On A Brighter Note

Some great news from the National Association of Realtors:

-93 out of 150 metropolitan statistical areas show increases in median existing single-family home prices from a year earlier
-Six areas with double-digit annual gains
-21 metros showing increases of 6 % or more
-Regionally, prices rose in both the Northeast and Midwest, as did the national condo price.

Lawrence Yun, NAR chief economist, says the data underscores the fact that all real estate is local. “Some metro areas are hot while others are experiencing localized problems,” he said. “The report also shows that home prices in the vast midsection of America, from the Appalachians to the Rockies, are affordable and, perhaps, even undervalued.

Seven Random Things about ME

I have been "meme" tagged by http://www.dressagemom.blogspot.com. The rules of the game are that I have to tell everyone in Blogging-Land seven random and little known facts about myself and then randomly tag seven other bloggers. So here we go:

• I once thought I couldn't possibly love my children more than I loved my dogs. This was before I had them, and boy was I wrong!
• I think I am very funny-- not many people get my sense of humor-- but I still think I am funny.
• In my teens and twenties I was horridly shy.
• I sometimes go to bed before 8:00 (no this does not relate to living in Washington in the winter--I just would rather sleep than be bored)
• I actually LIKE watching Hannah Montana
• I was afraid to ride horses from the ages of 10-14. I wanted to, but had experienced a bad fall and would cry if I even sat on a horse. I credit loss of brain cells in college for developing my current lack of fear.
• I have been married to the same man for half of my life

Open House Fun

So what does a realtor do at an open house for two hours if they have nobody come to look at the house? I spent my afternoon at a lovely new construction house. It had radiant floor heating (which I LOVE) and speakers thoughout the house of which I am a new fan. I did spend some time working on real estate type paperwork, but then I decided to play around with my windows movie maker. I made some fun horse sale videos to upload to youtube. It turned out to be a very productive two hours. Hopefully my open house tomorrow will be better attended!

More Doom and Gloom

Click the following link for a very depressing article predicting double digit decrease in prices in the Seattle market over the next five years! Yikes! They predict that home buyers won't pay more for a mortgage than they would for rent on a similar house. I am not sure that this is ENTIRELY accurate. Home ownership has many rewards. Long term buyers should still see a building of equity over time. The low interest rates and large inventory of homes currently on the market make it a great time to look and buy. As of now, we haven't seen any decrease in prices in the Bellingham market. It will be interesting to see how the numbers come back in the fourth quarter of 2007. I will definitely keep you all posted.


http://money.cnn.com/2007/11/06/real_estate/home_prices.fortune/index.htm

The Canadian Influence?

As the Canadian dollar keeps rising against the U.S. dollar it is interesting to see the effect on our local Bellingham economy. My favorite stores are packed with Canadian shoppers getting bargains. This stands in stark contrast to six years ago when the Canadian dollar was at about 56 cents to our U.S. dollar. In those days I spent much of my shopping time across the border in Vancouver and had a thriving business brokering deals on horses up in Canada.

In the last two weekends open houses I had several couples stop in from Canada. One retired couple was considering a move down to Bellingham from Vancouver. The other couple was looking to potentially invest in a multifamily rental property. Other agents in my office are seeing more Canadians make offers on area properties. The housing prices in Vancouver make our local prices look reasonable. This coupled with the strong Canadian dollar seems to be bringing buyers down across the border in larger numbers. I say WELCOME Canadians!

How to Select a Sellers' Agent

Many of the same criteria come in to play when selecting a realtor to list you house. You should definitely schedule several agents to make a marketing presentation. The Realtors should provide you with a detailed market analysis of the value of your home. It should include listings of properties currently on the market that are comparable to your home and homes that have sold. The agent should point out the days each house was or has been on the market ( a long time on the market indicates that the price may be too high or that there is something objectionable to buyers about that home). It is helpful if the agent has toured the homes that are on the market in your area so that they can give you an idea of how your home compares. They can also call the listing agents on the sold properties to find out more details about those homes. It may be helpful for you to ask the realtor take you on a tour of the homes that he or she feels are comparable to your home. A marketing presentation should also include how each agent intends to advertise your home. Currently most homes are sold off of there Multi-Listing Service listing. If the agent does not intend to put your home on the MLS they should be able to demonstrate how they have sold homes in the past without listing on the MLS. Additionally, 80% of buyers use the Internet to begin their search for a new home. Does the agent or their brokerage maintain a website? Is it user friendly? Does the agent intend to do open houses? How often? Will the realtor provide direction in staging your home? In the current buyers market these are all very important questions. The absolute LEAST important factor in the presentation is the percentage of commission the realtor intends to ask for. The difference of 1-2% in commission is of little importance if the home never sells. Currently only about 50% of the homes listed actually sell. Beware of realtors who price your home high and then ask to reduce, reduce, reduce before seeing any offers. Most of the traffic through a new listing comes in the first month. Having your home effectively marketed, properly staged, and priced right are crucial!

How to Select a Buyers Agent

How do you choose a realtor?

I think the most important thing to know is that you can, and in fact SHOULD, interview several agents before making a selection.

Buyers, you must realize you will be spending a great deal of time with your realtor. One of the first things you should look for is someone you enjoy being around.

Second in importance is finding a realtor who LISTENS to what you want in a house. An agent should take the time to ask questions to help you figure out what is important in your next home. Nothing is worse than looking at house after house that the agent loves but you don't! You may find that after viewing a few homes what you NEED or WANT in a house evolves or changes. Your agent should be aware of this and prepared to redefine their search to show you homes that meet your new criteria.

Buying a home is one of the most exciting and stressful decisions for most people. Having an agent that makes the process enjoyable makes the most of the excitement and minimizes the stress.

The third and hardest to determine quality you should look for in a buyers agent is someone who is prepared to tactfully and zealously negotiate in you best interest when you make an offer on a house. Realtors are in the business of putting deals together. Your realtor only makes money when a sale is closed. We have a fiduciary duty to act in the interest of our clients, but all agents aren't the savviest negotiators. Years of experience don't necessarily translate to effective negotiation skills. Agents who get defensive or worse offensive when trying to negotiate a sale can kill it while it is still on the table. Look for an intelligent, well informed agent who understands that negotiation is not a school-yard brawl.

What the Heck IS a Subprime Loan?

We have all heard on the news that home forclosures are rising sharply driven by the subprime loan market. Sooooo, what the heck is a subprime loan, and should you be worried? A subprime mortgage is a loan made to borrowers with credit scores below 620. These loans draw a lot of people who could not get approval on a traditional mortgage. Borrowers with bad credit or no money down are able to get into these loans with up to 60 percent debt-to-income ratio as opposed to a maximum of 33 percent on a traditional mortgage. This is a shaky situation regardless of your credit history.

To make the situation worse, the main type of subprime loan today is an ARM (adjustable rate mortgage) called a 2/28. These morgages are sometimes referred to as "exploding arms" (the nickname alone should be a warning!). These ARMs feature a deeply discounted rate for the first two years and which then balloons up to a much higher rate that can climb yet higher every 6 months.

Washington State's forclosure rate is much lower than many areas of the country. In fact, the national numbers are mainly driven by what is happening in California, Florida, Nevada and Arizona. 34 States nation wide actually eperienced DROPS in their forclosure rates this year. So, unless you actually have an "exploding ARM" there is not much to worry about!

Crashing Markets and Other Boring Stats

My most frequently asked questions are about the status of our slow, crashing or otherwise poorly performing market. We have been lucky up here in the Pacific Northwest that our market hasn't had the big downfalls that most of the rest of the country is experiencing. My Broker, Gragg Miller, is a huge stats buff. He has compiled the following information. The average sale price in Whatcom county for the first three quarters is slightly up (2%) the median sale price is holding steady (for used home sales). The number of homes sold for Bellingham and the county are also SLIGHTLY up over 2006 numbers. We did experience a big drop in numbers from 2005 to 2006, but are now holding steady. So WILL the prices fall? Will we hold steady? These are the questions that are driving buyers to slow and take their time in making a decision on what to buy. So how do sellers make their home SALEABLE? Price it "RIGHT" and stage your home to show off it's assets and minimize it's deficits. Happy Weekend!