Northwest Living | Bellingham Real Estate Market

Last week with the bad news out of Seattle about the fires in the Street of Dreams development, one of my real estate web sites called StreetofDream.com experienced very high traffic for that news day. You’ll notice that my web site domain there is missing the s, unlike the original StreetofDreams site.

It was amazing how much traffic my real estate website got from all the national news. I assume they either clicked on my site because It came up in the results a few pages back or they might have typed in the domain name and forgot the s. I can only imagine what the popular StreetofDreams.com web site had received over the last week. Anyways…it never ceases to amaze me how far the Internet has come in the last ten years and just seems to be growing more and more every day. 

My little Northwest WA Real Estate site is just a five page site that shows property listings up in my Northwest corner of Washington State with homes listed from $500k and up. It usually averages about 100 visitors a day, but that one day was quite a spike in traffic. Not exactly the way I would want to receive traffic, but never the less…it was interesting to see such a huge spike up.

Jerry Campbell - Muljat Group - Bellingham WA

Seattle WA - Cooking Light magazine named it’s top twenty cities in the country that provide the resources people need to live healthful lives, and topping that list was our own Seattle, Washington. The magazine ranked major metropolitan areas on 15 different criteria, including healthfulness and exercise data, restraurant ratings, farmers market listings, and parks and recreation data. The result of that study were the list of the top 20 American cities that best fit their philosophy to eat smart, be fit, and live well.

The magazine said with an abundance of fresh local foods, walker-friendly streets, and inclusive attitudes helps make Seattle America’s best city for healthy living. 

Whether seen from the vantage point of a peaceful kayak excursion on the waters of Puget Sound or a morning tour of bustling food lover’s mecca Pike Place Market, Seattle always appears to be a place where healthful living comes easily and naturally. In our year-long countdown of U.S. cities that epitomize the Cooking Light philosophy, Seattle ranked highest for dollars spent on parkland—$266 per person annually, according to the Trust for Public Land. The American Podiatric Medical Association ranked pedestrian-friendly Seattle a top spot for walking. Nearly 85 percent of city residents report exercising regularly and 89 percent say they are in good or better health, according to Centers for Disease Control and Prevention data. And when Seattleites are ready to indulge, they can do so in any of the city’s many top-rated restaurants—it’s home to both numerous James Beard Award-winning chefs and restaurants ranked “extraordinary to perfection” by culinary review, Zagat. If you love Cooking Light, we think you’ll love Seattle, too.

Portland, Oregon came in second on this list making the Pacific Northwest a must stop for travelor’s looking for quality light dining. Life is good in the second-ranked city, thanks to its seemingly endless supply of outdoor activities, cutting-edge restaurants, and vibrant environmental consciousness.

Portland is called the City of Roses for its proliferation of brightly hued blooms, but the color that best describes this city is green. Portland prides itself on being environmentally friendly, boasting an award-winning public transportation system, 277 miles of bike paths, and city planning that minimizes sprawl.

The soft seasonal drizzle that falls over the city (actually, there’s more annual rainfall in Atlanta) makes it literally green as well. Consequently, Portlanders enjoy 227 parks and 146 miles of lushly forested hiking trails, rain or shine. The climate also nurtures the fabulous food and wine produced here, helping make Portland fourth in the nation in per capita farmers’ markets and top for its number of organic restaurants.

Portland earned the second spot on the top 20 list of Cooking Light cities because it also ranked highly in the following categories: acres of parkland per capita; percent of population that reports to be in good or better health; percent of population that exercised in the last month; and its walkability. Read more about Portland, Oregon restaurants.

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

Seattle, WA - The Emerald city was recently rated one of the best place’s in the country to find a bargain on a home, according to a recent story by Forbes Magazine. The Seattle Port has profited from the weak dollar, but the housing price growth has slowed.

The best place to get a bargain on a home is an area where there is a healthy growth in a job market and there are more houses available on the market than people to buy them. Seattle is one of Those housing markets where you have high inventories but pliable borrowers, with lenders willing to deal.

According to the magazine, they went looking for markets where the damage from risky lending hasn’t been as dramatic as in some parts of the country and where employment growth will burn off an over-abundance of inventory quickly. Washington State ranked 49th in the number of foreclosers, which helps the state tremedously if home owners are not losing homes.  Seattle, WA fit that bill perfectly, making it one of the best bargain spots in the country to purchase a home.

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

Puget Sound - It’s the kind of house that a year or two ago would have been snapped up in days: a refurbished rambler in a woodsy residential neighborhood minutes from downtown.

The asking price: $559,000.

But after seven weeks, the sellers had not received a single offer on their Wedgwood home.

The sellers really believed there would be no problem selling, But the whole feel of the market has changed. They might have to drop the price.

These Puget Sound sellers, along with local real estate agents and economists, wonder whether sluggish sales are part of the usual winter slump or a sign that Seattle, a perennial most-livable-city contender, is joining the rest of the country in declining home sales. The question has put many locals on edge.

Right now there’s not that urgency among buyers to pull the trigger, is the feeling among many local real estate agents. We should start to see what will happen early this year.

If sales are sluggish during the traditionally hot-selling months of February through April, then people will have a better idea whether Seattle has joined the national trend.

Of 20 major U.S. metropolitan areas, all but three markets; Seattle; Portland, Ore.; and Charlotte, N.C., experienced a decline in real estate values this October compared with last October, according to the Standard & Poor’s/Case-Shiller composite price index.

Home prices have fallen most in the Midwest, Southwest, Florida and California. In Los Angeles, prices fell 8.8 percent; in New York, 4.1 percent.

Seattle prices increased 3.3 percent, but that was the smallest year-to-year rise for the city in more than a decade. The annual appreciation in Seattle has been slowing for more than a year and a half.

Some economists say it’s only a matter of time before Seattle joins the national slump. Although the city experienced a year-to-year increase, October prices fell 0.9 percent from September, the third consecutive monthly decline.

Gov. Chris Gregoire told residents not to be affected by the gloom. Bad news elsewhere, she said, doesn’t have to translate into bad news here.

“There’s no real reason for it to slow in our state, but for the fact that people are watching what’s going on around the national economy,” Gregoire said during the unveiling of a budget proposal in Olympia.

Seattle, Portland and Charlotte have bucked the trend partly because each has a relatively healthy local economy and all three continue to draw newcomers, which keeps demand steady.

Seattle has three ingredients that work together to keep home prices high, according to Seattle-area real estate blogger Larry Cragun: “lakes, mountains and liberals.”

The lakes and mountains don’t need explaining. The liberals, Cragun said, have created such an anti-development atmosphere that available land for building homes is extremely limited.

“When you only have a certain amount of land to build on, the value of that land tends to run up,” said Cragun, who has been in the local real estate and mortgage business for three decades and blogs at Real­ Esta­teUndressed.com. But Seattle has “experienced the worst of it” already, he said, and will rebound soon.

As for the Dittmaiers, they continue to hold their front door open to prospective buyers.

The holidays have been rough. In addition to the usual hustle and bustle, the Dittmaiers and their two young children have been busy packing their belongings. They have already purchased a new house nearby.

The family has been moving to the new place little by little. But the transfer won’t be complete, Kristen Dittmaier said, until their old house sells. Not to mention that the couple soon will be forced to make two mortgage payments if the Wedgwood house remains unsold.

Meanwhile, Dittmaier said, she has not seen the latest home-price report in the newspaper. And it’s just as well: “I don’t need to read a report to know houses are not selling as quickly as they used to.” via Herald net

 The two “R”s of green building are reuse and recycle. Reusing construction materials from old houses not only saves usable and often high-quality materials and architectural features, it also saves energy; every item reused means one that doesn’t have to be made fresh.

Recycling, while consuming energy, keeps construction and demolition waste out of landfills, where it’s estimated to be a large component. Also, recycling fees tend to be lower than disposal fees.

Interest in reuse and recycling is strong in the Seattle area. And it’s not just being driven by tree-hugger idealism. Businesses are making money being green. Four offer a sampling of the depth and breadth of recycled and reused building materials available:

• Seattle’s Environmental Home Center is a major source for building materials made with recycled content, as well as nontoxic paint, insulation and sustainable wood products. Founded in 1992, the company acquired Oregon-based Environmental Building Supplies, giving it locations in Portland and Bend.

• The RE Store, with locations in Bellingham and Ballard, sells what it bills as high-quality building materials at discount prices. It offers pickup, salvage and whole-building deconstruction, providing recovered materials for sale to contractors and home-remodelers.

• Second Use Building Materials in South Seattle says it salvages about 100 tons of building materials a month that would otherwise go to the dump. Its products include doors, windows, masonry, lighting, plumbing fixtures and architectural details.

• Bedrock Industries in Interbay makes tiles using 100 percent recycled glass. It also uses 100 percent recycled materials for packaging and shipping.

Many more such businesses are featured in the Green Pages of the Northwest EcoBuilders Guild, and may be downloaded from www.ecobuilding.org.

“Salvage and reuse are not a new concept,” said Michael Armstrong, co-owner of Second Use Building Materials. “It’s only been in the last 50 or 60 years that we’ve been so wasteful. Now it’s self-correcting.”

For contractors and homeowners, reuse cuts two ways. If a house is being demolished, reusable items should be taken out with “tender loving care,” Armstrong said.

It’s more deconstruction than demolition. Companies such as Second Use remove and/or pick up materials from houses and other construction sites. The company claims more than 3,000 items in inventory.

Architects, interior designers and contractors who build green in turn seek out items to reuse. “Perfectly serviceable items go back into use so new materials don’t have to be produced,” Armstrong said. “If you’re looking for a 1920s-era window and you can get one out of the same-era house, why not use it?” The reused item may also cost less than a new one.

“Consumer awareness [about green building, recycling and reuse] has grown by leaps and bounds over the last year and a half, two years” said interior designer Sandy Campbell, who operates the One Earth One Design studio. She has spent 18 years as a designer, the past 10 specializing in sustainability. Last November, she opened a “sustainable lifestyle” retail store in north Seattle.

Still, Campbell said, consumers should be careful about some green claims.

“If someone is shopping for flooring or furniture, be sure to ask, ‘What is the source of the wood?’ ” she said. “Some companies are making tables out of reclaimed railroad ties. They’re full of creosote. If the reclaimed wood came from an old barn and it’s painted, you might want to test it for lead.”

Meanwhile, carpeting made of recycled plastic bottles may not address the backing, adhesives or finishes. Campbell urges people to look for natural products.

“Just because something is recycled doesn’t mean it’s healthy,” she said.

Reuse and recycling also get a big push from government. For example, King County’s GreenTools program provides assistance on deconstruction and recycling construction waste, as well as a host of other green building issues.

The county also has an online materials exchange (www.metrokc.gov/dnrp/swd/exchange) with items ranging from doors and insulation to plumbing and floor coverings. Users can place materials for sale or purchase them.

Yet another area being studied is hybrid deconstruction, which seeks a balance between demolition and more labor intensive, and expensive, deconstruction. Increased labor costs and the time needed to deal with contaminated materials can be a disincentive to salvaging building materials.

Campbell sees the trend toward reuse and recycling only increasing. “I certainly hope so, for everyone’s sake. We have to change the way we do things.”

Second Use’s Armstrong said the green building movement is “akin to the organic food movement 20 years ago, and now you find organic food at Safeway.”  via partially seattle times.

Jerry Campbell - Muljat Group Realtors - Bellingham WA 98225 - 360-739-7779

 Portland’s once-soaring housing prices are cooling and heading into a buyer’s market.  Just  nine months ago Portland was one of the last hot markets left over from the hot market we all experienced.  However, housing economists say very few sellers are reducing asking prices but may have to soon.

The Northwest has been one area of the country that has weathered the slow down in the housing market over the last two years.  For the most part the Northwest has experienced relatively low unemployment, great retail numbers and just the natural beauty of living in such a quality area.  But, with the rest of the country experiencing this slow down, the downward housing market has now reached this area as well.

The median home price remained at $300,000 — flat from the month before — and homes required nearly two months to sell on average, according to the Regional Multiple Listing Service, the areas main MLS service for home-sales.

The inventory of available homes hit 6.2 months, tied for the highest since 2003 and nearly double the figure from a year earlier.

So far, most sellers have tried to avoid dropping their prices.  It appears the sellers are just reluctant to reduce the prices on their homes and have a false sense about what their home is worth in this market.

At some point sellers will have to reduce prices to start getting offers or risk the chance of chasing a down market.  

Portland prices still are holding as well as any in the country. August’s median sale price was 9 percent higher than a year earlier.  But thats the homes that sold.  the staticians never factor in the hundreds that tested the market and never sold.

Jim Cramer, CNBC News really ripped the housing market on wednesday, but on thursday he said one of the only areas of the country thats holding it’s own was the Seattle housing market.  Listen to Cramer’s comment on the homes market in a CNBC video at this link, Seattle Real Estate.

Hang in there Northwest and like all real estate cycles, we’ll get through this one as well and get back to a normal market once again.

Jerry Campbell - Muljat Group - Bellingham, WA - Bellingham real estate

 About two years ago I was attending the annual Washington State Association of Realtors Convention in Bellevue, WA and decided to take an afternoon class on the topic of Feng-shui.  I was a little skeptical at first, but after about thirty minutes of the class I realized maybe there is something to the way we show case a home and it’s energy.

 I’ve actually put some of these ideas to use in some of my client listings up in the Bellingham WA real estate market and thought id pass along this article I recently read by Amy Hoak…

 Tammy Winfield made every effort to depersonalize her home and keep it free of clutter. She even baked cookies before prospective buyers came in for a look, hoping the homey scents would help persuade them to make an offer.

Still, the Truckee, Calif., home that she and her husband, Bill, put on the market last September sat for months without any takers.

“We were getting a lot of showings but not many offers,” she said.

Then, in February, they took some home-selling advice — and a leap of faith.

At the suggestion of their real-estate agent, they brought in a home stager who refocused the home using the concepts of feng shui. The couple closed on the sale of their home in March.

When their agent suggested using feng shui to stage the Winfield home, there wasn’t immediate acceptance of the idea.

“I was somewhat skeptical. My husband was more so,” Tammy Winfield said.

At its heart, feng shui involves adjusting a place’s energy and enhancing the perception of space, often done by reconsidering furniture placement, said Christine Ayres, who staged the Winfields’ home and also co-wrote the book “Sell Your Home with Feng Shui.”

It’s a technique that has been around for hundreds — some say thousands — of years, she said. While the concept has long thrived in China, it’s only recently been embraced in the United States.

A home with a good flow of energy is one that makes someone feel comfortable immediately; a home without it, on some level, makes a person want to leave, Ayers said.

Feng shui also can be used to create a clear path to a home’s “room of first impression,” the room that will make the biggest impact on a buyer, Ayres added.

“Most Realtors are very open to it. They’re going to use any tool possible to help market the property,” Ayres said. There’s also little cost involved, she added.

Some tips to consider for those who want to try feng shui to sell their home:

Furniture shouldn’t be in the direct path of the entrance of the room, said Cynthia Chomos, a feng shui consultant, speaker, teacher and founder of the Feng Shui School for Real Estate Sales in Seattle, Washington.

For example, if the back of a couch faces a room’s entrance, the piece of furniture can cause a person to “pingpong” back to the door, Ayres said.

Chomos also advised having a solid wall of support behind a key piece of furniture — a rule that makes it a bad idea to place a bed under a bedroom window.

The front door, “the mouth of the house” should get special attention because “it’s where the house inhales its vitality and brings in the buyer,” Ayres said.

Spruce it up with a fresh coat of paint, replace scratched hardware or frame the door with matching pots, which has the visual effect of widening it, she said.

If potted plants flank the house, they shouldn’t have sharp, pointed leaves, Chomos said. A plant such as a palm can appear aggressive; “the last thing we want are sharp points pointing at a buyer’s stomach,” she said.

Ayres also suggests hanging a wind chime at the front, right corner of the home. That area is the buyer’s area, she said, where decisions regarding the sale might be made.  Via Amy Hoak.

 Compared with the first quarter, U.S. home prices rose in the second quarter at the slowest pace in nearly 13 years, according to government data that provides fresh evidence of the housing market’s problems.The Office of Federal Housing Enterprise Oversight this morning said in its quarterly report on the housing market that nationwide home prices grew 0.1 percent from the first quarter to the second quarter.

Washington state led the nation with the number of cities in the top 20 for appreciation with five. In order, there are: Wenatchee (up 23.54 percent), Longview (up 13.6 percent), Seattle/Bellevue/Everett (up 9.89 percent), Tacoma (up 9.34 percent) and Spokane (up 9.3 percent). And, the state had no cities in the bottom 20, which were located primarily in California and Florida.

Washington state ranked third, with appreciation at 9.12 percent, behind Utah at 15.28 percent and Wyoming at 12.84 percent.

The agency’s index of U.S home prices grew 3.2 percent in the second quarter from year-ago levels, the smallest year-over year price growth in 10 years.

“House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates and weakening buyer sentiment,” OFHEO Director James B. Lockhart said in a statement. “Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic since June.

OFHEO’s index is calculated based solely on information from the government-sponsored mortgage giants, Fannie Mae and Freddie Mac. Combined, Fannie and Freddie finance or guarantee about two-thirds of all U.S. home mortgages.

 Other reports have come up with different readings of the housing market.

The Standard & Poor’s/Case-Schiller quarterly index, which tracks price trends among existing single-family homes across the nation compared with a year earlier, on Tuesday found that U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since S&P began its nationwide housing index in 1987.  Via SeattleTimes

New local firms help consumers find environmentally friendly homes.  Kathryn Crawford’s concern for the environment influenced where she decided to work and what she does for a living.

It’s not surprising, then, that when Crawford decided to buy a home in Everett, she wanted a real estate agent who understood a “green” home means more than energy-efficient appliances and solar panels.

“I didn’t think a traditional agent would understand what I was looking for,” said Crawford, a community planner with a strong environmental ethos.

She became one of the first clients of a new Everett-based real estate brokerage focused on helping clients buy and sell properties built with green practices and products.

The business, Greening Properties, is the first of its kind in Everett. A handful of area agents at traditional brokerages specialize in green properties, and a company with similar aims, GreenWorks Realty, operates in Seattle.

Green agents aren’t the only sign the Northwest real estate industry is getting greener. The Northwest Multiple Listing Service recently added environmental check boxes to its listing forms, so homebuyers and agents can identify homes with certain features or third-party certifications. A homeowner can now tell, for instance, if a home offers Energy Star appliances, renewable bamboo floors or a drought-tolerant landscape.

Greening Properties operates like a regular brokerage, representing both buyers and sellers and providing standard services such as market analysis for sellers and presenting offers and negotiating on behalf of buyers.

What differs is knowledge of green practices and products, say owners Valerie Steel and Mary Ehrlich. Both have a history of community involvement, particularly on local environmental issues. Both were founding members of the Everett Shorelines Coalition, formed to protect shorelines, and Historic Everett, focused on preserving buildings with historic significance.

The term “green building” covers a lot of ground, including design, materials and building practices. One client may be interested in energy efficiency while another may be concerned about building materials that could exacerbate a child’s asthma.

Green encompasses a home that’s smaller and more energy-efficient, and it also can apply to older homes, since buying one doesn’t require the use of new resources. Sustainable homes also include touches a homeowner may never see, such as recycled materials, and paints and finishes that emit fewer toxic fumes. It may also mean the land was developed in a way that minimizes erosion, or workers recycled materials at the job site.

The specialty knowledge includes the ability to cut through what’s green and what’s marketing, Ehrlich said. The pair saw a recent listing where an agent misrepresented the greenness of a property, describing a home as green because it had a brick facade.

The company also differs from a traditional brokerage by providing clients with a livability checklist based on criteria by various green certification agencies such as Built Green and the American Green Building Council. For buyers, that checklist compares the features of properties they might wish to buy.

For sellers, the company rates sustainability of property and recommends how to make it more sustainable before it’s listed. For instance, if a client planned to spruce up his home with new paint and carpet before listing it, the agent might recommend using low-fume paint and a renewable flooring such as bamboo instead of carpet, Ehrlich said.

Demand for homes with green features is growing, and it can be difficult to find homes with certain green features, Steel said. Finding a home with Energy Star appliances is easier, while finding a home on land that hasn’t been “slashed and scraped” by developers is more difficult, she said.

Crawford, one of the company’s first clients, didn’t expect to find a green home ready for her to move in. Instead, she asked Steel to find an older home with “good bones” that she could remodel. She settled on a solid 2,220-square-foot home in the Port Gardner neighborhood, and she is already making plans to add solar roof tiles, replace windows and add bamboo floors. Via HeraldNet

If any of our viewers want more information on green homes visit Tree Hugger, these guys post an amazing 20-25 articles a day and have a ton of resources living green.

Jerry Campbell - Muljat Group Realtors - Bellingham WA -Bellingham Green Homes supporter

Talk about being in the right place at the right time.  While property speculators and house flippers in places such as Philadelphia, Las Vegas, and San Diego are running for cover, in other parts of the country home owners are fairing a little better with residential sales. Third-quarter median home prices last year climbed 14.6 percent in Seattle, Wash.; 12.3 percent in Portland, Oregon; and the rest of the Northwest appears to be the hottest market in America.

Home prices also increased by roughly 5 percent in Houston, Texas; Los Angeles, Calif.; Austin, Texas; Jacksonville, Fla.; and Charlotte, N.C., over the year before, according to the National Association of Realtors.

Price figures are based on total metropolitan areas as defined by the United States Office of Management and Budget. So, while the New York City metro area grew at a solid, but not blockbuster, rate of 3.6 percent, officials from New York’s Finance Department say the five boroughs grew at 19 percent in 2006 — twice the 2005 figure — with prices in Brooklyn and the Bronx swelling 27.6 percent from the previous year.

For the rest of the country, median home prices dropped 1.2 percent, on average. The area strongest hit by the slow down was the Northeast, where median home prices plunged 4.8 percent over the last year.

Homeowners out west were much better off over the last year and half, where Realtors expect prices to continue to rise. The Seattle real estate market has stayed hot even while most areas of the country have slowed down.  There are a lot of buyers relocating to our area and move up buyers are still active in the market.  Our economy remains strong, interest rates are still relatively low and employment numbers have remained strong this past year.  Seattle, Washington has long been a desirable area to live but the available amount of land to build on is in short supply.  On one side of Seattle is the Puget Sound and to the east are the Cascade Mountains.  So when this area grows we have to go north and south along the I-5 corridor. There’s not much room to grow, so you’ve got a lot of home buyers vying for smaller and smaller pieces of land.

In my own market up in Whatcom County, the Bellingham real estate market has experienced a slow down in the number of homes sold over the last eighteen months.  We haven’t experienced any noticeable drops in overall prices but days on market is definitely up with so many properties on the market.  I think once we start to see the over all number of properties on the market go down, we should start to bottom out and experience a leveling out of this market for several years.

The Northwest showed gains exhibited high job growth and positive net migration figures. They were also areas in which home affordability remained close to national averages through the boom, making them less prone to the corrections and adjustments seen in overheated markets.

Cities most affected by the downturn were old-line industrial markets such as Detroit or Lansing, where local economies are suffering the effects of mass layoffs in the auto industry.

In the Northeast, the number of jobs created last year grew by only 0.8 percent, according to the New England Economic Partnership (NEEP), versus the 1.3 percent national growth rate. If that’s not bad enough, NEEP’s projections for increases in gross regional product and per capita income also lag significantly behind national averages.
As a result, people are leaving the area. The latest United States Census net migration figures indicate that 4.6 percent more people left the region than entered it last year. The regional real estate market also experienced a 4.8 percent drop in median prices. On the flipside, the South’s economic conditions lead to the nation’s best migration rate (3.4 percent) and subsequently, at -.1 percent, the nation’s best median home price growth figures.

From 2004 to 2005, median homes prices in most of the cities that are now resisting downturn, such as Austin and Charlotte, grew at slower rates than the national average.
This made them less susceptible to the sudden swings of a high-flying, highly speculative market such as Miami. In this area, median home price exploded from $232,000 in 2003, to $391,000 at the end of 2005, driven by a market in which builders couldn’t keep pace with demand. Miami’s real estate market has since corrected, moving down 5.6 percent from its peak.

In the highest growth markets, there were a lot of home buyers who panicked when they saw prices going up by 8, 10 or 12 percent a year and rushed to buy in. Once prices started to fall in high growth markets, speculators got an itchy trigger finger because prices went up so high that it was very difficult to buy; affordability had gotten out of hand and people worried that if they waited six to eight months to sell, they’d be left holding the bag. The result is a short-term adjustment.”  Steadier, more tempered growth translates into a stable real estate conditions because affordability remains in line with local economic conditions. Thats why areas like Seattle have been able to weather this market so well.

“In markets with sharp transitions, there was a lot of speculative, short-run buying” says Lawrence Yun, a senior economist with the National Association of Realtors. “In places like Texas or North Carolina, home prices are affordable and there is a good job creating the environment. In Seattle, the job market is strong and while home prices are above the national average, they are affordable by West Coast standards.”

What’s more, when home values grew too quickly, builders rushed to keep up and when the market peaked, construction slowed and there was excess inventory. For example, this week the nation’s largest home builder, D.R. Horton, reported a 60 percent quarterly drop in earnings. In my own market of Bellingham, WA; D.R Horton sales slowed way down and then an unrelated moratorium put a hold on new starts for about 4 months.  D.R. Horton is building brand new homes in the Cordata area of Bellingham, WA and the moratorium was just lifted.  Now that the Cordata moratorium was lifted there was about 60 permits waiting to get started on new homes, several with D.R. Horton.

Add to the mix speculators anxious to dump property and the result is a jump in residential vacancy rates. Since the end of 2005, when the housing bubble began to pop, nationwide vacancy rates have jumped to 2.5 percent, a nearly 50 percent increase from the 10-year average. Higher vacancy rates give buyers leverage in negotiating price because sellers have excess supply.

Despite the numbers, some in sluggish areas remain hopeful.  In cities such as Boston, where median sales prices were beaten down 4.3 percent from the 2005 peak of $431,000, realtors say the market is still strong.

In the Bellingham real estate market the biggest difference from the peak markets of 2004 and 2005 is that sellers are willing to negotiate more on their prices and the bidding wars aren’t taking place very often any more. The bottom line is, if sellers price their home for sale correctly at the market price, it will move.  Sellers need to be careful not to price their home above a market that could be adjusting down, that would be a disaster in a downward moving market.  Sellers that hold out for higher prices could be chasing a downward market and actually get less for their home in the end, in most cases. 

The buyers in our Whatcom County real estate market don’t seem to have urgency right now because they think if they wait six months, they might get a cheaper price on a home.  Once this home market clearly bottoms out, the buyers will be back and purchasing homes again.

We probably won’t see that fast moving sellers market again for years, if the past is a good indication.  Hot sellers markets usually only last a few years and the buyers market or normal markets are usually a lot longer in the 4 to 10 year range.  There’s no question we will see a hot market again in the future…just not anytime soon.  Partially via Forbes.com