Darel's Wenatchee Area Lending Blog

Market support for Wenatchee Homes

2008-07-17T01:18:14Z

In the Wenatchee Real Estate market, you have to be careful about too many statistics. I actually took a statistics class or two back at UW many years ago, and we learned about something called sample size. Basically, if you don't have a lot of pieces to measure and slice and dice, it is hard to come up with statistics that mean anything. In Seattle, you can study trends; in Wenatchee, one good weekend of home sales can skew the numbers. It is best to look at the overall picture to see what is happening in Wenatchee Real Estate.

In Wenatchee, we have two markets, the locals and the Doctors/retirees/second home market. People retiring from Puget Sound and moving to the sunshine have more money to spend and buy/build nicer more expensive homes. People who work in the fruit industry or as medical staff etc are not usually buying those homes, they are buying something more in line with their income.

Short term, we have an oversupply in certain market segments, but this is correcting itself as builders are not starting new spec homes to add to the supply. The over supply is really above the $350K price level; at prices below this, there is generally only a 5-7 month inventory. So the over supply is in the more expensive homes, that may be painful if you are trying to sell one of these today, but long-term, these more expensive homes are where the demand will be.

The reason the demand will be there is the same demographic story: as baby boomers in the Puget Sound area retire, they start to notice that there are only 58 clear days a year in Seattle. And with their new found free time they visit the Wenatchee, Leavenworth, Chelan, or Winthrop areas and discover open spaces, no traffic, small town atmosphere, and a glowing orb in the sky that makes everything look pretty and feels warm. A certain percentage of these people will decide to move here.

Currently, we are slowed down a bit as these Seattlites and Eastsiders are having trouble selling their homes, however, the Puget Sound economy doesn't get hit as hard as the rest of the country in times of downturn, because someone has to build those 787 jets that the Arabs can afford to buy, and Microsoft continues to be the 9th largest country in the world.

So I expect we will see some slowness continue this year as people are a little shell shocked with the recent inflation. By next year the price of flying will be outrageous, and a weekend trip to Chelan will make more sense than a vacation in California, and the migration from rain to sunshine will renew.

Winthrop and Methow Valley Construction

2008-06-10T00:10:00Z

One of the things I love about my job is that I have to inspect home construction projects every month throughout North Central Washington, which allows me time to enjoy the beauty and wildlife of our area. I recently made my monthly trip up to Winthrop and Mazama in the Methow Valley, and (I apologize to our Puget Sound area readers), it was nothing like my old commute on 405 and I-5 in my past life.

For those that want to escape the rat race and can tele-commute, you ought to check out the Methow or other parts of Okanogan County. I have been financing several lot and land purchases in the area, and there are a lot of choices from small lots in the pines to sprawling large meadows. This isn't Detroit, so don't expect giveaway prices; but spend a couple days up here breathing in the fresh air surrounded by the stillness, and ask yourself what peace is worth. No lot at any price in suburbia can give you that.

The real sale comes Monday morning when you are back in traffic at home after spending a weekend in the Methow Valley, when you ask yourself all kinds of questions about what really happens if I win the rat-race anyway? Just make sure you keep your Realtors card with you so you can call back and make that offer on your own piece of paradise.

I look forward to meeting you when I come up and inspect your new cabin construction project.

Owner-Builder Financing in Eastern Washington

2008-04-23T00:36:06Z

I wrote last time that this was a great year for building your own home, and I have had lots of requests for financing. One thing I want to point out to people, is that at this point in time, if you want someone to finance you as an owner builder, you will need some equity in your land or have some cash. This is a t least true in my market of Eastern Washington.

In the past, some lenders would finance 100% of your entire land acquisition and construction, but those programs are gone, and you should plan on having 10-20% down payment. The way to figure this is figure how much you need to borrow (estimated cost of construction plus any loan payoff on your land. This is your maximum loan amount. Divide this by the value of what you are building (cost of construction plus the current value of your land (not what the County taxes you on).

For example you bought some land 2 years ago and paid $60,000. It is now worth $110,000. Lets say you still owe $40,000 on this. Now suppose you want to build a house for $250,000 in building costs. If you don't want to put any cash in, then you want to borrow the $40,000 to pay-off the lot, plus the $250,000 to build the house. Your loan amount is $290,000. The value of what you are building uses the current lot value of $110,000 plus the $250,000 in construction, or $ 360,000. We would confirm this number with an appraiser. So your loan to value is $290,000 divided by $360,000 which my calculator shows to be just over 80%. So a 90% loan program would allow you to add your closing costs and finance everything-because you are using your lot equity as your down payment. For an 80% program, you would need to bring in a few dollars to get your loan amount below 80%, plus you would pay your closing costs out-of-pocket.

People who bought just about any land in Wenatchee, Chelan, Leavenworth, the Methow Valley or Okanogan County 2 or more years ago likely have built up enough equity to build, because our land prices went up and haven't come down.

If you are looking for financing to be your own builder, and you are calling around to various lenders, here is atip to save some time: Instead of telling them about the land or the amount you wantto borrow, or even how long you have been a customer of their bank, just ask, "Do you do Owner-Builder" financing. You will soon find that there aren't many players left in the game.

Wenatchee Owner Builder Financing

2008-03-17T00:10:54Z

2008 seems to be a great year to build your own home in the Wenatchee area. I have seen a large increase in the number of clients requesting owner-builder mortgages. Some bought land a few years ago and others are buying their lots now. It looks like people will save some money building their homes this year versus 2007. The reason for this is that every subcontractor and supplier was scrambling last year to keep up with all the projects from their regular builders; this year, fewer builders are starting new speculative projects, which means the subs are a little hungrier and are more reasonable on their pricing.

Financing owner-builder projects is one of the most rewarding things I can do; I love to see someone build a house and gain a bunch of equity from their efforts. The key to this is good planning and organization. Without good planning, an owner-builder project can be costly.

Not everyone who builds their own home lifts a hammer; some do, but many just organize the subcontractors. As you price out all the work tasks of your home, sometimes you will find that a good sub with a professional, fast-working crew can often do a task for less than you can do it for yourself.

If you are considering being your own general contractor, I have a few tips: I should first qualify that I am only speaking from the experience of financing these owner-builder projects in my market areas; greater Wenatchee, Leavenworth, Suncadia, Okanogan County, and Lake Chelan; things may be different in Western Washington or other areas. I work for a smaller community bank, so for these loans, I am very familiar with the details as I not only did the upfront analysis, I did the individual monthly inspections and draws, so I have seen the downstream impacts of little mistakes on the front-end.

If you have never built a home before, I would suggest hiring a consultant to help you manage the project. Some licensed General contractors will simply do this for a fee, or you can hire one to do your main framing and finish carpentry. By doing this, you have someone to help you look at the overall project. One advantage of this is that they can recommend reliable subcontractors who will show up on time; many owner -builder projects have been delayed just waiting for a plumber, etc.

Looking at it from the subcontractor's side; if they were planning to come to your jobsite today, but one of their regular builders, who will give them 4-5 jobs this year, calls and asks them to come out to one of their projects, where do you think the sub is going to go?

Also, when a sub, say an electrician, is writing up your bid, he doesn't know how well your project is going too be managed; you may call him out to do the rough wiring before the roof is dried-in. He is not allowed to proceed, so he has to leave and come back another day. He has to factor in these unknowns about your management into his bid. If a professional is either building your house, or acting as your consultant, that electrician will likely give you a lower bid as he knows he won't have to make extra trips to your jobsite.

The things we need to see for an owner-builder project are 1) a cost breakdown of all major components of the home (foundation, framing, siding, plumbing, etc) with each item backed up by a bid from a licensed subcontractor. 2) A materials list that tells us what you are using, (what type of floors, roofing material, siding, etc) and 3) a set of plans.

If you don't have a consultant helping you, the biggest piece of advice is to not rush the planning; ask the subs lots of questions. Does the concrete bid include the rebar and concrete, pump truck, and finishing? For the plumbing bid, does it include the actual fixtures, or just the labor? Ask lots of questions, get good bids and have some contingency for those unknowns and you should be alright.

One last tip for those who have built a home in the past; almost every owner-builder project that I have seen run over budget has been someone who has built a home in the past, and they proceeded quickly assuming they knew how to do it. Inevitably, they forgot the fire-sprinklers, or they priced a generic floor tile without examining it closely; when they switched to what they really wanted, it was another $4,000 , etc. So the point is, even if you have done this before, take the time to plan.

Lastly, have your lender go through all your bids with you to make sure you haven't overlooked anything. With all the details in place, you should have a great project.

Wenatchee Home Builders Home Show This Weekend

2008-02-06T01:53:43Z

This weekend is the 5th Annual NCHBA Home Show in Wenatchee. NCHBA is the North Central Homebuilders Association; so the show is all about construction, remodeling ideas, doors, flooring, decks , windows etc. And of course I am there to help people finance their construction or remodel project. There are no pots and pans or ginsu knives. I have participated in all 5 and I like the fact that it is construction focused and that there is an admission charge. As a vendor, the price of admission keeps it from being overrun with people who are just bored on a weekend, so the people coming through are really serious. This allows us to engage in meaningful conversations with people at our booth as we are not distracted handing out flyers to people who don't want them.

The other nice thing about this show is that 99% of the vendors are from the local area and do business in the local area; these are not people who fly into town to sell a product and then leave. At the website you can get all the times, a list of vendors, and print a $1 off coupon. You'll also find a list of the practical Do-It -Yourself demos that will be presented. If you bring your kids along, they can build a wooden project in the KidZone manned by our local Lowes store.

So come on by, walk around slowly and talk; we are Eastern Washington folks, and were not in a hurry. Tell us about your project and well get you hooked up with the right people to help you out.

Chelan Land Financing

2008-02-05T01:37:35Z

Lot and land sales at Lake Chelan seem to be brisk right now; as I am getting inquiries every week from people wanting to finance a building lot or some land. Most people have not financed land before so I hope to remove some confusion with a little explanation. This would also apply to people financing Leavenworth land or a building lot in Wenatchee.

The first thing you will find is most lenders don't want to finance land; especially now. Land is harder to liquidate if the bank ends up taking the property back, and the national lenders who are trying to improve their loan portfolios are dropping their land financing programs. So your first place to start would be a community bank that knows the area.

The next thing you will find is that the loan programs vary widely between lenders; one will want a 30% down payment and the loan will only last 12 months, and the next will take 10% down and give you a 30 year loan. Some offer interest-only programs. Some will only do subdivision lots with full utilities, others will let you do 20 acres or more. So if you are looking at property, you better check out your financing options before you start writing an offer.

One thing that is fairly consistent amongst lenders; because land is a little more risky, there are usually minimum credit score requirements, so you better know where you stand there. I check mine at annualcredit report.com, because you don't have to sign up for any monthly monitoring service. I suggest paying the small fee to each of the three agencies so you can get your actual score; it cost me maybe $7-9 each.

As the banks are usually lending out their own money, rather than selling the loans, the underwriter can sometimes be flexible; for example, we want to see a minimum Equifax score of 680 for a lot loan, but we approved a client in the 620's because he had a credible explanation for his credit, he had a low debt-to-income ratio,and high documented income; we call these things 'strong compensating factors'. Another exception was someone who wanted to finance a 20 acre parcel with 0 down. Of course his national bank turned him down; but we looked at his overall situation and saw an enormous income with millions of dollars in the bank (the one that turned him down), so we wrote the loan. Heck, we probably would have financed a toxic waste dump for this client; it was obvious we would be paid back. On other occasions, we will write the loan to cover the lot purchase and also use another property as extra collateral if the buyer is weak in a certain area (ratios,credit score, down payment).

Before you call a lender,its a good idea to have your overall plan in mind; what are you going to do with the land and when. I would say the most common thing I hear is that the customer wants to acquire the lot now, and plans to build a home on it in 2-3 years. So try to find a loan program that fits your needs, and check the terms. If they are offering an Adjustable Rate Mortgage (ARM), is it amortized over 20 years, or 30 years? What happens after the initial period, does it adjust and keep going, or does it re-set, or does it balloon? If it adjusts, how high can it go?

If you plan to start construction soon, you may be able to combine your land purchase with your construction loan. For more information on construction loans in Eastern Washington click the link.

With the government owning about 80% of Chelan County, and much of the rest in agriculture or on steep unbuildable slopes, supply and demand points to increasing values for your land purchases. Plus the sunshine and recreation continually attracts people from the Puget Sound region to Lake Chelan, the Wenatchee Valley and Leavenworth. All this is to say, if you want a piece of it for yourself, I don't think its going to get any cheaper.

Come and take a look, and then shop around for your financing, you will find 10% down lot loans, interest only lot loans, ARMS and fixed rate lot loans; whatever you need to meet your needs.

Wenatchee Mortgage Market Update

2008-02-02T02:13:16Z

In our markets of Wenatchee, Leavenworth and Chelan, we are benefitting from the drop in mortgage rates while not participating in the housing market declines that are hitting some parts of the country. But, as we have local media that just re-prints what the national Press is saying, we have some people sitting on the fence not sure if they should buy right now. The local mountains,lakes, skiing and sunshine with a close proximity to Seattle keeps a steady flow of second home and retirement buyers coming to Wenatchee, Leavenworth and Chelan. The majority of my business is land and construction loans for these people.

I try to get out some financial market news to agents and builders in our market on a regular basis to help them see where the mortgage markets are headed. Because, we do have plenty of potential buyers out there, and a good interest rate is often all it takes for them to jump in.

I was expecting some more volatility in rates than we saw this week, but I don't think we are done with rate declines. The Prime Rate came down a full 1.25% in January and that did not really rally the stock market, it just kept it from a deep decline (so far). I think today's announcement of the first decline in US payrolls in over 4 years is significant. The FED can't lower their short-term rates every week, so when we get a negative report next week, I think you will see the slide continue. Plus, this is going to be aided by the Press; they have been beating the Housing market to death for the past 6 months, and it looks like they are now targeting the whole US Economy.

The attached article appeared by the Associate Press today and highlights what you will see coming. The added words used to 'interpret ' the data for the reader is full of opinion and assumption. The 'Shower of Pink slips' they are talking about is a loss of 17,000 jobs. Against a US non-farm employment of 146 million people, I can't get enough digits on my calculator to figure that percentage. They also mention the economy grinding to a halt and tumbling into recession. As we learned with housing, once the press decides that the economy is crumbling, they will be making headlines out of anything. So, my analysis is that they will succeed in convincing the public that the sky is falling, enough to drive down the stock market and as a result, mortgage rates will continue to drop. It will be a net gain to us, because we won't lose any local jobs (because the sky really isn't falling here) but we will sell a lot of homes because of the low rates. Have a great weekend

Wenatchee Construction Update

2008-01-29T00:31:47Z

I have talked to several people this month who are buying land in our area with plans to have a home built in the near future. As most of the questions are similar, I thought I would fill people in on Construction Lending in Wenatchee, Leavenworth and Chelan.

First of all, its Winter here, which is very pretty, but if you didn't pour your foundation beforehand, you'll need to wait until it thaws. Depending on where you are in the area, that can be anywhere from February to May. Also, people who are finishing homes right now are generally moving in without exterior paint, stonework, patios, driveways or sidewalks; those things will be finished up in the Spring. These items are generally completed towards the end of the project, so if you are planning a new home which takes 6 months to build, and you start in July, guess what, you need to plan for this.

If you have never had a home built before, you need to make sure you are working with an experienced builder and lender who can help you through the process. You need to be working one-on-one with people you trust, because who is going to make sure that someone comes out in the spring to finish up those items, and how do they get paid? We can handle all this, but I just want to emphasize that it is alot easier when the lender, appraiser, escrow company and builder all work and live in the same market and know where to find each other; trying to move into your unpainted house in Wenatchee when your lender is in Texas, may pose some problems. Owner-builders need to be especially careful, if it is not something you normally do. If a subcontractor gives you a quote, make sure he knows what time of year you plan to have him up on a ladder. Just some things to think about. I don't mean to put construction fears into people, it is a great thing to do, and it's the majority of my lending; I just want people to be smart and get some good advice.

Right now is a great time to be doing your planning; most builders in our area did not start new spec homes last fall (waiting to see where the market is going), as a result, they have more time right now to review your plans and give you bids. I can't quote it here, as I only heard it 2nd hand, but I heard of someone quoting a cost per square foot today that was at a rate I hadn't heard in 3-4 years.

As of today, all-in-one type construction loans were back down to levels we haven't seen since last Spring, and with the Prime rate coming down, the 'Construction-Only' loans are the lowest they have been in 2 1/2 years. Combine these rates with some good builder quotes, and that new house becomes a reality.

For the details on how a construction loan works, see my Wenatchee Construction post. One place to do your homework: the North Central Homebilders Association is putting on their annual Home Show. There are no frying pans or kitchen knives, its all homebuilding related. Feb 8,9,10 in Wenatchee. You can get a dollar-off coupon and more info here.

Wenatchee Real Estate benefits from Cooling Economy

2008-01-28T23:44:46Z

We are very fortunate in the markets of Wenatchee, Leavenworth and Chelan in Eastern Washington. We are able to take advantage of the low mortgage rates driven by the cooling national economy, all without actually having to participate in the cooling economy. Last week was crazy, and it looks like mortgage rates are poised for another wild ride this week.

Last week they plunged briefly on Tuesday to some recent record lows, then they rose late that afternoon and later in the week were back up to almost the December levels. Mortgage rates respond to economic news (see below if you want more detail *), and this week is packed with more critical economic reports than I have ever seen in one week. Since I am not a fortune-teller, I can't tell you what all these reports will say, but odds are some will be positive and some negative, and the result will likely be extreme turbulence.

So here is my advice: Last week, the extreme low rates were only available for about 30 minutes. So if you have a transaction ready to lock, I would tell your loan officer what rate you want, and tell them to lock for you if we hit that rate. If it would benefit you to refinance your own mortgage in the low 5% range, I would suggest getting your application in with enough info that your loan officer can lock for you if rates hit your magic number.

Last Tuesday I called some people and quoted them the great low rates, but by the time we got the info and ran the numbers, the rate was gone; but now we are ready to pull the trigger at a moments notice. For your clients who don't like risk, if they like the monthly payment they can get today, they should probably lock ahead of the roller coaster ride.

*More info if you want it: Remember, Mortgages rates are one of those strange creatures which are not driven by their own supply and demand; more people wanting mortgages does not drive the rates up. Instead, they are driven by Wall Street Investors' view of the stock market. If the investors are concerned that stocks won't provide a good return, they buy securities with a guaranteed return, such as bonds or Mortgage Backed Securities (MBS). These are driven by supply and demand, so when more investors buy them, it drives the price up and the interest rate down

Why I love Living in Wenatchee

2007-11-03T01:02:19Z

Most jobs involve some driving; and mine is no exception with construction inspections around Eastern Washington. But I love the outdoors, so I have chosen a great place by living in Wenatchee. Last week I did inspections in Suncadia and Ellensburg. During my drive, besides the sunshine and fall foliage, I saw a 4-point Bull Elk with 3 cows, a coyote, and a flock of about 20 wild turkeys. Now I used to live in the Seattle area, and I will take this drive over the best day on I-405. I forgot to mention that I also saw Mt Rainier that day as well, as you get a clear view when you see it from the east.

Next week I have to run up to Chelan, and that means seeing Big Horn Sheep, this time of year it is almost impossible to not see the sheep and some deer along that road. Last Spring I drove up to Okanogan one day to teach a First Time Homebuyers Seminar with the Community Action Council. I stopped counting Bald Eagles after I got to 20; and its only about a 90 minute drive.

As you can tell, I believe there is a difference in the quality of life you get when living in Wenatchee. Wenatchee gets lots of press for being the top of numerous lists; all I can tell you is, if you like the outdoors, it can't be beat.

Is Mortgage Qualifying Getting Easier?

2007-10-30T00:50:28Z

In the last week, it appears that Fannie Mae is loosening the reigns and making mortgage qualifying easier. I won't try to completely explain Automated Underwriting here, but basically, when we as lenders take an application for a loan that will be sold to Fannie Mae or other investor, we gather all the details of the home purchase and all the buyers personal and financial information. We enter the information into our origination software and then send it off to Fannie Mae's Desktop Underwriter (DU) or other similar approval system. What we get back in seconds, is a list of what needs to be verified in our loan file for Fannie Mae to buy the loan.

When the mortgage fallout began, we in the Wenatchee mortgage business were quite frustrated because DU started asking for a lot more documentation than they used to. We were frustrated because our values remain high, but we were getting caught up in Fannie Mae's desire to improve the quality of loans they were buying. Some loans that would have been a slam-dunk Approve/Eligible in March were being declined in June. So we learned to adjust, as nobody has access to the mysterious inner-workings of DU; you just adjust to it's new personality and move on.

But in the last week, I have had three loans where DU waived the requirement for an appraisal!!, I haven't seen that in a long time. I would think this would be one of the last things they would let up on. Is this just happening for our area, or are they issuing Property Inspection Waivers (PIWs) all over the country? I'm not complaining; it speeds up the process and saves my clients money, so keep it coming. I'm just surprised by Fannie Mae's timing on this.

Wenatchee Fall Construction Race

2007-10-15T00:02:06Z

It's that time again; every Fall in the Wenatchee area, builders scramble to get their foundations poured before it freezes, giving them a chance to get their homes framed in so they can work inside during the Winter. Some years have been mild, where you could excavate and pour concrete all Winter long. But more typically, we see someone get a late start and be delayed for 2 months and finally pour in February.

Good news this year for people planning a custom home, many good builders are holding off on their spec building to see where the market goes. This means these top builders are available for your custom project. If you have a piece of land and have been waiting to build that house, this is a great time.

I spoke recently with three top architects in our area, and they say they are all very busy with custom home designs; so if you still need plans, I would be getting your appointment set.

Also, construction is sort of immune from the recent mortgage woes as the lot loans and custom construction loans are generally funded directly by the bank, and/or they are backed by one of the large agencies like Fannie Mae. The problems in the mortgage market are primarily related to "Secondary Financing" from hedge funds and mortgage bonds.

If you have never had a construction loan before, fear not! , 90% of people who come looking to get a construction loan are also first-timers, so we will walk you through the whole process. Here is a brief overview of how construction loans work.

If you need a recommendation for sub-contractors or builder, I'd be happy to help. For the Wenatchee, Leavenworth, Chelan, Okanogan areas, you can also contact the Homebuilders Association for referrals.

Great news for Veterans and First Time Homebuyers

2007-10-04T01:29:27Z

In the State of Washington, the HouseKey program has resumed it's funding. This means Veterans and anyone who has not owned a primary residence in the last 3 years can get 100% financing for their home purchase, including manufactured homes and condos. The program is offered through specific loan officers who have been certified by the Washington State Housing Finance Commission (WSHFC).

The rates are below market, and have some income and purchase price limitations, but you can still find a few homes to fit the parameters in our part of the state (Eastern Washington).

Here are the current rates as set by the State:

30 year fixed

6.5% 0 origination/discount points

6.25% 1 origination/discount points

6.0% 2 origination/discount points

(They also offer 40 year and interest-only rates)

Income limits for our area are $70,000 for households of 3 or more and $60,000 for households of 1-2 people.

House price cannot exceed $230,000

So, to find the house that fits your budget, you may have to be a little farther from town, but it gets you into a home of your own.

At a time when 100% financing programs are as hard to find as baby pigeons, this one is amazing. If you know any veterans, they don't have to be a first time buyer to qualify. Also, it is amazing that someone can get 100% financing on a manufactured home (doublewide, HUD certified).

A couple more things: It has to be your primary residence, and you need to attend a free class in order to qualify. If there aren't any in your area, contact a WSHFC certified lender to find out about other training options.

Some nay-sayers will tell you that you have to pay recapture tax if you sell your home, but talk to a WSHFC certified lender and they can explain the math to you to see why only 1 person has ever had to pay this tax out of the roughly 50,000 clients.

We have done a lot of these loans in our market, and we are glad the state was able to resume the funding of this program.

Refinance Boom in Wenatchee

2007-10-03T01:54:47Z

With the extraordinary increase in home values over the past 2-3 years, most people gained a lot of equity in their homes and land. I am now seeing a lot of people coming in to refinance; some to take equity out, others to eliminate PMI (Private Mortgage Insurance). I closed loans recently for two separate clients who wanted to pull some cash out of Chelan building lots, each of which had more than doubled in value. (Yes, you can refinance a building lot).

More commonly, people are pulling modest amounts of cash out their primary or investment homes for remodeling or to payoff other debts. Several clients who purchased homes with 100% financing 2 years ago are now getting cash plus eliminating PMI, with their new loan under 80% of the appraised value.

For clients who just want to get their PMI removed, who want to keep their current loan, they should contact their current lender to check the procedure. The lender will probably have you pay for an appraisal. In general, you will need to have their loan balance under 78% of the new appraised value to get it removed.

This is all a result of recent great gains in equity, and continued low mortgage rates.

In the Leavenworth, Chelan and Wenatchee markets this is also a busy time for construction loans as people want to get their foundation poured before the ground freezes up. Most builders are holding off starting new spec homes this fall, so some great builders are available to build custom homes.

Wenatchee Tour of Homes - This Week

2007-09-12T14:29:02Z

If you have read about the great Real Estate market in Wenatchee and want to check it out, this week provides a perfect opportunity. High temps will be in the 80's and the Tour of homes runs Thursday through Sunday.

Thirteen homes will be on display, all from local builders. Plus while you are in town, peaches, apples and pears are all coming out of the orchards right now, so take home some fresh picked fruit.

You can get your Tour tickets and get more info including maps online.

Wenatchee Tour of Homes

2007-08-24T01:13:16Z

The 2007 Wenatchee Tour of Homes is coming up in just 3 weeks. I wanted to give you a quick preview of the 13 homes. Unlike the Seattle Street of Dreams, the NCHBA and Sangster Motors Tour of Homes (the official name) is not located on one street, so you will be able to see many different views and neighborhoods.

The homes range in price from $370,000 to $2.5 Million and are nicely spread over that range. On the high side, one home sits on 8 acres, another is over 7,000 square feet.

All the homes are the signature work of local professional builders. Wenatchee is small enough that we don't have the huge subdivision builders that are found in the Seattle are. All of the builders in the Tour live right here in the community; they don't just build homes and move on down the road. This also means that you will find the best quality available for the price, because these people rely on happy clients to spread the word.

The builders are listed below, some may sound like corporate names, but click the links to the builders info page; The owners you see can be found at the jobsite:

Antram Homes

Van Lith Developments

Custom homes by Wendy

H&H Construction

GVL Construction

Gold Construction

Precision Homebuilders

Bollinger Construction

SLD Companies

Wenatchee is making a lot of lists as a great place to live, so come on over for the Tour and check out the area.

The Tour dates are Thurs-Sunday, September 13-16. Check the times.

Ellensburg Real Estate

2007-07-27T01:50:22Z

Ellensburg is becoming more and more a commuter town. My Sister and her husband are having a home built there, and he will be commuting to Factoria.

That would have sounded crazy to me when I was living in Issaquah years ago. But now that I live in Wenatchee and can't handle heavy traffic anymore, it makes sense to me. My Brother-in-Law can hop on I-90 with no traffic and be at the office in just over an hour (mostly at 70MPH). I'm one who believes that 40 minutes in traffic is a lot more stressful than twice that time on open roads.

And once he's home, its small town living on several acres with open views. It's not for everybody, but more and more people are doing the same thing from Ellensburg, Cle Elum, Roslyn, and Suncadia.

If you are looking for Ellensburg Real Estate, I like Craig Smith. He knows the market and can show you even down to the topsoil and water rights why one area is better than another. It's not just which house looks prettiest.

Anyone who loves the outdoors and can tele-commute ought to be looking all over Eastern Washington, there are great opportunities for rural or small town living. Does your town have a rodeo?

Lake Chelan Real Estate

2007-07-27T01:18:39Z

I went up to Lake Chelan with my family and the neighbors a couple of weekends ago. We rented two 3-seater Wave runners for a half day and we had all the riding we wanted. Chelan is a great place to play in the sun. It feels to me like the Chelan Real Estate market is hovering, waiting to take off again. I am not a market genius, but I have visited almost every major mountain resort town in the Western US. In my opinion, Chelan will always be gorgeous because it is subject to the most stringent Growth Management (as far as I know), so those hillsides will never be completely filled in. I think that once a few more amenities show up (Championship Golf, restaurants, etc) the prices will soar.

If you want to buy a piece of the Lake Chelan lifestyle and are looking for an aggressive agent, I like Jeff Hallman. Jeff is aggressive, but he will be totally honest about values. If a property is overpriced; he'll tell you- even if you are the one selling it. Some agents are energetic but are so slick you feel like you're being sold a used car. Jeff is energetic and honest. At our bank we often lend on unique properties in Lake Chelan, and I always trust Jeff to give me some good comparables to help us make a decision. He is an expert on Lake Chelan Real Estate.

If you have never been to Chelan or haven't been for awhile, get up there this summer and enjoy some sunshine, a beautiful lake and check out some of the local small wineries.

I'm currently lending on several lake Chelan land and construction projects, and I love it every time I have to go up there for an inspection, its so relaxing.

Wenatchee Tour of Homes Update

2007-06-26T01:27:27Z

Here is an update on the Wenatchee Tour of Homes.

The tour is put on by the North Central Homebuilders Association and sponsored by a car dealership in Wenatchee, so it is officially called the 2007 NCHBA and Sangster Motors Tour of Homes. It will be held September 13, 14, 15 & 16 in the greater Wenatchee, Washington area. The homes this year will be built by 14 different builders and are located throughout our valley, on both sides of the Columbia River

This will be a great show, and September is the perfect time to visit the Wenatchee area; average temperature in September is 75 degrees, and average rainfall for the whole month is 4 tenths of an inch (not per day- that's the whole month)

With the weather and the abundant recreation opportunities, Wenatchee has become very popular, and Wenatchee has proven to be a great place to invest in Real Estate; vacation homes and investment properties have both gone up in value at the fastest pace in the country. So come enjoy the weather, some fresh just-picked apples and check out the Real Estate opportunities.

Here are the builders for this year's tour,

Antram Homes

Bollinger Construction, LLC

Custom Homes by Wendy, Inc.

Gold Construction, Inc.

GVL Construction, Inc.

Harper Construction

H & H Construction NW, Inc.

Precision Home Builders, Inc.

Sadler Construction, Inc.

SLD Companies, Inc.

Stimac Construction, Inc.

Van Lith Developments, Inc.

As we get closer I will talk about each home as well as the background/experience of each builder; I will also be able to post some photos of the construction progress. Mark your calendars now and plan to come join us in the sun.

Wenatchee Land- Helping Your Kids Into Their First Home

2007-06-21T02:30:30Z

I am currently working on three transactions where relatives are helping the younger generation get into their first homes. I am excited to see this as we are all aware that rising prices in Wenatchee, Leavenworth and Chelan Real Estate markets are making affordable housing for first time homebuyers harder to find.

I recently posted on Geordie Romer's Leavenworth Real Estate site about using gift money. However, two of my current transactions involve a relative who bought some land a few years ago,selling the property to the kids at a reduced price and gifting some of the equity to the younger buyer to have their first home built. The net effect is the equity counts as the buyer's down payment for their construction loan and the first time homebuyer ends up with a lot of equity when the house is complete.

It made me think that even though lot and land prices may seem high compared to the recent past, our kids will be very thankful a few years from now if we picked up some dirt at today's prices.

You need to find a good lender who can advise you on the best land financing options. For some people a Home Equity Loan is the best way to go, for others I suggest fixed term Adjustable Rate Mortgages (3 yr, 5yr or 7yr ARMs), and I have others on a 30 year fixed land loan. Some sellers also offer good financing, so check out your options.

With 80+ percent of Chelan County held by the government, and plenty of beautiful mountain slopes, there isn't much buildable land to go around, and remembering your supply and demand curves from Econ 101, that remaining small amount will likely continue to be bid up.

Wenatchee Construction- Going cheap may cost you

2007-05-22T01:07:00Z

I heard about 2 Wenatchee/ Leavenworth area builders last week who are being impacted by the continued housing boom in our area. They both have had their projects delayed by a lack of available workers. This brings up a thought when shopping for a contractor to build your custom home: the lowest bidder probably doesn't pay top dollar for his framers. So when you award the contract to Mr. low-bid Builder and he calls up his framers, guess what-they won't show up, because they just got a better offer to work another project.

Meanwhile, while you are waiting, you end up paying additional months of interest to your lender. You probably would have been better off going with the builder that has his own crew, or who pays enough so that everyone shows up for work on time.

When you are interviewing builders, be sure to get names and phone numbers of recent clients. Call and ask them if there were any delays on their home; you'll be glad you made the call.

If you plan to be your own contractor in the Wenatchee, Leavenworth, Chelan market this year, and are subcontracting the labor, be sure to factor in some incentive pay in your budget to keep your project moving forward.

Just a quick construction market snap shot - I finance spec homes for contractors. With the exception of one $900K home, all the specs that got started late Fall or early Spring have sold during construction, and all at prices well above what we appraised them for at the start of construction. In fact, in the past 3 years, every spec I have financed has sold before completion.

Lastly, my tip I give everyone who is hiring a builder; find one who communicates well with you. 95% of all construction horror stories come from a lack of communication between the owner and the contractor.

Click here if you need to learn some basics information on how construction loans work.

Okanogan First time Homebuyers Seminar

2007-05-17T00:38:53Z

Okanogan County in Eastern Washington is a beautiful place, and may be one of the last places to find affordable housing. The Okanogan County Community Action council is a great organization that offers homebuyer training on a regular basis. I will be explaining the mortgage process and covering various loan programs at their next class which takes place Saturday, May 19th from 9AM to 4 PM. Click here for registration information. Also, Veterans who meet the income limitations also are eligible for this program, even if not a first-time buyer. For eligibility details contact me.

As some people may know, the State of Washington issued too many tax-exempt bonds this year, which has cut back the available funding for their popular House Key program. However, due to the econamic demographics of Okanogan county, many people will still be able to qualify for the below-market rates of this program.

Wenatchee Land Financing

2007-05-15T03:04:03Z

I work in the still growing markets of Wenatchee and Chelan County, where demand often exceeds supply. You may have seen the blog by my friend Perrin Cornell talking about how to best deal with multiple offers. The other side of this is that many people can't find the home they want, so instead they buy a building lot or piece of land to build on sometime in the future.

As financing land is a little different than financing homes, I thought I'd pass along a little information to help keep potential Wenatchee land buyers informed.

The first thing you'll find is that most lenders won't lend on raw land. The main reason for that is, unlike home mortgages, there isn't a huge secondary market where lenders can sell these loans. Of the lenders that will finance land, you'll find a wide range of terms. That's because the lenders are lending their own money, and they want to set terms to meet their own needs of risk and return. No bank wants to capture the entire market in lot loans. Most want to have some nice safe ones that get paid off with construction loans. That's also why many lot loan programs feature Balloon payments; they want you off their books so they can lend the money to someone else. Its just like a restaurant, they are happy you came, but they really need you to leave so they can use the table for the next paying customer.

Most want to see higher credit scores as well. 620 is a standard score for a conventional home loan, but most lenders want to see a 680 score for land.

Lenders also want to see some down payment money. There are plenty of 100% financing programs still available for homes in Wenatchee, but for land, most want 20%-25%, but you'll find some programs that go down to 10% and a rare few at 5% (but you better have good credit and low debt ratios).

So if you have decided on a piece of land, first determine how long you will need to finance it before you plan to pay it off, or roll it into a construction loan. Then shop around for the terms that best fit your needs. If you are financing land in Wenatchee, Leavenworth, or Chelan, you will be able to find an assortment of ARMs (adjustable rate mortgages) which are fixed for 3,5 , or 7 years and then either adjust after that or balloon (depending on the lender). Some are amortized over 15, 20 or 30 years, so do your shopping to find what best fits your scenario. There is even a 30 year fixed lot loan (which completely violates the restaurant analogy).

(For an explanation of ARMs and Balloons, check out Mortgage-x)

Land values in Wenatchee and Chelan are amazing; here are two examples. I am financing a spec home in the Sunnyslope area of Wenatchee, the builder bought the lot for $90,000 in 2005; and the same lots are now going for $200K. I financed a lot purchase on Lake Chelan exactly 2 years ago for $219,000. We just refinanced the lot for the client and it appraised at $600,000 - nice capital gain.

If you need a piece of land right now, my friend Geordie Romer has some nice treed Leavenworth acreage available.

And once you have the land, here is some info on how construction loans work in Wenatchee and Chelan County.

Wenatchee Tour of Homes

2007-04-29T02:16:59Z

Every year the homebuilders in the Wenatchee area put on a Tour of Homes, showcasing some of products of the local builders. This year the event will feature 14 homes ranging in price from the $300s to over $1 million. The tour has been moved this year from July to September and will span 4 days Thurs-Sun Sept 13-16. September is a great time to visit, we average 4 tenths of an inch of rain for the entire month, and the average high temperature that time of year is a dry 75 degrees. Perfect time to see some homes, tour a winery,fish,play some golf and pick up some fresh apples pears and peaches.

The secret is already out that Wenatchee is a great place to live, and we continue to have one of the highest appreciating real estate markets in the country. Come check out the area and see these nice homes and condominiums. As I get updates on the homes, look for them here. Also, when the North Central Homebuilders Association launches their exclusive Tour of Homes webpage, I'll have the link.

One thing I can tell you is the homes are spread on both sides of the valley, so you'll have your choice of views. If you haven't been here, the greater Wenatchee area is where the Cascade mountains meet the Columbia River and the arid Wheat country of Eastern Washington. So as these things come together in one spot, you have an almost infinite array of views, depending on where your home sits. Typical views include snow capped mountains 10 months of the year, orchards (cherry,apple,pear,peach,apricot),vineyards, Lakes, Rivers (Columbia, Wenatchee, Entiat, Icicle), wheat fields, rocky cliffs, desert, forest, or rangeland. You can also have your choice of rainfall because in 25 miles, the average rainfall drops from 25 inches to 8 inches. So if you prefer living in pine trees with a view of a river and 18 inches of rainfall, your Realtor can dial you in to the right location.

Mark your calendar and plan to come on over.

Bad News for First Time Buyers in Washington

2007-04-25T23:31:50Z

Affordable Housing in Washington was dealt a serious blow this week when the Washington State Housing Finance Commission (WSHFC) issued a statement announcing the restriction of funds for their popular House Key program. We have put a lot of first-timers into homes in recent years with this great program, but apparently some other state agencies have used up all the available bond money for other programs.

According to the announcement there is some hope that the full funding may return in the fall. We sure hope so. In the meantime, they have lowered the income limits on who can qualify to 80% of the Counties median income.

One positive and timely note, I understand the US Senate is going to try to push through a bill next week expanding FHA paramaters to allow for 100% financing, that would sure help.