework" he emphasized.

Short sales continue to be a drag on prices and source of frustration for brokers and agents, according to Beeson. A National Association of REALTORS® analysis revealed that distressed homes typically sell for 20% less than the normal market price, thereby drawing down the overall median price.

Many pending sales are yet to close because of short sales, which Beeson estimates take twice as long to close as a more conventional transaction. "Many pendings have to be resold because the first buyer tires of waiting for the lender's response."

Beeson also notes the next challenge will be reactions to the next round of foreclosed properties that are expected to come on the market in the next six months. He said there could be another dip in prices, but adds, "I think we've been through the worst."

Right now is a great time to buy. Very rarely do we get the combination of lower prices, high amounts of inventory, anxious sellers willing to deal, and interest rates that are at approximately 50 year lows. This is the very best time to buy we’ve had in years!

Snohomish County Statistics - June, 2009

2009-07-07T20:09:00.000-07:00

Current Residential & Condo listings - 5,627 (down 21.55% from last year)
New listings taken this month - 1,730
Pending sales this month - 1,191 (up 30.16% from last year)
Percent of listings that sold this month - 21.17%
Median closed sales price - June ‘08, $329,450
Median closed sales price - June ‘09, $299,000
Rate of appreciation = -9.24%

~ Courtesy of NWMLS

King County Statistics - June, 2009

2009-07-07T20:07:00.000-07:00

Current Residential & Condo listings - 13,351 (down 15.67% from last year)
New listings taken this month - 4,373
Pending sales this month - 3,042 (up 19.34% from last year)
Percent of listings that sold this month - 22.79%
Median closed sales price - June ‘08, $400,000
Median closed sales price - June ‘09, $363,116
Rate of appreciation = -9.22%

~ Courtesy of NWMLS

Eastside Statistics - June, 2009

2009-07-07T20:04:00.000-07:00

Current Residential & Condo listings - 5,144 (down 7.83% from last year)
New listings taken this month - 1,466
Pending sales this month - 942 (up 13.63% from last year)
Percent of listings that sold this month - 18.31%
Median closed sales price - June ‘08, $539,000
Median closed sales price - June ‘09, $476,000
Rate of appreciation = -11.69%

~ Courtesy of NWMLS

National real estate highlights from last week

2009-07-07T17:29:00.000-07:00

The Pending Home Sales index came in last Wednesday a blip UP for May over April. This was the first time we had four consecutive monthly gains in the National Association of Realtors index since October 2004. And May's number was up 6.7% over a year ago.

Also on Wednesday, the government announced that homeowners who are underwater up to 125% can refinance under the Obama administration's Home Affordable Refinance Program (HARP). They have to be current with payments and the loan must be owned or guaranteed by Fannie Mae or Freddie Mac. They're boosting the program's loan-to-value (LTV) ceiling from 105% to 125% so more homeowners can take advantage of lower mortgage rates. The idea is to have HARP prevent more foreclosures to help stabilize the market. Details are available at www.makinghomeaffordable.gov.

Another sign of hope came last week from the S&P Case-Shiller home price index. We feel this index is negatively biased in tough times, yet April's reading showed the third straight month of DECREASING home price declines. There were even HOME PRICE INCREASES in some of the 20 US cities included in the index. Moody's Economy.com chief economist Mark Zandi chimed in: "The long and painful crash in the housing market is coming to an end."

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com

National Real Estate News...

2009-07-01T19:33:00.000-07:00

We continued to have encouraging housing news, starting with Existing Home Sales up 2.4% for May to a 4.77 million annual rate. This was the third month in a row of increased sales, which are now 6.2% above their January low. And the percent increase for the last two months is the largest since April 2004. The existing homes supply decreased to 9.6 months from April's 10.1 months. The median price of an existing home INCREASED to $173,000.

Next we saw new home sales at a 342,000 annual rate for May, with the supply dropping to 10.2 months from April's 10.4 months. New home inventories are now at 292,000, down 49% from their mid-2006 peak and at their lowest level since 2001. Sales were down slightly for the month, but still above their January low. The 111,000 new homes for sale still under construction are at their lowest level since 1970. The 135,000 completed new homes for sale are the lowest level since 2006. The Mortgage Bankers Association reported purchase loan applications UP 7.3%!

Last week we reported the housing market needs to get back to 1.6 million starts a year just to meet knock-downs and population growth. A new Harvard University report heartily agrees. It says there will be millions more echo boomers than there were boomers who first grew the housing market. The report projects household growth between 12.5 and 14.8 million in the next 10 years! The report also notes that price declines and low interest rates have brought affordability to many housing markets.

~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.893.5723, CChrobak@GolfSavingsBank.com

In Seattle, a Tight Housing Market

2009-06-29T07:43:00.000-07:00

Stringent building restrictions, and the city's unique geography, prevented overbuilding during the boom.

Two big factors will help bolster Seattle housing prices in the next few years: stringent building restrictions and basic geography.

City officials kept a tight rein on development during the boom. Much of the new housing consists of "in-fill" projects that replace existing buildings or other properties. For example, South Lake Union, a multi-use development with 2,800 residential units so far and Amazon.com's (AMZN) new headquarters, was built on a former industrial site. "It's a difficult market to penetrate from a land acquisition perspective," says local builder Peter DelMissier, division president of Pageantry Homes. Not that there's much undeveloped land to buy. An isthmus, Seattle is hugged by the Puget Sound on the west and Lake Washington on the east.

With such constraints, Seattle doesn't have a significant supply of homes on the market. It would take just five months to work through the excess inventory, compared with roughly nine months for the U.S. as a whole, according to the National Association of Realtors. "Given sales, demographics, and job growth, we expect the inventory in Seattle to burn off faster than in other markets," says Richard M. Gollis, founder of The Concord Group, a consulting firm in Newport, Calif. Generally, cities with low inventory will bounce back sooner than the rest of the U.S. Tight supply in Seattle—much like in Dallas, Denver, and Portland—should set the stage for recovery in the next year or so.

Homeowners in Miami aren't as lucky. Builders in the coastal city slapped up condominiums and houses during the boom, figuring investors and retirees would jump on them. Today half-built condos mar the skyline, and newly constructed developments sit empty. The area has more than a 40-month supply on the market—among the highest in the country. Atlantic City and Las Vegas also are plagued by excessive inventory. The overhang in those markets will continue to weigh on prices for years, even as the rest of the country recovers.

Some areas of Seattle are on the mend already, with houses even sparking bidding wars. In April, Jen Hoff, 39, and her husband, Pete, 37, decided to upgrade to a bigger house to accommodate their expanding family. They put their Craftsman-style bungalow, typical of the homes in Seattle's oldest neighborhoods, on the market, and received five offers the next day. A few weeks later they sold their starter home for $406,500, roughly $7,500 above the listing price.

The family moved in May to a $569,500 four-bedroom brick home built in 1947. Their new place is only one street away from the old—so Pete Hoff, a statistics professor at the University of Washington, can still bike to work. "We love the character of the neighborhood and that it reflects a time when it was first built," says Jen Hoff, a stay-at-home mom with two sons, ages 2 and 11. "It's not a neighborhood in transition."

Building restrictions—and the city's unique geography—should help lift prices.

~ Courtesy of BusinessWeek, June 18, 2009

No Surprises From the Fed

2009-06-27T07:52:00.000-07:00

Wednesday’s Fed Meeting concluded without much fanfare in the market. The Fed Funds rate was not changed and Prime Rate remains at 3.25%. The main details of the Fed policy statement suggested that the downturn in the economy is slowing and deflation is no longer a big threat. The Treasury and Mortgage Backed Security Purchase Program will remain the same as well. The Fed meeting was basically a non-event for the market as nothing really changed.

Thursday was an impressive day in the Bond Market, as yields were pushed higher on positive Treasury Auction results. It was just a few weeks ago that rates soared on an oversupply of Treasuries and poor investor participation in auctions. The auction results were a much needed sigh of relief for mortgage rates.

In Friday’s news, it was announced that the personal savings rate for Americans has soared to 6.9%. This is the highest level since December of 1993. A high savings rate can be a double edged sword for the economy. While it is good to see people saving, spending is the lifeblood of a strong economy.

We’ve seen a nice drop in mortgage rates since the peak a few weeks ago at 5.625% on the 30 year fixed. Currently, the 30 year fixed is 5.125%. We don’t know how long this dip in rates will last, so take action now on your purchase or refinance!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

161 Days Left to Use the First Time Homebuyer Tax Credit!

2009-06-22T18:42:00.000-07:00

The clock is ticking…there are only 161 days left to take advantage of the $8,000 first time homebuyer tax credit! In order to qualify for the tax credit, one must close on a home no later than November 30th, 2009.

While it remains an excellent time to purchase a new home, we are starting to see the first signals of the bottoming out process of the current recession. While we are not seeing many signs of economic growth, we are starting to see signs that the recession is slowing and the economy is starting to stabilize. We are also seeing sales of single family homes starting to increase.

The brightening economic news has led to and will continue to lead to increasing mortgage rates. The increases in rates have been slight and currently rates remain at historical lows. Long term economic recovery, however, will eventually be accompanied by higher interest rates.

Right now is the best time in history to be a first time homebuyer. With today’s combination of low interest rates, low home prices and a tax credit of $8,000, there has never been a better
opportunity to enter the market. It could be a once in a lifetime opportunity, don’t miss out!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

National foreclosure filings drop!

2009-06-16T07:55:00.000-07:00

We got the news last week that May foreclosure filings were down 6% from April. This was the first month-on-month decline since January. On top of that, the drop would have been larger except for increases in just a few states.

It's important to note that the bulk of foreclosures are concentrated. If you take out the four states with the highest number of foreclosures, the remaining 46 states (including Washington) had only 1% of mortgages in foreclosure, according to the Mortgage Bankers Association.

Also remember that not all homes with foreclosure-related filings wind up owned by the lenders. Many homeowners are able to refinance their loans or negotiate a loan modification or short sale.

What a difference a week makes!

2009-06-12T19:20:00.000-07:00

Home loan rates pushed up to 5.625% on Wednesday, a level not seen since the Federal Reserve announced its mortgage backed security purchase plan last November.

Rates have improved from Wednesday’s peak and are still phenomenal compared to historical interest rates. So much has happened in the credit markets over the last year it is hard to remember that in June of 2008, 30 year fixed mortgage rates hovered around 6.25%. That is nearly 1% higher than today!

The rise in mortgage rates continues to be attributed to fears of inflation and over-supply of bonds in the market. The improvement in rates is partially due to news that the Paulson & Co. hedge fund will begin purchasing distressed debt and mortgage backed securities. Additionally, there are no Treasury bill auctions scheduled for next week and this will give some relief to the oversupply in the market. In other news, consumer sentiment came in at its highest level in 9 months and retail sales met expectations. Since this met market expectations, it did not cause a reaction in bonds.

Where rates go from here is always open for speculation. What is certain are today’s rates. Current rates make it possible to get a historically low mortgage interest rate. It is still a great time to purchase a home or refinance your current mortgage.

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com