Northwest Living | Bellingham Real Estate Market

Puget Sound, WA - When the U.S. housing market hit the skids, home builders in our area that thrived by offering large homes and expensive amenities began to rethink their home designs with an eye toward making smaller, less costly homes.

Three years into the downturn, that trend appears to be intensifying, as many builders scramble to make their wares palatable and affordable to new home buyers and compete with a market full of resale homes and deeply discounted foreclosed homes also on the market. The problem with builders shrinking their floor plans, is the basic fact they actually make less money on the new home because hard costs like lot prices, permit fees and sub contractor prices haven’t moved much at all. 

Puget Sound home builders are taking steps, as the industry seeks to stem losses due to falling home prices, tighter mortgage lending standards and skittish buyers. New home sales fell in August to the slowest pace in 17 years, while the median sale price fell 5.5 percent, but on the plus side sales were up 5.5 percent.

The trend in smaller homes is a reversal of more than two decades of expanding floor plans, during which median size single-family went from less than 1,600 square feet to more than 2,200 square feet.

That steady drive by home builders to deliver increasingly bigger homes peaked during the housing boom. Derided by some as McMansions, these super-sized homes packed with amenities helped drive up home prices even more.

Beyond competing with preowned homes on the market, declining home prices have also made it less profitable to build large homes. Builders need to factor in much more into the equation of building and marketing a home a lot more today than in the past ten years.

The only way to respond to the lower price environment … is to make the home smaller.  As you kind of reduce the floor plan size, we’re getting back to more the way things were historically, kind of undoing the excesses, not just from a price perspective but home size and fewer amenities.

In my Bellingham real estate market, a builder I work closely with, had to re-evaluate the size of homes and amenities in them to make them more affordable towards their demographic market of empty nestors and retirees. After a thorough evaluation of their market they have made the required adjustments to meet the price point that would attract those buyers, without sacrificing quality.

In some markets of Seattle I’ve seen homes, while smaller, feature large open spaces, a so-called great room often linking the living room and dining room area that might have previously been walled off. The homes also have a two-car garage standard and storage space.

Sometimes the builder has to look beyond just the square footage and instead focus on the utility, efficiency and flexibility of the home. It’s all about creating a niche and differentiating your home from the competition. You could have a three-bedroom, 2,500 square-foot single-story home and all you had was wide hallways and bigger rooms. It wasn’t really giving (buyers) the utility.

The bottom line is that builders need to first get back to the basics: What people can afford is the type of home they’re going to buy. If you can add a few extra items to set yourself apart and still have decent margins on the sale, then consider yourself lucky.

Builders will continue to build smaller houses and that’s a function of price, because financing is more difficult to get today.

Home buyers’ tastes, possibly influenced by tighter mortgage lending, are also helping drive the changing trends in new homes.

Big formal entries, high ceilings and lavish light fixtures are also not as high a priority among many buyers these days. In the mid to lower range newer homes, fewer buyers are opting to upgrade from a standard laminate kitchen counter top to a granite counter top.

Builders have also had to downgrade the level of amenities and finishes built into its showcase homes, to reflect the base price of homes.

With move-up buyers, for a long time everybody wanted the biggest house on the biggest lot with the best view and all of the options. What we’re seeing today are instead homes being built instead with a lot fewer options and the size of home considerations.

Jerry Campbell - Muljat Group - Bellingham WA - Ferndale Homes For Sale

Bellingham, WA - Some home sellers share the belief that when fall arrives and the leaves start to come down, so should their For Sale signs. But that could actually be a mistake for a home seller to remove their home from the market.

Buyers don’t have a month when they say they’re going to buy. They buy when they need to buy, and that need happens 12 months out of the year. Fall often brings out the more serious lookers who need to find a home right away. There is most definitely less competition because many sellers aren’t willing to stick it out through fall and winter.

The other thing to think about is the fact that as home values slip in our area, sellers run the risk of actually selling their home at a lower price for their home if they take it off the market now and re-list it in the spring instead.

However, the fall is a great time for home sellers to regroup and think about things like the selling price of their home and whether it is competitive. Take a good hard, honest look at what’s on the market right now. You want your house to be the best value. You have to price things realistically because of this buyers market that we are stuck in.

Sellers should also use the off season to their advantage. Putting up fall decorations — like a wreath on the door. Setting a few mums on the porch can bolster a home’s curb appeal.

Fall is also an ideal time to get rid of clutter and embark on home-improvement projects neglected during spring and summer. Home sellers may want to update the carpet, paint some interior rooms and do a thorough cleaning. In pricier homes, sellers should consider higher-end upgrades like adding granite counter tops, wood floors and ceramic tiles.

Think about hiring a professional home stager to help decorate your home, eliminate some clutter, and  rearranging furniture is also a good idea. Home stager are in my opinion one of the best investments a home owner can pay for to make sure they get the most value out of their home. Since it is the fall consider adding seasonal flowers, decorations, and maybe even select a new wall color and improve lighting throughout the house.

A stager is more important than in the past to rise to the top of the competition. You might as well keep the house looking new, even while living in it. And besides, you’ll get to enjoy the new life your stage home puts out until it sells.

Jerry Campbell - The Muljat Group - Bellingham WA - Bellingham homes for sale

Sales of previously owned U.S. homes rose 5.5 percent for September 2008. This was the biggest gain since July 2003, and the inventory of unsold homes fell 1.6 percent. Sales additionally were up 1.4 percent from September of 2007, the first year over year increase in three years. Hopefully this is a sign the housing market could be stabilizing and we can finally reach a bottom. Were hopeful in my own local Bellingham real estate housing market. 

September sales of existing homes rose to a 5.18 million unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate. The positive number is important because this is the highest number of sales since August of 2007. In a real estate market like this, a .25 (25,000 units) above the expert’s expectations is a nice surprise to the upside.

The increase in sales was spurred, in part, by a rise in foreclosure and other distress sales in regions of the country hard-hit by the ongoing housing downturn. The foreclosed units are making it’s way through the market & the faster we can get these through the market the faster we can get back to a market resembling something more normal. However, 82% of the sales were homeowners that were living in their homes and that’s a very positive sign.

Leading the way were home sales here in the West recording a 16.8 percent jump. The Midwest saw an increase of 4.4 percent and the South saw a 2.2 percent rise. In the Northeast, sales fell 1.2 percent.

In some regions like the West, the lower prices are seeing buyers return to the marketplace. This was a nice jump and hopefully this trend can continue because the first step in stabilizing the housing market is an increase in home sales.

A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices. The number of homes unsold in the market also went down last month which was another good sign.

However, For the 12 months ending in August, U.S. home prices fell 5.9 percent, and the cumulative decline since the April 2007 peak is 6.5 percent, according to the Federal Housing Finance Agency’s House Price Index. The closer we are to a bottom we should start seeing more and more signs like this with buyers getting back into the market place. Via CNBC News.

Jerry Campbell | Muljat Group | Bellinghma WA | Bellingham WA Real Estate

The financial markets are shrouded in gloom, but I’m still bullish about the real estate market. You can’t make money investing unless your willing to take risks along the way. The way to make money in this real estate market is to buy towards this bottom and then hold onto your real estate investment for better markets in the future.

With all the financial upheavals of the past two months, does it still make sense for the average investor to buy residential real estate? It’s a tremendous buying opportunity. Unless you need liquidity, real estate is the best long-term investment. I like the great leverage it gives you. You can live in this investment and enjoy it. If the numbers work out, you can eventually rent the home and purchase another one as your primary home.

You might be wondering whether you should liquidate stocks to invest in real estate, under the current scenario. I have very little money in the stock market myself. It’s way too volatile for me, and who knows when it will bottom out and get back to normal. If you have patient money, real estate gives you the ability to ride out bad times.

I think the current downturn in the real estate market should bottom out in 2009 or early 2010. There will be more job losses and increased inventory that will further depress home prices. This means if you’re buying a house, your going to find some good bargains along with great interest rates as well. I’ve seen some good buys in our Bellingham real estate market lately, with buyers snapping up some of these bargains.

Before you make an offer on a place, do your homework and find out what comparable properties are selling for. Consider negotiating the price down a little since it’s currently a buyers market. You should be able to get at least a small discount off the price or some favorable terms. Make sure to hire a real estate agent as a buyers agent to assist you.  Don’t let your emotions rule you. If you don’t have a deal, sometimes you just have to walk away.

In this type of real estate marked the question comes up about making money on current foreclosures and flipping houses. I personally don’t think this is the time to buy with the intent to flip a house. I would instead recommend buying a home you’ll enjoy living in for the long term or buy, rent and hold for several years or more.

Another end of the market to look at are the foreclosures in an area you want to buy a home. When it comes to foreclosures though I would probably stay away from luxury properties, because they won’t command enough rent to cover your equity investment. I would buy mid-priced homes in areas with good schools, transportation and job growth. When the market improves, your tenants may want to buy the property.

One of the biggest mistakes buyers make in this market is becoming too focused on being victims, rather than being opportunistic. The savvy real estate investors will be the people making a lot of money from real estate investments made during this downturn. When the market turns around, and believe me it will, the ones that took the risk today will profit from their investment years from now. You need to think: Why not me?

Jerry Campbell - Muljat Group - Bellingham Homes For Sale

This month we are featuring this brand new two story home in the new community of Liberty Park in North Bellingham. The home is located at 1412 Patriot Lane, which is just inside the city limits of Ferndale, WA.

This home features a covered front porch with a concrete aggregate base, nice rock finish touches, and detail trim finishes giving a taste of that Northwest look. Yard is completely finished w/turf sprinklers, lawn & landscaping. The back yard & garage side yard are already fenced. 

The interior of the home is very comfortable and inviting with high ceilings in the great room and is very elegant & full of custom features throughout. The kitchen has hickory shaker cabinets & large pantry, granite counters; hardwood floors in kitchen, nook, entry & half bath, slate in master bath, vinyl in bath 2 and laundry rooms; & fully wrapped windows.

The home was built by local custom home builder Roosendaal-Honcoop Construction who have been building homes in the Whatcom County area since 1979. You can also see more homes being built in their new homes community at Liberty Park Homes.

Jerry Campbell - Muljat Group - Bellingham, WA - Ferndale Homes For Sale

A Realtor in Sarasota, Florida is in the midst of a legal battle launched at him by the Sarasota Association of Realtors®, (SAR) where he is an active member, because of the use of “mls” in his website address.

According to Marc, the use of “area mls” in a Realtor’s website address was widely recommended in a 2002 an article written by “Mr Internet” in a publication by the National Association of Realtor’s® (NAR).

Marc Rasmussen, a Sarasota Real Estate Agent, purchased his website address “thesarasotamls” back in 2003 based largely on the advice he read in the article and when marketing real estate on the internet was a new venue for real estate agents.

Over the last five years Mark worked hundreds of hours and spent thousands of dollars creating one of the top Sarasota Real Estate websites. For all his hard work he had achieved high rankings in most internet search engines for Sarasota, Fl.

A recent change in Article 12 of the National Association of Realtors® Code of Ethics, now allows local Realtor® Associations at their sole discretion to determine if their members are permitted to use the term “mls” regardless of how long they have used it and especially with disregard to the recommendation featured in the Mr Internet article.

It should be pointed out that “mls” is not a trademark of any Realtor® Association, instead the trademark for Major League Soccer (MLS).  The public has also come to know mls as a common everyday term for real estate property listings.

Morgan Carey, owner of Real Estate Webmasters and web designer for Marc explains this situation in detail on his blog. Read more on Marc the Realtor® vs the Sarasota Association of Realtors® on REW’s blog. It will be interesting to see what happens in this case and if it sets precedence for MLS’s across the country.

Read more linked articles about this interesting battle over the use of the word mls:

• Inman News - MLS Name Dispute Lands in Court
• Eric Blackwell -  SAR: The Real Cybersquat
• Ryan Ward -  Sarasota Association Slaps one of Their Own
• Judy Orr - Sarsota MLS attacks Its Own Member 

Jerry Campbell | The Muljat Group | Bellingham WA | Bellingham Real Estate

Former Federal Reserve chairman Alan Greenspan said on Friday Oct 10, that the U.S. housing market should begin to recover in the first half of 2009, according to an article he wrote for Emerging Markets magazine.

Greenspan wrote that “the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw as frightened investors take tentative steps toward reengagement with risk. More conclusive signs of pending home price stability are likely to become visible in the first half of 2009″.

I would have to agree that once the housing market finds it’s footing, financial markets will be able to tackle the main issues related to this credit crisis. The question remains though on how much overall deleveraging is going to be required to get investors to again become committed holders, at modest interest rates, of the liabilities of the world’s financial institutions.

It’s at least assuring to know that Alan Greenspan, one of the smartest money managers in the world, sees an end in sight to this tail spin our economy has been in lately. I think the Northwest will be one of the first areas to recover since we had far less to do with subprime loans than most areas of the country.

Jerry Campbell - Muljat Group - Bellingham Homes For Sale

Whatcom County - With the fall season brings beautiful colors in our local trees, cooler temperatures, and of course pumpkin season and Halloween. Those looking for something more than just picking up a pumpkin or two from a local Cost Cutter or Haggen’s might want to consider a local farm experience to pick up the perfect pumpkin. There are lots of local farms and farm stands to choose from when it comes to picking up the right Pumpkin. We compiled a list of some great options for this fall or any year in the near future.

My family has enjoyed visiting most of the places on this list including Stoney Ridge Farm, BelleWood Acres, and Boxx Berry Farm. Make sure to inspect the pumkins well and make sure there are no soft spots. You don’t want that chosen pumpkin to rot before Halloween after all. Thanks for visiting Northwest Living and we hope your pumpkin patch time is enjoyable.

Jerry Campbell | Muljat Group | Bellingham WA | Bellingham Real Estate 

Pending sales of existing U.S. homes unexpectedly rose in August to the highest gain in over a year, this is according to data from the National Association of Realtors. The NAR Pending Home Sales Index, based on written purchase & sale contracts, rose 7.4 percent in August to 93.4 on pent-up demand as affordability improved.

Most of the recent turmoil in the national & global financial markets have escalated since the August pendings, so I’m sure that number will actually have to be revised depending on how many pendings fail to close.

August’s reading was 8.8 percent higher than a year earlier and was the highest since 101.4 in June 2007. Economists in a recent poll had expected sales to drop by 1.8 percent.

“What we’re seeing is the momentum of people taking advantage of low home prices,” NAR’s senior economist Lawrence Yun said in a statement.“Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” in early September, he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.” Pending home sales gained across all regions in August: up 18.4 percent in the West, 8.4 percent in the Northeast, 3.6 percent in the Midwest and 2.3 percent in the South.

However, I’m wondering if this is really a sign of where this market is going or not, because some of those numbers are foreclosed homes at bargain prices upping the numbers. In my area of Bellingham, WA I’m personally not seeing a lot of foreclosures, but they are out there certainly.  It’s been said that Housing at first impacted the economy and the economy is now impacting housing in a vicious cycle.

The NAR is also forecasting that U.S. existing home sales will be at 5.04 million this year, rising to 5.41 million in 2009, and new home sales of 503,000, falling to 471,000 next year. Housing starts, including multifamily units, should drop 28.2 percent to 973,000 units this year, and fall further to 843,000 in 2009 as builders clear their current inventory.

Jerry Campbell - Muljat Group - Bellingham Real Estate

Seattle, WA - I just attended the annual Education Conference held every year in Seattle for Realtors in our state. The event was put on by the Washington State Association of Realtors and is the largest event each year for Realtors state wide to receive education opportunities, attend a trade show, and learn about important topics of our time.

This years event was held at the Doubletree Hotel in SeaTac after years of being held at the Meydenbauer Center in Bellevue, WA. The event was sponsored by NWMLS, RMLS, Quadrant Homes, and others.

Some of the classes that were offered included International real estate, Surviving & thriving in this market, Mandatory CORE curriculum, NAR Code of Ethics, and at least 12 other classes. On the Tuesday Oct 7, I used the full day to attend two classes by Amy Chorew on Advanced Internet Marketing, and Complete Automation. Amy Chorew is an excellent national speaker on technology strategies for the real estate industry and I would highly recommend her.

Towards the end of the day we covered the topic of real estate blogs and the uses of them in our business. I had the opportunity to meet Marlow Harris, a well known Seattle real estate blogger, who also blogs for the Seattle PI, Inman news, and many other blog forums. Marlow shared a lot of great ideas about real estate blogging with us in class and how we can use our blogs to inform end users about real estate.

Jerry Campbell - Muljat Group - Bellingham WA Real Estate