Northwest Living | Bellingham Real Estate Market

I recently read some interesting stats put out by the goverment that showed what renters accumulated in assets vs home owner appreciation gains over a ten year period. The Department of Commerce reports that between 1995 and 2004, the average renter accumulated a little over $4,000 in net worth. The average homeowner accumulated $184,400. That translates into $180,000 more, or $1,500 per month. In other words, each month that the average first-time buyer continues to rent, it costs them $1,500 in lost wealth accumulation. Furthermore, renters are subject to rent increases as well as higher tax rates because they cannot take a mortgage deduction.

With rents increasing in the Bellingham Whatcom County area this would seem to be a convincing factor on why waiting to purchase a home may not be the right thing to do for some potential home buyers. Interests rates are low again, homes available to purchase are high and are approaching reasonable prices, and negotiations currently favor buyers. It’s just one more thing for buyers to think about when considering whether they should purchase now or wait until some magic moment in the future…

Speaking of waiting for a better time to purchase, home buyers should consider the following scenario I read in the February 25, 2008 issue of Time Magazine as an example of the cost of waiting to buy. The article logically poses the argument that home prices and mortgage interest rates do not rise and fall in sync. Though prices may fall a bit farther, rates can turn and head up at any time. Their example begins with the purchase of a home today at $218,900 at an interest rate of 5.5%. They compare it to purchasing the same home a year from now at $197,010, a drop of 10% in price, but with an interest rate of 6.0%.

The principal and interest monthly payments end up less than a dollar apart. So, the price savings evaporates with the increase in interest rates. But that’s not all:

• Waiting caused them to pay an extra year’s rent for a home they do not want.
• The interest tax deduction they could have used by Itemizing was lost for an entire year.

So when home buyers are trying to time a market either on price, interest rates, finding the right home, or any other number of reasons…many times the waiting game will in the end be a lost opportunity. In my life time the best investments that I have ever made, were the times when nobody else wanted to take the risk and buy. The need for housing will not disapear, thats a fact, the time to buy is when others are sitting on the fence, causing an in-balance with the supply and demand curve in a buyers favor…

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

Bellingham, WA -  With a strong local economy and favorable home buying conditions this  will prove to be a good time to buy or sell a home. There’s just too many economic conditions in place for home buyers, that are positioned to purchase a home, to ignore any longer.

Now is a good time to buy and sell real estate in Whatcom County, no matter what people may be hearing about the national market. The national media has focused too much on negative things that they only contribute to housing and economic problems instead of help. Thats the news cycle in general though, they tend to focus on negatives and rarely talk about the positive things in life. It’s unfortunate but very much true.

The Puget Sound economy is strong, unemployment rates are low, interest rates are low, local housing inventory is good and the return to good safe mortgage loans are back. It’s not a bad time to sell, especially if sellers will be turning around and buying, but sellers need to be flexible at the negotiating table in this type of market. With rental prices climbing over the last two years with less buyers in the market, It makes more sense to buy then rent currently. Coupled with the fact that home prices have plateaued or declined bodes well for home buyers.

I would have to agree with so many that a lot of the housing problems could be pointed firmly at the media, who are confusing the public by publishing headlines designed to appeal to emotions and reports that use local and national information to distort the truth at times. For them to report about the high number of subprime loans in the south and some how use that for the Northwest is confusing. The Northwest never got into the subprime loans on the scale of a lot of southern states, so no wonder we are doing so much better. But unfortunately that news is not getting out as much as the bad news from other parts of the country.

Limits on Federal Housing Administration loans were recently raised, which should give buyers more homes to choose from at favorable mortgage rates. Hopefully a bill that would lower the down payment requirement for FHA loans from 3 percent to 1.5 percent, making the loans more accessible to first-time buyers gets passed.

This past week both Fannie Mae and Freddie Mac were allowed to lower the amount of funds they kept in security from 30% down to 20%, freeing up two hundred billion for mortgages as well.

The subprime mortgage mess has made lenders return to “old school” restrictions and requirements. Buyers may have to get help from family rather than use a riskier loan. I think in the end it will be much better for buyers who use discipline in budgeting and learn to save for a down payment instead of securing no down payment loans of the past which teaches buyers nothing.

This “normalizing” of the market gives people a chance to take a few months and get their finances in order before purchasing a home.  I think if buyers put more of their own hard earned money in to a home, they will become less likely to fall behind in payments and go into foreclosure.

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

Bellingham, WA - March is traditionally when homeowners thinking of selling their homes prepare their property for listing in the local Whatcom County real estate market. The winter holidays are usually the slowest time of the year because of the cold weather and holiday events. As soon as buds start to appear on trees it seems to be the real beginning of the listing season and for sale signs pop up in yards.

The last two years there have been a few more for sale signs than usual and they have stayed longer than the boom years from a few years ago. To stay competitive in this ever changing market most homeowners thinking of selling need an edge to get noticed. The best thing a homeowner can do is make sure their home is in show condition. I’ve posted about the importance of staging a home for sale before, so I won’t go into to much today. Our viewers might want to visit an article we posted called selling your home in a buyer’s market to get an edge in selling their home. There are also some good articles under our Seller Tips category that should help as well.

Bellingham and Whatcom County home owners have it a lot better than many real estate markets in southern states across the nation. According to the statistics, Whatcom County only had 19% of all loans in the sub-prime market, with 81% in prime lending. That number most definitely has dropped even more, now that the mortgage industry has returned to more normal loans. Just because Whatcom County has 19% of mortgages in the sub-prime market does not mean all of these will fail. It’s estimated that only about 5% of these will go into some form of foreclosure. By checking out the following national subprime mortgage map, county by county, home owners can get a better feel for where the real problems are across the nation.

If one were to look at the subprime map, you can see that the Northwest really doesn’t have the same problem that the many areas of the country are experiencing. I mention this because It’s really the negative chatter and consumer sentiment that is making our real estate markets tough in the Northwest. Because we are a national economy it does effect us locally, but certainly not like those in parts of California, Arizona, Texas, Mississippi, Florida, and many more states.

The thing most home owners should take to heart is that if your selling in a buyers market and planning to buy right away, then on the buying side you will gain that advantage. Actually no matter what market your in, as long as your selling and turning around and buying again…you’ll do fine. Happy Saint Patrick’s day everyone and may you find good luck in all your housing needs this year.

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

 The real estate industry launched last week it’s version of an online encyclopedia called the Real Estate Wiki. A collection of real estate professionals got together and created the brand new wiki to provide a information on the real estate business in one place.

The new real estate wiki includes real estate definitions, frequently asked questions about home selling, home buying, finance process, home inspections and a whole lot more. The wiki will also provide interesting bio information on leaders in the real estate industry, real estate books, leading real estate brokerage companies, real estate associations, and real estate blogs. They go even further and tell the public about all the designations Realtors earn, courses they take, publications of the industry, our social networks and institutes as well.

With the reputation of the the larger Wikipedia as the world’s largest free encyclopedia on the Internet, this will allow a more targeted drill down to a specific profession like the real estate industry. Since Wikipedia has a reputation for being non-biased and independent the hope is that the consumers will be able to gather tons of useful information at one reliable source.

It’s estimated that at least ten million people work in the industry related to real estate including real estate agents, brokerages, mortgage, financial, construction, and appraisers. With so many consumers now searching the Internet for real estate related information this should be a big plus for buyers, sellers, and renters alike.

This will be very exciting to see how this all evolves and how the public in general takes to the new real estate wiki. This should be a great source for my local Bellingham WA and Whatcom County real estate markets.

Jerry Campbell - Muljat Group - Bellingham WA Real Estate -  360-739-7779

During the whole month of December we have been developing a brand new Whatcom County real estate web site in order to better serve our buyers and sellers for the Whatcom County area.  The site will also provide services to the Skagit County, Island County, and San Juan County real estate market as well.

Our new web site will provide extensive information about the Whatcom County area to better inform buyers relocating to our area. 

The search real estate capabilities will be built out over time and we have joined the REW web site capabilities on our WhatcomRealEstate.com site with our WhatcomHomeSearch.com to create a Dynamic web site of the future. The combination of these two sites together will serve our current clients and future clients needs in so many ways, that we feel we will be providing them with many advantages over the competition.  

 When I saw this on a home improvement ideas web site about a year ago, I saved the site and didn’t think much about it.  I was just clearing out my faovrite saved web sites the other day and thought it was interesting enough to share here with my readers. What a smart idea having several pull out drawers in your stairs. 

Some genius came up with this idea of installing custom pull out drawers under each step on the stairs.  In the example here the designer is using the space for shoes, but I could see a ton of uses for something like this.  This would be a great storage idea especially for anyone thats building a small two-story home, condominium, or townhome.

In Bellingham WA here our local public officials are attempting to solve the affordable housing issue.  I think this would be a great idea for those individuals or families that have to build a small home and need a little extra storage space.

When I first saw this I wondered how the stairs and the storage space would hold up over the years with all the up and down traffic.  According to the article though, the way the stairs are built there really isn’t any difference between this type of construction vs the normal finish.

Another area that a homeownder could pickup on extra storage space is all the area that usually goes unused under the stairs.  So many times over the last fifteen years I’ve watched homes being built and thought that space would be great for storage.  But in most cases its not used at all or just a small closet is put in and the rest of the space is unused behind a wall of drywall.

Well I hope this might give someone an idea for when they go to build a home some day.

The Federal Reserve dropped the federal funds rate to 4.25 percent today. The street however was hoping the Fed might instead lower rates by a half point but chose not to. This key rate is what governs overnight lending between the nations banks.

In another move the Fed also lowered the discount rate it charges for direct loans to banks by matching a quarter point here as well to 4.75 percent. Since September the Fed has now lowered the overnight rates by a full percentage point in an attempt help the nations economy and lower the risk of falling into a recession. 

Most of todays decision was based on the nations condition with the housing sector.  With so many banks exposed to subprime loans, especially in the southern part of the country from California to Florida, that the banks are reluctant to extend credit.  The Northwest is not spared from the subprime mess, but were at least fortunate to have a much lower rate of subprime loans outstanding per loans on the market. One look at the national map of subprime loans shows that the Northwest should at least be feeling like we will get through this. 

But because the nation as a whole has several areas of concern with housing and subprime loans, it affects us all, and so the fed had no choice but to step in and react.

Outside of the housing and financial services sectors, the U.S. economy has exhibited resilience. In addition to a steady labor market, many retailers reported stronger than expected November sales and a slumping dollar helped boost demand for U.S. exports.

Also, the risk of a inflation, which the central bank had cited as a reason for monetary restraint even as financial markets clamored for rate cuts, appears to have
eased slightly. Productivity has been strong and core inflation gauges, which exclude volatile energy and food costs, have remained tame.

However, after a period of relative calm, credit markets are showing a level of strain not evident since August, when mounting defaults on U.S. subprime mortgages first led to a
worldwide pullback in money markets.

Does this mean that interest will drop in lock step, not necessarily, because interest rates are connected to long term bond rates.  Subprime borrowers will not gain from this cut, because those type of loans are keyed with LIBOR rates which actually have been trending up in recent weeks. Because of the liquidity issues in global financial markets, LIBOR rates have actually increased at the same time that treasury and other benchmark yields have been declining. The rate cuts today will however benefit those that are looking for lower rates on home equity loans, because those are tied in with the prime rate that borrowers pay on such loans.

Jerry Campbell - Muljat Group - Bellingham, WA - Bellingham WA Real Estate

 Before buying that brand new home you might want to consider a few things as part of the process. In the excitement of looking at a brite and shiny new home, sometimes one forgets to consider some of the following thoughts:

Check builders reputation - Ask your Realtor about the builders reputation, how long have they been building, and maybe some addresses on homes they recently built.  Nothing wrong with making sure they have a good reputation and will stand behind their product.  If you have any doubts, maybe call the local builders association and see what they say as well.

New Home Inspection - If you don’t know the reputation of the builder and especially if their only building a few homes in a community, look into getting an inspection.  Even though the home will go through a full inspection from the permit process, and the builders themselves, Items can be missed.  The builder I represent usually doesn’t mind having one, and looks at it as the final inspection to make sure he didn’t forget anything.  It also saves him the hassle of having to fix something later.  With that said, I usually only see about 1 inspection for every 4 brand new home I’ve sold in the past 15 years. It’s just something to think about and cheap insurance when your out spending $400,000 on a brand new home. 

Builder Warranty - Most builders today will provide at least a one year warranty on the purchase of a new home.  In the state of Washington it’s mandatory that all homes come with at least a one year warranty.  Make sure you read the builders warranty and what it covers.  Ask your Realtor lots of questions on this and how do you go about getting items done if problems do eventually arise.

Walk thru orientation - I’ve been working with a local builder for almost fourteen years and one added feature they provide is a 1-2 hour orientation with the new home buyers.  The builder or one of his reps will go through the entire home and explain how the house works and answers a lot of questions at the time of the walk-thru. It’s a great way to create a nice bond between the builder of the home and the new home buyer.

They don’t call it a walk-thru inspection because that sounds so confrontational to begin with.  Even though during the walk-thru orientation, there are occasional items that are addressed and then completed prior to closing of the home.

Change all the Utilities - within a few days of the closing date make sure you contact all the utility companies and make arrangements to have all the utilities changed into your name.  Sometimes you can avoid costly deposits by doing this while the utilities are still in the builders name.  The other reason you want to do this within a few day of closing, is to avoid having them turned off and then having to pay a fee to have a utility rep come out.  The builder will usually be calling the utilities to take his name off that house on the expected closing date, so I would make these calls.

I’m fortunate to live in an area like Bellingham, WA where most of the builders in the Whatcom County area have pretty good reputations. It’s always good to make sure as a new home buyer to do your home work and due diligence before buying.  When every thing falls in place though, there’s nothing like owning a brand new home.

Jerry Campbell - Muljat Group - Bellingham, WA 98225 - Bellingham Real Estate

 Over the last eight years I’ve accumulated the total homes sales on a monthly basis and have been using them in my own bellingham real estate business in order to watch monitor the local Whatcom County housing market trends.  The chart below shows the total number of sales for the first ten months of each year since 2000. At the end of the year I’ll post the final sales for 2007 compared to 2006 and subsequent years back to 2000.

The graph below shows sales numbers in four different Whatcom County sales groups.  The top line shows the number of sales of resale homes in the Bellingham, Washington market for the first ten months of each year back to 2000. The next line shows the number of sales for resale in the Ferndale, Lynden, Blaine, WA real estate markets.

The bottom two graph lines show the total number of new homes that sold in Bellingham with the blue line and in yellow for the Ferndale, Lynden, and Blaine markets.

It’s very clear that the resale market was displaying some big numbers around Whatcom County from 2001 through the end of 2004.  It’s my belief that as the prices within the Bellingham WA area started to get to high for most buyers, they started to look more at markets like Ferndale, Lynden, and Blaine because home prices were more affordable at the time.  That’s why if you look at the graph above, the up market extended into 2005 for most of the county markets outside of Bellingham. 

The market peaked over all for Whatcom County around August - September of 2005.  That’s about when we started this big change and a downward trend in sales numbers. We have shifted to more of a buyers market during the last two plus years, but it appears that the Bellingham market might have finally hit a low.  If you look at the two Bellingham graphs, we have slightly out performed 2006 sales numbers through the same time period of 2007.  We will need to look at the November and December 2007 numbers to really get a much better idea of where were at in this market.

I think the biggest thing thats affecting us currently is all the negative chatter over sub-prime loans from that boom period.  Even though most of those type of loans are no longer being marketed by the banks and mortgage companies, the fallout from foreclosures can still have an effect on the market place.  The Northwest really came out pretty well from the sub-prime mortgages.  I say this because if you look at the US map in the post on Northwest Counties With Highest Subprime Loans we have one of the lowest amount of loans in sub-prime loans compared to many areas of the country.

So, we should be able to come out of this period better than areas in California, Arizona, Nevada, Texas, and the Southern states.  The Northwest economic conditions are pretty good with low unemployment rates, Interest rates are historically low, retail sales numbers are strong, and we live in a very desirable area of the country.  For us up in Whatcom County we also are enjoying good retail, tourism, and travel spending from our Canadian neighbors due to the parity between the US Dollar and the Canadian Looney.

I will post several more in depth articles on the housing market in January 2008, once I receive the final Whatcom County sales numbers for November and December 2007.  I tend to not look at average sales price of homes because those numbers can be manipulated way too much.  I like to look at total sales numbers in the market, because it’s much better way to get a feel for where our local markets are heading.  In most cases you really don’t know your in a down market or up market until your well into it.  That’s why having complete sales numbers over a long period of time, allows one to clearly study the over all Whatcom County real estate market and have better capabilities to forecast trends more accurately.

Jerry Campbell - Muljat Group Realtors - Bellingham, WA 98225 - Whatcom County Real Estate

 I normally don’t like to post to many interest rate articles, but wow interest rates are down under 6% again and the trend is looking good for the foreseeable future.  That’s got to help our local Bellingham WA real estate market.  Here’s some stats I want to pass on. 

Long-term mortgage interest rates were down Monday, and the benchmark 10-year Treasury bond yield dropped to 3.83 percent.

The 30-year fixed-rate average sank to 5.82 percent, and the 15-year fixed rate fell to 5.4 percent. The 1-year adjustable held at 5.53 percent. The 30-year Treasury bond yield was down at 4.29 percent.

Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.  But one still needs to check with one of our local banks or mortgage company’s here in Northwest Washington.

Anyone that might be looking to lock in some decent rates and buy a home in this buyers market might have just gotten an early Christmas present with the new interest rate news.

Jerry Campbell - Muljat Group Realtors - Bellingham WA - Search Bellingham real estate