Seattle home prices post small increase for October

According to the Standard and Poor's Case/Schiller index, Seattle home prices rose 0.44% in October. This is the first monthly gain for our area in 2 1/2 years.

The Case/Schiller index tracks 20 major metropolitan areas and Seattle was one of eleven cities to post a monthly gain in October.

Read article here.

U.S. home prices appreciate?

A major index that tracks home prices in 20 major metropolitan areas, called the Standard & Poor's/Case-Shiller home price index, is reporting a modest increase in September. Their index shows prices rose 0.3% in September.

Obviously this is not a major increase and does not represent home prices in every market. But it is more positive news after yesterday's favorable report on increasing existing home sales.

Read the full article here.

Home sales rise to highest level since February '07

Due in large part to the old deadline for the first-time home buyer credit. Before the credit was extended to April 30th, 2010, buyers were rushing to close on their first home by November 30th, 2009. Naturally, this caused October home sales to rise drastically.

A few weeks ago, President Obama signed an extension to the $8k credit into law. In addition, there is a new credit for current homeowners so they can get $6500 if they buy a new home. For both credits, you must have a new home under contract by April 30th. The rules of the credits allow until June 30th for those contracts to finalize financing and close the transaction.

I am not alone in thinking that the extension and expansion of the home buyer tax credits will bring the typical spring buying season a little bit earlier than usual.

Read the full article here.

4% appreciation in 2010?

The National Association of Realtors recently predicted that real estate nationwide will see a 4% gain in appreciating values in 2010. This might seem far-fetched but if the extended and expanded tax credits have their desired effect...such gain in value isn't too outrageous.

The extension of the $8k tax credit and the new $6500 credit for repeat buyers aims to entice more people to buy a home between now and June. A large influx of buyers in the next 6 months would deplete the inventory of homes for sale, thus causing prices to stabalize and theoretically rise in some markets.

The big question in my mind however will be what the market activity looks like after the credits finally expire for good. If everyone thinking of buying in the next 2 years decides to buy early to get their government money, then what happens after the credit runs out? Who will be in the market to buy a home? Granted, people always need to move...but we'll really see the health of the real estate market when people aren't getting fat $8,000 or $6,500 checks in the mail.

This past spring and summer, Seattle certainly saw bidding wars for nice homes under $400k. So perhaps any appreciation will be dependent on the price point, city, neighborhood and type of home. But in the end, that's how it always works...

Read full article here.

$6500 tax credit for repeat buyers

Lost amid the excitement of the recent extension of the first-time buyer credit is the NEW $6500 tax credit for current homeowners who buy another house. This particular credit could be more important than anything else for the real estate market.

Homeowners who have wanted to move for the last 2 years but remained in their home due to the soft market will hopefully be motivated to make the move when the government is giving away $6500. The middle range of the market nationwide has been slow for some time. Homes above $400k tend to languish on the market because the pool of buyers has been low.

Hopefully now that will change.

Here's a great article from the Seattle Times that explains the credit in more detail.

Tax credit extended and expanded...here are the details

Last Friday, President Obama signed the Tax Credit Expansion into law. This extends the first-time buyer tax credit and creates a new tax credit for current homeowners who buy a new house.

This is a really big deal - Just ask any first-time buyer who has been trying to make the old deadline!

The tax credit extension coupled with low interest rates, creates a prime opportunity to buy your first home, move up to fit your growing family or downsize while the government helps you!

Below is a summary of the new modifications in the extension and expansion of the tax credit:

• The $8,000 tax credit will be extended and available for first-time buyers through April 30th, 2010.
• Prospective purchasers with written contracts in place as of April 30th, 2010 will have until July 1st, 2010 to close the transaction.
• A NEW $6,500 tax credit will be available for current homeowners. To qualify for this provision, you must have used the home being sold as a principal residence consecutively for 5 of the previous 8 years.
• Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
• The limitation on the cost of the purchased home is $800,000.
  

Here are some really great websites that provide more information and answer situational questions:

• www.federalhousingtaxcredit.com
• www.wahomeowners.com

Seattle sales trend upwards

It's nice to see the red 'pending sales' line continue it's upward trajectory. The continued increase is due in large part to the home buyer tax credit which was just extended. Let's see if the extension causes sales to continue during the typically slower winter months.

Extending home buyer credit gaining major steam

Reports this morning are suggesting the Senate has agreed to pass some form of an extension on the $8k home buyer tax credit. In fact, they are also talking about expanding the benefit to select move-up buyers that have owned their current home for at least 5 years. To clarify, nothing is official yet...but it is exciting news nonetheless.

Here are a couple links to the story:

Article on msnbc.com

Article on cnn.com

King County sales update

Sales in King County are up significantly from a year ago and prices show signs of stabilizing. Prices are down 7.9% from one year ago but this is the smallest decline since December.

I anticipate sales to surge again in October as we race towards the 1st-time home buyer credit deadline.

Here's the full article from the Seattle Times.

Should $8k tax credit be extended?

Update: Here's a new article from the Seattle Times that discusses the same $8k credit topic written about in the below blog post. Check it out.

This is the question of the moment. At least in real estate circles it is. The theory behind extending it and possibly expanding it is that the credit will continue to stimulate the housing recovery. On the other hand, it will obviously cost a lot of tax payer's money.

As a Realtor, I am definitely in favor of extending AND expanding the tax credit. On the ground, I see signs of market improvement and increased sales activity. However, we are not out of the proverbial woods quite yet. Perhaps allowing our politicians to spend at this rate will bite us later...and that's where I think I'm a bit shortsighted.

But in just speaking about what will help our housing market...I say give $15k to ANY home buyer for the next year. Now that's true stimulus.

Here's an interesting take on the impacts of extending or discontinuing the tax credit.

Buyers' market or sellers' market?

When people talk to me about the real estate market, they are often under the assumption that we're in a complete buyers' market. A buyers' market means that less than 45% of available homes are selling every month. This in turn shifts power to the buyer and gives them the ability to ask the seller for more concessions.

Articles in the media (such as this one) make the public think that they can submit low ball offers that ask for all closing costs to be paid and the seller's first born child.

In Seattle, certain neighborhoods and certain price ranges actually reveal a different story. Tons of 1st time buyers are in the market and snapping up single-family homes under $400k. In most of the in-city neighborhoods of Seattle, sellers actually hold much of the bargaining power.

Crunch time for 1st-time buyers...

We've reached the midway point in September and any potential 1st-time home buyer must get a home under contract soon or risk the possibility of not qualifying for the $8k tax credit. Average time to close a home from accepted offer to closing the transaction is about 45 days. Making an offer today and not experiencing any bumps in the road would mean closing at the end of October. Since today's lending market is the equivalent of a gravel forest service road, buyers are almost certainly going to experience at least a few minor bumps or delays. It's imperative to give yourself a cushion to close before 11/30/09.

Here's a Seattle Times article that discusses the countdown toward the deadline.

1st Time Buyer Alert!

Less than $200k for a cute townhome!

Extend and expand the 1st time buyer credit?

Rumblings about a possible extension on the 1st-time buyer tax credit have been growing lately. Let's hope the government abides by the old philosophy of, "If it ain't broke, don't fix it."

Unless of course they want to give all buyers even more money!

Here's a recent article from the Seattle Times about efforts to extend the credit and even raise the dollar amount.

Oh, Market...Where art thou?

So is the market really improving here in Seattle? Take a look for yourself. Decreasing active listings and rising pendings and solds suggest we're at a better place than last fall and winter.

Is your neighbor ugly?

Perhaps more importantly...is your neighbor's house ugly? If you're contemplating selling your own home, the appearance of the surrounding homes in your neighborhood can make a huge difference. A street lined with cute homes and manicured lawns is obviously more appealing than an adorable house in the midst of weeds and peeling paint on other properties.

This article from the Seattle Times looks at what you can do to encourage your neighbors to keep things looking presentable. In some cases, you may have to do the work!

Read the full article here.

A new twist on an old idea?

A local developer is building a brand new rooming house in Capitol Hill. The Seattle times writes, "The rooms are small — about the size of a parking space — but the project's developers say they fit the budget and lifestyle of young adults who might be working as baristas or $12-an-hour clerks in big-box stores."

Personally, I lived in some form of a rooming house for 6 years of college and graduate school...but I knew all of my roommates! Not sure if I could handle close quarters with strangers. Let's hope they all do their dishes...

While not my cup of tea, it is an interesting idea to provide affordable housing here in the city. Check out the Seattle Times article below to read more.

Read the full article here.

King County property taxes

Appealing King County property taxes has become a popular topic of discussion. In fact, the number of homeowners appealing property taxes in King as well as other counties have increased dramatically.

The reason for this is the sharp decline in market value for homes and the delay in how properties are assessed for taxable value. In short, comparable homes sold in 2008 are used to determine property values on January 1st, 2009 for taxes payable in 2010. So those who bought at the height in 2007 or early 2008 caused assessed values for many people to increase. Despite the actual market value decreasing 15% or more.

Below is a great article on the issue and some helpful hints on how to appeal your King or Snohomish County property taxes. If you would like up to date comparables for your house in order to appeal your assessed value...just shoot me an email and I can send them over.

Read the full article here.

Local condo projects slashing prices to attract buyers

Several large, luxury condominium projects in Seattle and Bellevue are finishing construction or are recently completed. The problem is, the down turn in the real estate market has caused sales to be non-existent or extremely slow. Of the 539 units in the Bellevue Towers, only 43 have closed. To stimulate sales, they have slashed prices by an average of 20% at the eastside project.

Vulcan's newest building, Enso, is nearing completion and they are finalizing their pre-sale commitments as well as doing their best to attract new buyers. While Enso won't release their price adjustments to the press, agents were invited to an open house where we were informed some units are now reduced as much as 25%. It's nice to see they are being realistic about the market and their pricing should help move much of their inventory.

On the other end of the spectrum, Olive 8 is refusing to reduce prices and claims they will wait out the market. The developer seems to think the Hyatt hotel that makes up the first 17 floors will carry the building through this down market. Perhaps they should rethink this as only 28 of 229 units are closed.

Read the full article here.

King County home sales in June highest since October 2007

Homes sales in June were up 4 percent from a year ago in June 2008. This is the first increase since the height of the market two years ago. The county hasn't recorded this many sales since October of 2007. Total sales in the southern portions of the county were actually down, while Seattle sales were up 11 percent!

First-time buyers were leading the charge on much of this market activity. But the article from the Seattle Times points out what I've said will happen all along. The people selling to the first-time buyers will eventually buy their next home and create a trickle-up effect.

Prices are still down, however. Median single-family home prices in King County were down 12% in June from a year ago.

Read the full article here.

Backyard Cottages in Seattle?

Here's an interesting article from the Seattle Times regarding a current proposal from the Seattle City Council. If the council approves the proposal, homeowners throughout Seattle will be allowed to build backyard cottages up to 800 square feet. While attached mother-in-law style units have been allowed since 1994, the city more recently explored the idea of allowing property owners to develop what they're calling 'backyard cottages'. The technical term for such a structure is called a 'detached accessory dwelling unit'.

In 2006, the city decided to experiment with the idea by allowing only residents in Southeast Seattle to build these cottages. To this point, only 17 have been built. While the idea is meeting significant Resistance, a city survey reveals that neighbors either like the units or don't notice them.

In general, the city views this as an affordable and creative means for residents to downsize or allow family to live nearby. It also adds density without major development. Opponents of the plan suggest that the proposal in-effect rezones the entire city to multi-family zoning.

Read the full article here.

Seattle sees growth in city

Census data recently released reveals that large cities are now growing faster than other parts of the nation. This reverses a decade-long trend of urban sprawl. The Associated Press article suggests the growth in large cities is due to the economic crisis and housing downturn. With people making less money and not being able to sell real estate as easily, they are starting to remain in big cities.

The article claims that Seattle is one of the large cities seeing faster growth in large part to foreign-born immigrants who moved and stayed here.

It goes without saying that growth in the city of Seattle will eventually help our real estate market. More people equals more demand for housing. More demand leads to appreciating values.

Read the full article here.

Mortgage rates inch upwards

Home mortgage rates crept a bit higher this week with an average rate of 5.42%. This is up from a week ago at 5.38%. It appears (at least for the immediate future) that our super low rates in the mid to upper fours are a thing of the past.

An interesting phenomenon seen in in some potential buyers is the idea of holding out for that ultra-low rate of 4.78% seen a few months ago. While 5.5% is extremely low when looked at from a historical perspective, some buyers are wishing for the rate that they missed. People who bought in the 1980s will be happy to inform anyone who will listen that 5.5% is amazing compared to the double digit rates they faced a few decades ago.

Fears of inflation could be another reason rates will only continue to creep higher.

Read the full article here.

Boeing's 787 delay bad for local real estate?

When looking ahead to the outlook for Seattle area real estate in 2009, 2010 and beyond...one must look at many different economic factors. I don't pretend to be an expert on other industries outside of real estate but the recent news regarding another delay on the 787 Dreamliner made me pause for a second.

Boeing certainly doesn't drive our local economy like it once did...however it is still a major player for employment around these parts. I would keep your eyes on this 787 project because any bad news for Boeing in this already difficult economic climate could have ripple effects on housing.

If Boeing loses too much money because of these delays or future orders for this plane are rescinded because of the long timeline then it's possible layoffs could follow. No jobs leads to selling houses or people not buying houses...not something our market needs.

Read full article here.

Affordable Seattle neighborhoods?

This article is a few weeks old but I'd still like to share it. In the article, The Seattle Times discusses serious price adjustments from the height of the bubble to now. Many average income earning families are now able to afford homes closer or in the city limits of Seattle.

Low interest rates, lower prices and tax credits are all allowing buyers to pursue their piece of the American Dream.

Read the full article here.

U.S. existing home sales up 2.4%

Apologies for the long blog layoff. An upswing in the Seattle real estate market means I have a bit less time for writing on the blog! But here we go...

The Seattle Times published an article this morning that existing home sales in the U.S. are up 2.4%. Because many of these sales are short sales or bank owned properties, the median sales price dropped to $173,000 for the national average. Read the full article here.

The western states saw an increase in home sales by 16%. In fact, this article from the Seattle Times mentions how hot the Seattle real estate market is for homes under $400,000. Seattle sales are down 33% from one year ago but up from March of 2009.

All this data is great but what does it mean? Well, it's still too soon to say we've reached bottom on either a national or local level. Three months of increasing sales is great, however it's only three months. I personally think we are starting to see signs of reaching the bottom in the lower priced tier (under $400k). Unfortunately, the pricier homes may still see a decline.

Price per square foot by neighborhood

Are you curious to know how your neighborhood's value has performed over the last 15 months? Below are charts depicting price per square foot up through March of 2009. The charts below represent large MLS areas that span a more than one neighborhood. If you would like a more accurate report on your specific house, give me a call.

Ballard/Green Lake/Wallingford/Greenwood

Central Seattle/Madison Park/Capitol Hill

West Seattle

North Seattle

Richmond Beach/Shoreline

Queen Anne/Magnolia

Downtown Condos

Residential Architecutre Snapshot: The Bungalow

These narrow, rectangular one and one-half story houses originated in California during the 1880s as a reaction to the elaborate decoration of Victorian homes. The style then moved eastward to the Midwest in the early 20th century, where it remained popular until the Great Depression. Bungalows have low-pitched gabled or hipped roofs and small covered porches at the entry. The style became so popular that you could order a bungalow kit from Sears and Roebuck catalog. The name "bungalow" had its origins in India, where it indicated a small, thatched home. This style of home is common throughout Seattle but are very prevalent in neighborhoods such as Queen Anne, Wallingford, Ballard and parts of Greenwood.

Interest rates under 4%?!

You better believe it! Sterling Savings Bank and Banner Bank are offering mortgages with interest rates under 4% in an effort to stimulate home sales and aid builders in moving inventory.

Read more about it here.

First-time home buyers success stories

This is another article from the Seattle Times (the city's last print newspaper) on a couple success stories involving first-time home buyers in Seattle. Every situation is different but there are certainly many deals to be had here in Seattle. Since when can a person buy a home for $350k in a great Seattle neighborhood?!

Read the full article here.

Homebuyers emerge for spring season

I hope that this blog can offer fair and objective takes on various aspects of the real estate market here in Seattle. The last thing I want this to be is a sounding board for every positive piece of news regarding real estate and nothing realistic or sobering. I especially have a distaste for "glass half full" people that like to skew statistics and information to make everything sound peachy! That being said, I have a direct investment in seeing this market turn around for the better...so I get excited when I see articles published such as the one below. This article does a good job of stressing caution when looking at the recent gains in home sales. Furthermore, since Seattle eased into the housing slump versus crashing into it, our area may also see a more gradual rebound.

Read the full article here.

Light at the end of the tunnel?

Let's hope it's not a train! The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent in February compared with January. This pushes total activity to a seasonally adjusted annual rate of 583,000 units. This surge is good news to analysts who where expecting continued declines. However, construction activity remains 47.3% lower than a year ago...so February's gains must be viewed with some expectation of more housing troubles to come. All area's of the country posted increases in construction activity except the west, which has been hit hard by the slump in housing.

Read the full article here.

House prices making mortgages more attainable...

Price declines for real estate nationwide are starting to make mortgage payments line up again with incomes. Especially in the Seattle market where sky high prices simply priced many would-be buyers out of the game. Now, low prices coupled with a few new incentives to entice buyers and stimulate the housing market are causing Seattle home buyers to get more serious. Home buying incentives:

• $8,000 first-time homebuyer tax credit of 2009
• Fannie Mae and Freddie Mac increasing the loan limits for larger loans. The limit increase -- from $506,000 to $567,500 in the Seattle area -- means people can get larger loans without entering the private jumbo mortgage market, where rates are much higher and standards much tougher than for conforming loans.
• Home prices in many parts of Seattle are back to 2006 prices.
• The Federal Reserve acting to keep rates low

Many mortgage professionals are hearing (yes, this is speculation) that rates will rise in the second half of 2009. Rising interest rates all but zero out any potential drop in home prices...possibly making the next 6 months one of the best times to buy a house in the greater Seattle area in quite some time.

Importance of Staging

Prepping a house for sale is of vital importance in any market but especially in a slower moving one like we're in right now. With so many houses for buyers to pick from, sellers must have every aspect of their home polished and perfect to grab buyers' attention. Staging the home prior to selling is one super common way to prep a house. If a home will be occupied during its time on the market, then a home stager can come in and consult on how to arrange furniture. One major component is removing unnecessary items to declutter the home. If a home is vacant, then stagers can bring in their own furniture and arrange it in a way that highlights the positive aspects of the home.

A Seattle real estate agent actually is credited for establishing the home staging industry in the 1970s. Homes for sale in Seattle are often staged in some way. If you're considering selling your home, it's a good idea to tour Seattle open houses of comparable homes to see the difference between staged and non-staged homes. Knowing your competition gives you perspective on where your house stands prior to putting it up for sale.

The Seattle Times has a great article on staging and its impact on selling quickly in this market.

Read the full article here.

Another one bites the dust...

The Marlborough is scheduled for foreclosure auction in May. This building is a 13 story Gothic-revival building built in 1927. Formerly apartments, The Marlborough is one of several projects for Live Historic. They were in the process of converting the building on First Hill into condos. You can see Live Historic's projects: here.

While they make a nice product, it looks like we can chalk this up as yet another casualty for developers. I'm not quite sure the building will fetch the $19.9 million in debt the company has towards this project since it will more than likely turn back to apartments for the time being.

The 4th quarter was a tough one for Seattle real estate but it's likely this project has been in trouble for some time.

Queen Anne High School Condos up for auction

The Seattle PI reports:

The 12 remaining unsold units at Queen Anne High School Condominiums will go up for close out auction on March 22. Nine two-bedroom units previously priced from $474,950 to $599,950 will have minimum bids of $245,000 to $325,000; a studio condo previously listed at $254,950 is down to a minimum of $145,000; and a 1,432-square-foot penthouse is down from $999,950 to a $650,000 minimum. Buyers who arrange financing from Wells Fargo Home Mortgage and close within 30 days of the auction will get $2,500 toward closing costs.

The auction is scheduled to start at 1 p.m. at the Grand Hyatt Seattle, 721 Pine St. Beverly Hills-based Kennedy Wilson's Auction Group, which is hosting, has scheduled a "how-to-buy" seminar starting at 1 p.m. March 15 at the Queen Anne High School Condominiums Auction Information Office, which is open from 10 a.m to 5 p.m. daily at 201 Galer St.

The former high school has a total of 137 condos.

This project is interesting and I think a majority of the units in the building are pretty cool. Some of the smaller ones don't have some of the common ammenities such as a washer and dryer but it is a good use of an old building. Much preferable, in my opinion, than tearing it to the ground. Shoot me an email if you would like more info on the auction.

More on the tax credit for home buyers 2009

First-time home buyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction--a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income. The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit vs. Tax Deduction

It's important to remember that the $8,000 tax credit is just that...a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduciton in a tax liability that would only save your $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Phaseout Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to home buyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: 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 $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.

Example 2: 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 $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.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principal residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principal residence also qualify.

$8,000 First-time Home Buyer Tax Credit

Last year the government passed a first-time home buyer tax credit that allowed eligible participants to receive $7,500. The big catch was that this had to be paid back at 0% interest over 15 years. The 2009 version of this tax credit is much improved and should cause many buyers to jump off the fence prior to November. Who wouldn't want $8,000 to pay down their loan or furnish their new place with furniture? This should be a big incentive to Seattle home buyers who are already enjoying lower prices and interest rates! Below are the basics of how the tax credit works.

• Effective dates: applies to purchases from January 2009-November 2009


• Tax Credit available up to $8,000 for first-time home buyers only.


• A first-time home buyer is a buyer who has not owned a home during the last 3 years. (Joint purchase applies to both parties)


• Eligible Property: Any residence that will be used as a principal residence. (Including single family, attached townhouses, condos, manufactured homes and houseboats) No second homes or investment properties.


• Income Limits: Adjusted gross income for single filers with incomes below $75,000 and couples with incomes below $150,000.


• Estimated partial credit for single filers with income up to $90,000 and couples up to $170,000. This is a general example. Please consult a tax advisor for stipulations on the partial credit.


• Tax Credit vs. Tax Deduction: the true benefit is a dollar for dollar tax reduction, rather than a reduction in liability. If you owe $8,000 in income taxes and you qualify for the tax credit, you owe nothing.


• Tax credit only needs to be repaid if home sold within the first 3 years.


• Purchases closed in 2008 will not be eligible for the 2009 revision of this tax credit.

Take advantage of the $8,000 tax credit today!

January Numbers to Know

The following graph depicts single-family home sales in the city of Seattle. Overall inventory continues to drop which is a good thing to see for the health of the market. Pending sales are down from a year ago but up from the past few months. This potentially points to more activity from buyers in the new year. As we begin the spring buying months, I expect these numbers to creep up a bit more. Ideally, the $8,000 tax credit acts as a catalyst to move sales up even more.

Obama to unveil mortgage relief plan

Even in a stronger real estate market like Seattle, many homeowners still need help to stay in their homes. Obama will outline the details for his upcoming plan to stabilize the mortgage industry in order to help struggling homeowners. In anticipation of the plan, government-controlled mortgage finance companies have halted all foreclosures until March 6th. Obama seems to recognize the importance of housing in relation to the nation's economy and is expected to allocate roughly $50 billion to keep homeowners in their houses.

While foreclosures are higher in the Seattle area than in years past, other areas have been hit much harder by the downturn in real estate. One of those, Arizona, is where Obama has chosen to deliver his address for the mortgage plan.

Read full article here.

More on the home buyer tax credit...

Well, it appears that in the negotiations to find middle ground between the bill that the House passed and the one the Senate passed...the $15k deal proposed by the Senate was wiped out. Of course, nothing is official until President Obama signs the package into law. But this isn't the best news for home buyers or for people like me in the real estate world. It appears the credit was eliminated to lower the overall cost of the stimulus package and perhaps put more focus on creating jobs. $15k or no $15k, people can't buy houses if they don't have a job!

There is a slight silver lining however. It seems as though the Senate and House agreed to make the current $7500 first-time home buyer tax credit permanent...meaning, a person can keep the money vs. pay it back as current law now requires. It also looks as if it might be bumped up to $8000. This could have a direct effect on Seattle real estate as it seems a lot of younger buyers are waiting out the "unknown."

In the end, I just hope the stimulus works for our country even if it doesn't have an immediate impact on the housing market. Roughly $8k will still be great for any Seattle home buyer making their first purchase...or their first purchase in 3yrs. Free money is free money!

Again, nothing is official yet. So I will have a full explanation of the bill as it relates to real estate as soon as I can.

$15,000 home buyer credit?

It's not official law quite yet but the Senate took a bold step yesterday to truly stimulate the real estate market. They approved an amendment to the upcoming stimulus package that would essentially give $15,000 to anyone who buys a home in 2009. This money would come in the form of a tax credit and will not have to be paid back! The provision states that a home buyer can receive 10% of the price of their purchase up to $15k. Home prices in Seattle essentially dictate that most buyers will qualify for the full amount. If you owe money on your 2009 taxes, the amount you owe would be taken out of the $15k. This is great news for our markets, economy and any buyers sitting on the fence.

If you've been waiting for prices to drop or interest rates to drop, $15,000 should be enough reason to make you buy now while both rates and prices are low! The longer a person waits, the more buyers will enter the market to cash in on their tax credit. This will have a stimulating effect on the market and cause prices to level out or rise in some micro-markets.

Read the NY Times article explaining the tax credit.

"Will the last person leaving Seattle..."

...Please turn out the lights.

Nearly everyone is familiar with the famous saying from the 1970s. If that that specific phrase, then perhaps one of the many altered forms that pop up in any depressed city or institution. According to the Seattle Times:

The message has been copied all over the world, with the word "Seattle" replaced by Detroit, St. Louis, New Jersey, Australia and even "the planet." And it has been used for other occasions in which a catchy, sardonic slogan is desired — "Will the last person with ethics on Wall Street... "

The two minds behind this iconic message are Bob McDonald and Jim Youngren. The pair were selling commercial real estate during one of the darker periods in Seattle's economy. Boeing had recently laid off 60,000 workers and the state's unemployment rate was more than double the national number at 13%. The two posted the sign as part satire and part business opportunity.

Now, with recent layoffs from Seattle's major companies: Boeing, Microsoft and Starbucks...stories and blogs have started to recycle the famous line.

Read the full article here.

King County property tax set to rise...

During the last election, voters in King County approved a variety of measures to increase property taxes. The increased revenue will go towards everything from improvements to Pike Place Market to school bonds in Bellevue and Renton and parks maintenance throughout the area. Property taxes will increase overall by 6.16% in 2009.

Read the full article here.

Incentives to buy at Veer Lofts...

One of the hardest hit groups of the current downturn in housing are developers. New construction pricing is at rock bottom and builders are doing anything they can to get property off their hands to stay afloat. This is especially true with new condos in downtown Seattle.

While Paul Allen's development company, Vulcan, is not in any immediate danger of going under...they too are doing their best to stimulate interest in some of their condo projects. Veer Lofts is offering the following for buyers who close on certain units by the end of February:

• Pay no homeowner's dues until September 1st 2010


• All closing costs paid up to $7450


• $1,000 IKEA gift card


• A 1 year membership to Rain Fitness, just 2 short blocks from Veer


• Two $500 gift certificates for Alaska Airlines

All the units offering this great deal are under $300k. If you're on the verge of buying, this is a stellar opportunity. It takes roughly 2 years from breaking ground to completion for a new condo project to be finished and despite all of the cranes you see downtown...no new buildings have started within the last year. Over the next couple years, the current inventory will dry up and banks will again offer lending for developers to start new projects. Considering the new construction condos in downtown Seattle will be at a premium in a few years when the inventory runs out...buyers at Veer and other buildings will likely see substantial appreciation in 3-4 years.

$7,500 tax credit may be yours forever!

Who couldn't use an extra $7,500? In an effort to spur potential home buyers into the market, Congress passed a bill for a first-time home buyer tax credit. In short, here's how it currently works: If you haven't owned a home in the last three years, meet certain income restrictions and buy a house between April 8th, 2008 and July 1st, 2009...you can apply for the tax credit of up to $7,500. This amount minus any taxes you owe Uncle Sam is yours on either your 2008 or 2009 refund (depending on when you buy). The catch is that you must pay it back with 0% interest over 15 years. Not bad...but nothing to get excited about.

The latest stimulus package that President Obama is attempting to push through Congress has a few minor tweaks to the tax credit that result in some major changes. Nothing is official but here is a simplified version of the changes: you don't have to pay the $7,500 back! Ever! Now that's a reason to jump of the fence if I've ever heard one. The National Association of Realtors is lobbying to push the July 1st deadline back to December 31st of 2009 which would give buyers more than a couple months to close after the bill passes next month (assuming it does!).

So with houses on sale in nearly every market; interest rates at historic lows and Uncle Sam giving you $7,500...what reason would you have not to buy your first house?

Seattle Times article discussing proposed changes to tax credit.

Numbers to Know...

Here are the Seattle real estate sales numbers for the month of December 2008. As you can see, the overall trend for closed sales continued down from the summer. However, sales increased from the previous month. It's always difficult to judge sales numbers for December as the holidays and short daylight hours can skew the stats. We also had the snow days this year as well. One great downward trend to notice is the number of active listings. The more that drops, the closer Seattle will come to a balanced market. Seattle Real Estate continues to be a quality, low-risk investment. Local and national media continue to report on the stability of Seattle compared to the rest of the country.

Read about Seattle being a low risk real estate investment here.

New neighborhood map search...

The city of Seattle has a new map search function on their city website that is pretty cool. It allows you to filter for certain features and attractions of your favorite in-city neighborhoods. Want to know where the nearest farmers' market is located? How about public fire pits, p-patches, libraries or locations to buy a pet license?

Check it out here and start searching a neighborhood near you!

Home buyers getting off the fence...

This is an article from the Seattle PI that talks about some recent activity for Seattle home buyers in January. The new year often brings out a few more home shoppers but add on lower prices and rock bottom interest rates and the circumstances can't be better. One person quoted in the article thinks Seattle home prices still will drop 15% before the bottom hits. While this is possible, it would be surprising. Since Seattle did not suffer from over-development like Las Vegas and Arizona, the amount of inventory is high but not staggering. The recovery for real estate in Seattle depends largely on when a majority of buyers decide to hop off the fence.

Read the full article here.

Seattle Home Prices Rise in December

Home prices in Seattle rose in the month of December by just over 2% from the previous month. Year over year the area is down 7%. While home values rising is welcome news, using statistics from December can be a bit misleading. The holidays and inclement weather usually mean sales are down, so a few homes in the higher price range can skew the numbers.

Read the full article here.

Will the recession redesign the American home?

With the Seattle PI up for sale and Boeing announcing substantial layoffs, the Pacific Northwest can no longer claim it's in a protected bubble from the national downturn. In fact, Seattle real estate has been pretty quiet since September.

Our nation's history might suggest that our current economic downturn will our tastes for certain homes. In the years following WWII, soldiers arrived home ready to settle down as home owners but still remembered lessons learned from the Great Depression. Americans as a whole did not want to over-extend themselves but large numbers of people wanted to buy real estate. Therefore, small and inexpensive tract housing of the 1940s and 50s was born.

Flash forward to the late 1990s and early 2000s when "McMansions" were all the rage. However, our current recession combined with many Americans environmental sensitivity and their appetite for sustainability...the future homes in America might see yet another transformation.

Already, homes in Seattle are trending towards smaller, environmentally friendly and attached. Seattle townhomes are woven into the old in-city neighborhoods as city leadership looks to add urban density to account for future growth. Green building in Seattle is already prevalent and our region will continue to support this type of construction. The city of Seattle has very little land available for development, so the city might not always mirror the rest of the country in regards to housing styles. But be certain that home buyers in Seattle will begin to gravitate towards small and sustainable.

Read the full article here.

To Rent or Buy in Seattle?

Real estate agents are known for always saying, "Now is a great time to buy!" Well, that's not always the case for every potential home buyer. A lot of factors go into whether it makes sense to buy a home or to continue renting. For instance, the 2009 outlook for Seattle real estate appears to show that prices will level out or perhaps dip just a bit more. That combined with historically low interest rates might point to 2009 being a great time to buy a house. However, if the current economy makes your employment situation look troublesome...or you don't want the potential headache of home maintenance, then perhaps renting for now is best.

While systematically paying down a mortgage is a proven wealth building technique...and homeownership has many emotional benefits...the decision to buy a home must be taken on a case by case basis. The Seattle Times has a great article highlighting two different families who took different paths.

Read the full article here.

Residential Architecture Snapshot: Federal

Federal-style architecture dates from the late 1700s and coincided with a reawakening of interest in classical Greek and Roman culture. Builders began to add swags, garlands, elliptical windows, and other decorative details to rectangular Georgian houses. The style that emerged resembles Georgian, but is more delicate and more formal. Many Federal-style homes have an arched Palladian window on the second story above the front door. The front door usually has sidelights and a semicircular fanlight. Federal-style homes are often called "Adam" after the English brothers who popularized the style.

The main floor windows are usually up off of the street level so the well-to-do homeowners weren't forced to look at and be on the same level as the common street-dwellers. This style of home can be found in parts of Capitol Hill and Queen Anne but also scattered through the city of Seattle.

Architecture $.05

Need some cost-effective advice on an upcoming home remodel? Visit the Ballard Sunday market to see John Morefield. This is a sober, yet slightly humorous, article from the Seattle PI about a young architect who finds himself as another victim of this struggling economy. Morefield has been laid off twice in the last year but chooses to have a more optimistic view of his situation. The last few weeks he could be found at the Ballard market offering advice and attempting to secure longer consultations for eventual design work. At the very least, we can all agree this is a creative idea. Just the sort of thing we want from an architect...

Visit John's website: Architecture5cents.com

Read the full article here.

First-time home buyer tax credit

Okay all you first-time Seattle home buyers! The federal government released this tax credit last summer, however it's an important one to remember now that the new year has arrived. While the tax credit is a huge bonus for would-be first-time home buyers, it's not going to last forever. As it stands now, a buyer must close on their new house by July in order to qualify for the $7500 tax credit.

The Seattle Times published a recent article outlining some of the highlights of the credit. Remember: If you haven't owned a house in the last 3 years, you are considered a first-time home buyer and can qualify for the money! This makes buying your first house in Seattle even more enticing when you can receive money from Uncle Sam instead of owing him. Currently, this credit acts as a no interest loan. However I've heard some rumblings that part of the rumored stimulus package from the incoming administration will specify all or a portion of the credit will not need to paid back. Even better!

Read the full article here.