Due to the declining Real Estate market lots of area builders have been sitting on finished homes making payments every month and have been watching their profits disappear. Some Builders have either had to give their homes and lots back to the bank or have depleted all their reserves and are on the brink of having to do so. Where does this leave us in Snohomish County as far as the new construction market is concerned? For the most part it puts the product in the hands of the local banks who made the loans to area builders to buy finished lots and build new homes. The banks are having to take back the homes and lots and turn those non-performing loans into performing loans. How is this possible in this market? Well the answer is pretty easy; it all comes down to affordability and the banks have reduced the sales price of the homes to where they are generating good sales activity. In 2007 Snohomish County was closing on average 310 new homes per month; in 2008 that number slipped 51.5% to 159 homes closed per month and in January of 2009 we saw 69 new homes close.

The upside is we are starting to burn through the existing inventory and the sales rate will start to increase. Local Banks are offering incentives to buyers to purchase a new home and obtain their mortgage through that Bank. The banks are willing to do the loan for a lower interest rate than what a buyer could get elsewhere and therefore they turn a loan on a property that a builder stopped paying on into a loan that the new buyer is paying on back into performing loan. The upside is that people are able to get a great value on a new home. The downside is any builders left in the market find themselves competing against the bank; sometimes the same bank they received their construction loan from. If the existing builders cannot stay in the game they too may have to give property back to the banks. This will eventually wash the market clean and will reset the values on homes and land.

We have all seen the double digit appreciation with real estate over the last decade and now the correction is happening. Historically real estate has appreciated around 4% per year and most local analysts are hopeful that we will bottom out at the appreciation point that we would be at if we had only bee appreciating at 4% a year over the last decade. Some areas in the county will be harder hit than others because of over developing thus throwing the supply and demand way out of balance. Some areas will bounce back faster because of a lack of supply and a healthier demand. Local banks will continue to take losses by selling off new homes they have taken back in hopes to balance out their portfolio. Some banks are being very aggressive at this and some are still in denial of the overall size and scope of what they are dealing with.

The bottom is near and house and land values are resetting; we will see soon what banks and builders are left standing as we start a new chapter in the real estate cycle. If you are a qualified buyer or have ever considered an investment now is the best time to get a new home with a great interest rate to go along with it.

A road maintenance agreement is usually a good thing to have in place if you share a common access with one or more properties. Sometimes the only access to some properties is on a private easement road from a public right of way; this means that the responsibility of the road maintenance falls on the people who have the right to use the road.

A road maintenance agreement will generally contain these items: The legal description of all properties that have the right to use the road, the way that responsibility for repairs is to be shared by the parties, how the costs for repairs will be incurred by the parties, emergency repairs and the consequences for non-participation in the maintenance.

Road maintenance agreements are a great thing as long as all parties involved share in the repairs as spelled out in the agreement. Sometimes a lender on a property with a private road will require that an agreement be in place prior to them making the loan.

So remember when you are looking at property that takes access on a private road easement to check with your real estate agent and check the title report to see if an road maintenance agreement is in place. Reviewing a preliminary title report during your feasibility or inspection period to check for these kind of red flags can save you time and heartache in the end.

• Residential sales volume: off 58% to $2.2 billion
• Residential transactions: off 54% with 6,282
• Mobile Home sales on land: off 65% to $40 million
• Multi-plexes (2-5 units) sales: off 60% to $38 million
• Land sales: off 77% to $137 million
• Commercial volume: off 58% to $483 million
• Average residence: $354,800, off 9%

Existing home transactions sold up 21% in December 2008 vs. November 2008Existing Home Sales (vs. year-to-date 2007)

• Units sold off 53%; volume: off 58% to 1.3 billion
• 3,561 units sold this year vs., 7,544
• Average price off 11% to$368,172
• Half homes (median) sold for more than $329,500, off 6%
• Average $/SF for homes sold: $211.16 (all sales), off 10%
• Best range: $300,001 – $350,000, with 63.4 monthly
• Second best absorption rate: $350,001 – $400,000 WITH 42.1 per month

5.6 acreage parcels sold monthly, off 69% from last year: average price, $187,561, off 11%Acreage Sales (vs. 2007)

• 30.6 per month of existing homes sold, off 57%; average price: $509,132, off 22%
• Median price for existing homes $430,000, off 14%
• 5.6 new single family homes sold monthly, off 56%
• The new home average price: $436,632, off 25%
• Median price for new homes: $450,000, off 22%
• The $/SF for existing homes: $244.18, off 26%
• The $/SF for new homes: 4241.32 off 17% (18% of sales with data)
• Average lot sizes, for existing homes: 4.1 acres, up 11% for new: 2.9 acres, up 5% December’s residential recorded transactions were 55% fewer than last December.

New single family units sold in December 2008 up 58% from November 2008New Single Family Homes (vs. Year-to-Date 2007)

• Average sales price: $355,622, off 13%
• Median sales price: $405,000, off 11%
• New homes represent 24% ofvolume and 21% of units recorded
• 965 sold vs. 2,105 last year, off 54%; volume off 60% to $420 million
• Average $/SF; $195.07, off 22% (10% with data)
• Best range: $300,000 – $350,000 with 13.5 monthly
• Second best range: $350,001 – $400,000 with 12.6 month

Best range: $100,001 – $150,000 with absorption of 3.9 per month, off 69%Subdivisions (vs. 2007)

• The average lot sold for $159,897, off 18%
• Half (median) the lots sold for more than $130,000, off 32%
• 13.1 sold monthly vs. 77.2 monthly last year, off 83%
• The average lot represents 36.7% of the average new home price
• The median priced lot represents 32.15 median priced home

Attached unit sales up 15% in December 2008 from November 2008Attached (vs. Year to date 2007) includes condominiums and townhomes

• Average sales price: $281,348, off 1%
• Median sales price: $252,000, off 5%
• 42% (642 units) new
• 1,515 sold vs. 3,469 last year, off 56%; volume: off 57% to 426 million
• Average existing $/SF, $209.20, off 5%; for new: $206.78, off 5% (10% with data)
• Best range existing: $225,001 – $250,000 with 12.4 per month
• Best range new: $300,001 – $350,000 with 11.2 monthly

Projection

• Relative inventory decreased to 20.4 months, a strong buyer’s market. Price will weaken
• Lower mortgage rates and lower prices could encourage more people to purchase a home. The uncertainty which hangs over the economy and jobs being cut will discourage some.

Posted with Permission by REAL ESTATS: LAM@realestats.netsince 1991 www.realestats.net

Oct. the 3rd the topics are “Taking Actions in your home” and “Business and Community” The Keynote speaker will be Jim Diers a nationally acclaimed community organizer and author. The conference that day features 3 breakout session tracks consisting of “Remodeling Green”, “Greening your garden” and “Sustainable Communities” 

The fun continues on the 4Th from 9:00 am to 4:00 pm with the Green Everett Renewable Living Fair and the Solar and Green Building Tour. There will be a kickoff speech from Everett Mayor Ray Stephenson and the Keynote speaker will be Charles Stephens talking about “On Peak Oil” also “What Communities Can Do to Reinvent our Future”

So come and learn how you can clean up your living space and have a healthier living area as well as how to save energy in your home and community. There will be food and music as well as computer recycling. For more inf visit www.sustainablesnohomishcounty.net This is a zero waste event; we hope to see you there.

In Snohomish County in 2006 we sold 1980 residential building lots and in 2007 we sold 1874 building lots;for the first quarter of 2008 we have sold 47 building lots a decrease of 94.5% 1 year ago. The bottom line is we need to sell off our housing inventory in order to see some lot sales; developers are still asking yesterdays price because they have nothing tangible to compare prices to. The pipeline is also full with roughly 16,000 lots being processed in Snohomish County for a total of 602 plats. All of these plats probably won’t make it through because they were purchased at too high of a price to be in line with todays numbers even though were not sure where that’s at.

The subprime lender meltdown has now put FHA financing back on top and with the buyer assistance programs it could be even better than before. As the lenders get their acts back together and the Snohomish County job market continues to get better we will see more people move into this area. The slow climb out of the slump will help to stablize the market and get us back into perspective as this market correction starts the next cycle.

Please check out the article written by Barb Lamoureux with Lamoureux Real Estate. This was published in The Herald on December 23, 2007.I found it very uplifting and inspiring in contrast to the negative media attention regarding the housing market.

http://www.heraldnet.com/article/20071223/OPINION03/24495727

Barb and many other Real Estate Agents who have been in the business for years know the market and what is really going on.Don’t believe everything you read and hear in the Main Stream Media.Now you know “the rest of the story”.

Ruth Hopkins, Sales Representative

]]> http://www.pnwt.com/blog/?feed=rss2&p=7 3 http://www.pnwt.com/blog/?p=6 http://www.pnwt.com/blog/?p=6#comments Fri, 21 Dec 2007 19:36:50 +0000 admin http://www.pnwtsno.com/blog/?p=6 Hi and welcome to our blog. We plan on using this forum to write about events and issues pretaining to the real estate market in the Pacific Northwest covering a wide variety of topics. We want our site to be a resource that you will reference while making business decisions or just doing research. The bulk of the information is about real estate and the market but we will cover related topics as well so please stay tuned as we grow into our blog and work to serve you better by providing the information you need.

A positive attitude with the desire to give the customers what they want, when they want, has been the key to our success. PNWT is one of the largest title companies in Snohomish Country. Our staff has the knowledge and experience to handle the most difficult transactions. That experience with an aggressive and flexible underwriting attitude has contributed to our success.

Pacific Northwest Title is able to service a client’s real estate needs anywhere in the United States. Our market share and customer base validate our dedication to customer satisfaction.

Chris Schulz, President
Snohomish County