Northwest Living | Bellingham Real Estate Market

Whatcom County - The Whatcom County Association of Realtors (WCAR) are promoting a huge CountyWide weekend of open houses through out Whatcom County with well over 600 homes open to the public on both Saturday and Sunday.

One of the biggest open house events being held this weekend will be in the community of Liberty Park in the North Bellingham area of Ferndale, WA. Custom home builder Roosendaal-Honcoop Construction will have seven brand new homes open to the public and for sale. Besides the homes being open to the public R/H Construction will also be putting on a free barbecue for guests & offering some pretty nice door prizes to those who enter a ballot.

Mike Kent will be broadcasting Saturday with his “Radio Real Estate” show live from Liberty Park from 10 AM to 1 PM as well. Mike is also an experienced Realtor that works at the local Windermere Real Estate Company. With this event, the builder is expecting well over 200 people to attend the open house and visitors will be able to view seven of his quality built homes.

If your going to attend any of the open houses this weekend from the CountyWide event around Bellingham or Whatcom County, I would definitely put this one on your list. In one stop you can view seven finished homes, enjoy a barbecue, and enter win some great prizes.

Peoples Bank will also be on site as well as Whatcom Land & Title. The builder will be on site to answer any questions about their new homes or if your considering having one built. I will also be at this event as well, because I’m proud to say I have represented Roosendaal-Honcoop Construction new home sales for the past 15 years.

Liberty Park is located just off of W. Smith Rd. between Northwest Rd. & I-5. For more Directions to Liberty Park & a quick Google map visit Liberty Park for Directions. The Liberty Park community is just inside the new city limits of Ferndale, WA.

Update Saturday April 18, 7PM: We had a huge turn out with between 300-350 people in attendance. Here is a link to the Podcast of Liberty Park’s open house on Mike Kent’s Radio Real Estate show conducted Saturday April 18th. Mike thanks for doing your Real Estate Radio show at our Liberty Park open house.

Jerry Campbell - The Muljat Group - Bellingham, WA New Homes

Bellingham WA - over the past couple of days I’ve talked to at least four to five local Bellingham mortgage lenders and it seems the concensus is that rates on thirty year mortgages are down around 5.25%. With those kind of rates being offered, most of these lenders are locking a lot of loans for consumers in our local bellingham real estate market.

I’m not sure if these loans represent home owners that are refinancing, buyers getting financing on a current home purchase, or buyers locking loans for something they plan to buy soon. The positive in all this good news, is that the activity in the local mortgage lending is up all across the board. I think the next couple of months, as long as rates remain low, will actually be busier in home sales than we have seen in the last year or two.

I’m really surprised that more home buyers are not taking advantage of this rare timing of really attractive interest rates, depressed home values and the fact that it’s a buyers market. I think once the holiday season is over and we start to get into to the new year, we will see some upticks in our local Bellingham real estate sales numbers.

Whats really fueling this drop in interest rates is the ten year long bonds which have droped from a range of about 3.25 to 3.50 down below 3.00 and as low as 2.67 just today. That’s just incredible and reflects strongly in whats happening with interest rates on all kinds of mortgages. I really can’t see interest rates dipping to much further and I would strongly suggest anyone thinking of locking a rate, should be doing it sooner than later. This is obviously just my opinion, but I really can’t see why anyone is waiting if they want to secure some great rates right now. 

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

Bellingham WA - in a recent survey more than half of the real estate agents who responded think the national real estate market will finally hit bottom sometime early in 2009, according to the Campbell Communications marketing-research firm. Fifty-two percent of agents who took the survey said the country should see the bottom of the housing market in the first six months of 2009. Additionally, 7.7 percent said prices have already bottomed out, and 16.5 percent believed that the bottom will happen in 2010 or later.

Traditionally, by the time you get to March, you’re entering into the spring-summer homebuying season, and that’s when sales pick up. If interests rates are still under 6% by then and home prices are still soft, we should start to see some improvements in our local Bellingham real estate market. Sales this year have been down about 32% across the board, if you include all of Whatcom County’s home sales.

So if the survey is correct, then what the real estate agents are saying is that as sales pick up, prices are also going to firm up or solidify at some point. I think locally as we approach the end of 2009 and the spotlight starts to shine on the Vancouver 2010 Winter Olympics we will most definetly see our Whatcom County real estate market return to normal.

In the survey, more than 2,500 real-estate agents also identified the three most resilient markets in the nation for selling homes. They mentioned that if they had to pick three states in the country that are large states and where property values really haven’t declined that much and employment has held up, the three states that would fit that criteria would be Texas, North Carolina and Washington state. It seems like every article that has been written during the past three years always includes Washington State and the Puget Sound region as one of the top performing areas in the country.

The biggest problem were having in Bellingham is that buyers that want to buy have to sell their current Bellingham home first. This creates a challenge for both home buyers and home sellers in making successful transactions.

Some of the fears home buyers have are with the difficulty in obtaining financing and the thought that home prices will continue to fall. Most Bellingham Mortgage lenders that I have talked to though, say that locally, lending has not been anything near as bad as other areas of the country. Locally, you can get thirty year fixed mortgages at around 5.75%, which is pretty good coupled with lower home prices.

I think people are just waiting to hear that the market has hit bottom, and once that reasonates through the markets, that’s when you will see buyers return in numbers. Right now, home buyers just seem afraid to purchase a home and then have their home value decline immediately by 10 percent or so based on what is happening to other properties in some communities across the nation.

But I also belief that some sellers are are also a little unrealistic about what their home is worth on the market, pricing it well above the going rate. When your in a down market or soft market like this, the last thing you want to do is price your home above the market. If you take this approach and home prices continue to drop, the home seller will be chasing a down market and end up getting less than if they had priced it right to begin with.

Well, lets see what happens this coming spring and hope that our Bellingham real estate and Bellingham homes for sale markets will begin to return to something more normal.

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

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

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

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

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