"All Things Edmonds" Blog

Republicans on the House Financial Services Committee have drafted legislation that would raise the minimum down payment for FHA mortgages to 5% and cut the maximum FHA loan amounts in many markets. The bill looks to be more of a philosophical response - rather than a fiscal one - to the question of how much the federal government should be involved in the housing market.  Ironically, the program originated during the Great Depression of the 1930s, when the rates of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance. So, its contraction in a similar economic and housing environment today is worthy of "factoid" status.

FHA loan limits are already set to decrease in various markets beginning in October 2011. If this bill passes, those limits will come down even further.  But I'm not here to state that loan limits are, or are not, at the right levels. Quite frankly, the only market I service and know well is Seattle so speaking to the limits of other markets would be spurious.

However, I know that there are many buyers who can only purchase with the assistance of an FHA-approved loan.  There have been many who have made the argument that these limits should go up because too many people who can't afford houses are buying. This argument is based more on anectdotes than real life. We should remember that most home-buyers who are FHA-approved still have to demonstrate an ability to pay and have decent credit ratings.  FHA has two distinct advantages that a conventional loan cannot provide certain buyers: first, it allows those buyers the ability to get a home loan without a significant downpayment that most conventional loans require; second, it provides for better interest rates than the conventional lender, which in turn makes the home purchases (more) affordable.

And so before you make final judgment on certain people who have good jobs and credit - but not quite the tens of thousands often required to get into a home - don't deserve an opportunity at homeownership, keep in mind that many of those would-be buyers are likely to be the ones looking at your home you've got listed.

Enjoy the sun!

Casey
Edmonds, WA

Earlier this week I posted some new data that showed that 30% of home sellers lost money in March '11.  The fine folks at NPR recently asked a Juliard opera performer to sing the home prices from 2001 through 2011.  They charted national home prices from the well-known Case-Shiller Housing Price Index (see attached graph) into musical notes.

You can hear the NPR story here.  Happy reading.  Or listening.

Zillow just reported that one-third of all home sales in the greater Puget Sound region (Snohomish, King & Pierce Counties) lost money in the sale of their homes.  That number was 22% in March '10. If it's any consolation, that's still less than the national average of 37%.

Zillow also reports that the median price of all homes (condos, townhouses, etc) was $259,200 in the same month.

My own analysis of MLS data shows that in Edmonds, 70 homes sold in March '11. The average sales price was $427,849 and the median price was $353,750 with an average of 115 days on market.  These are very healthy numbers compared to either the country or greater Puget Sound. In fact, in an earlier post I indicated that the single family housing market for Edmonds is very healthy -- to the point of almost becoming a balance market (neither a buyer's nor a seller's market).

It's an age-old question: is it better to rent or buy?  The question has many facets and can be complex to answer depending on an individual's situation.  But generalizations are sometimes useful to view market-wide trends.

I ran across a news story that reported that it is cheaper to buy than it is to rent in 39 of the 50 largest cities in the US. The report was issued by real estate site Trulia. Their rent vs. buy index compared the median list price with the median rent on two-bedroom apartments, condos and townhomes as of 4/1/11.  "With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying," said Ken Shuman, Trulia's spokesperson, in a statement.

I also found a rent vs buy tool that the New York Times newspaper put together. The tool is below and you can click on it to get to the original article which allows you play with some of the tools and run different scenarios.

Keep in mind that this is a purely theoretical (and economic) tool which does not account for intangibles as pride in homeownership, stability, etc.  I would also point out that it is almost always beneficial to purchase a home if you want to "settle down" in the order of many years (10+).  The current housing slump aside, homes willl likely appreciate over the long term.

New stats came out this month that show our neck of the woods is still suffering from economic jet lag.  For the Edmonds/Lynnwood/Mountlake Terrace neighborhoods, housing sales volumes dropped from 158 homes sold last September to 126 this September, for a drop of 20.3%.  Year to date, though, we've actually sold more units than last year at the same time.  But it might still be too optimistic to say we're out of the woods based just on that statistic alone. After all, the median price of $295,000 for Sept '10 is still 2.5% lower compared to last year ($310,000).  Oh, and it's taking twice as long to sell real estate than it did last year at this time.

On a bright note, these numbers are better than other areas in Snohomish County - like Everett, Mukilteo, Mill Creek, Monroe, Marysville & Arlington/Lake Stevens.

Statistics aside, I still see the light at the end of that very long tunnel now. Buyers are ever so slowly getting back into the market with record low interest rates and affordable home prices.  If you're considering buying OR refinancing, here's a nice tool that will help you comparison shop and figure out payments. No surpise: it's from Google (again).

Casey Bui, REALTOR
Edmonds, WA

Here are some statistics courtesy of PMI and the National Association of Realtors. 

These housing and mortgage data may be a bit much but it gives you a good snapshot of what the national market looks like today.

You can follow this link for regional data.

Casey
Edmonds, WA

This is just a quick update to let you all know how we're doing in our little corner of the world.   I'll try and provide these updates monthly and make them super easy to read in 10 seconds via bullet points.  Charts are courtesy of Bill Conerly.

Bottom line?

• Big business if pretty confident right now but small business and consumers are not.
• The cost to borrow money is still ridiculously low.
• WA state poverty is lower than national average (thanks to a stronger state economy).
• Employment growth has actually been positive in Tri Cities area (thanks to federal money) but still lags everywhere else.

Casey
Edmonds, WA

You may have heard that mortgage lenders like Bank of America have started to freeze their foreclosure processes because of lax protocol.  In most, if not all, of the cases uncovered thus far, it's likely that the borrower was indeed behind on payments. That's not the question at hand. The problem is that the lenders haven't bothered to follow their own rules on the process of getting to actual foreclosure.  If borrowers are required to dot their i's and cross their t's, well it makes sense that the lenders should do the same.

But keep in mind that these lenders have a massive back log of delinquent properties to process. I've heard that Bank of America has 1.5 million homes currently foreclosed upon already.  That's a big number.

Here's an article on the national impact of these ill-processed foreclosures.

Casey
Edmonds, WA

The Seattles Times is reporting today that the number of homes sold in King County was down 18% from a year ago.    I decided to do some quick number crunching and found that here in Snohomish County, sales volume has dropped even further: 25% (from 635 homes sold in 2009 to 476 this year).  That number is three percentage points higher if you account for condominium sales as well.

Our fair city of Edmonds did far better, closing just 13% less homes August '10 (39 sold) than in August '09 (45).

Here's a quick breakdown of how each neighborhood in Edmonds did last month (compared to year-ago figures):

• Edmonds Bowl: no change (4 sales in August '09 & '10)
  
• 5 Corners: +300% (3 sales last month vs. zero in August '09)
  
• Downtown: +200% (2 sales last month vs. zero in August '09)
  
• Edmonds Comm College:no change (zero sales in August '09 & '10)
  
• Esperance: +100 (1 sale last month vs. zero in August '09)
  
• Lake Ballinger: no change (2 sales each in August '09 & '10)
  
• Meadowdale: -33% (6 sales last month vs. 9 in August '09)
  
• Perrinville: no change (zero sales August '09 & '10)
  
• Seaview: -71% (2 sales last month vs. 7 in August '09)
  
• Westgate:+100% (2 sales last month vs. 1 in August '09)
  
• Woodway: +100% (1 sale last month vs. zero in August '09)
  
• Yost Park: +100% (1 sale last month vs. zero in August '09)
  

These numbers will vary slightly as sales depend on agent designation of neighborhoods.

Edmonds, WA Real Estate | December 2009 Edmonds Home Sales Report

Edmonds Real Estate | December 2009 Homes SOLD

There were 44 homes (houses & condos) sold in December 2009 for Edmonds, WA (actually recorded with the Snohomish County Recorder's Office). In this monthly Edmonds real estate update blog, I'll summarize the market and point out any highlights worth noting. Let me know if you have any questions or are thinking about buying or selling into Edmonds or the surrounding areas. If you want to learn more about how we transfer property in Washington State a really great site to visit is the Escrow Association of Washington site. There you can find definitions and explanations of the home buying process for Edmonds, Washington.