This Week: The median single family home price in Bellevue this week is $799,974 With inventory trending up but days. With inventory trending up but days-on-market trending down and the Market Action Index essentially flat recently, conditions don't seem to have strong up or down pull.
PRICE:The market has been on a downward trend recently and this week, while essentially flat, doesn't break us out of that cycle.
The Market Action Index answers the question "How's the Market?" By measuring the current rate of sale versus the amount of the inventory.
Supply & Demand: Local conditions are currently quite strongly in the Buyer's Market zone (below 30). The 90-day Market Action Index stands at 9. With several months of inventory available at the current sales rate, buyers should find ample choice. (Index above 30 implies Seller's Market conditions. Below 30, conditions favor the buyer.
QUARTILES: Investigate the market in quartiles -where each quartile is 25% of homes.
<="<">Most expensive 25% of homes
<="<">Upper-middle 25% of homes
<="<">Lower-middle 25% of homes
<="<">Least expensive 25% of homes
<="<">
<="<">In conclusion it is no surprise that we continue to be in a strong buyers market. With the home prices in Bellevue starting to show signs of stabilization, I recommend buyers get pre-approved and begin to weed out the homes that don't match their criteria. The First-time home buyer credit is only available on homes that close on or before November 30th.
The topic of hot debate, what's the difference between a short sale and bank owned property (REO)?
This is a great question. There are two big differences. A property being sold as a Short Sale is still owned by the current home owner. They are in default on their mortgage and instead of being foreclosed on and ruining their credit more, they ask the bank to accept a sale and take less then what is owed to bank, it's the banks choice to take this or not and some banks are not offering this option anymore. A Bank owned property or REO (Real Estate Owned) is a property that has already been foreclosured on and has been taken back by the bank and being sold by them.
I have put together a pros and cons list of purchasing a bank owned and short sale property in and around the Orlando area.
Short Sale PROs:
From my stand point there are very few pros
1. These homes are often times in move in ready condition (home owner often times still live there)
Short Sale Cons:
1. Average time frame it takes to just get a response to an offer: 3 months but can take well over 6 months
2. The price you see has nothing to do with the price the bank is williing to accept. Hopefully the agent did their home work, but if an appraisal comes back $70,000 higher then the list price, be sure the bank will want that appraised value, they have no incentive at this point in the game to sell the property for less then what it's worth.
3. There are often times more then one loan on the property meaning that the short sale process involves more then 1 bank, double the time and work.
4. Since we are in a declining market the average depreciation right now is 1% a month. So lets say it takes 4 months to get a response to an offer you made back in February. You cant change your offer price and now the property might worth 4% less then what you offered. Not such a good deal anymore.
5. Sellers usually have no money to make repairs to a home and the bank isnt going to either.
Bank Owned Pros:
1. Response time. Banks normally respond to your offers in 24-48 hours.
2. Price is generally below market value, sometimes way below, meaning you truly get an outstanding deal.
3. Most times your appraisal will come back at asking price or sometimes $30,000 higher, meaning instant equity.
4. Even though properties are AS-IS you can still get new roofs put on and major FHA items taken care of before closing.
5. The price on the listing is a price the bank will accept no guessing.
Bank Owned Cons:
1. Some bank owned homes need TLC - New flooring, paint or missing appliances and fixtures that were taken out by angry home owners.
2. Since the prices are great there are often times bidding wars, so be ready. Homes normally have multiple offers on them within the first few days of entering the market.
Im sure each agent will have their own take. I started with short sales back in 2006 when very few of them were being done and things were different but as the market started to slide so did the process and my view point of them, so I got into listing REO properties for the bank and selling them to my buyers. I have the knowledge and experience of working both sides of these transactions and feel I come from a point of experience and not just perception
In this weeks Real-Time Market Profile, the median single family home price in Bellevue this week is $722,250. The 730 homes have ben on the market for an average of 170 days.
Inventory and days-on market are climbing, while the Market Action Index has been flat recently. The trends point to a weakening market.
To get a tightly targeted understanding of homes in the market, I break each locale into quartiles. Each quartile is 25% of the homes listed. They are broke out as follows:
Most Expensive 25% of homes
Upper-middle 25% of homes
Lower-middle 25% of homes
least expensive 25% of homes
I will refer to the quartiles in the trend graphs below.
PRICE
The market seems to have paused around this plateau. The Market Action Index is a good leading indicator for the durability of this trend.
QUARTILE PRICES
Often, I find insights by watching pricing trends within the quartile segments. Price weakness is evident across the board. All four quartiles have been in price decline in recent weeks. Look to the Market Action Index as a leading indicator of the bottom of the market.
INVENTORY
Inventory has been climbing lately. Note that we had a dip in January and are adjusting for seasonality.
MARKET ACTION INDEX
Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustaind changes: if the index falls into the Buyer's Market zone for a long period, prices are likely in for a downward correction.
The bellevue market is currently quite strongly in the Buyer's Market zone. The 90-day Market Action Index stands at 10. With several months of inventory available at the current sales rate, buyers should find ample choice.
The market has settled in at a relative stasis in inventory and sales conditions. It's a Buyer's market that has seen prices trend lower. Expect that consistent up trends in demand will be required before price trends change significantly.
For and in depth analysis of how your home stacks up please sign up for a FREE Market Snapshot.
A fellow REALTOR asked me a question yesterday about sorting his database. He was wondering if he should prune down his database. I was in the middle of my day and didn't immediately shoot back a response. In fact I sorta forgot the question until about 10:15pm. I am brushing my teeth mindlessly reviewing my day when it struck me. Read the Toothbrush Epiphany below:
"Ok don't think that I am I weird..(I guess you can think that if you want) I was brushing my teeth and thinking about your question. I myself have over 260 active names in my database. I was wondering ...do I have too many? Why am I wasting my time and resources.... That is when it hit me. In today's market we are have to reach further and go deeper in relationship to get less that in the last few years. Isn't that true? There are less transaction ergo less referrals. Why would you eliminate your referral base? Now, if you sincerely can't see yourself enjoying calling and individual then by all means DELETE. By my philosophy right now is more and develop deeper relationships with as many and you can. Know that you won't see as many referrals as we saw in the past, but that the relationships matter. Be sincere in your interest and courteous in your request and let them know you're not just showing up for a commission check but here to advise them and their friends, family and colleges in these tough economic times."
Here is my nod to the opportunity for buyers in today's marketplace. I have decided that I don't want to participate in the conversation that is always being had. Is now the best time to buy, where do you see home values, etc. I know that for many out there it has become a conversation that they just can't stop having. Here is my official stance:
If it's the right time to buy or sell a home you want someone you can trust to help you through the process.
True home prices are still falling. When will we hit the bottom, I just can't say. Should I really be admitting that I don't know something. I believe that it's fair to say nobody knows when the market will turn around. The only way we will know is when we are looking in the rear view mirror. Along the lines of market commentary I will post a copy of a email that I received from Gerald & Linda Carruthers Home Loan Specialists from Countrywide Home Loans
An Opportunity of a Lifetime Warren Buffet says, "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." While Mr. Buffet was writing about buying stocks, the same can be said for housing today. Housing issues have permeated the economy both locally and nationally. This week, one index that tracks housing prices, S&P/Case-Shiller Home Price Indices, indicated home values fell the most since 1968, declining 18.5% in December from the year before. Looked at from a different perspective, this means home prices have fallen to levels not seen in six to twelve years, depending on individual markets. Following the Case-Schiller report was the report from the National Association of Realtors (NAR) recently. The NAR reported that home prices for the month of January fell by 14.8%. The bright spot though in contrast was that the number of homes sold in December increased. Home buyers from coast-to-coast have been buying distressed properties at the rate of 45% of total sales. Recognizing that now is the time to buy, everyone - from those looking to purchase their first home to seasoned real estate investors - is buying homes today. Bruce Norris, the head of an investment group in Southern California, expects to buy at least 100 homes this year as, "This is the buying opportunity of our lifetime."
Fundamentals Point to Strength The basic fundamentals of the housing market point to higher prices ahead. Almost half of the properties being sold today are existing homes that are either owned by banks or homes on which banks are accepting short sales, allowing them to be sold for less than what is owed. New homes or homes under construction are near all-time lows. The country's demographics point to more potential buyers coming into the housing market than projected inventory in coming years. This all points to higher prices on the horizon as demand will be greater than supply. This is supported by the fact that the inventory of unsold homes fell 2.7% in January.
Why Buy Now? Three very important reasons to buy now are:
· Interest rates are near all time lows;
· Home prices have declined to levels not seen in years; and
• Qualified first-time home buyers are now eligible for up to an$8,000 tax credit.
Lower Prices Don't Always Equate to Lower Payments One final point to consider. Even if you believe that home prices will continue to decline, it's very difficult to believe that interest rates will remain at these low levels. Did you know that even if home prices were to decline 10% but also during that time, interest rates available for home loans were to increase by 1.00%, your monthly principal and interest payment would actually be higher? It's true. So, if you are thinking of buying or the end of your lease is near, get busy and get in the game. To quote Mr. Buffet again, "If you wait for the robins, spring will be over."
I am not advocating that it is the best time to buy. As a matter of principle, I don't want to go there. There are personal factors that may effect your decision one way or the other, how is your job, do you have enough reserves built up, have you saved you down payment, are you planing a move in the next 3 years. This is why it is so important you to consult a trusted adviser to determine what your priorities are.
If your ready to make that move and have questions give me a call I am happy to help!
Many of my home sellers have asked me what expenses will be incurred in the sale of their property. I can answer that question pretty quickly. Commission, Excise tax (1.78% in Washington State,) Title and half of Escrow fee. All of this seems pretty clear but I always notice a bit of confusion appear at the mention of Title Insurance. I explain that this is required to ensure you have right and ability to sell the home. Again I am met with confusion. I asked Lisa Privette my Title Rep for Commonwealth to give me some examples that I can share with you more about how and why title insurance is necessary. Here is a quick story of how no two title companies are the same
"Recently, we had a situation where the buyers went in to sign in escrow and discovered that a judgment had been put on the title a month prior. In order to close, everything on the title must be cleared. The buyer was unable to gain control of the property on that day. This was caused by the seller's agent not choosing Commonwealth for title. Originally title was opened by another title company but when it comes to closing the transaction Commonwealth was title company working the escrow. We had not received notice of the judgment. If the title had started through us, this would not have happened. We have what is known as a "fall-out" plant. What that means is that once title is opened with us, we continue to research it until it is closed. The title may be clear when it is first opened but if something shows up on the title, Commonwealth will find the new judgment or lien and notify the agent immediately. The agent then works with the seller to clear that off so they can have a smooth closing. The lesson to be learned here is that it is very important to make sure you know that the title company you are working with is a "fall-out" plant and continues researching your title. It is important to talk to your agent to ensure that they are looking out for you and being consistent with their title company. I may determine if you are able to either give or get keys on your scheduled closing date." - Lisa Privette
I have a great relationship with Commonwealth, they are professionals at all they do. All my sellers enjoy the security of knowing they will be able to get their moneys worth when it comes to the cost of purchasing a title insurance policy.
It seems that there may be a little something extra in my stocking this year, as the good news starts to show. Last Sunday's Seattle Times started my Christmas cheer by declaring that, "Opportunity Knocks!" With plenty of inventory and mortgage rates low Ron Lieber summates "Five or ten years from now.....we will look in the rearview mirror and realize that we missed a golden age for first time home buyers." The sugar plums are dancing in my head! I have always felt that buying a home shouldn't be attached to market ups and downs. The buying process is one that is about the home, not the investment potential.
However, with all that is happened this year, the Seattle area real estate future looks great. This was echoed in Forbes.com recent article titled "America's Best Long-Term Real Estate Bets". It discusses how more stringent building restrictions and better growth management plans prevents the market for overbuilding in boom times. I am not a betting man, and I like the term "long-term". I believe it is important for buyers to have a plan, save for a down payment, and don't buy a home that will stretch your budget. In addition, In Rhonda recent post at the MortgagePorter.com Rhonda outlines the feds actions and how they will effect long term interest rates. Right now we are seeing 4.875% rates on 30 year fixed! Ho Ho Ho!
Through the ups and downs of this tumultuous market one thing is certain and it's why I love Seattle area! We have diversity. Diversity in cultures, diversity of economics and, diversity of ecosystems. We have rain, sun, mountains, and the ocean, need I go on. All these things will continue to make this area a great place to live and oh yea....buy real estate!!!
In a recent artilce by Dorothy Pomerantz, Forbes.com Nov 3rd, 2008 titled: Real Estate Markets Most Likely to Rebound "The best cities in which to invest are those that are considered gateways to international investment, have vital downtowns where people can forgo cars, and don't have a glut of condos or office space. These traits landed Seattle the No. 1 spot on the list. No city scored above a 6.15 on a scale of one to nine (one being an abysmal place to invest and nine being excellent)."
It is hard to control our excitement, let's just hope that once we hit the bottom we bounce!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
This is a great question. There are two big differences. A property being sold as a Short Sale is still owned by the current home owner. They are in default on their mortgage and instead of being foreclosed on and ruining their credit more, they ask the bank to accept a sale and take less then what is owed to bank, it's the banks choice to take this or not and some banks are not offering this option anymore. A Bank owned property or REO (Real Estate Owned) is a property that has already been foreclosured on and has been taken back by the bank and being sold by them.
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