May. 23, 2009 - King County Home Prices by School District
The information in this graph is similar to that in the graph in the previous post, but I have consolidated the stats. Note - King County only
The rest of the criteria is identical except I calculated the data for March, April and May of each year as a single result. We can more easily see Renton and Northshore pulling together and Bellevue and Lake Washington pulling together. More as I calculate more data, i.e. volume, to see if volume is pushing on prices more than other facters, and foreclosures as part of that volume.
I need to take a long break as I have an appointment, but will try to get back to this later this evening.
required disclosre - Stats are not compiled, verified or posted by NWMLS
May. 23, 2009 - Home Prices by School District in King County
This morning I started a study regarding median price per square foot by school district using Bellevue, Lake Washington, Issaquah, Northshore, Renton and Federal Way.
I removed water and mountain view considerations so view properties in the areas that have them didn't skew the data as to progression of prices, particularly as volume of sales diminished.
I cut off at a million dollars, assuming public schools and high priced homes might not have a correlation, given many would choose private schools in the upper tier of pricing.
I started in March of 2005 as I can't get data earlier than that by school district. The option to sort by school district drops off as sold property is moved to "the archives" during the month of Feb of 2005.
Other than the brief abnormality in April of 2005 in the Bellevue School District, there was a predictable pattern that went totally haywire in 2009. It looks like a horse race with everyone keeping a certain pace until the end when all hell breaks loose and the #2 horse pulls way in front of the #1 horse, and Horse #3 gets pooped out LONG before horse #1 and horse #2.'
The obvious, you get a lot more house for your money here vs. there, is of assistance to people trying to choose home and school district simultaneously. But I have to do a few more graphs to determine what is happening and why in the later stages of the graph.
Stay tuned - as this is a developing "story".
BE = Bellevue, LKW = Lake Washington, ISS = Issaquah, NTH = Northshore, REN = Renton and FED = Federal Way
(required disclosure - these statistics are not compiled, verified or posted by NWMLS)
May. 10, 2009 - Mommy gets a house for Mother's Day!
We never have a closing on Mother's Day, since it is always on a Sunday. The next best thing is having your offer accepted on Mother's Day.
The Seller Mother would have preferred to wait for tomorrow. I was able to convince the other agent that my client, a relatively new Mommy with her first absolutely beautiful baby, would get a Mother's Day present if the offer was signed around today.
People always worry from the time they submit an offer until it is signed and the property is taken off the public sites as "Pending" vs. "Active". So whoopee! The seller signed and my new Mommy client is having a Happy Mother's Day with less stress.
Happy Mother's Day everyone! Do a little something for a mother, anyone's mother, every mother you meet today, to make their day a little brighter.
May. 5, 2009 - A short sale is not really for sale
On Rain City Guide, some time ago I wrote a post called Should You Buy a Short Sale Property? That post was written for a client of mine who was already in the escrow process on a short sale. It covers a lot of ground, but recently I am seeing more confusion by people making offers on short sale properties, than those in escrow on short sale properties.
This morning I followed a link on Twitter purporting to be a mini-tutorial on distressed property sales from short sales to foreclosures to REO Property. It said this about short sales:
"A short sale is a property... that is put up for sale with the lender's permission..."
That is so not true. The lender in most cases has NOT given permission, and does not interact with the short sale process until there is an offer on the property.
This is causing a lot of confusion, especially when the lienholder approval number is higher than the asking price. The best analogy I can give is if a wife put a house up for sale without asking her husband. Then when she has an offer, she goes to the husband for him to agree with the price she put the property on for. He might refuse to sell it period, he might agree and sign the offer, he might hold out for more money than the asking price. Such is a short sale.
The person with the ultimate authority to approve the offer, is NOT consulted prior to the property going on market, in most cases. So a short sale is not REALLY "for sale"...it's "maybe" for sale. The lienholder may decide to reject ALL offers and take the property instead.
I'll try to write a post in more detail on Rain City Guide when I have a chance. In the meantime, knowing a short sale is not necesarily "for sale" may help some people who are currently making offers on short sale properties.
Slight increase YOY in the number of homes sold for $400,000 or less. In all other market segments, the rate of decline in home sales is increasing.
Slightly less than half of all homes for sale are in the $400,000 to $800,000 price range, leaving approximately 15% in the other three value segments.
Slightly less than half of all homes sold were also in the $400,000 to $800,000 price segment. The $400,000 and under segment is selling faster than new inventory can replace the homes sold. The over $800,000 price range holds approximately 30% of all homes in market, but only 11% of all homes sold.
(required disclosure) Statistics not compiled, posted or verified by NWMLS
May. 2, 2009 - Earnest Money = How Earnest ARE you?
I just did a Twitter search for the term "earnest money" and found this tweet:
"working on making an offer on a house. Short sales take a while. Getting an addendum so there's no earnestmoney deposit"
Remember, the amount of Earnest Money answers the question "How EARNEST are you?" That's what Earnest Money IS!.
Maybe yours is the only offer today, but a short sale can normally take offers all the way to closing. What will happen if someone comes along with a lower offer and $50,000 Earnest Money, saying they are WAY more "earnest" about buying this house than you are?
No earnest money depost = zero commitment to purchasing...in the literal sense. Why leave that door so wide open for another buyer to walk through and beat you out with?
Of course if you don't really want the house, and are not committed to buying it if the lienholder approves your offer, then "no earnest money deposit" is appropriate.
I am very excited about the "new"er Search Box feature in the sidebar on Twitter.
Caroline McCarthy of cnet news posted Search Box starts popping up onTwitter back in March, but said, "I unfortunately don't have access to it yet..." She posted this screen shot
The Twitter Search Box on my Twitter page accessed via @ARDELLd shows the search box further down in the sidebar. Often you will see things "pop up" in Twitter briefly, as they test out new formats, only to have them disappear when you next log in.
I noticed the search box during the tremendously exciting Game 6 of the Celtics vs. the Bulls, particularly during the final stages and into the 3 overtimes. Tweeting about Ray Allen among my normal Twitter-friends was...well, boring. Only a few were watching the game, though one turned the channel to the game as a result of my tweet:
"Recommend you watch the last 7.5 minutes of the Celtics and the Bulls. The Ray-Ray is hot! 12 pt lead is down to 5 with some heavy action".6:28 PM Apr 30thfrom web
I put Ray Allen in the search box and found all the Chicago fans lamenting the skill of Ray. Then I put in Ray-Ray and Jesus (from Ray Allen's name in "He Got Game" and found all the Celtics fans. Then I mentioned that I am really a Seattle-Ray Allen fan and found a Sonics die hard Tweeter.. Something seems to be wrong with his tweet stream as it appears differently everytime I view it, unless he's deleting his own updates.
You can read Caroline's article to learn about the importance of Twitter having it's own features, decreasing the need for so many Twitter apps and expanding the number of people using the web access to Twitter vs. TweetDeck and other applications.
For now, the search box is working for me, and I find it invaluable! Especially coming up on Game 7 tonight of the Celtics and the Bulls. I happen to like Boston and Chicago equally, but I will follow Ray Allen anywhere he may go.
Apr. 15, 2009 - Do Homebuyers Make these 10 Mistakes?
There's an article floating around the web: "Top 10 mistakes of First Time Buyers" first seen on Smart Money. I generally don't like to regurgitate popular web articles, but would like to add my $.02 FWIW on this one.
1) The article suggests that the #1 mistake first time homebuyers make is not knowing how much home they can afford. I think that's old news, as lenders are more cautious these days about giving someone a mortgage they can't afford. My particular beef with the response to first time buyers in this article is that they should get the answer from a mortgage professional.
My advice would be to determine the monthly payment, including taxes and condo fees or home owner's insurance of the type of property you might buy. Let's say you are paying rent of $1,000 a month, and the monthly payment if your purchased would be $2,000. I would suggest that you "pretend" you are paying $2,000 a month by religiously, on the first of each month, pay your $1,000 rent and put an extra $1,000 into your savings account. If you can do this for up to a year without struggling, you have proven to yourself that you really can afford to pay the amount the "mortgage professional" told you that you could afford. Don't just take someone else's word for it. Try it before you buy it.
2) Making assumptions that foreclosures are great deals. My thoughts? Rarely, if ever, can a first time buyer purchase a true foreclosure property at the courthouse steps. I'm sure it's very rare. So they are likely really talking about bank-owned properties and short sales. More often than not those are better deals. I think more people make the mistake of thinking a huge price reduction is a great deal and getting burned that way, than who get burned overpaying for a foreclosure property.
3) Showing the seller or seller's agent how much you love the house. Actually, I see the opposite more often. Buyers "kicking tires" and trying to convince the seller he's got a crappy house, to get the price down. Often the seller will just say, "Hey! If you don't like my house, get out!" You want a balance of letting the sellers know that you do like their house, but market conditions scare you and so you are cautious about overpaying for it, even though in a different market it would have been worth more. Sellers appreciate people who like their house, and sometimes will sell it for less to a buyer who loves their house. Sellers appreciate a first time buyer's fear of losing their downpayment to declining home values. Sincere and honest responses are good. I would caution buyers looking at homes when the seller is not home, that often the seller is hanging out next door or across the street. Screaming how much you love it because you think no one is home, especially when you are outside of the house, is not recommended. But pretending you don't really like it, but are making an offer on it anyway? No one's buying that ploy.
4) Find a good buyer's agent. The article goes on to recommend finding an EBA (Exclusive Buyer's Agent). Maybe EBAs will make a comeback in this market, but generally they are too few and far between for that to be good advice. An agent with local experience is often better than an agent from another County who happens to be "an EBA". No matter how good your agent is, stay engaged in the whole process. I would say the bigger mistake buyer's make is delegating everything to the agent, period. You will be the one living there. You will be the one paying that mortgage payment. Stay engaged in the process.
5) Understanding the full costs of homeownership. I agree with this one. I especially recommend that people make sure the $8,000 First Time Homebuyer Credit in 2009 be used as a reserve against unexpected (or expected) repairs.
6) Failing to budget for property taxes. Nope - these are almost always paid by the lender for a first time buyer, and part of the monthly payment.
7) Assuming your first offer will be accepted. Nope - more often the first offer doesn't go through to closing due to inspection issues than failed negotiations.
8) Skipping the inspection. Nope - Even in the hot market, a buyer often does a pre-inspection prior to offer or an informational inspection in multiple offers. I don't think I'd let a buyer buy a house without any inspection prior to closing, unless they were going to tear it down and are buying at lot value.
9) Doing too much too fast. I give my buyer clients my Mom's advice "give it a year". By the time you are living there a year for 4 seasons, you know what you really need to add or change, including landscaping issues. You don't want to pull great flowers, thinking they are weeds, or plant over bulb you don't know are there. Give it a year and only do what you have to during that time.
10) Failing to have a mortgage contingency clause. Nope. I think they were stretching to get to 10 things in these last few. They should have quit at 5 :) I have never seen this happen. Making the contingency too short is more the mistake, vs. not having one at all. Haven't seen one in 20 years where the buyer forgot to have a mortgage contingency.
Rushed through the end there as I have an appointment. If you have any questions or disagree, I'll follow up in the comments as needed.
Apr. 12, 2009 - Seattle Area Home Prices just prior to $8,000 Homebuyer Credit
Refer to the post below this one to get the full significance of this chart. Home prices at year end and early in 2009 remained unchanged as you can see in the chart below, until the stimulus package was signed by Obama. The % of 2009 Assessed Value of these homes taken just before the credit passed, remain at 10% below what they became after the credit was passed. Approximately 30 days or more beyond that date is used to gather data, to allow time for those transactions entered into after the credit passed, to close escrow.
Perhaps more surprising is that the closing in late March and early April came in at 100% on average of the 2009 Assessed Values. Not because of the 10% increase in pricing necessarily, as Spring Bump will create some upswing that may later come back down at the end of 2009. What is most surprising is that buyers are paying the new assessed values, which were at the time we first became aware of them, consider to be "inflated' prices. This market continues to surprise us.
(required disclosure) Information in charts is not compiled or verified by NWMLS.
Apr. 12, 2009 - 10% Increase in Sales Price as % of Assessed Value
In the chart below you can see that at the very end of 2008 these homes were selling at an average of 91.8% of the new 2009 Assessed Values. I removed the high and the low % and averaged the remaining 8 homes.
The homes that closed, in the same area, At the end of March and early April, which would reflect actions taken for the most part AFTER the $8,000 Stimulus Credit was passed, the prices jumped to an average of 100% of the 2009 Assessed Values.
More on this in the next post showing the closings between these two time periods, and just before the credit was passed.
(required disclosure) Information in charts is not compiled or verified by NWMLS.
ARDELL
DellaLoggia
On Seattle Real Estate including Kirkland, Bellevue, Redmond, Green Lake and most areas around Lake Washington North of Downtown Seattle.
Phone: 206-910-1000 - Mailto:Ardell@RainCityGuide.com
RSS Blog Feed
