Latest on Seattle and national home prices...

One of the more prominent indexes that track home prices across the U.S. released their latest report this morning. Standard and Poor's/Case Schiller 20 city index fell by a record 18% from October of 2007 to October of 2008. Their 10 city index fell 19.1%. While it might not make us feel better, Seattle real estate continues to weather the storm well.

On a semi-bright note, Seattle only fell 10.2% year over year in October. This was the first double digit loss for our city since the inception of the index in 2000. Of course, October was one of the worst months in history for U.S. stock markets and President Bush was forced to sign a $700 billion bailout plan to help ease the global financial panic. Since then, the Federal Reserve has slashed interest rates and helped drive down mortgage rates to historic lows.

Many people lost significant sums of money in their investment portfolios during the huge market declines in October. In some cases, it only took a week to lose 40-50% of a persons nest egg. That makes 10% loss in home value look benign. As a Seattle real estate agent, I admit I am biased. But using real estate as an investment vehicle is a wise and proven method. Not to mention, it's not as volatile as the stock market can be.

Read the full article here.

FHA rehab loans

For those of you who are unfamiliar with Federal Housing Administration (FHA) financing...I highly suggest you peruse this Seattle PI article. Especially if you or someone you know is considering buying a home in the Seattle area. Once upon a time FHA loans were reserved for low income home buyers or those with poor credit. The last several years, the program fell out of favor more trendier loan programs (the infamous subprime loans). This past year, Washington has seen a major increase in loans through the traditional FHA program as well as their rehab loan program.

In a very basic sense, the FHA rehab loan provides up to $35k in additional funds to fix or rehab the purchased home. As we've seen a slight increase in foreclosed homes and homes remaining vacant for a year or more...these rehab funds are great! FHA loans are very good option for first-time home buyers in Seattle and King County.

Read the full article here.

Seattle Real Estate 2009 Outlook

I saw this article over my time off over Christmas. It's an article from the Seattle Times regarding the upcoming year in regards to the Seattle real estate market. Everywhere you turn, another source's cyrstal ball seems to say something different about where Seattle's housing market is headed. Bottom line is nobody knows with any certainty.

The only thing we know for certain is that Seattle home prices are down to where they were 2-3 years ago. While this isn't great for more recent buyers, it's not the end of the world. Not to mention people who have owned for 1o years or more are still sitting on a fat pile of equity. In addition to more affordable prices, interest rates are at historical lows.

While this article is an interesting read...please take from it that the future looks rosier than last year but we're not out of the woods quite yet. The old saying, "Buy low, sell high." is repeated more often than it is followed. Now is a low point for Seattle housing and low interest rates make it that much more prime to buy now.

Read the full article here.

Forbes calls Seattle best housing bet!

I mentioned this in a previous post but feel it is worth highlighting again. Forbes.com has pegged Seattle as the #1 city to target for long-term real estate purchases going forward. Seattle is at the top of their list of cities that are least likely to overheat and bust in addition to having the most prospering economies going forward.

Here's what they had to say in regards to Seattle:

What lands it in the first position on this list is the combination of strong job growth with a building cycle that hasn't run in high excess of demand and, in part, its constrained geography. Especially compared to cities on the West Coast, Seattle has historically not overheated in boom times.

There's just less room to grow and few laws that make it easy to do so. In these markets, building activity doesn't rise as hastily during national booms, and, as a result, doesn't crash as dramatically during slowdowns (based on historical volatility and current market conditions).

While this doesn't necessarily ease the pain of current declines in home values, it should be one more piece of evidence that buying real estate in Seattle has been and will continue to be an extremely solid long-term investment. Now, more than ever, prices in Seattle have become extremely affordable compared to recent years. This is a correction from the minor inflation of value over the last ten years. First-time home buyers who now see their first in-city home as attainable will be the heroes of this current market. As they start to snap up their first home, this will release current sellers and allow them to move up as they have been wanting...thus creating a chain reaction. Hopefully positive media attention to Seattle, such as this Forbes article, will encourage home buyers to get into the game!


Read the full article here.

1st time home buyer heaven...

As a real estate agent, I get extremely frustrated with our local and national media when they refuse to cover the positives of our current real estate market. Seattle is weathering this unpleasant storm extremely well and has all the fundamentals for an eventual rebound. Seattle recently made Forbes magazine as one of the most likely cities to rebound first.

That being said, my friends at the Seattle Times recently published a great article on the possibilities for first-time home buyers. People who qualify to buy a house for the first time are in a position they might not see for another 10 years. Furthermore, once they start buying, this will allow current sellers to move on and move up. This in effect will help lead our area out of a slow housing market. So let's all cheer on those first-time home buyers!

Read the full article here.

Numbers to Know...

Here's a brief look at important statistics and numbers surrounding Seattle real estate.

This graph shows how many months of inventory exist on the market in Seattle. In other words, if no new listings were to come on the market then it would currently take 10.8 months to deplete what is now for sale. Eleven months is a long time and demonstrates how slow the market is moving right now in Seattle. However, as you'll see in the next graph...it's due more to the rate people are buying and much less with an inflated number of active listings.

Sales really dropped off in November while pending sales (signed contracts set to close in the future) had a slight increase. This trend seems to follow the general pattern of all consumers right now. People seem to be holding off on purchasing items (and houses!) that aren't necessary. Again, active listings dropped significantly last month. You can see from recent history that inventory tends to drop in the dark winter months but the reduction of homes for sale will be one step on the path to a rebounding market.
We always hear in the news about prices dropping and home values on the decline. This give a visual to the factual reality of how prices are performing on a $/square foot basis. While certain outlying areas have seen significant declines, the city of Seattle really hasn't posted major declines in the prices of real estate. There is no question values have softened but many think the drop should be viewed as a slight correction to formerly inflated prices.

What your money can buy in Seattle

This was a revealing article printed last weekend in the Seattle Times. It breaks down what kind of home different amounts of money will buy in the Seattle area. A person looking to spend $250k can easily find a 1 bedroom condo in the popular neighborhoods north of Lake Union. And then a substantial, yet reasonable increase to mid-$300k can buy a single family home or townhome in the same area.

Prices have really softened this fall and early winter. That combined with incredible interest rates on a home mortgage make buying in Seattle extremely compelling.

Read the full article here.

Residential Architecture Snapshot: Cape Cod

Cape Cod style homes were one of the first styles built in the United States. Original Cape Cods built by the colonialists were one-story, sided with shingles and did not have dormers. As the style became more popular in urban developments during the mid-20th century, the houses retained their original style with only a few embellishments. A more contemporary Cape Cod is square or rectangle with one or one-and-a-half stories. The roof is gabled, steeply pitched and may have dormers. I realize I've used some obscure architectural terms in this post...so here are a couple definitions important to residential architecture:

Gable: A gabled roof line describes the upside down "V" shape to the ends of some houses. A basic house might be a square shape with two gabled roof lines. Where as more complex designs can have several roof lines. Here is a picture of a cross-gabled roof:

Dormer: Dormers are windows that jut out from the roof of a home, and have a roof of their own. The word comes from the Latin dormitorium meaning "sleeping room," because dormers often bring space and light to bedrooms. For decorating purposes, a dormer creates a cozy spot for a reading chair or a desk.