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.

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.

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.