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How Seattle Rides Real Estate Storms

This article and letter to a customer (from March 08 with subsequent updates) are a brief collection of my thoughts on Seattle’s ability to ride out the current national economic storm.  As with all research, anyone can tweak any data to mean what they wish, so I have tried to find the most balanced perspective possible. I do believe in Seattle Real-Estate as a sound real-estate investment in comparison to other parts of the country. When to sell ? When to buy? That’s as individual as yourselves.  Where to buy? HERE as soon as you find a place that’s comfortable.  How much to buy, what percentage of your debt to income ratio? Likely up to somewhere around 41% of your gross income, including all your debts is the old standard before this last unregulated splurge that got many in trouble.  Well here it is, hope this is of some help.

info added 11/19/08
Forbes where to invest in real-estate
(specifically commercial but homes follow that market closely)
http://realestate.msn.com/buying/Article_Forbes.aspx?cp-documentid=12808843&GT1=35000 

Info added 10/30/08
New US home price comparative graphs 1990-2008 US as a whole and select markets Seattle  SanDiego, Miami, etc
http://mysite.verizon.net/vodkajim/housingbubble/

Seattle is an area of excellent opportunity in real estate. The most stable is King County. Currently, home prices are down 1-6% + – over last year in King county (the area Seattle, Bellevue and Redmond are in), each micro area has its own story most readily explainable. Most stable are the areas just north of Seattle’s city core and then east through north Bellevue and Redmond.  These areas are home to Microsoft, Amazon.Com, Zymogenetics, UW, and their employees.  Many Boeing management employees also live in these areas.  Boeing plants are south and north of town and while the areas around the plants are susceptible to air tanker, and dream liner, sales and losses (causing housing to fluctuate) the management core doesn’t fluctuate as much.

The historical charts show somewhere between 3 to 5 years for the average slump which is usually fairly flat then turns upwards. By my count we’re at about 18 months in and hopefully near the bottom of the curve but who really knows.  My family has been in real-estate in WA state since 1914.  My Grandmother was a real-estate lawyer in a downtown Seattle office. She always said real-estate was a sure deal, but always buy it knowing it could be a 20 year investment.  You might be able to sell it at 5 or 10 years at a profit but who can tell?  At somewhere between 10 and 20 years it was her feeling you would always have an opportunity to net a sizeable gain.  Choosing just when to sell was the art … I guess some things never change.

I think right now or fairly soon is a good time to invest.  How much?  That depends on your available funds … Properties at the $250-350k are “affordable housing” and every house flipper/investor or newlywed/first time buyer are eating them up.  Many of the GREAT deals seem to be in new construction town homes $500-600K or you can look for the last $700K house on the cul-de-sac because the builder wants to be done with that plat.

This article (admittedly from March 08) excepting the new US market comparative graphs at http://mysite.verizon.net/vodkajim/housingbubble/

These links are some of the best I have found on defending Seattle’s ability to ride out the current national economic storm.  Obviously, there is no crystal ball, but next is one of the best single sources of a fairly balanced view that I’ve found, as well as a couple of links to some graphs I found interesting:  http://seattlebubble.com/blog/2006/09/03/seattle-times-we-are-immune-so-says-history/
 
http://seattlebubble.com/blog/2008/02/19/king-county-home-prices-1946-2007/ http://seattlebubble.com/blog/2008/02/28/king-county-affordability-1950-2007/#more-1621http://www.zillow.com/static/images/quarterlies/2008-Q1/Home-Price-Appreciation-Seattle-WA.jpg 
Zillow can be kind of up and down on their pricing/valuing of current homes on the market, however these links are the compiled home prices sold last year and not their “zestimates”.

http://seattlebubble.com/blog/
For continued discussion of the local market, the Seattle Bubble blog is a fairly well balanced neither Polyanna nor the Harbinger of Doom.

Larry Baumgartner  | Realtor 

Market Updates for October 2008

Here are the monthly Real Estate Market updates for King, Snohomish and Pierce Counties:

http://www.comebuyahouse.com/OctoberKing08.pdf

http://www.comebuyahouse.com/OctoberSnohomish08.pdf

http://www.comebuyahouse.com/OctoberPierce08.pdf

Compiled by our title partner, from MLS statistics.

Lynette Hensley, Associate Broker, Realtor

Market Updates for September 2008

Here are the September 2008 Real Estate Market updates for King, Snohomish and Pierce Counties:

http://www.comebuyahouse.com/SeptemberKingR.pdf

http://www.comebuyahouse.com/SeptemberSnohomishR.pdf

http://www.comebuyahouse.com/SeptemberPierce(2).pdf

The reports by neighborhood are particularly interesting:

http://www.comebuyahouse.com/SeptemberKing.pdf

http://www.comebuyahouse.com/SeptemberSno.pdf

http://www.comebuyahouse.com/SeptemberPierce.pdf

Compiled by our title partner Commonwealth Title, from MLS statistics.

Lynette Hensley, Associate Broker, Realtor

Market Updates for August 2008

Here are the August 2008 Real Estate Market updates for King, Snohomish and Pierce Counties:

http://www.comebuyahouse.com/AugustKing.pdf

http://www.comebuyahouse.com/AugustSnohomish.pdf

http://www.comebuyahouse.com/AugustPierce.pdf

Compiled by our title partner Commonwealth Title, from MLS statistics.

Lynette Hensley, Associate Broker, Realtor

Get your landscape ready for Autumn

Here is a link to the Lowe’s Newsletter–it’s got great info for getting your yard ready for Autumn.

September Newsletter–Lowes

Fed cuts short term interest rate by .5%

The Fed cut the short term interest rate by .5% today in a move to improve the housing market. The stock market responded with immediate gains of about 1.5%, showing a hopeful outlook for recovery and a soft landing for the wider economy.

From CNN Money, “The federal funds rate, an overnight lending rate that banks charge each other, is important since it influences the amount of interest consumers must pay for various types of debt, such as credit cards, home equity lines of credit and auto loans. The rate cut should help some beleaguered home borrowers who are set to see monthly payments on adjustable rate mortgages rise later this year.”

The immediate response among the lenders that I work with? Rates dropped in many conforming loan products. This should allow people who need to refinance to do so with a very attractive rate, and move into a long term product, especially for those who want to stay in their homes for the long haul.

How Walkable is your Neighborhood?

What is Walk Score? 
Walk Score shows you a map of what’s nearby and calculates a Walk Score for any property. Buying a house in a walkable neighborhood is good for your health and good for the environment.  The walk score of the Space Needle, for example is 89.  Bill Gates’ house walk score is 6.  Our house is 65.  The higher the score, the more walkable the location.  How does the site calculate walkability?
 How It Works
Walk Score calculates the walkability of an address by locating nearby stores, restaurants, schools, parks, etc. Your Walk Score is a number between 0 and 100. The walkability of an address depends on how far you are comfortable walking—after all, everything is within walking distance if you have the time. Here are general guidelines for interpreting your score:

· 90 – 100 = Walkers’ Paradise: Most errands can be accomplished on foot and many people get by without owning a car.
· 70 – 90 = Very Walkable: It’s possible to get by without owning a car.
· 50 – 70 = Some Walkable Locations: Some stores and amenities are within walking distance, but many everyday trips still require a bike, public transportation, or car.
· 25 – 50 = Not Walkable: Only a few destinations are within easy walking range. For most errands, driving or public transportation is a must.
· 0 – 25 = Driving Only: Virtually no neighborhood destinations within walking range. You can walk from your house to your car!

 Check it out via our website:  www.ComeBuyAHouse.com

Ways to Use the Free Search on our Website

 Whether you are buying or selling a home or just want to know what the current values are in your neighborhood, you will find our Free MLS Search and email reports to be a useful tool.  
The main use of our search is for buyers who can preview the market or actively search for their next dream home.  Yet that’s not the only purpose.  If you are preparing to sell you can see what neighborhood prices are, which homes are in competition, and how they are being marketed.  This information along with your ComeBuyAHouse.com team’s current knowledge of the market will be useful as you place your home for sale.    
Homeowners who want to stay put and just want to be in the know, can simply track the current neighborhood values accurately using MLS listing data.  
Sign up on our website anytime!   ComeBuyAHouse.com

Great News for Seattle Area Values

 It is a bit of a buyer’s market in many areas, and some good deals are to be had!
In general, houses for sale are spending longer times on the market than in recent years, and some areas are showing signs of prices coming down. Buyers: sellers who need to sell quickly are selling low. Sellers: Fear not, you can add value to your property and negotiate in creative and
tangible ways.  
The mortgage market and interest rates are contributing factors to this market change.  (Please see the next article for mortgage market info.)
Still the house value trend in Seattle is good news. According to the Seattle Times, in the 2nd quarter of 2007, Washington State led the nation with 5 cities in the top 20 for appreciation, with the Seattle/Bellevue/Everett areas up 9.89%,
“Washington State led the nation with the number of cities in the top 20 for appreciation with five. In order, there are: Wenatchee (up 23.54 percent), Longview (up 13.6 percent), Seattle/Bellevue/Everett (up 9.89 percent), Tacoma (up 9.34 percent) and Spokane (up 9.3 percent). And, the state had no cities in the bottom 20, which were located primarily in California and Florida.”  Seattle Times
The rest of the Seattle Times article includes national information.  If you would like to have the entire article in print or via email, please send an email request to us at ComeBuyAHouse [at] gmail.com
——-Lynette and Larry
 

Legal Issues Class = Even better agents

Larry and I took an interesting class today with attorney Greg Ursich covering legal issues from purchase and sale to closing.  It covered title insurance, types of deeds, essential elements of a purchase and sale agreement, and avoiding misrepresentation. 

The new thing that I learned about title insurance that more people will come up against is this:  if you place a property into a trust, an LLC, or any other ownership entity AFTER the purchase, the title insurance coverage ends.  You can provide for continued coverage by contacting your title insurance company and obtaining a rider to transfer the title to the new entity.

It was interesting to get the information about each kind of title insurance–there are three–without the marketing bent of a title insurance rep.  Greg’s a lawyer who is often hired by title companies to handle legal issues that arise in this arena, so he sees not as a salesman, but as a practicing litigator, handling claims and problems. 

Title insurance is backward looking–not forward looking like most insurance–though there are some new provisions for identity theft and future encroachment.  Title is primarily research of the marketability of the title using recorded documents for the research.  I can get lots more detailed, but for a blog, I’ll keep this brief.  Title insurance tends to be rather dry till there’s a problem.  Any time you have a question, I’d be happy to talk it over with you, and either explain it myself, or get you in contact with one of our title partners.

Regarding deeds, there are three basic ones.  Warranty deed, the most common.  Bargain and sale, usually for lender owned foreclosures or estate sales.  Quit claim deed, with no warranties or covenants attached to it.  Add a spouse, or remove a spouse from ownership on a property using a quit claim deed, and it would be good to check with your title insurer to make sure you are still covered.

Regarding the purchase and sale contract, real estate agents have a license for a limited practice of real estate law. Limited because we are licensed to fill out standardized forms that have been painstakingly created by lawyers.  We are allowed to fill in the blanks, and create simple addenda with simple instructions like extending closing dates or instructions following inspections.  Custom instructions or agreements beyond the agents expertise should be created by a lawyer.  A real estate agent that writes anything into a purchase and sale agreement will be held to the same standard as a lawyer. 

Disclose disclose disclose is the mantra for a real estate agent, and incidentally for the seller of real estate.  I’ve been told by one of the area’s top lawyers that a seller need not disclose an issue in their home that has been fixed.  But Greg advises that it’s better to tell the buyer everything–the problem, the repair, the whole history.  More comfort for the buyer, more protection for the seller. 

All in all, a great class, lots of info, even better super agents.