For Sale: 3BR/2.5BA Single Family House in Auburn, WA, $284,950
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Tuesday, September 1, 2009
Thursday, August 20, 2009
Recent Auburn,WA YTD stats released
This first chart shows the increase and then decrease in value from 2005 to today. As you can see the values have are similar to the that of 2005. If the chart went back to 2003-04 you would see exact matches 5 years later.
This data lists several major sections of Auburn, WA. As you can see the home values over the last twelve months have taken a double digit hit.
Thursday, August 13, 2009
Wednesday, August 12, 2009
Home sales warming up | The News Tribune - Real Estate | Seattle-Tacoma News, Weather, Sports, Jobs, Homes and Cars | South Puget Sound's Destination
Wednesday, August 5, 2009
Update on Auburn, Sumner, and Bonney Lake homes
Currently the number of Auburn, WA homes, Sumner homes, Bonney Lake homes, active is at 961. The inventory for Auburn, Sumner and Bonney Lake is decreasing. Also pending sales for homes in Auburn, Bonney Lake and Sumner have increased. The percentages of sales are attached below.
When you combine invento
ry in Auburn, Bonney Lake and Sumner you see a decrease of nearly 30% in the last 12 months. Pending properties have increased over 60% in the last year and 70% in last 15 months.
ry in Auburn, Bonney Lake and Sumner you see a decrease of nearly 30% in the last 12 months. Pending properties have increased over 60% in the last year and 70% in last 15 months. Most of these pending sales are due to listings accepting offers on their homes they are selling in distress. When these type of offers are mutually accepted between a seller and a buyer they still need to be approved by the lienholder/mortgage company. This is why you see the recent spike in pending sales and the sold stats slowly trailing behind. Not all of these short sales are closing and a majority of them are taking a while to do so. Bank owned homes in Auburn, Bonney Lake, and Sumner along with shorts sales are to credit for nearly 60% of the closed transactions last month. It wasn't too long ago when we were able to ignore short sales and REO's and consider them outliers of the market statistics. Today they are major factors and are affecting thousands of homeowner's when computing their market value to sell.
Tuesday, August 4, 2009
Tax Credit is almost gone!!
The current increase in sales and listing traffic can be directly correlated to the closing window of opportunity for the $8,000 tax credit. Remember this incentive for home buyer's ends November 30th, 2009.
The requirements are simple: (This information
has been retrieved from (http://www.federalhousingtaxcredit.com/2009/home.html)
Who is eligible to claim the tax credit? First-time home buyers purchasing any kind of home, are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases. See the IRS website for more detail.
What is the definition of a first-time home buyer? The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How is the amount of the tax credit determined? The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Are there any income limits for claiming the tax credit? Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
Can you give me an example of how the partial tax credit is determined? Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phaseout range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008? The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
How do I claim the tax credit? Do I need to complete a form or application?Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
What types of homes will qualify for the tax credit? Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. Please consult with your tax advisor for more information. Also see IRS Form 5405.
I read that the tax credit is "refundable." What does that mean? The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
Another incentive to purchase is the Zero Down USDA program. This program allows for buyers to take advantage of 100% in certain geographic areas of Washington. To see if a home you are interested in is eligible visit the website below:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Monday, August 3, 2009
Friday, July 31, 2009
Homebuying Seminar Handouts
On July 30th we had our homebuying seminar. The discussion and material was very beneficial to all who attended. Attached is the handouts that we gave to the guests. Feel free to contact your Windermere agent @ 253.883.0400 with any questions about the material or email me @ tylerfreed@msn.com
HOMEBUYING SEMINAR HANDOUT (takes a second to upload)
HOMEBUYING SEMINAR HANDOUT (takes a second to upload)
Wednesday, July 29, 2009
Wednesday, July 22, 2009
Homebuying Seminar July 30th 6:30PM to 7:30PM
Your Invited
When: July 30th 6:30PM to 7:30PM
Where: Windermere RE Lake Tapps 18008 SR 410 E Bonney Lake, 98391
We will be covering the basics of buying a home; getting qualified, searching for homes, bank owned homes and short sales, and the tax advantages including the 8k Tax Credit.
The seminar will only be an hour long and will have enough time for you to ask questions afterwards. Hope to see you there.
Tuesday, July 7, 2009
Market Update July 7th
Below is a message from Tom Rhea of Pacific Guarantee Mortgage. This update discusses the current interest rates and the factors that could increase or decrease rates in the upcoming week.
Hope everyone had a safe 4th of July holiday! We have seen some improvement to the market in the last several days and we continue to see interest rates for conforming 30 year fixed hold just above 5% and FHA 30 year fixed at 5.375%. We just can’t seem to get enough of a push to move back below the 5% range, although there is word that the Obama administration is working on another stimulus package that could either hurt interest rates or push them back down so we will wait and see.
I wanted to point out a program that could help some of your buyers who are requiring private mortgage insurance. We have access to a product that offers a premium PMI payment. With this program borrowers with a credit score of 740 or greater and a debt ratio of 41% can qualify. What makes this different is that there is a 1% upfront cost which could be paid by the seller and the monthly PMI factor is .11%, in most cases this gives the client a much better option than traditional PMI. For example at purchase of $350,000 with 10% down would give a loan amount of $315,000, with typical PMI the monthly factor would be .52% or $136.50 a month. With the hybrid PMI there would be an upfront amount of $3150 and the monthly factor of .11% or $28.88 per month. All of the PMI coverage has become much harder to get with minimum credit scores for most lenders of 720 or higher and maximum debt ratio’s of 38 -41%.
Here is your Market Report:
Bonds continue to dance just under a thick dual layer of resistance formed by the 50-day Moving Average and recent highs…and Bonds might find it hard to bust through the overhead ceiling and find much improvement today unless Stocks roll over.
After struggling most of the day, Stocks mustered a run higher late yesterday to erase their losses and actually finish the day with slight gains. The Dow finished a modest 44 points higher on the day, while the S&P 500 was higher by 2 points. Overnight, European Stocks continued the climb, after manufacturing orders in Germany reported the highest jump in almost two years. The report helped ease some concerns that a global economic recovery is stagnating.
But even given the positive news from across the pond, Stocks opened lower again this morning, despite a small rebound in the price of Oil and rumors about a potential second economic stimulus package. Vice President Joe Biden commented over the weekend that “the administration miscalculated how bad the jobless problem would be”, prompting speculation that more stimulus might be in the works during 2009. More stimulus would translate into more inflation…and also would mean more Treasury auctions to pay for it, creating even more supply to be sopped up. Many members of Congress admittedly voted to pass the first stimulus package without even reading through it, only to now look back and discover that most of the almost $800B was not earmarked to actually stimulate the economy, but more towards social programs. This will be an important story to watch as it certainly could create a negative impact on Bonds and home loan rates down the road.
With no Economic Reports scheduled for release today, Traders will likely remain cautious and keep their eyes on the initial second-quarter corporate results due out later this week. Also in the news this week is another round of Treasury securities up for auction, totaling $73 Billion. Depending on how the sale is received by the markets, it could put pressure on Bonds, particularly in light of the recent comments on added stimulus.
Bonds are in a tough spot, with both technical indicators and fundamentals working against them, so a Locking approach might normally be more appropriate. However, the picture for Stocks may even be uglier than it is for Bonds – and a sell-off in Stocks would mean that some of that money would find its way into Bonds and potentially push prices higher…or at least support present levels.
If you have any questions on the tax credit, qualifying for a loan or if you have a friend looking for a home give me a call. You can reach me directly at 206.963.0424
Hope everyone had a safe 4th of July holiday! We have seen some improvement to the market in the last several days and we continue to see interest rates for conforming 30 year fixed hold just above 5% and FHA 30 year fixed at 5.375%. We just can’t seem to get enough of a push to move back below the 5% range, although there is word that the Obama administration is working on another stimulus package that could either hurt interest rates or push them back down so we will wait and see.
I wanted to point out a program that could help some of your buyers who are requiring private mortgage insurance. We have access to a product that offers a premium PMI payment. With this program borrowers with a credit score of 740 or greater and a debt ratio of 41% can qualify. What makes this different is that there is a 1% upfront cost which could be paid by the seller and the monthly PMI factor is .11%, in most cases this gives the client a much better option than traditional PMI. For example at purchase of $350,000 with 10% down would give a loan amount of $315,000, with typical PMI the monthly factor would be .52% or $136.50 a month. With the hybrid PMI there would be an upfront amount of $3150 and the monthly factor of .11% or $28.88 per month. All of the PMI coverage has become much harder to get with minimum credit scores for most lenders of 720 or higher and maximum debt ratio’s of 38 -41%.
Here is your Market Report:
Bonds continue to dance just under a thick dual layer of resistance formed by the 50-day Moving Average and recent highs…and Bonds might find it hard to bust through the overhead ceiling and find much improvement today unless Stocks roll over.
After struggling most of the day, Stocks mustered a run higher late yesterday to erase their losses and actually finish the day with slight gains. The Dow finished a modest 44 points higher on the day, while the S&P 500 was higher by 2 points. Overnight, European Stocks continued the climb, after manufacturing orders in Germany reported the highest jump in almost two years. The report helped ease some concerns that a global economic recovery is stagnating.
But even given the positive news from across the pond, Stocks opened lower again this morning, despite a small rebound in the price of Oil and rumors about a potential second economic stimulus package. Vice President Joe Biden commented over the weekend that “the administration miscalculated how bad the jobless problem would be”, prompting speculation that more stimulus might be in the works during 2009. More stimulus would translate into more inflation…and also would mean more Treasury auctions to pay for it, creating even more supply to be sopped up. Many members of Congress admittedly voted to pass the first stimulus package without even reading through it, only to now look back and discover that most of the almost $800B was not earmarked to actually stimulate the economy, but more towards social programs. This will be an important story to watch as it certainly could create a negative impact on Bonds and home loan rates down the road.
With no Economic Reports scheduled for release today, Traders will likely remain cautious and keep their eyes on the initial second-quarter corporate results due out later this week. Also in the news this week is another round of Treasury securities up for auction, totaling $73 Billion. Depending on how the sale is received by the markets, it could put pressure on Bonds, particularly in light of the recent comments on added stimulus.
Bonds are in a tough spot, with both technical indicators and fundamentals working against them, so a Locking approach might normally be more appropriate. However, the picture for Stocks may even be uglier than it is for Bonds – and a sell-off in Stocks would mean that some of that money would find its way into Bonds and potentially push prices higher…or at least support present levels.
If you have any questions on the tax credit, qualifying for a loan or if you have a friend looking for a home give me a call. You can reach me directly at 206.963.0424
Thursday, June 11, 2009
Market Recap June 11th
King County and Pierce County Recap
Today's market is one that is experiencing a high volume of distressed homes similar to late 2008 and early 2009. The difference is the agents that have stayed in the business have become educated on the process and the banks have become somewhat easier to work with.
In some areas of King County we are seeing a very healthy market. Last week I presented an offer on a house in the Greenlake area and there were 6 other offers! The home went for more than 20K over asking price. This is happening when homes are priced right and also if the home is in a high desired place. Some sectors of Renton are experiencing multiple offer situations.
In Pierce County we have seen inventory decrease and pending sales increase. Buyers are getting off the fence with recent rate increases. The media has continued to inform buyers to wait for lower rates. Hopefully rates decrease somewhat over the next few weeks. If not I expect to see more buyers jump in and buy homes. The tax credit has been a blessing to our first time home buyer's market. If only the highly sought after bridge loan of the $8,000 could be polished, then we would see more of a spike.
In summary Pierce County is hoping to experience the strength that the King County Market is currently seeing. I expect more buyers to entertain viewing homes and making offers. The second half of 2009 will be a key indicator on the economy and housing market for our country.
Today's market is one that is experiencing a high volume of distressed homes similar to late 2008 and early 2009. The difference is the agents that have stayed in the business have become educated on the process and the banks have become somewhat easier to work with.
In some areas of King County we are seeing a very healthy market. Last week I presented an offer on a house in the Greenlake area and there were 6 other offers! The home went for more than 20K over asking price. This is happening when homes are priced right and also if the home is in a high desired place. Some sectors of Renton are experiencing multiple offer situations.
In Pierce County we have seen inventory decrease and pending sales increase. Buyers are getting off the fence with recent rate increases. The media has continued to inform buyers to wait for lower rates. Hopefully rates decrease somewhat over the next few weeks. If not I expect to see more buyers jump in and buy homes. The tax credit has been a blessing to our first time home buyer's market. If only the highly sought after bridge loan of the $8,000 could be polished, then we would see more of a spike.
In summary Pierce County is hoping to experience the strength that the King County Market is currently seeing. I expect more buyers to entertain viewing homes and making offers. The second half of 2009 will be a key indicator on the economy and housing market for our country.
Wednesday, April 1, 2009
Foreclosure vs. Short Sale
Ever wonder what the difference between a foreclosure and a short sale will be on your future? Lets break it down for you:
- With a foreclosure the homeowner who loses a home is ineligible for a Fannie Mae backed mortgage for a period of 5 years. With a homeowner who closes a short sale they will be able to purchase a Fannie Mae backed mortgage after only 2 years.
- For investors the short sale also outweighs foreclosure. If an investors property goes into foreclosure they are ineligible for a Fannie Mae backed investment mortgage for 7 years. An investor who negotiates a short sale will be eligible for an FHA investment mortgage after 2 years. (Who's noticing a nice trend here?)
- Future loans for any type of financing will require filling out an application with questions that ask "Have you had a property foreclosed upon or given title or deed-in-lieu thereof in the last 7 years? This will negatively impact the interest rate of that new loan. Fortunately Short Sales will not be covered on these applications.
- How about credit score impacts?: With a foreclosure scores may drop from 250 to 300+. With a short sale only the late payments will show after a sale the mortgage will be reported as paid or negotiated. This will drop your credit score as little as 50 points if all other payments are being made. This term can be as little as 12 to 18 months.
- Deficiency judgement: In many states, other than Washington, depending on the kind of loan the bank has the right to pursue a deficiency after foreclosing on the property. Depending on the type of loan some lenders who accept a short sale may be able to pursue a borrower for a deficiency judgement. In some short sales we are seeing the lender giving up the right as part of the short sale.
Tuesday, March 24, 2009
Real Estate Success Tips
This morning I taught a class about being successful in Real Estate. Through agent discussion these were the top ten tips for success.
- Personal Relationships
- Build Trust
- Communication/Follow Up
- Market Updates/Market Knowledge
- Referrals
- Communicating the process/buyer counseling sessions/setting the expectations
- Asking for the order
- Customer Care/Clients #1 priority
- Technologically Savvy
- Professionalism
Others that made the discussion: Identifying Motivation, Setting Goals, Tracking successful activity, providing options.
Today there was excellent discussion. On April 8th I will be speaking at the Washington State University to the Finance, Insurance, and Real Estate organization. I will cover this material more thoroughly and provide a summary.
Friday, March 20, 2009
What drives interest rates and an update of the current mortgage market
The mortgage market has an interesting dichotomy. The reason rates go up and down is not simple to explain but here is a good tip from HSH Associates Financial Publishers.
The answer is that rates are moved by a number of related factors, and believe it or not, you -- Joe or Jane Consumer -- are one of those factors.
Mortgage money can come from many sources, including deposits at banks and brokerages, but most comes from investors through what is collectively known as the "capital markets." This is where investors interested in purchasing certain kinds of debt instruments -- bonds, in this case -- come to buy these items.
In order to attract investors, sellers of bonds must compete with one another to get their money. They do this by offering a variety of " instruments" (also called "product") with differing structures of risk and return over given periods of time. These offerings compete with other investments which are reasonably similar in performance, such as US Treasuries, corporate bonds, foreign bonds, and others.
Mortgage market makers serve not one client, but two: investors, who want the highest possible return on their investments, and the homeowner or homebuyer, who wants the lowest possible interest rate. Simultaneously, rates need to be high enough to attract investors but low enough to attract borrowers. (http://library.hsh.com/read_article-hsh.asp?row_id=85)
This information was extracted from an email from Tom Rhea from Pacific Guarantee Mortgage, our in house mortgage brokerage. Great information in regards to the mortgage market and its recent behavior.
The last two days have been a wild ride for mortgage rates. We had big time improvement on Wednesday afternoon and the 4.5% coupon moved into territory not seen since December and overall rates improved to the range of 4.75% - 4.625%. At the start of the day yesterday that lasted for just part of the morning as lenders were flooded with locks and we started to see price changes around 10:30am that continued into the afternoon and here we are today with rates back in the same range as they were early in the week. The conforming 30 year fixed base rate is at 4.875% and the FHA 30 year fixed rate is at 5.00%. This is again another example of why it is so important to have your clients approved and in position to be able to take advantage of the short term movement, the people that either could not contact their loan officers or we not aware of the change missed the boat.
I wanted to give you some information on Condominium financing as some of you may not be aware of changes that have gone into place recently that are making financing more of a challenge for consumers. Fannie Mae has added restrictions making it more difficult for developers to sell their units and making it more expensive for everyone to purchase. Fannie Mae has stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51% which was the previous guideline. In addition, the company won’t back loans for sales in buildings where 15% current owners are delinquent on association fees or where more than 10% of units are owned by a single entity. The new policy became effective March 1st, 2009 and most lenders have started to implement these guidelines. The new rules protect borrowers from buying units in buildings that have a high risk of failure while also preventing the companies and taxpayers from throwing good money into troubled developments. Developers have been petitioning for exemption from the occupancy rule but so far no exceptions have been made. In addition fees for condo loans are scheduled to increase next month. Buyers without at least a 25% down payment will have to pay closing – cost fees equal to .75% of their loan amount regardless of the borrowers credit score. And Fannie Mae says these fees are necessary to protect against higher default rates. So when you are working with potential buyers who are looking for a condo please make sure that you take these changes into consideration and share with your clients.
Hopefully this information will be helpful to you and I will continue to try and provide some of these guideline changes in my updates. Here is the rest of the market report:
Yesterday there was talk about how even the chatter of inflation can spook Bonds and yesterday's sell off was sparked by inflationary talk and that theme is continuing again this morning. Once again, if you have clients on the fence, you must explain to them that should inflation talk continue, it will be hard to see mortgage rates move much lower.
At 12:00pm ET, Fed Chairman Ben Bernanke will be speaking about the economy with the topic being "The Financial Crisis and Community Banking." This talk could have an impact on the markets later today.
The New York Fed is continuing its Mortgage Backed Securities purchase plan as it bought $19.67B from March 12 through March 18. The Fed increased its purchase plan by $750B to $1.25T on Wednesday and will run through 2009. The Fed has purchased almost $235B since the program began. (Tom Rhea PGM)
The NASDAQ and S&P 500 both fell today. The question of where is the best investment for my retirement and where should I put my money is still being tossed around. The stock market is at record lows as is the Real Estate market. I believe both of these markets will gain strength together in the near future. Keep an eye on both markets, consumer spending and job growth. All four will be the keys to building a stronger economy on all levels (city, state, and national).
The answer is that rates are moved by a number of related factors, and believe it or not, you -- Joe or Jane Consumer -- are one of those factors.
Mortgage money can come from many sources, including deposits at banks and brokerages, but most comes from investors through what is collectively known as the "capital markets." This is where investors interested in purchasing certain kinds of debt instruments -- bonds, in this case -- come to buy these items.
In order to attract investors, sellers of bonds must compete with one another to get their money. They do this by offering a variety of " instruments" (also called "product") with differing structures of risk and return over given periods of time. These offerings compete with other investments which are reasonably similar in performance, such as US Treasuries, corporate bonds, foreign bonds, and others.
Mortgage market makers serve not one client, but two: investors, who want the highest possible return on their investments, and the homeowner or homebuyer, who wants the lowest possible interest rate. Simultaneously, rates need to be high enough to attract investors but low enough to attract borrowers. (http://library.hsh.com/read_article-hsh.asp?row_id=85)
This information was extracted from an email from Tom Rhea from Pacific Guarantee Mortgage, our in house mortgage brokerage. Great information in regards to the mortgage market and its recent behavior.
The last two days have been a wild ride for mortgage rates. We had big time improvement on Wednesday afternoon and the 4.5% coupon moved into territory not seen since December and overall rates improved to the range of 4.75% - 4.625%. At the start of the day yesterday that lasted for just part of the morning as lenders were flooded with locks and we started to see price changes around 10:30am that continued into the afternoon and here we are today with rates back in the same range as they were early in the week. The conforming 30 year fixed base rate is at 4.875% and the FHA 30 year fixed rate is at 5.00%. This is again another example of why it is so important to have your clients approved and in position to be able to take advantage of the short term movement, the people that either could not contact their loan officers or we not aware of the change missed the boat.
I wanted to give you some information on Condominium financing as some of you may not be aware of changes that have gone into place recently that are making financing more of a challenge for consumers. Fannie Mae has added restrictions making it more difficult for developers to sell their units and making it more expensive for everyone to purchase. Fannie Mae has stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51% which was the previous guideline. In addition, the company won’t back loans for sales in buildings where 15% current owners are delinquent on association fees or where more than 10% of units are owned by a single entity. The new policy became effective March 1st, 2009 and most lenders have started to implement these guidelines. The new rules protect borrowers from buying units in buildings that have a high risk of failure while also preventing the companies and taxpayers from throwing good money into troubled developments. Developers have been petitioning for exemption from the occupancy rule but so far no exceptions have been made. In addition fees for condo loans are scheduled to increase next month. Buyers without at least a 25% down payment will have to pay closing – cost fees equal to .75% of their loan amount regardless of the borrowers credit score. And Fannie Mae says these fees are necessary to protect against higher default rates. So when you are working with potential buyers who are looking for a condo please make sure that you take these changes into consideration and share with your clients.
Hopefully this information will be helpful to you and I will continue to try and provide some of these guideline changes in my updates. Here is the rest of the market report:
Yesterday there was talk about how even the chatter of inflation can spook Bonds and yesterday's sell off was sparked by inflationary talk and that theme is continuing again this morning. Once again, if you have clients on the fence, you must explain to them that should inflation talk continue, it will be hard to see mortgage rates move much lower.
At 12:00pm ET, Fed Chairman Ben Bernanke will be speaking about the economy with the topic being "The Financial Crisis and Community Banking." This talk could have an impact on the markets later today.
The New York Fed is continuing its Mortgage Backed Securities purchase plan as it bought $19.67B from March 12 through March 18. The Fed increased its purchase plan by $750B to $1.25T on Wednesday and will run through 2009. The Fed has purchased almost $235B since the program began. (Tom Rhea PGM)
The NASDAQ and S&P 500 both fell today. The question of where is the best investment for my retirement and where should I put my money is still being tossed around. The stock market is at record lows as is the Real Estate market. I believe both of these markets will gain strength together in the near future. Keep an eye on both markets, consumer spending and job growth. All four will be the keys to building a stronger economy on all levels (city, state, and national).
Thursday, March 19, 2009
Purpose of this blog
Thank you for all taking the time to read this blog. My goal is simple. To provide up to date information on the current King County and Pierce County real estate market. My vision is for this to be a resource for individuals interested in the real estate and mortgage market. Topics will range from county trends, mortgage rates and impressive inventory that I come across when showing homes to family and friends.
I would love to field questions from everyone in regards to all aspects of real estate. If you are able to please select the follower button located to the left of this thread. I will do my best to answer all questions and provide insight of what I am seeing available on a day to day basis. Included in this blog will be comments from showing homes in different areas (similar to the Graham post after I showed homes earlier this week.) Also I will include recaps of real estate courses and seminars that I attend.
I believe now it is more important than ever to do research before buying or selling a home. Thank you for taking the time to read this over.
I would love to field questions from everyone in regards to all aspects of real estate. If you are able to please select the follower button located to the left of this thread. I will do my best to answer all questions and provide insight of what I am seeing available on a day to day basis. Included in this blog will be comments from showing homes in different areas (similar to the Graham post after I showed homes earlier this week.) Also I will include recaps of real estate courses and seminars that I attend.
I believe now it is more important than ever to do research before buying or selling a home. Thank you for taking the time to read this over.
The Business of Foreclosures and Shorts Sales Recap
Yesterday I attended a seminar by Howard Hegwer, an excellent instructor, on the process of selling and listing short sales and bank owned homes. We covered the current saturation of short sales and foreclosure properties on the market, the causes of these distressed homes and how to implement these areas of expertise into our business plans.
Foreclosure is simply defined by nolo.com as the forced sale of real estate to pay off a loan on which the owner of the property has defaulted. These current trends that Howard shared are shocking.
Over 3 million American homeowners received foreclosure notices in 2008. That is over an 80% increase from 07 and over a 225% increase from 2006. Broken down on a nationwide level that is 1 in every 54 homes received a foreclosure notice. Another shocker is the states that were hit the hardest in 2008, I know you are all thinking obviously Arizona, California and Florida right. You are correct that they have been hit the hardest but from 2007 to 2008 the largest percentage of change in foreclosures was Maine (896% change from 07), Washington DC (438%), New Hampshire (436%) and Vermont (372%) respectively. Washington pulled in the middle of the pack, ranked 28th in the nation with 26,058 total filings in 2008, a 71% increase from 2007. (RealtyTrac.com)
Howard also provide information on the myths of foreclosure. Foreclosure always represents a great investment deal, instant equity, homeowners are never at fault, they are motivated to sell etc. I admit that I have always seen foreclosures as a way for instant equity. From what I am seeing in our area that holds true.
We also covered short sales in our time. Simply put a short sale is when the outstanding liens are greater than the value of the home. The homeowner or the lender will end up short on the sale and taking a loss. Many people ask why do banks and lienholders take less than the amount owed? This is a great question. Lenders allow short sales to avoid; costs of attorney fees, the process of eviction, damage to the property and the costs associated with resale and most importantly it is faster than foreclosure. Some sellers have ended up staying in their homes for over a year without their home going to auction. The costs keep piling up.
As REALTORS we realize that we are not lawyers or tax advisers. We recommend you speak to either or both before considering selling your home short or letting it go to foreclosure. The biggest factor of these distressed sales it the emotional aspect. Sellers don't want to default or admit that they took on more than they could handle. Sometimes short sales and foreclosure are the only option.
On the buying end this is an excellent route to go if you have the time and energy and an experience agent to represent you. Howard extensively covered the offer process and the challenges that most agents will face and be able to get past.
I've said it time and time again, if you have the time and the patience, purchasing a distressed home can be an excellent way to get the home you want at a lower than market value price. Each property, city, is different but we are seeing some homes sell well below market value. There are many factors to consider when buying or selling a distressed home. Speak with your local REALTOR that you refer to for more information. If they are interested in short sales and bank owned homes contact me for additional information.
Also if you are a real estate agent looking for an excellent instructor I highly recommend Howard Hegwer Seminars, http://www.hegwerseminars.com/.
Foreclosure is simply defined by nolo.com as the forced sale of real estate to pay off a loan on which the owner of the property has defaulted. These current trends that Howard shared are shocking.
Over 3 million American homeowners received foreclosure notices in 2008. That is over an 80% increase from 07 and over a 225% increase from 2006. Broken down on a nationwide level that is 1 in every 54 homes received a foreclosure notice. Another shocker is the states that were hit the hardest in 2008, I know you are all thinking obviously Arizona, California and Florida right. You are correct that they have been hit the hardest but from 2007 to 2008 the largest percentage of change in foreclosures was Maine (896% change from 07), Washington DC (438%), New Hampshire (436%) and Vermont (372%) respectively. Washington pulled in the middle of the pack, ranked 28th in the nation with 26,058 total filings in 2008, a 71% increase from 2007. (RealtyTrac.com)
Howard also provide information on the myths of foreclosure. Foreclosure always represents a great investment deal, instant equity, homeowners are never at fault, they are motivated to sell etc. I admit that I have always seen foreclosures as a way for instant equity. From what I am seeing in our area that holds true.
We also covered short sales in our time. Simply put a short sale is when the outstanding liens are greater than the value of the home. The homeowner or the lender will end up short on the sale and taking a loss. Many people ask why do banks and lienholders take less than the amount owed? This is a great question. Lenders allow short sales to avoid; costs of attorney fees, the process of eviction, damage to the property and the costs associated with resale and most importantly it is faster than foreclosure. Some sellers have ended up staying in their homes for over a year without their home going to auction. The costs keep piling up.
As REALTORS we realize that we are not lawyers or tax advisers. We recommend you speak to either or both before considering selling your home short or letting it go to foreclosure. The biggest factor of these distressed sales it the emotional aspect. Sellers don't want to default or admit that they took on more than they could handle. Sometimes short sales and foreclosure are the only option.
On the buying end this is an excellent route to go if you have the time and energy and an experience agent to represent you. Howard extensively covered the offer process and the challenges that most agents will face and be able to get past.
I've said it time and time again, if you have the time and the patience, purchasing a distressed home can be an excellent way to get the home you want at a lower than market value price. Each property, city, is different but we are seeing some homes sell well below market value. There are many factors to consider when buying or selling a distressed home. Speak with your local REALTOR that you refer to for more information. If they are interested in short sales and bank owned homes contact me for additional information.
Also if you are a real estate agent looking for an excellent instructor I highly recommend Howard Hegwer Seminars, http://www.hegwerseminars.com/.
Wednesday, March 18, 2009
Bank Owned/Short Sale Seminar Initial Thoughts
Just got out of a six clock hour class on selling and listing bank owned and short sales. First thoughts are:
1. Why are agents so nervous to list and sell short sales?
2. How can I change my business model to accomadate for the influx of these distressed homeowners?
I believe, now more than ever, explaining the buying process of these distressed homes to buyers is the key to eliminating the negative energy that spreads with the idea of short sales and REO properties. By gathering the necessary information at the beginning, remember preparation breads success, these can be closed in a timely manner.
This discussion and a summary of the seminar will be properly documented tomorrow.
OTHER THOUGHTS
Consumer spending increased in February thus showing signs of a healthier economy. We will see what news comes about with the WAMU debacle and how that will effect consumer views. Rates still are below 5% on a 30 year fixed conventional loan and right at 5% on an FHA loans.
1. Why are agents so nervous to list and sell short sales?
2. How can I change my business model to accomadate for the influx of these distressed homeowners?
I believe, now more than ever, explaining the buying process of these distressed homes to buyers is the key to eliminating the negative energy that spreads with the idea of short sales and REO properties. By gathering the necessary information at the beginning, remember preparation breads success, these can be closed in a timely manner.
This discussion and a summary of the seminar will be properly documented tomorrow.
OTHER THOUGHTS
Consumer spending increased in February thus showing signs of a healthier economy. We will see what news comes about with the WAMU debacle and how that will effect consumer views. Rates still are below 5% on a 30 year fixed conventional loan and right at 5% on an FHA loans.
Tuesday, March 17, 2009
Graham Real Estate
Today I went and showed homes to a buyer in Graham. The search criteria was for homes under 280K with at least an acre of land. We came across a bank owned home and a short sale that were both on level lots.
The home that proved to be superior was a bank owned home. I always prefer these over short sales (The other was a short sale). This home was absolutely dialed in. The front yard was huge and back yard was at least .6 of an acre. This rambler was 1500 square feet and the garage was huge, three car. Let me know if you want me to send this listing your way.
For those of you that prefer homes on secluded lots with plenty of space for BBQ's and bonfires, Graham is an excellent option.
The home that proved to be superior was a bank owned home. I always prefer these over short sales (The other was a short sale). This home was absolutely dialed in. The front yard was huge and back yard was at least .6 of an acre. This rambler was 1500 square feet and the garage was huge, three car. Let me know if you want me to send this listing your way.
For those of you that prefer homes on secluded lots with plenty of space for BBQ's and bonfires, Graham is an excellent option.
Market Update March 17th
This week began with our county date trends showing a major decrease in Pierce County inventory of the last 12 months, down 15%. King County stayed relatively even with a slight 1% increase in inventory since February 2008.
This tells us two things; the first obviously being the health of the King County real estate remains stronger than Pierce County, which has been a previous trend. Also it tells us that the decrease in inventory is due to the extensive competition from Bank Owned and Short Sale listings. These distressed homes are currently making up close to half of the YTD sales in the Auburn, Bonney Lake, Buckley and Sumner area.
From my experience appraisers have not used these distressed homes to formulate appraisals in the past but now they are. Sure the educated buyer is aware that short sales can be tricky and challenging to close but for 10% or more below competition they can be worth the wait, same with banked owned homes. This is why I let buyers know that bank owned homes, when in good condition, are always a good route to go. They offer the same instant equity and are available to close faster.
Today's sellers need to be aware that their homes can and will sell but they have to be in selling condition. In the past seller's have been able to put a sign up and their property has sold within a month or two. Unfortunately market times and competition have increased. Today these seller's need to be educated on the current prices in their neighborhood and surrounding comparables. Also they need to establish planned price drops for their home so they will stay with the market and get behind the trend.
Remember if your home is not getting any showings, your priced to high. If you are not getting any offers, your priced to high. Lower the price until you are getting showings and offers are coming in. It's that simple.
Rates are good today once again. It appears an FHA 30 year fixed rate loan is at 5% and 4.875% for conventional loans. Remember there still are areas in North Pierce and South King County offering zero down financing through the USDA Rural Loan Program.
Keep educating yourself on the mortgage market and the housing trends. I am sure you will see that within the next six months is a wonderful opportunity to buy.
This tells us two things; the first obviously being the health of the King County real estate remains stronger than Pierce County, which has been a previous trend. Also it tells us that the decrease in inventory is due to the extensive competition from Bank Owned and Short Sale listings. These distressed homes are currently making up close to half of the YTD sales in the Auburn, Bonney Lake, Buckley and Sumner area.
From my experience appraisers have not used these distressed homes to formulate appraisals in the past but now they are. Sure the educated buyer is aware that short sales can be tricky and challenging to close but for 10% or more below competition they can be worth the wait, same with banked owned homes. This is why I let buyers know that bank owned homes, when in good condition, are always a good route to go. They offer the same instant equity and are available to close faster.
Today's sellers need to be aware that their homes can and will sell but they have to be in selling condition. In the past seller's have been able to put a sign up and their property has sold within a month or two. Unfortunately market times and competition have increased. Today these seller's need to be educated on the current prices in their neighborhood and surrounding comparables. Also they need to establish planned price drops for their home so they will stay with the market and get behind the trend.
Remember if your home is not getting any showings, your priced to high. If you are not getting any offers, your priced to high. Lower the price until you are getting showings and offers are coming in. It's that simple.
Rates are good today once again. It appears an FHA 30 year fixed rate loan is at 5% and 4.875% for conventional loans. Remember there still are areas in North Pierce and South King County offering zero down financing through the USDA Rural Loan Program.
Keep educating yourself on the mortgage market and the housing trends. I am sure you will see that within the next six months is a wonderful opportunity to buy.
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King County Inventory July 2009
Inventory King County
Pierce County Inventory
Inventory Levels July 2009
