March 31st, 2010
Are looking for ways to spruce up your house for spring?
Come to the Grant County Spring Fair And Home Show on April 2, 2010
This includes a carnival, commercial vendors, lawn mower races, power tool
races, equine events, junior livestock show, car show and much more.
For more information go to:
http://www.grantcountyfair.com/
March 29th, 2010
#6 Real Estate Trend of the Decade
(509) 750-7587
As promised here is the sixth-ranked trend of the thousands. Written by Brian Summerfield, Online Editor of Realtor Magazine.
#6: HVCCFor a demonstration of the problems caused by the Home Valuation Code of Conduct (HVCC), adopted by Fannie and Freddie on May 1 of this year, look no further than this blog. Back in July, my colleague Rob Freedman published this post featuring a video interview with NAR policy analyst Jerome Nagy, which set off a firestorm of comments that criticized or defended the HVCC and appraisals generally.As Rob and I noted at the time, neither the blog nor the video have anything especially controversial to say about the HVCC. The code itself was just that controversial. As with Tiger Woods’ recent peccadilloes, merely bringing the subject up could trigger a heated larger discussion about everything that went wrong and how to fix it.So what, exactly, was wrong with the HVCC? Well, the most persistent criticism was that it led to more out-of-area appraisers assessing properties, but from the real estate professional’s perspective, it was more than that. Many of these appraisers—not being from the area—didn’t value homes correctly, the appraisals weren’t taking place in a reasonable amount of time, and in many cases, deals were falling through as a result.Compounding the frustration was the fact that the HVCC was implemented in the worst real estate environment in more than a quarter century. The market was already tough enough as it was, and this made things even more difficult for practitioners.But did the HVCC get a bad rap? Some think so. The trouble might not have been caused so much by the code itself as misinterpretations of it and poor practices of appraisal management companies (AMCs). And, of course, the timing didn’t help.The HVCC—or at least the most problematic provisions of it—could be eliminated early in the next decade. The most likely route to its demise would be an amendment in the Consumer Financial Protection Act of 2009 that would sunset the code next year. That bill has made it through the House Financial Services Committee, but hasn’t been voted on in the House or Senate. However, Fannie, Freddie, and the FHA have essentially incorporated the HVCC into their own guidelines, so even that might not kill it altogether.Regardless of the eventual outcome there, we’re stuck with HVCC—a system that more than one-third of REALTORS® say has caused a lost sale this year—for the rest of this decade.”Watch for the blog on the seventh-ranked trend of the real estate market for the decade!
March 22nd, 2010
#5 Real Estate Trend of the Decade
(509) 750-7587
As promised here is the fifth-ranked trend of the thousands. Written by Brian Summerfield, Online Editor of Realtor Magazine.
#5: Commercial Crash
I feel like I’ve been paying a fair amount of attention to the commercial market lately. There’s a good reason for that: This sector of real estate is currently going through something like what housing experienced from 2006-2008. In fact, it may even be worse.
Let’s take a quick look at a few figures:
- Even though rents will almost certainly decline, office vacancies will likely climb more than 2 percent between now and this time next year, according to the latest commercial forecast from NAR’s research division, and may approach 20 percent next year.
- That same report says vacancy rates in the industrial sector are expected to top 15 percent in the third quarter of 2010.
- In the most recent Commercial Real Estate Index from the Society of Industrial and Office REALTORS®, 85 percent of participants report that there is essentially no development in their markets.
So, how did it come to this? Simply put, when the broader economy started contracting in mid-2008, most sources of capital dried up. The money just wasn’t there for hiring new employees (or paying many existing ones), funding new business ventures, and building new retail complexes and office parks.
This isn’t to say that commercial real estate didn’t have any internal problems. There was clearly overbuilding of retail and office developments in many areas, some of which were also experiencing an overheated housing market. But the commercial sector’s woes were due primarily to the meltdown in the broader economy.
There may be more problems ahead, too. More than $1 trillion in outstanding commercial debt will be due by the end of 2012 (the same year as the Mayan Doomsday Prophecy—coincidence?). And a broader economic recovery is needed before we can start to seriously contemplate a turnaround in commercial real estate.”
Watch for the blog on the sixth-ranked trend of the real estate market for the decade!
March 16th, 2010
#4 Real Estate Trend Of The Decade
(509) 750-7587
As promised here is the fourth-ranked trend of the thousands. Written by Brian Summerfield, Online Editor of Realtor Magazine.
#4: The Practitioner Explosion
Most of you are well aware of how crowded this industry has gotten over the past few years. The boom in real estate at the beginning of the 21st century was perceived as something like the Gold Rush of the late 1840s—an ostensibly free-for-all environment that held out the promise of prosperity to anyone who pursued a career in this area.
One incredible indicator of how much the industry grew was NAR’s own membership. Around the start of the ‘00s, NAR had nearly 800,000 members; at its peak during this decade, it had approximately 1.3 million, an increase of well over 50 percent. (It currently has around 1.1 million members, which is still significantly higher than its membership at the start of the decade.)
Observers offered several explanations as to why this was the case. A couple of these revolved around demographics: Some said professionals switched to real estate mid-career because of a lack of fulfillment or job security in their previous roles. Others explained that Generations X and Y were attracted to real estate because of the apparent freedom and flexibility it offered. While these may be partially correct, I’m more inclined to think that they were following the money (and there’s certainly nothing wrong with that).
Rather than offer my own opinion as to whether this trend is ultimately beneficial or detrimental to the industry—because, frankly, I’m not entirely sure—I’d like to get your perspectives on this. Have you seen a significant increase in colleagues and competitors? Do you think this has helped or hurt real estate?”
Watch for the blog on the fifth-ranked trend of the real estate market for the decade!
February 25th, 2010
#3 Real Estate Trend of the Decade
#3. Government-Led Recovery
When it became apparent in the later years of this decade that the housing market wasn’t just going through a small correction and would not resume its rise, economic policymakers in the federal government took action to solve the crisis in residential real estate, as it was viewed as critical to the broader economy. In fact, President Barack Obama listing housing as a key recovery “metric” in one of his first televised speeches in office.
Thus far, the results have been mixed. For example, the home buyer tax credit has turned out to be very popular among real estate pros and consumers, and arguably effective to boot. On the other hand, loan modification programs have not met with as much success, due to reasons ranging from complicated processes to inadequate lender effort to scams.
In addition to entirely new (and supposedly temporary) programs, a couple of established federal institutions have put forth considerable efforts to spark a recovery. First, the FHA stepped in to fill much of the void in mortgage financing caused by the breakdown of Fannie and Freddie. (In fact, nearly 40 percent of recent buyers used FHA loans, according to the latest REALTORS® Confidence Index.)
Also, the Treasury Department and Federal Reserve each have bought loan securities to provide additional financing for mortgages, though it’s not clear how many they’ll continue to buy and for how long.
Now, the complete and cumulative effect of these endeavors is debatable, and probably won’t be fully understood until years from now. But we can say one thing for sure: Without the government’s intervention, the housing market would look very different right now.”
Watch for the blog on the fourth-ranked trend of the real estate market for the decade!
February 16th, 2010
#2 Real Estate Trend of the Decade
(509) 750-7587
As promised here is the second-ranked trend of the thousands. Written by Brian Summerfield, Online Editor of Realtor Magazine.
We’re getting close! Here’s the second-ranked trend on our list of top real estate developments of this decade:
#2: The Fall of Fannie and Freddie
When the financial system that underpinned mortgage financing for more than three decades collapses, it’s a pretty big deal. The fact that it’s not number one on the list of most important developments over the past 10 years should tell you something about the kind of decade we’ve had in real estate.
Fannie Mae (established in 1938 and privatized by Congress in 1968) and Freddie Mac (created as a government-sponsored enterprise, or GSE, in 1970) together comprised more than half of the secondary mortgage market in the United States in recent years.
But all that ended on Sept. 7 2008, when FHFA Chair James Lockhart III announced his decision to put both Fannie and Freddie under the organization’s conservatorship after the value of their shares had plummeted by half during the preceding week. Henry Paulson, the U.S. Treasury Secretary at the time, supported the move, and explained that after reviewing the financial situations of the GSEs, “it would not have been in the best interest of the taxpayers for Treasury to simply make an equity investment in these enterprises in their current form.” (Translation: We’re not going to throw good money after bad business practices.)
The near-failure of Fannie and Freddie also set the tone for what was to come in the broader economy. That same month, financial institution Lehman Bros. went bust after more than a century and a half of operations, and AIG’s rescue plan was announced.
Besides the general economic uncertainty it ushered in, I think the most shocking thing about this was the speed of the decline. In 2008, the same year they all but folded, Fannie Mae and Freddie Mac were ranked at numbers 53 and 54, respectively, on the Fortune 500 list. When it was clear that these GSEs weren’t going to hold up on their own, the decision to pass them over to FHFA conservatorship was similarly speedy, with Lockhart, Paulson, and Fed Chief Ben Bernanke all affirming it was the right move at the right time.
Now, Fannie and Freddie could get on the path some sort of comeback during the next decade—indeed, many see their resurrection as essential. But even if they are restored, their role in the secondary mortgage market will not be the same as it was before those dark days of September 2008.”
Watch for the blog on the third-ranked trend of the real estate market for the decade!
February 9th, 2010
2009-Year in Review Grant County, WA
(509) 771-WIND (9463) lisahanley@windermere.com
Yes, it is painfully obvious that the real estate market remains down. BUT, hold on there Little Buckaroos… don’t get too worried yet! The numbers actually are better than expected, and bear in mind that Grant County is a relatively small market, so pay more attention to the numbers than the percentages.
Using quarterly figures from Northwest MLS, Grant County has seen increases in both solds and pendings in the 4th quarter of 2009. The number of single-family homes that have gone pending (under contract but not closed yet) in Grant County is up 12% from 110 in 4th quarter ‘08 to 124 in 4th quarter ‘09. Sold homes are also up 11% from 142 in 4th quarter ‘08 to 158 in 4th quarter ‘09. The increases are due to several factors including the obvious, such as the home buyer tax credits (recently expanded to include current home owners), and the less obvious… the rapidly expanding pool of short sales and foreclosures hitting the market, as well as improved weather conditions.
Interest rates have miraculously, and against all predictions, remained low. The most recent news from the feds is that, for now, they are going to keep them as low as possible. This should result in brisker than predicted market activity. The graph below shows the current active, pending, and sold for the last 15 months. Be sure to pay attention to the month to month comparisons, as well as the overall trends.
Summary: It is still an AMAZING time to buy. It is a respectable time to sell if you approach it pragmatically, get educated information about how to prepare your home, and set the most realistic price point. Homes are still selling…you want yours to hit the ground running!
February 2nd, 2010
January 2010 Moses Lake Home Market News
By: Lois Kincaid
Owner/ Broker
Windermere/K-2 Realty LLC
GREETINGS
People always ask me, “How’s the market?” As promised, here’s the latest statistics just released from the Northwest Multiple Listing Service.
MY THOUGHTS
The tax credit stimulus has buyers out of their caves. If you are a first time home buyer it means $8,000 in your pocket. If you are repeat home buyer it means $6,500 in your pocket. A contract must be in place by April 30, 2010. Home purchases must close by June 30, 2010. Act now…call me today!
Interest rates are at 4.87% for 30 year fixed on a 30 day lock. How can you beat that?
Please stop in and say hello the next time you are going by.
We would love to see you!
January 27th, 2010
NEW JOB GROWTH IN GRANT COUNTY SHOULD REVIVE EPHRATA AND MOSES LAKE REAL ESTATE MARKET
Owner/Realtor
Windermere/K-2 Realty
he total number of single family homes sold in Grant County declined 29% in 2009 as the local economy reflected the national recession. The median price of single family homes sold in 2009 fell only 4.5%.Graph Source: Realist/ NWMLS
However, two recent announcements should translate to a needed boost in the local real estate market.
The recent news that the BMW/SGL joint venture company is considering building a plant in Moses Lake to manufacture carbon fibers that would ultimately be used in the making of the electric “Megacity Vehicle” in Germany (See Columbia Basin Herald Article Link.) Moses Lake is one of only two sites in the world that is being considered. One of the reasons that Moses Lake is in the final running for this plant is the fact that BMW/SGL wants the production of this next generation vehicle to be a “Green” process including the use of hydro-electric power in the manufacturing process. This plant would eventually provide about 180 jobs when completed and would stimulate the local economy in the interim during construction of the plant.
The Port of Ephrata and a Washington Tire representative announced recently that construction will begin in April of 2010 on the first phase of a tire manufacturing plant on property sold by the Port. An import tax of 35% on tires manufactured in China has made it financially feasible to manufacture in the U.S. This will be one of the first tire manufacturing plants built in the U.S. in the last 25 years. If all goes well they could have the first phase of the project operational by end of 2010. The company representative said that by the end of the third phase of the project (likely in 4 to 5 years) they expect to offer more than 2,000 jobs to the local economy. (See Columbia Basin Herald Article Link)
Like the ongoing REC Silicon project and other completed construction projects, these two projects will provide a significant number of construction jobs which will stimulate the weakening rental housing market. The flow of employment dollars and capital expenditures during construction should shore up the home market and eventually the commercial real estate market.
Other projects like the $100 million bio-oilseed plant in Warden and the startup of the nearly completed Guardian Industries insulation plant in Moses Lake will also contribute to the speedy recovery. Eventually, (maybe as early as 2011) the permanent job hiring will begin on these projects and bring back the severely depressed new housing construction market. Both Moses Lake and Ephrata have new housing subdivision projects that have stalled or been stopped due to the current economic slump.
In my opinion the needed recovery in the local residential real estate market should begin by early 2011. The recovery in the commercial real estate market including expansion of retailing should follow in 2012. This year (2010) will provide a good opportunities for buyers.
January 25th, 2010
10 Best Real Estate Developments of the 00’s
This is a really good read! Brian Summerfield, Online Editor, Realtor Magazine, posted this article on December 23, 2009. #1 according to Brian is the Boom and Bust of the U.S. Housing Market, #2 is the Fall of Fannie and Freddie, #3 is the Government-Led Recovery, #4 is The Practitioner Explosion, i.e., the Realtor gold rush of the 2,000’s. But wait, there is more. You will not want to miss reading about the #5 is the Commercial Crash, #6 is the HVCC, #7 is the Record Lows in Mortgage Rates, #8 is the RE.net, #9 is Real Estate on TV, and last, but not least - #10 Going Green!
#1: Housing Goes Boom and Bust
I have to be honest: I feel like this entry is kind of cheating. It just seems too broad to offer up as a single development. Why not talk about something more specific, like the subprime crisis? Surely that’s emblematic of the larger issue, isn’t it?
But, really, the boom and bust in housing wasn’t just the real estate story of the decade, it was the economic story of the decade. And even that’s not really doing it justice. To put it another way, it would be impossible to write the Great American Novel about this time period without including the tumultuous real estate market in some way. For that reason, I feel like there’s no getting around putting it at the top of this list.
I’m not going to go through all of the events that produced the explosion in housing values and the ensuing drop, partly because I’ve already touched on some of them in previous #Top10inRE blogs, and it’s simply too much to cover in a single post.
But I would like to discuss, briefly, what we’ll take from all this into the next decade and beyond. There are some obvious lessons, such as scaling back on exotic mortgages and easy credit. Then there are some that are more problematic.
The one I find most troubling is how we’ve perceived homes as an asset. In the housing mania that lasted roughly from 2001 to 2006, consumers came to view their homes as a very safe, sustainable investment that would yield high returns for everyone in a short amount of time. The fact that there has never been such an investment in the history of investing did not seem to deter them in the least.
But after the housing bubble burst, the pendulum swung too far in the other direction. The conventional wisdom came to be that houses were no longer investments, but rather mere shelter. This isn’t quite right, either. While home ownership does provide a roof over one’s head, so does renting. And there’s a reason why, even now, the majority of people in this country prefer the former.
Real estate is a store of wealth, one that does appreciate in value. But it’s not the kind of investment that’s going to provide 50 percent or greater returns in just a couple of years for an indefinite period of time. The sooner everyone—practitioners, lenders, buyers, sellers—realizes this, the sooner we’ll be on the road to a long-term, tenable recovery in real estate.
Well, that’s my list for this decade. Let me know if you think I left anything out!”
I hope you enjoy this information. Want to discuss theories? Please stop by my office. The coffee is always on… Look for the second top real estate development of the 00’s to come next week!