Author: Katrina Munsell
Recent posts
October 13, 2008
Source: BigCharts.com
For the last eighteen months or so, we’ve all been lamenting over the drop in home values, which at least in principle, translates to a drop in net worth. For example, if your home loses 20% of its value and is now worth $50,000 less than it was in 2006, does that mean that you are now $50,000 in the hole? Perhaps…but has the true value of your home really changed for you? Sometimes it’s hard to maintain perspective. After all, a home to live in provides benefits that greatly outweigh even the most generous of cash dividends paid when you own stocks.
That said, people still consider their home equity to be a vital component of their total net worth. So how does your home investment compare to how you would have done if you had put that same amount of money into the stock market over the last decade? Using the most recent quarter of data for the Case-Shiller Index, housing prices in the Seattle have gone up by 195% over the last ten years. In comparison, the Dow Jones Industrial Average (DJIA) since October 1998 has been flat. Nada. Ziltch. Exactly zero. ( DJIA closed at 8452 on 10/19/1998 )
What’s the point? Maybe it’s just not as bad as you think. Maybe you should even feel good about your home, even with the recent declines in value. Real estate has provided a great diversification strategy, buffering total household net worth from complete devastation in the turbulent times we see around us today.
October 10, 2008
Looking for a distraction this weekend? Bellevue’s Kelsey Creek Farm Fair, a local fall favorite is scheduled for this weekend, October 11-12th. This quaint community fair offers hayrides, pony rides, kids’ crafts, and local little people favorites, Cowboy Buck, Hollywood Educated Parrots, and the Valentine Pigs. Additional details on crafts, displays, and an event schedule can be found here.
Kelsey Creek Community Farm Park
410 130th St, SE
Of course, while you’re out with the family, stop by and visit these Bellevue family-sized open houses, all open Sunday, October 12th, 1-4 pm.
905 170 Pl SE
4 br/3 ba, 3,240 sq.ft.
Price $937,000
NWMLS 28101842
1225 134th Ave NE
5 br/3.5 ba, 2,800 sq.ft.
Price: $828,000
NWMLS 28159963
17086 SE 47th Ct
4 br/2.5 ba, 2,600 sq.ft.
Price $819,000
NWMLS 28164227
16248E 34th St
4 br/2.5 ba, 2,580 sq.ft.
Price: $579,900
NWMLS 28159801
October 8, 2008
Despite the all out economic free fall that we are in, every once in a while, there’s a spot of good news. Nationally, pending home sales increased 7.4% from July to August, according to the National Association of Realtors (NAR). Furthermore, the NAR projects sales of existing homes to rise next year in addition to a 2-3% increase in home prices. Locally, the NWMLS reports Pending Sales up 4.1% from Year Ago, Total Inventory Unchanged, while Seattle Bubble recaps King County SFH pendings to be up 15% from same time last year.
Thank you also, readers, for giving some hope. Last week, I asked whether or not homesellers out there are continuing to see action, either in actual offers and sales or even in plain, old, walk through traffic. Well, I’m encouraged to hear that some of you report recent sales, and it doesn’t even scare me that most of you mention the words “price drops” in the same breath. Hey, I understand basic economics–heck, lower your price enough, and anything will sell.
However, this has me wondering even more about exactly how much of an impact does a price drop make in attracting buyers. In what seems like an economic eternity ago, I asked sellers, Is a Low Ball Better Than a No Ball? Today, I pose the flip side of this question to buyers–would the listing price of a home actually prevent you from making an offer? I’m speaking within reason, of course, but for the purposes of this hypothetical, would a listing price prevent you from making an offer 5% below? 10% below? Or do you really need to see that price drop before you’ll make the offer?
October 6, 2008
Urban myth or landlord nightmare? Judge for yourself.
The latest real estate fodder making its way around the net is “Buy My Dump – I’m selling my trashed dirty apartment – world’s most disgusting flat,” a Houston rental property, supposedly gone very, very, very wrong. The property owner cites:
Basically I was underinsured and my insurer will NOT pay for the tenant damage. I’m pretty jaded by the whole thing but I want to just walk away from it. Problem is it has a mortgage over it so I need it sold. A savvy Houston area investor could pick up a bargain. The place should be worth around $80,000 any figure that would clear my mortgage could very well land you this place. Serious bidders can email me at buymydump@gmail.com for an address, plans, rental figures and repair estimates.
…
The pictures do NO justice. There is suppose to be 2 cats living here but I can’t find them (I think they’re dead somewhere inside the apartment-I contacted the SPCA). The place REEKS to say the least, I gagged non stop. If you’re good with a scrubbing brush this could be bargain of the century for you…
The owner claims that the property is worth about $80,000, and the highest current bid is at $38,900. Keep your gag reflex in check and view more photos of this property here.
What’s your take on this one, digital image detectives? Real homeowner in distress, or savvy-viral-web-mythmaker-who-knows-how-to-monetize-a-site-with-Google-AdSense in disguise?
October 5, 2008
Look outside and you’ll know-autumn has arrived in all of its glory. The brilliant colors of falling leaves, the distinctive chill in the air, and yes, the very first power outages of the season (for some of us) have arrived. What better way to start the weekend than with a cup of hot coffee and a fresh donut?!
So we headed off toward a brand new eatery, which opened up not more than two months ago in downtown Bellevue–Top Pot Doughnuts. Yum! What was once only convenient to those on the Seattle side of the bridge, this new Bellevue location allows Eastsiders to get a taste of downtown, while still being able to park your car. Over a steaming cup of coffee, we sampled an assortment of “o-shaped” delights–my favorite clearly the Rasberry Glazed Ring, the perfect way to start off the day.
I love this new found discovery, though honestly not so much for the donuts, but for its sophistication and ambience. It’s an upscale eatery on the Eastside, where you can gather for a lazy weekend breakfast or for a late afternoon chat session. I could get used to living like this and one day I can clearly see myself migrating back toward the city center, where top notch coffee and sophisticated, late night dinners are all within walking distance.
Sigh.
I love Bellevue.
I could picture myself in any one of these mighty fine downtown digs, all listed for under $1 million.
10610 NE 9th Pl #503
1 br/1 ba, 869 sq.ft.
Price: $479,950
NWMLS 28165096
1100 106th Ave NE #602
2 br/1.75 ba, 1,136 sq.ft.
Price: $529,000
NWMLS 28133110
1188 106th Ave NE #430
2 br, 2.75 ba, 1,588 sq.ft.
Price: $830,000
NWMLS 28165740
10590 NE 12th St
3 br/ 2.5 ba, 2,032 sq.ft.
Price: $875,000
NWMLS 28007909
1106 108 Ave NE #505
2 br/ 2 ba, 1,908 sq.ft.
Price: $899,000
NWMLS 28065549
October 2, 2008
Today’s main real estate article in the Seattle Times reads “More Sellers are Growing Desperate as Homebuying Stalls Locally.” Glad you guys could finally make it to the party–this has been going on for quite some time now. According to today’s article:
The Seattle-area housing market, once touted as bulletproof against the forces that were pulling down other markets across the country, is now stressing out sellers, who are seeing inventories rise, sales fall and prices drop. Many are shellshocked — particularly those needing to move out of town or trying to forestall foreclosure.
The thing is, desperate homesellers can be found in every neighborhood these days, and I happen to be and know quite a few of them. However, the funny thing is, this article probably paints a bleak picture for those of you lucky enough to be on the outside of the real estate market right now, but from the inside, I believe this article still paints a far rosier picture than it actually is.
For example, there’s the owner of the Factoria townhome, who’s been through the emotional ups and downs of at least two offers fallen through, but you know what? This story gives me hope that I didn’t have prior to reading his story. You see, it means that if he’s gotten two offers (albeit unsuccessful), there are actually buyers out there, those mythical creatures.
Hey, I’m right out there on the front lines with you, desperate homesellers, with something to sell and nobody to sell it to, let alone even look. Other desperate homeseller buddies share similar stories, and collectively, our experience is adding up to about one walk through every three weeks and nary so much as a nosy neighbor at an open house.
Lucky, lucky you, Mr. Factoria townhouse owner–at least you’ve got hope. Sigh. For some of us, it’s going to be a very long winter.
Homesellers out there on the front lines, what’s your experience these days? Are you getting lookers? Are you getting bites? Or are you just getting plain old frustrated?
September 30, 2008
With all the recent talk of $700 billion dollar Wall Street bailouts, obscene “TED Spreads”, and the inability of businesses to get short term loans, you might be wondering what all this has to do with you beyond the fact that your 401K is gyrating up and down by 10% or more a week. The theory goes that banks are tightening credit lending so that only the most qualified of buyers can get a loan. The reality is probably somewhere in between as even the major news agencies admit that when they poll local lending institutions things are not much different than they were one or two months ago.
While the credit crisis has shaken Wall Street to its core, the thousands of community banks that make up the lion’s share of the nation’s banking system remain, to a large extent, quite secure.
“Our lending window continues to remain open,” said Jonathan Fox, the chairman and CEO of The Fowler State Bank, a Colorado-based bank an hour’s drive from Pueblo with about $56 million in assets.
Source: CNNMoney
So all this negativity we see in the press got me thinking–we are obviously in an economic crisis in this country, but are we truly in a consumer credit crunch? How hard has it been for real people to get loans? Share your stories and let’s hear what your experience has been like in securing a home loan.
September 26, 2008
Mark your calendars, the 10th Anniversary Seattle Home Show 2 will be at Qwest Field Event Center from October 16th-19th. Talk to contractors and vendors from all over about home projects galore and watch mouthwatering kitchen demonstrations at the same time. It’s a great opportunity to casually discuss home remodeling ideas with experts in the field and get some fresh ideas about who and what’s out there to help you get the job done!
Show hours are:
Thursday, 10-6
Friday – Saturday, 10-8:30
Sunday, 10-6
Tickets can be purchased online here, and you can visit for a second day for free if you register at any entrance for a return admission. Ticket prices are:
Adults: $9.00
Seniors (60+): $6.00
Kids (7-15): $3.00
Kids under 7: Free
September 24, 2008
Redmond is one of my favorite areas on the Eastside. It’s home to big wig player Microsoft and it’s also a hop skip and a jump into downtown Bellevue and Seattle, which makes it an attractive option for folks who prefer a quieter lifestyle, but still want be close enough to enjoy all the amenties of a big city. Consequently, I decided to play around with Redfin’s new neighborhood functions, and take a look at sales over the last 3 months in the Redmond area. Here’s what I noticed:
- Redmond is largely a family-oriented area, about two-thirds of sales over the last three months consisted of single family homes, compared to condominiums.
- Similarly, two-thirds of sales were 3+ bedrooms, compared to 1 and 2 bedroom places. In terms of size, nearly three-quarters of the homes sold were below 2,500 square feet.
- Slightly more than half of homes sold during this time period were $500,000 or less, while about 44% fell in the half million to $1 million category.
Some examples of Redmond sales not too far from Microsoft’s main campus include:
6027 150th Ct NE
3 br/2 ba, 2,030 sq.ft.
Sold (9/11) for $450,000
6503 152nd Ave NE
4 br/3 ba, 2,420 sq.ft.
Sold (8/29) for $565,000
6301 157th Pl NE
3 br/2 ba, 1,440 sq.ft.
Sold (8/28) for $360,000
14407 NE 61st St
3 br/3 ba, 2,420 sq.ft.
Sold (8/12) for $722,760
Additional detail on recent sales in the general area can be found over at the West Redmond Real Estate Buzz.
September 21, 2008
Imagine buying a house on a three year home mortgage where you had to visit the bank every three years to renegotiate a new rate. If you couldn’t afford to refinance your home, either because you were out of work or the home value dropped, you would be forced to pay the balance in full or lose your home.
This is how the banking system worked prior to 1933 when the Home Owner’s Loan Corporation (HOLC) was formed as part of the reforms of the Great Depression. HOLC’s job was to swap bank’s bad home loans with bonds issued by the U.S. government. Sound familiar? Working with homeowners all over the United States, HOLC re-issued home mortgages as fixed payment, fixed interest rate, 15-year term mortgages. For almost 50 years the commercial real estate banking industry played along, and almost all home loans were issued in 15, 20 and 30 year fixed payment terms.
As Congress debates the $500 billion dollar bailout for the home loan banking industry this next week, let us hope that the innovation will not stop with allowing the banks to exchange toxic, high risk debt with cold, hard cash. Now is the time to once again reset the banking industry standards so that home owners have clarity in their home ownership aspirations. For instance, if the government took a page from HOLC history and extended loan lengths, there is the potential to re-negotiate distressed mortgages into longer lengths of perhaps 40 and 50 years. Such products already exist on the private market but have not been readily used because they are vilified as mortgage products that build equity very slowly. In an age where 1 out of 10 homeowners is in distress of paying the monthly bills and is in risk of losing their home, the loss of quick equity seems like a fair trade off.
Longer term loans would allow the lender to bring down the monthly payments to allow home owners to rebalance the affordability of their property. For instance, a $400,000 loan paid over 30 years at a fixed interest rate of 6% would result in a monthly payment of $2,528.00. If that exact same loan were to be re-issued as a 40-year fixed payment, the monthly bill would drop to $2,341.00. For the homeowner, that’s a savings of almost $200/month, a predictable payment schedule, and time to slowly rebuild the equity in their home.
What do you think? Might longer term mortgages offer a potential option for struggling homeowners? If you were in a mortgage bind, would you be willing to renegotiate your home loan to 40 or 50 years to reduce your payments?
