Categoriesreferrals

The “Source” of the Source…

We try be a valuable resource to our clients before, during and after any transaction.  And in fact, we want to be that kind of resource regardless of our business relationship.  It is our philosophy that the best thing we can do for our business is to be of service to others!  We are not the source of all information.  But we do make it our business to be an information hub, or the “source” of the source, if you will, for our clients and friends.

One way we’re doing this is by starting a formal business networking group.  We looked around and decided that Business Networking International (BNI) was a good fit.  We are selecting members that share our business priorities (hard work, excellent service, fun, and a desire to grow business by providing great support for one another).  If you, or someone you know, are interested in growing your business by consciously expanding your networks let us know.  We are seeking new members and we encourage you to visit our group.  We have found it to be fun, energizing and extremely effective.

Most importantly, if you are in need of a referral for a local professional we may have a great connection for you.  You can visit our BNI group website for an ever increasing list of service providers.  Or, better yet, give us a call because our networks extend far beyond the BNI group.

From Arborists to Yoga teachers we’ve got you covered! (We
don’t yet know any zoologists). 
 
 
Warm Regards,

Domenica
Windermere Real Estate

Categorieseconomy, info for home owners

The Politics of Foreclosure

We are all facing the challenges of the economic downturn in one way or another.  Many of our good friends and clients have lost their jobs and are struggling.  Over the last year and for the much of the coming year, a big segment of our work is devoted to providing solid information and expertise to assist with sometimes difficult transitions.  We just want to thank our clients for placing their confidence and trust in us.

Last weekend there was a great program on KUOW about “The Politics of Foreclosure” (to best listen to the program, click on the “download” link under the “Listen to Weekday” section).  We encourage you to take some time and listen to this discussion.  Steve Scher invited a panel of local experts who have very interesting insights into the current state of foreclosures in our area.  The Seattle area is more solid and hopeful than most areas of the country, but it is predicted that our area will still experience a higher than normal level of foreclosures as adjustable rate mortgages and sub-prime mortgages continue to reset. 

The good news:

  • There is more strength in the market in the last few months and more buyers buying homes due to low interest rates and the Federal tax credits. 
  • 87% of the sub-prime mortgages (most risky) have already reset and the remaining adjustable rate mortgages that are due to reset have a “soft landing” with the current low interest rates
  • We have a diverse economy in our region and jobs are a key factor in home sales and overall recovery.

We know that the homeowners who are most at risk are those who bought or refinanced (and maybe took out equity) since the height of the market in 2007.  For these homeowners, they may be upside down on their mortgage if they need to sell because home values have decreased over that period.  The options for loan modification are limited, but work is being done to address this issue.  Our expertise is in selling homes, so we cannot assist you with loan modification questions, but we know of some resources to pass along and would love to learn from you, too!
 
 
 
Warm Regards,

Categoriesfinancing, info for buyers

2009 Year In Review

A recap of the top stories in 2009:

2009-The year of the first-time home buyer
Supported by the tax credit and low interest rates, first-time buyers had an unprecedented showing in 2009 and helped to boost the struggling economy with their aggressive approach to the market.  In the Seattle Metro area, 5950 homes sold in 2009 with an average DOM (days on market) of 59 days.  72% of those homes sold for less than $500,000, 52% sold for less than $400,000 (data from Northwest Multiple Listing Service).

Short sales and Foreclosures
Foreclosures, and the problems created by them, were among the most important stories of 2009.  Coined “toxic assets” these homes were either sitting vacant or creating a flurry of paperwork as first-time buyers and investors competed to find the deal of a lifetime.  Due to defaulting loans, foreclosures in 2009 helped cause the financial collapse, but by year’s end they were appealing to a growing segment of buyers.  Overall, the foreclosure rate in Seattle has remained low compared to the National average.

Low interest rates
The rush to buy was due to a miraculous combination of factors.  Interest rates continued to stay low, setting records as they fell against speculation.  Low priced foreclosures and short sales, and the high inventory of homes on market brought prices down to affordable levels.  Even the luxury market saw deep declines as sellers began driving prices way down.  In 2009, interest rates stayed below 5.5% and in the 4% range for much of the year.

$8000 tax credit and the extended/expanded tax credit
Home sales continued to drop until the Fed stepped in and passed the $8000 tax credit for first-time home buyers.  It took a few months to sink in and then sales shot up around mid-year to their highest levels in more than two and a half years.  Slated to end on November 30, the tax credit was extended & expanded through April 30, 2010 to include homeowners buying their next home, if they’ve lived in their current home at least 5 years. The tax credit is one of the most important stories of 2009.

Below is a graph showing the sales activity for the past 12 months.  The number of homes sold in 2009 is comparable to 2004, as well as median and average price.  The average DOM for the homes sold last year was approx. 78 days, which is skewed high due to the increased length of time to sell short sales.

Warm Regards,

Domenica
Windermere Real Estate

Categoriesfinancing

Changes of “interest” in 2010

As a kick off to the new year we thought we would check in with our favorite mortgage broker and friend, Rob McAllister at West Seattle Mortgage.  For a primer on mortgages and how rates effect payment start out by taking a look at this short 3 minute video.

Here is what Rob has to say about how we got where we are and what we can expect in the coming year:

Forecasting rates for 2010 will be much easier than in past years.   Although I don’t have a crystal ball, I do have very solid reasons to feel certain we will see interest rates go up throughout 2010.  Mortgage interest rates are tied to the bond market and in 2009 the Federal Reserve (Fed) was purchasing mortgage bonds as a means to keep rates low.  The Fed allocated 1.25 trillion dollars toward purchasing mortgage bonds and did a very effective job of keeping rates down to stabilize the housing market.  However, the well is coming dry very soon and the Fed announced last fall that they didn’t plan to allocate any more money toward the bond purchase plan beyond the end of March, 2010. When the Fed departs as a buyer it will leave only the private investors, decreasing the demand for bonds and dramatically bringing prices down.  In the bond world when prices fall, rates go up.

So the big question for me isn’t whether rates will go up or down.  The question becomes when will the end for lower than 5% rates come, and how high will rates go in 2010?   For that I think the answer has already presented itself.  Mortgage bonds fell below a key level of support (200-day moving average) back on December 21st and haven’t been able to push back above this tough ceiling since. I think we will see rates in the 4.75% – 5.25% range for a conventional 30 year fixed loan for another month.  Then sometime in February we will see rates begin their inevitable climb to the mid-5’s and perhaps the high 5’s by late March.   Things could certainly get worse given the concern about inflation and the amount of Treasury Bonds that are being issued to fund the Federal Budget deficits.  If the Fed begins to talk about concern over inflation this could push rates up over 6% very easily by the middle or end of the 2nd quarter.  I do think the Fed will keep their Federal Funds rate at its current .25% through most, if not all of 2010, but the Feds comments about inflation may still have an impact on longer term bond performance; including mortgage bonds. 

So buyers and folks looking to refinance or buy a new home should take a hard look at their plans if they want to lock in the low interest rates that we’ll likely not see again in our lifetime.  Keep in mind that just 20 years ago (1990) the average interest rate was 10.13% with 2 points origination (national average).  Though I don’t see rates rising to 10%, I do think we can expect interest rates to go from the low 5’s early this year to the mid-6’s by the end of the year.  It’s going to be a volatile year for mortgage bonds, and thus interest rates, so you will see days that swing higher and days that swing lower.  Overall we will see them trending higher, so don’t wait to act if you plan to buy a house in 2010… after the 1st time & move-up buyer tax credits expire in April things may look a lot different. 
 
 
Warm Regards,

Domenica
Windermere Real Estate