Just a quick reminder that we’ll be a hosting our next client appreciation event this Sunday, October 9th from 12p to 4p at Craven Farm in Snohomish.

We’ll be serving up homemade smoked BBQ pork and beef, sides, drinks and desserts to fuel you pumpkin hunt and visit to the many activities at Craven Farm.  In addition to finding the perfect pumpkins you can also visit the petting zoo/barn, take a hay ride, go pumpkin-chunkin’ and take pictures in many of their harvest themed settings.

If you’d like we’ll even have our professional camera on hand to take family photos for seasonal cards.

Please RSVP by email or phone (206.371.1146) so we can have plenty of food on hand.  Friends and family are welcome so bring them along to join in on the fun.

For directions and more information about Craven Farm, click here.  Here’s a map to help guide you to us.

I saw this article today, and it gave me a good chuckle.  Nothing like innovation in marketing when things get slow.

So would you buy a $450,000 home if the Seller offered to buy you a $1,000 in drinks & food at the local pub?

One of the bright spots of our economy recently has been the exceptionally low interest rates for home mortgages.  Rates peaked in April this year at 5% before declining to around 4.5% for most of the summer.  However, in early September rates descended further to around 4.125%!

Of course, rates dropping always improves affordability of homes.  The basic rule is that a 1% drop in rate will result in a 10% increase in buying power and this holds true with today.

For example, if you had a budget of $1,600 for principal and interest on a home loan, here’s how the buying power of your housing payment has dramatically improved.

This clearly shows the power of leveraging lower interest rates – a simple shift in rates buys more than $32,000 more home for the same payment.  If you’re considering buying a home or refinancing, now is an incredible time.  Call us for more information!

We don’t have to look far to see that Autumn is just around the corner from changing color of leaves to crosswalks filled with kids heading off to school, now’s the time to work on a few projects around the house to ensure that you are ready for the cooler weather and rain of the coming season.

Gutters, Downspouts & Drains
Now is an excellent time to clean out debris from your gutters, downspouts and drains to be sure they are ready for the increase precipitation of the coming season.  It’s much easier, and safer, to do this when it’s not wet and slippery on your roof.  Don’t forget to check any driveway or yard drains as well!

Furnace Filter
If you’re like us, and many of our clients, you may not have turned on your furnace in a couple months.   Before the weather cools down take time to swap out your furnace filter – it’s quick and easy, and will help your furnace operate more efficiently while keep the air in your home cleaner.  Additionally, if it’s been more than a couple of years since you’ve had your furnace cleaned and tuned, now would be a great time.  It only costs about $100-$150, and can help you avoid costly repairs and save on energy costs.

If you have a wood burning fireplace, now is a great time to check the flue and perhaps even have the chimney cleaned for optimal operation and safety.

Checking For Pests
As weather turns colder, vermin tend to seek out shelter wherever they can find it.  Before they take up residence in your crawl space, take time to walk around your home (and perhaps even venture into the crawl space) to identify and block any areas that rodents can enter your home…  spaces as small as a ¼” to ½” square can be enough to allow mice into your home – so be sure to seal up these spaces with foam, steel wool or other materials.

Check Smoke & Carbon Detectors
It’s always a good idea to check on your smoke detector batteries to make sure they are up to charge and ready.  Now is also a good time to check your carbon monoxide/dioxide dectectors, or install one per floor of your home, if you haven’t already.

If you need any assistance with these Autumn projects, please feel free to call us.  We have a number of great contractors who can help with these projects and more.

Welcome to the Autumn season!  While we hope there’s more summer weather around the corner, we know that soon the leaves will be turning, harvest will be in full swing and kids will be dressing up and asking for candy.

To help you kick off a wonderful autumn season, we’re hosting a day at the Pumpkin Patch at Craven Farm in Snohomish on Sunday, October 9^th from 12pm to 4pm.  Much like last year, we’ll be providing a free lunch of homemade BBQ beef & pork sandwiches, chips, drinks and desserts.  We’ll also have our camera on hand to take family photos of you in the pumpkin patch or any of the settings that Craven provides.

We’ll be sending more details as we get closer to the event, but in the meantime please mark your calendars, and feel free to call with any questions or to RSVP!

As you’re enjoying the long overdue summer sun, some of you may be wondering how has the real estate marketed faired during the major summer selling months?

Put simply, the market held its ground this summer.  We’ve seen increases in sales volumes, decreases in inventory and steady prices.  While statistics accurate showing the relative number of distressed sales in the market are hard to come by – we know from being out in the market daily that distressed sales have seen modest growth in the past 6 months with more short sales and bank owned properties available.

Let’s look more specifically at a few statistics:

Inventory
When we compare the number of active listings in a month with the number of closed sales, we can estimated the number of months of ‘inventory’ we have in our market.  Generally, when we see more than 6 months of inventory, we think it’s a Buyer’s market while less than 6 months mean a favorable market for Sellers.

We started the year with nearly 10 months of inventory which steadily declined to a low of just 4.8 months in June and has returned to the year to date average inventory of about 5.2 months in August.

When we focus on houses, we find that the numbers are better ranging from a high of 8.8 months in January to a low of 4.4 months in June ending up at 4.9 months in August with an average inventory year to date of 6 months.

Condos presently are lagging behind in the recover mainly due to distress issues (foreclosure & short sales) which are creating higher inventories and resulting in slowly declining prices.

The best explanation for the improving inventory numbers has been the strong sales we’ve seen during the year which have put us on pace to meet and potentially exceed 2010 sales volume when we had very significant tax incentives for Buyers.   From January to July 2010 there were 12,802 closed sales, while during the same period of 2011 there were 12,359 closed sales.

When we put this years inventory numbers in context with the past couple years, there is definite trend towards a more balanced market with reasonable inventory levels.

Median Price
Flat and bumpy is the theme of the 2011 median home price stats… we started the year at $316,000, and then rattled around rising and falling from month to month between a high of $330,000 to a low of $313,000 coming in at $318,000 in August with a year to date average of about $320,000.

In our opinion, these median price statistics are neither good nor bad news.  They simply illustrate that our housing market riding out a very bad event and hold its own and hopefully for preparing for improvement as the overall economy improves.

When we compare home prices over the past three years, the picture isn’t wonderful as we’ve certainly seen declines since 2009.  However the declines have become much less steep, except for condos which are getting hit hard by foreclosures and short sales.

Our Expectations

We expect to see the market have its seasonal soft patch from October through January when prices will likely decline and inventories will rise, however in 2012 we expect residential prices in King County to rises from the bottom levels set in 2011.  As for condos, we expect the beginning of the recovery to lag houses by about 6-12 months as the backlog of short sales and foreclosures will clear.

A bit of good news for our local real estate market was reported by the Seattle Times today…

The number of closed sales in August increased by more than 35% from a year ago with 1,775 closed sales.  This is a great news as it shows a strong recovery from the post-tax credit lull we experienced in 2010.

However, despite the increase in volume of sales we aren’t seeing an increase in prices as median home prices have remained unchanged from July to August, and are 8% lower than a year ago (keep in mind the tax credits expired in September 2010).  Home prices have been hit by an overabundance of supply due to distressed properties – especially in the condo market.

For the most part we’ve been bouncing along at the same price levels for the last 6-8 months – hitting bottom about 2-3 months after the tax credit expiration.  The good news is that the increasing volume of sales is helping offset a decent portion of the increased supply and keep our prices stable.

As employment improves it will create more buyers and fewer distressed owners, and the market will really start to turn the corner.

For more information see: Seattle Times – Local Homes Sales On Upswing

As rents rise and home prices stay flat more investors are taking the long term approach to real estate investment by choosing to rent out properties they acquire rather than selling them after a quick rehabilitation.

This trend has been reported in the most recent Campbell/Inside Mortgage Finance Housing Pulse Survey that shows first time home buyers are a growing segment of the market, but so are distressed properties.  While investors are still purchasing the good deals, nearly 48% surveyed said they’d be holding the properties as rentals which is up from 28% a year ago.

Causes?

Consumer Confidence/Federal Government Disfunction
Many brokers are pointing to declining consumer confidence due to concerns disfunction in Washington DC which has cause a significant number of  buyers to postpone purchase plans.

Rising Rents/Low Home Prices/Low Interest Rates
Additionally, we feel that the widely reported expectations for rising rents in the coming years coupled with incredibly low interest rates (even for investment properties) and low home prices make owning rentals incredibly attractive in today’s market – so it simply makes more sense to buy and hold.

For for information, see the Campbell Survey’s Press Release.

Finally… the banks are getting a bit more realistic about how they deal with pre-foreclosure properties – more commonly known as ‘Short Sales’ – properties that are being sold for a price that is less than is needed to pay off the associated mortgages.

According to RealtyTrac, the time it takes to sell a short sale has decreased by 4.3% in the past quarter – though it’s still an eye popping 245 days.  For the delay and hassles, the buyers of short sales typically see a discount of 21% which is up from 14% a year ago.  Keep in mind that these are National figures, and locally while the marketing time is very similar the discounts for short sales are closer to 7-12% when compared to non-distressed homes.

We are definitely seeing banks get more realistic, as well as increase their capability to process short sales, which is wonderful.  However they are still far from an easy way to buy.  Today 30-40% of all short sale offers still fail, and they take somewhere between 3-6 months to get approval and another 30 days to close – so only those buyers with a great deal of patience and tolerance to risk get the payoff of the discounted sales price.

Of course, it’s also important to know that the discounted sales price isn’t just for the hassle and risk, it often is mostly because of the relative poor condition of the properties where significant cosmetic fixes and deferred maintenance are the common themes.

For more information on this story see: Bloomberg – Home Short Sales Increase…

In the continuation of recent trends for our housing economy, and our economy at large, the recent Mortgage Delinquency Survey report from the Mortgage Bankers Association (MBA) shows that foreclosures are down, but delinquencies are back up.

Foreclosures Fall
The MBA has reported that foreclosure rates have declined to 2007 levels so fewer borrowers are losing their homes to bank repossessions.  In the second quarter of 2011, 0.96% (less than 1%) of loans were in some stage of foreclosure which is down from 0.12% the previous quarter and down 0.15% from the previous year.

Proportionally, that means that foreclosures are down approximately 11.2% from the previous quarter, and 13.5% from the previous year – which is certainly a significant step in the right direction.

Deliquencies Rise
However, providing a counterbalance to this good news were the numbers on mortgage deliquences – those borrowers who’ve missed 1 or more payments, but weren’t far enough behind to be at risk of foreclosure.  This rate rose 0.12% in the past quarter to 8.44% total, but is 1.41% lower than the second quarter last year.  So the long term trend here is positive, though the most recent quarter certainly dampens optimism.

What Does This Mean?
Like much of the economic outlook these rates are tied closely to labor and employment, as stated by Jay Brinkman the Chief Economist for the MBA – “Mortgage loans that are one payment, or 30 days, past due are very much driven by changes in the labor market, and the increase in these delinquencies clearly reflects the deterioration we saw in the labor market during the second quarter.”

As our employment locally and nationally continues to improve, so will mortgage foreclosures and deliquencies which in turn will help improve the overall housing market.

For more details on this report, please read:

Mortgage Bankers Report

CNN/Money Magazine Story