Northsound Property News

New Site is Live!

2007-08-03T09:33:00.001-07:00

Welcome to North Sound Property News. We've moved!

We are now live on the web with our own domain and a whole new look and feel!

Please visit us at the new address: http://northsoundpropertynews.com/

We will no longer be posting here on Blogspot so if you have any links, please update them.

Thank you for visiting and thank you for your support--I hope you enjoy the new site!

Northsound Events Calendar

2007-08-02T08:54:00.000-07:00

The Mukilteo Chamber's long-awaited summer concert takes place Saturday August 4th at the Village Center in Harbour Pointe. The bands scheduled to play include: Tweety and the Tomcats, Soundview, Bad Habit, Janine Elf and The Stephen Grace Band. The concert starts at 2pm and goes until 8pm. There will be food tents and a beer garden for those 21 and over so the concert should be a great opportunity to meet and greet Mukilteo residents and enjoy a free day of good music. Mukilteo.

Further afield, Seafair weekend is this weekend. I-90 bridge closes today and tomorrow from 9am to noon, and of course the Blue Angels will be doing their thing through Sunday. As usual, this will give local "uptight Seattleites" plenty to complain about what with the noise and all. As for me, I will thrill to the sound of F-18 Hornets as they scream overhead any time I can. I am a Navy brat and an Air Force veteran after all--that's not noise, it's the sound of FREEDOM.

I jest. It's actually the sound of 40-year old technology. But seriously, I don't mind the noise--it makes the heart palpitate, which is a sensation I kind of enjoy.

If that doesn't make you feel better about the noise then just remember folks--the hydros and the Blue Angels are a couple of the last celebrations we have of Seattle's blue collar heritage. Think of it as a way to remember that Seattle is the town airplanes and lumber mills built.

And the Seafair airshow is usually pretty good, if you like airshows. I realize there are those who don't but in the interest of full disclosure I submit that I am married to a Boeing engineer so by default, I like airshows. Seattle.

Other stuff

Thursday

A summer concert series planned at Alderwood mall, featuring food, music, book readings and special activities, runs from 5 to 9 p.m. Thursdays through Aug. 23. Go to http://www.alderwoodmall.com/ and click on "events."

Open mike night for musicians and poets at Zippy's Java Lounge, 7 p.m. Thursdays, 1804 Hewitt Ave., Everett.

Friday

Farmers Market at Country Village, 10 a.m. to 3 p.m. Fridays through September, 23718 Seventh Ave. SE, Bothell.

Free First Friday Afternoon 3 to 5:30 p.m. Friday at Imagine Children's Museum, 1502 Wall St., Everett. For more information, go to http://www.imaginecm.org/.

Edmonds Outdoor Movie Night, at dusk Friday, Frances Anderson Center playfield, 700 Main St., Edmonds. Bring a blanket or lawn chair. Call Edmonds Parks and Recreation at 425-771-0230.

Saturday

The Future of Flight Aviation Center offers a "Day of Learning" 9 a.m. to 3 p.m. Saturday, 8415 Paine Field Blvd. Mukilteo. For information and tickets, call 800-464-1476 or go to http://www.futureofflight.org/.

Edmonds Museum Farmers Market, 9 a.m. to 3 p.m. Saturdays through Oct. 28, Bell Street between Fifth and Sixth avenues, Edmonds. 425-774-0900.

Mukilteo Chamber Concert (see above)

Sunday

Everett Farmers Market, 11 a.m. to 4 p.m. Sundays, 1600 W. Marine View Drive, Everett.

NEXT WEEK

Wednesday

Music on the Plaza Concert Series from 11:30 a.m. to 1:30 p.m. at the Snohomish County office campus, 3000 Rockefeller Ave., Everett. The concert series runs each Wednesday through Aug. 22. 425-388-3186.

Mukilteo Farmers Market, 3 to 7 p.m. Wednesdays through Oct. 5, 304 Lincoln Ave., Mukilteo.

Let's Get Real About the Housing Market

2007-07-30T20:02:00.000-07:00

This post by "The Mass. Mouth" Michael Freedberg sums up quite nicely I think what is currently going on in the housing market in North King and South Snohomish counties. Freedberg is based in Massachusetts, but his observation could be applied to anywhere that is experiencing similar market phenomena.

The Mouth's supposition is that in a changing market, the reason prices will initially be observed to rise even as time on market and number of homes being sold is shrinking is because when the market changes, only the best homes on the market will sell.

He said some other things I didn't agree with as much, but this explanation of why prices are still rising as inventory creeps up along with time on market, did make sense to me.

This is certainly what I have observed in my neck of the woods. Currently, we have more homes on the market than buyers looking to purchase. So, buyers have their pick from the cream of the crop. That just means that if a home comes on the market and is not the best one in its price range, it ain't gonna sell. It's got to compete and win in order to sell. It's really as simple as that.

Now, a couple of years ago, quality didn't matter as much because buyers so heavily outweighed sellers. I think in some places such as close-in King county we're still seeing this kind of market, though even there things have slowed a bit. But here in the outskirts (North King and South Snohomish County) what I'm seeing is pretty much what Michael describes: the best stuff sells, and the worst sits on the market until price reductions finally cause it to move or sellers take it off the market.

So then the question is, "why am I talking about this?"

Simply because--and I wish the National Association of Realtors would realize this--you can't fight market forces by pretending they don't exist. It's best to understand and accept what the market is doing, and then plan your strategy accordingly. No matter what the market may be doing, there is a winning strategy. Usually, that strategy is to do the exact OPPOSITE of what the rest of the herd is doing.

Market forces are a lot like a mob, they move on momentum. Once momentum gets going, it's got to run its course. Which it will do in time. There's no need to panic when it comes to observing market forces in operation. What I am constantly telling people is that it's okay if prices come off last year's highs--they have to if normal people are going to be able to afford a home in the future.

15% appreciation every year (or more) is not normal--not unless we all start getting 15% raises every year. Normal appreciation is a rate that outpaces inflation, but not by a lot. Back in the day when I took economics in college, we were told that 5 - 8% return on real estate was pretty good. Stocks should be in the range of 8 to 10%. However, these are rates of return over time--the way it looks in reality is typically that prices go up fast, then drop back or level off before they go up again. If they go up a lot, they can drop back a lot--or they can be stagnant.

In areas where there is a lot of in-migration such as Seattle, I would expect stagnation rather than price declines, but it depends on a variety of economic factors. If something happened to shift the supply of jobs elsewhere, then, obviously I would be more concerned. But in general our overall economy in the area is good. Therefore, people will be needing a place to live.

Given that, I would not expect to see a mass exodus out of the housing market given that the pool of rental properties has declined over the last few years (condo conversions anyone?) so renting is not really that great of an option at this time. Rents have gone up significantly along with housing prices and of course, the law of supply and demand dictates that if demand for rentals goes up and supply doesn't meet the demand, then prices for rentals will also increase.

So it's natural for markets to move up or down. The thing that is important to keep in mind, is that they usually recover. Supply and demand will eventually bring a market back to equilibrium. A healthy market is one where neither buyers nor sellers have too much power, and neither supply nor demand is too far out of whack. In fact you could say that we are recovering right now from a market where sellers had too much power, and buyers didn't have enough.

The only time markets don't recover, is when the need for the thing that is being bought and sold goes away. I don't think the day will ever come when people won't need a roof over their head.

No matter what happens, I believe that home ownership will always be an important goal for most people. And like Scarlett OHara, I believe that a piece of land is the most important thing you can own, because it gives you roots. As the child of a life-long renter, owning my own home is an incredibly significant achievement to me. It represents stability, faith in myself, and faith in the future.

I also believe that it's a sound financial move for most people, most of the time.

Renovate or Buy New, Part II

2007-07-30T18:37:00.000-07:00

A couple of years ago I wrote a blog post about how a person could decide whether to renovate their home or buy a new one. Well, it turns out this is by far the most popular search term for people who find their way to this blog, so with that in mind I thought it was probably time to expand upon the original post.

Here are a few more things for people who are trying to make this decision to think about:

1. A good rule of thumb for how much you should spend on a renovation is, do not renovate if the cost exceeds 30% of your home's value. More than that and you are in "overimprovement" territory and you may find it difficult to recoup the value.

2. You should consider the neighborhood. Renovations will show more ROI in some neighborhoods than others. If others around you are renovating their homes, it probably makes sense to renovate yours too. If other homes around yours are not being kept up, you will probably find it more difficult to get a return on your renovations. So, compare your home to the surroundings. Also, find out if there are any changes, such as new construction, road expansions or zoning changes, coming to your neighborhood. A call to your city or county planning department will only take a few minutes but could save you money in the long run.

3. Remember that renovation or remodeling is not the same thing as maintenance and upkeep. Maintenance and upkeep includes things like repairing a roof, new exterior paint, etc. These are just part of the cost of owning a house and do not usually add value to the house. Renovations that are mostly cosmetic, such as installing new flooring, also do not necessarily add value. However, adding additional square footage to your home or adding to the functionality of your home--for instance, upgrading a kitchen--typically do add value.

4. You need to look at what the market is doing. If the market is appreciating, you probably will be able to recoup some or all of the costs of your renovations as long as you choose them wisely. If the market is depreciating, this will be more difficult.

5. Consider the factors that a buyer would look at when evaluating your home. Are the schools good? Is the neighborhood generally good? Would a buyer pay more for a home in your neighborhood with the planned renovations? For instance, in some new construction tracts or condominium complexes, homes tend to be pretty similar, and they typically sell in a certain price range. When buyers are looking at the homes, they will compare your home to others that have sold. In neighborhoods like this, it's harder to recoup the value of renovations than in neighborhoods where the homes are more diverse. Older homes, even if they were originally tract homes and fairly similar, will typically show more diversity over time and it is somewhat more likely that you will be able to find "comps" to support your new price.

6. Most importantly, does your home fit with your lifestyle overall? Ultimately, the best renovations are the ones that make it possible for you to enjoy your home now and for several years to come, while still adding resale value when you are ready to sell. Sometimes, we just outgrow our homes and the renovations we perform simply forestall the inevitable. If you think this may be the case, it probably makes sense to consider a move.

The Big Shakey-Shakey

2007-07-26T08:58:00.000-07:00

No matter where you live in the United States, there is always some kind of natural disaster that is common to the area. If you live on the East Coast, you have hurricanes. The midwest and mountain states have tornadoes. Here in the Pacific Northwest (and all up and down the West Coast) we have earthquakes...and volcanoes.

This is one of the big concerns that is expressed to me by people moving here from out of the area, and it's something that we who live here do need to keep in our minds and be prepared for. They don't happen very often, but when they do, there is no warning. So, you need to be prepared and know what to do BEFORE they occur.

Here is a list of the Top 5 Things You Should Do Before, During and After an Earthquake.

Before

1. Have your disaster preparedness kit ready. It should include at least a 3 day supply of non-perishable food and water, protective clothing, bedding, battery powered flashlights and batteries, a first aid kit and any essential medications, a working fire extinguisher. You should have a kit in your home (everyone should know where it is) and one in your car.

2. Have a disaster/earthquake plan. This includes having an out of town contact that knows how to reach you in case of emergency, and making sure others know who that person is. If possible, take a first aid class.

3. Identify a safe place in every room of your home, and practice "Drop, Cover and Hold On."

4. Identify and mitigate any safety issues in your home BEFORE a disaster occurs. This includes strapping or bolting down any "tippy" objects in your home, such as bookshelves, cabinets and water heaters. As an aside, if you're buying a home, strapping the water heater is an item that comes up on our home inspections in Washington state so if you can get the seller to address it, that's one less thing for you to worry about later. It costs about $20 so there is no reason not to do it.

5. If your home is on natural gas, you should know where your shut-off valves are and know how to use them. Posting written instructions in your home is a helpful tip, in case you are not home when disaster strikes.

During

1. During an earthquake, move away from any windows.

2. Go to the safe place that you identified before the earthquake and "Drop, Cover and Hold On." Protect your face with your arm.

3. If you're in bed, stay there and cover your head with a pillow.

4. If you're outside, move away from any trees, buildings and power lines.

5. If you're in a car, slow down and drive to a clear place. Stay in the car until the shaking stops.

After

1. Check yourself and others for injuries. Administer first aid if necessary. There may be a lot of debris around, so protect yourself from possible injury by wearing long pants, a long sleeved shirt, gloves, and sturdy shoes.

2. If you smell gas or think it may be leaking, turn it off at the shut-off valve and do not turn it back on until instructed to do so by a professional.

3. Check for any small fires and extinguish them. Check your home for damage and be prepared to leave if the home is unsafe.

4. Listen to the radio for instructions. Expect aftershocks and be prepared to "Drop Cover and Hold."

5. Stay off the phone unless there is a life threatening situation.

It's also important to know where to go for help, so here is the contact information for some of our local emergency services providers.

Snohomish County

Snohomish County Red Cross
Phone: 425-252-4103
Website: Snohomish County Red Cross

Snohomish County Emergency Management
Phone: (425) 388-5060 during office hours (call 911 for emergencies)
Website: Snohomish County Emergency Management

King County

Seattle Red Cross
Phone: 206-323-2345
Web site: http://www.seattleredcross.org/

Emergency Services Division
Phone: 206-296-3830 (call 911 for emergencies)
Web site: http://www.metrokc.gov/prepare/

Seattle Makes another Top 10 List

2007-07-23T08:17:00.000-07:00

Seattle made another top 10 list this week. Unfortunately, it was the Forbes list of Top 10 Least Affordable Cities. According to the Forbes article,

"A lot of it has to do with regulations and zoning," says Robert Bruegmann,
a history and urban planning professor at the University of Illinois at Chicago.
"The higher cost of doing business--and the uncertainly of business--in places
like California drives up home prices. The cost of building isn't that different
in Houston versus Los Angeles, yet L.A. prices are so much higher. ... One of
the few variables you can look at is regulatory burden."

...Unaffordability is also relative. Few residents of Sacramento,
Calif., and Seattle can afford homes in the areas, but property there is still reasonable by regional standards. Both cities are experiencing strong growth and immigration patterns, in large part due to the fact that they're less costly than West Coast cities like San Francisco, San Diego or Los Angeles...

Forbes' criteria for unaffordability is what percentage homes recently sold would be affordable to a family earning the median family income. Here's how Seattle stacked up:

Median household income: $67,870
Recent affordable home sales: 22.6%
Price-to-income affordability: Eighth worst

The news is not all doom and gloom however, as Seattle also recently made Forbes' list of Best Cities for Young Professionals, ranking 7th, based on ability to attract and retain graduates from top universities nationwide. Our strong hiring market and relatively low cost of living as compared to other similar cities (think New York, LA and San Francisco) still make this area one of the best choices for career-oriented young people.

The best take-away from this is that if you are considering a move to the Seattle area, your best course of action is to take housing prices into account when negotiating your salary. For those moving here from San Francisco and other areas in California, housing prices here will probably seem refreshingly low, but if you're moving here from the Midwest or Mountain States, plan to spend at least 10% more of your annual income on housing, and negotiate for salary accordingly.

Real Estate Vocabulary

2007-07-19T18:53:00.000-07:00

In honor of studying for my Broker's Exam, I thought I would write an entry about the vocabulary that really is used in real estate listings. These are not the legal terms that all agents and brokers are required to learn for their state licensing requirements, rather, words that are used in the marketing of our listings on a regular basis.

This vocabulary is intended to help the average consumer understand what they see in our listings just a little bit better.

Without further ado:

A

Approximately XXX square feet - We have no idea how big it actually is.

B

Beautiful - The most overused of all Realtor terms. Means "I lacked inspiration and I read somewhere that using the word 'beautiful' will inspire buyers to pay more for this house."

Big enough for the whole family -As long as it is a family of mice.

C

Custom - Seller had it built/installed himself. You will probably want to tear it out/down.

Cute - Small. Very, very small.

D

Den - The oddly-shaped, windowless room under the stairs.

Designer Paint - Not white.

E

Elegant - Everything the seller owns is in storage right now.

Exquisite - Similar to "Beautiful."

F

Finishes (as in, "top-quality finishes throughout") - Normal people refer to this as trim or woodwork. May mean that the seller bought a $15 door trim kit and installed it himself, then added $1,000 to the price.

First-Time Buyers (as in, "Attention First-Time Buyers!") - People with no money, willing to live anywhere.

G

Garage - This is the room that your cars may or may not fit into, after you load it up with all of your stuff.

H

Handyman's Special - Tear down that may actually be falling down. Get an inspection.

I

Investor's Dream - Cheap. See Handyman's Special.

J

Just Listed - This house has been on the market for three months. Please buy it before the seller fires me.

K

Kitchen Upgrades - The garbage disposal (refrigerator, diswasher--insert your appliance of choice) crapped out and the seller had to buy a new one. And he would like YOU, Mr. Buyer, to double his money.

L

Lots of Upgrades - We painted.

M

Many Upgrades - We had the carpets cleaned.

N

Natural Setting - You have to go 10 miles down a dirt road to get to it, if you can ever find it.

O

Open Space - The county won't let me build on it but is taxing me for it anyway.

P

Pastoral Setting - See "Natural Setting." Think of the movie "Deliverance."

Q

Quality (as in "Quality Finishes") - Home Depot special.

R

RV Space - We paved over our entire yard.

S

Seller is motivated - Desperation, people. It's not pretty.

Staged - The listing agent made the seller get rid of his stuff, and also his 30 cats.

T

Truly (as in "Truly beautiful") - I had some extra space in this ad, and nothing else relevant to say.

U

Unbelievable - This one depends on context. If it says "unbelievable view," the house probably has a pretty good view although it may or may not be obstructed. If, however, it just says "Unbelievable!" that usually means that we're hoping you won't notice that the roof is about to cave in. It's only unbelievable because you won't believe someone would actually list their house for sale with it looking like this.

V

Value-Priced - House has nothing going for it except a low price. See "Handyman's Special."

W

Well-appointed - The seller is taking everything with them.

X

Extra Large - Average size.

Y

Why Wait? - Frequently seen on new construction. Means roughly "We're lowering the price in a week." You should wait.

Z

Zilch - Hey, I did pretty good keeping this up all the way until the end but I can't think of anything for Z.

This list is mostly for fun, but I also wrote it to let buyers know that sometimes, words don't mean what they seem to mean. So, read carefully, and to get the most from your home search work with a buyer's agent who previews properties for you.

This is also an admonition to those of us in the business to remember that a lot of these words are overused, and in some cases are not understood the way we meant them, so we must choose our words carefully!

North Sound Round Up, Part Two

2007-07-19T15:03:00.000-07:00

Mukilteo's mayor got a raise, but the pay is still less than the mayors of other nearby cities of similar size, and by my estimation, he is also paid less than the salary of a good administrative assistant. Now, I don't purport to be an expert, but I am thinking the job of mayor is more complex, by far, than what your average administrative assistant would be expected to handle.

Part of the issue with bringing the pay scale for the position of Mukilteo's mayor in line with what a mayor of a city this size would be expected to earn, is the question of whether or not the job should be a full time one or not.

According to Mayor Joe Marine, the job is effectively a full time one whether it's paid as such or not. Others in the community feel that the mayor's job should remain a part time position. When Marine was elected, the position was understood to be a part-time one so some people feel that when Marine chose to run for the office, he should have been prepared to do what he was elected to do based on the pay scale as offered.

I think there is probably some merit to that argument, but on the other hand, I think this is part of a larger problem that the city of Mukilteo seems to have with adapting to change. It seems to me that what once worked for Mukilteo as a small town, can't be expected to work as the city continues to grow. The last 20 or so years has transformed what was once a sleepy little town into now a fairly large suburb. And I would expect that the growth will continue with the healthy economy that we enjoy. So, pretending that we are still a town too small to need infrastructure, to need planning, and to need full time employees to help manage the growth that we are experiencing, seems rather short sighted to me.

Now that I've thrown my hat into the ring on THAT little argument...

Across Puget Sound from Mukilteo, the Clinton ferry terminal on Whidbey Island has been renamed for late Washington Senator Jack Metcalf. I had the good fortune in my life to be acquainted with Mr. Metcalf growing up on Whidbey Island. He was a good man--had a farm not far from our home in Langley and I have fond memories of going to his farm to buy fresh, unpasteurized milk. I also experienced electric fencing for the first time on his farm! He was described by the Seattle Times as "having a reputation for independence and quirkiness." Sounds like a Whidbey Islander to me!

Finally, a real estate tidbit from the Zillow Blog. Today's post called, "Selling or Buying, Better Check that Calendar!" talks about the best time to list or buy a home. No, they are not talking about which month of the year is the hottest buyer's or seller's market. The topic is what day of the week, is the best time to list or make an offer.

Best time to list? Thursday morning. List any earlier in the week and your listing is stale by the weekend. Wait any longer, and you could miss some of the buyers that are searching for homes to tour that weekend. Thursday also gets you on the hotsheet for the buyer's agents that are planning tours for their clients.

Best time to buy? The first Tuesday morning of any month. Why? Because sellers will have just paid their mortgage on the first of the month (ouch!) and by Tuesday they will have given up on receiving any other offers based on the previous weekend's showings.

I think these are interesting thoughts, but there are a couple of other things that clients need to consider. For instance, when listing your home in my area, a Thursday listing will eliminate the possibility of getting your home seen on our Broker's Open, since those occur on Thursday. And in my office, our office tour is Wednesday, so a Thursday listing would mean that clients wouldn't be able to be on tour until the following week.

Northsound News Round-up

2007-07-18T16:38:00.000-07:00

I'm a bit short on time today, but I've been saving up tidbits for the blog in my Google Reader, so I'm going to round 'em up and head 'em out!

This year's Seattle Street of Dreams home show is now in progress. This SOD differs from previous years in that the show is incorporating a focus on green building techniques. Though the homes featured are still large by any definition and of course they feature all manner of bells and whistles (this is about dreams after all!) , square footage is capped this year at just under 5,000 asf. Street of Dreams takes place in Quinn's Crossing, a community of 48 homes near Maltby.

Redfin has announced that it has received $12 Million in VC funding from Draper Fisher Jurvetson, and is now open for business in the Washington DC market. This has been covered with varying degrees of seriousness all over the blogosphere, but I'm going to chime in with my own two cents here anyway.

The real estate industry today reminds me very much of the IT industry about 8 or 10 years ago. I was involved in that industry at that time, and I recall that retailers were very concerned that their brick and mortar business model was doomed to go the way of the dodo, with the advent of companies like Amazon.com, Drugstore.com, etc. There was a huge influx into the Internet marketplace of online retailers and discounters. Some of these retailers have lasted, and others burned bright and flamed out.

Take as an example, HomeGrocer.com. The media played it up that ordering groceries online was the wave of the future, and competing grocers were concerned that it was a threat to their business model. HomeGrocer soaked up huge amounts of VC funding, but never turned a profit and eventually went out of business.

Even those pure-play dot-com retailers that outlived the dot-com bust, such as Amazon, still struggle. Meanwhile, those companies that effectively combined the best of the web with a brick-and-mortar presence eventually won out. Look at Nordstrom--fabulous website, and fabulous service whether you visit their store online or in real life. At Windermere, we often look to Nordstrom as the gold standard of service and what we should aspire to in our business.

The major real estate brokerages had it good the last few years, with lots of easy sales and plenty of cash to go around--very reminiscent of the 90s dot-com boom. The industry has NOT been quick to adapt to changes in the marketplace but by and large we have a business model that still works. It could be more consumer friendly, and we need to be more proactive about adopting technology.

Technology will revolutionize real estate and the way we do business will change. But the real estate agent will survive, even if we do our jobs somewhat differently, because we provide a service that people want and need. Maybe not EVERY person will need a real estate agent in the future, but enough of population values what we do that we are in no danger of following the dodo into extinction. Though, I would say that the easy money of the last few years has inflated our ranks, and it's likely that there will be a thinning coming. And frankly, it will be good for the industry to have that happen.

What I hope from all this is that companies like Redfin will help the industry move in a more consumer-friendly direction, and that it will force the industry to embrace change, rather than resist it. But will Redfin be the one to outlast the field? I don't think so. They just don't seem to have a business model that will take them to profitability, and they don't have the kind of universal appeal that will allow them to work with the population at large. They are and will always be a niche player. But we do NEED what they are bringing, even if we don't always like it.

Okay, moving on!

There's been ongoing talk of converting the Smith Tower office building in Downtown Seattle into condominiums. Looks like we are a step or two closer to having that happen. The developer is down to the last city approval before they can move forward with the project. Seems like that would be a pretty cool building to live in, if they can upgrade the systems to modern standards. In particular, a faster elevator would be good! And it's a great way to preserve an important piece of Seattle history.

Last item. 3Oceansrealestate blog ran a great feature this morning on how to know when it is the right time to buy a home. Regardless of what the market may or may not be doing, here are the factors buyers should be thinking about:

You found the home you really want and you can see yourself living
there.
It’s affordable.
You can get a reasonable loan.
It will serve you and your family for years to come.
You’re not looking for perfection.
No home is perfect.
You’ve given up trying to beat the market.
You’re comfortable with your compromises, whether it’s location, size,
price, features, or condition.
You’re confident the home you’ve chosen is desirable enough that you will be
able to sell it in any market.

While it makes sense for investors to try to time the market, with home-buyers, it makes less sense since you are talking about a longer holding period, and also, there are other reasons--tax relief, pride of ownership, stability, etc.-- to buy besides the investment possibilities.

Okay, that's it for today. I. Am. Outta here!

Mukilteo on Money Magazine's Top 100 Places to Live!

2007-07-17T09:43:00.000-07:00

Mukilteo is number 69 on the Money Magazine "Top 100 Places to Live," one of only four Washington communities to be featured. Other Washington towns to make the top 100 are Silverdale on the Kitsap peninsula in 99th, Camas in the Portland/Vancouver area at number 63, and Sammamish on the Eastside, which came in at number 11.

So how does Mukilteo stack up against the rest of the Top 100?

Median family income is a little lower, with the average family earning $83,569 compared to $90,316 for other communities in the Top 100. Job growth in the area is higher at 15.83% versus 13.41% for the rest of the Top 100. Real estate is more expensive here, with the average home in Mukilteo being priced at $401,510 compared to an average of $359,352 for the rest of the Top 100. On the other hand, property taxes are lower, as is auto insurance. And while sales tax here is higher than other towns in the Top 100, there are no income taxes in Washington state, so our overall rate of taxation is well below the average for the Top 100.

As for schools, approximately 100% of students in Mukilteo attend public schools, compared to 91% for other towns in the Top 100. Test scores for reading are .7% lower than other towns in the Top 100, but math scores are 17% higher. This makes sense given our proximity to Boeing and other high-tech employers.

Mukilteo is also one of the more diverse communities in the Top 100. The average racial diversity index for the Top 100 is 59.2%, while Mukilteo scored 81.3%, with higher numbers indicating higher levels of racial diversity.

Click here to see how Mukilteo stacked up in all other areas considered by the Top 100.

Northsound Weekend Calendar

2007-07-13T09:28:00.000-07:00

There are lots of fun things to do in the Mukilteo and Everett area this weekend. With a slight cooling in the weather, it's a great time to get outside!

Friday, July 13th

Wine Tasting - Wicked Cellars
Everett's Wicked Cellars is hosting a wine tasting of eclectic wines from around the world. 4 -6 pm, 2616 Colby Avenue, Everett. Call (425) 258-3117 for more information.

Everett Cinema Under the Stars
Take advantage of a balmy evening and see "Over the Hedge" at Everett's Cinema Under the Stars, an annual, summer-long festival featuring movies shown at Thornton A. Sullivan Park at Silver Lake."Over the Hedge," a family-friendly animated film, will begin at 7 p.m. tonight at the park, at 11405 Silver Lake Road in Everett.

For more information, call 425-257-8322.

Saturday, July 14th

Mukilteo Garden and Quilt Tour
The Mukilteo Garden & Quilt Tour promises to be an outstanding event for local gardeners and quilt lovers. The tour runs from 10 a.m. to 5 p.m., rain or shine

Jetty Island Sunset Harbor Cruise
Be dazzled by the splendor of the sunset over Port Gardner Bay. Enjoy the sights and discussions with a Jetty interpretive naturalist. This popular cruise happens only four times in conjunction with late-night campfires, and it always fills up. Call the Jetty Kiosk for reservations at 425-257-8304.

Sunday, July 15th

Sand Castle Building Contest
Test your sculpting skills against some of the region's most creative amateur builders in this increasingly competitive contest. Or just come to have fun! Bring digging tools, buckets and your imagination. Prizes awarded.All ages welcome for single or group entries.

All Weekend

Jetty Island Days
Jetty Island Days are still in progress. Ferry runs on the half hour between Everett 10th Street Marina and Jetty Island dock. Take the ferry or rent a kayak to get to the island (or, hitch a ride with a friendly boater).

For more ideas, see this article from the Everett Herald, Top Ways to Spend the Day.

Swing for the Fences

2007-07-12T21:53:00.000-07:00

Here in Boeing-land, you can't swing a dead cat without hitting someone that either works for the big B or is married/related to someone who works there. When I was a kid growing up here, nearly everyone I knew had a dad or an uncle working for Boeing. Naturally, my rebellious nature caused me to swear I would never marry a Boeing employee. But, time has a way of proving us wrong, so naturally, when it came time to marry I married a Boeing engineer.

So yes, we are a Boeing family, like many other thousands of Boeing families here in the "Northsound service area." Quite a few of my clients work for Boeing, many of them on the 787 project, so it was with a special sense of pride that we watched the 787 roll out last Sunday.

Boeing is the largest employer in my little corner of the world, and while I wouldn't say we are a one horse town, Boeing is definitely a major driver of the local economy. One metric I've heard is that for every one Boeing employee, there are 5 to 10 other individuals in local businesses that depend on him for their job.

And while the North King/South Snohomish county area is now a bedroom community for Seattle and the Eastside as well as Everett employers like Boeing, the housing market here still rises and falls with Boeing's business outlook. Since the 787 project began, we've seen a huge number of people come here to work on the project, and I've had the good fortune to work with many of them. There's been an excitement surrounding the project that has spread to the community at large. On Sunday, that excitement finally bore fruit.

After all, it's not like we get a moment like this every day. The day of the 747 roll out is still etched clearly in the minds of a lot of people around here. That was nearly 40 years ago. This is the first new plane program to roll out in nearly 15 years. And it wasn't too long ago that the pundits were saying that Boeing's days as the leader in the commercial aerospace market were numbered. So Sunday meant a lot, to a lot of us.

And not just because it's good for the local economy. A few years ago on 9/11, the aerospace industry was hit hard. REALLY hard. It was a real blow to a lot of people in our neck of the woods. So, for us, Sunday's ceremony wasn't just a chance to share in a moment of civic pride. To a lot of us, it marked the triumph of American ingenuity over those who would like to harm us.

We were hit hard, but we came back swinging for the fences.

Northsound News Bits

2007-07-12T09:51:00.001-07:00

Here are a few of the stories that are of interest in North King/South Snohomish counties today.

1. The Weather! The temperature yesterday was in the upper 90s, prompting many north end residents to suddenly become sick and have to leave work. Most parts of the country see temperatures in the 90s pretty consistently during the summer, but here in the Northwest its not that common. In fact, it's so uncommon that it tends to precipitate a lot of sudden illnesses. Illnesses that can only be cured by going to the beach, or taking out the boat.

2. Kenmore Redevelopment: According to to the Seattle Times, the city of Kenmore has signed an agreement with Kenmore Partners LLC to redevelop a large, city-owned parcel of downtown into a new city center with pedestrian-friendly shopping, in accordance with Kenmore's downtown master plan. Kenmore Village by the Lake will include housing, retail, and a central gathering space. The 9.6-acre site, at 68th Avenue Northeast and Northeast 181st Street, is now home to a temporary City Hall, a park-and-ride lot and a shopping center that dates to the 1960s and is currently home to Ostrom's Drug. The public comment period will begin in the fall.

Kenmore is one of the areas where I work, and I think this is great news given that one of the things that is less desirable about Kenmore is lack of this kind of infrastructure. It's actually a neighborhood that has a lot to offer in terms of its location and the kinds of homes that are available, but home values have been somewhat lower here than other nearby communities because of the lack of a central core. The completion of this project should increase home values in the area.

3. Arlington Fly-In is In Progress: The 39th Annual Arlington Fly-In began yesterday at the Arlington Airport and runs through Sunday. The Fly-In is one of the leading air shows in the country for experimental and "sport" aviation.

Downtown & North Everett Market Stats - June

2007-07-11T10:28:00.001-07:00

Downtown and North Everett are a couple of my favorite areas to work and play, so I like to keep abreast of what is going on in that market. So I have decided to start publishing market statistics for the central Everett area (which includes Bayside, Riverside, the Business District, Stadium, Rucker Hill and Forest Park) here on my blog. If you would like a breakdown of a specific neighborhood let me know and I will be happy to provide that for you.

All statistics are hand calculated by me, using NWMLS data, and include the period June 1, 2007 through June 30, 2007

Active Listings
Listing Count: 104 (this includes ALL active listings through June 30, regardless of date listed)
Average Time on Market: 76 days
Median List Price: $298,450
Average $ Per Square Foot: $212 (range: $111 to $475)

Under Contract (includes Contingent, Active STI and Pending)
Listing Count: 53
Average Time On Market: 50 Days
Median List Price: $272,500
Average $ Square Foot: $252

Sold Listings
Listing Count: 40
Average Time On Market: 50 Days
Median Sale Price: $323,445
Average $ Square Foot: $193 (range: $110 to $364)

Interestingly, times on market are longest in the $300,000 to $500,000 price range, at 87 days. Five out of 39 properties in this price range have been on the market longer than 200 days. One property in this price range was originally priced at $1.8 million and was recently dropped into this price range in May. The property in this price range that has been on the market longest has been on for 379 days (it is new construction and part of a new townhome development called BelMonte Heights in Riverside).

Average time on market is shortest in the $500,000 and up price range at 64 days. There are only 8 homes in this price range currently on the market, with the top priced home in North Everett currently listed at $2.9 million. Excluding this particular home, which has been listed for 289 days, the average time on market would only be 31 days.

What does this tell us? Demand for homes in this area is strongest in the highest price range. North Everett, particularly Rucker Hill and Bayside north of 19th, has always been an area known for its high end homes, many of which boast incredible views of Puget Sound and Port Gardner.

Other areas near Everett's downtown, such as Riverside and Stadium, boast a lot of great starter homes and rental property for which demand tends to be pretty strong.

In between however, there are fewer options, and fewer buyers looking for those homes. That price range tends to be dominated by families, for whom schools are a big concern. Many of these families choose to live in more suburban areas such as Mukilteo, Mill Creek, Silver Lake or Snohomish.

Overall, the central Everett market has about 5 weeks of inventory based on June figures, indicating a strong seller's market for homes in this area.

Note that according to the NWMLS system-generated chart below - click to see a larger version - inventory is about evenly divided between new listings (less than 30 days on market) and older listings.

Craziest. Transaction. Ever.

2007-07-09T17:33:00.000-07:00

For the last couple of months, I have been sitting on a great blog post topic and haven't quite had it figured out in my head, what I wanted to say about it. I was still pondering it. There was a transaction I did, not long ago, that probably will go down in memory as the craziest one I have ever worked on. Well, craziest one so far. Maybe someday there will be one crazier--after all, I expect to be in this business for a long time and part of what attracts me to it is the craziness! Gives me good stories to tell over beers...and over the internet.

Anyway, I had a client that contacted me wanting to do a rehab/flip of a property. After going to great lengths to explain the various ways these deals can go south, and making sure that they understood the risks involved and so forth, we in the end decided to go forward.

Several months went by, looking for the perfect property. Finally, we found a property that my clients felt like would be worth the work to fix up as they envisioned. The neighborhood was great--right on a golf course, in an area with a lot of older homes that are being fixed up. Prices range from $600K up to over a million. The commuting distance to two of the Northwest's major employers is about 20 minutes in either direction depending on traffic. The home also has a view of the lake. And, it was a very large home.

It was listed with a Limited Service agency. That meant, all contact had to be made with the seller directly. Dutifully, I called the seller to set up a showing. Up to this point, there was nothing to indicate that things were about to get strange.

I call the phone-to-show and a teenager answers the phone. I say that I am interested in seeing the house and can I please speak to Mr. or Mrs. Seller? I was informed that the parents were out of town, but I left a message for a parent to call me back. I did, and we set up the showing.

The next day promptly at 10, my buyers and I arrive. The first problem is, there is no lockbox. The second problem is, there are two large dogs barking their heads off on the other side of the door. There also appear to be kids home...several of them. How many kids are living here, my buyers and I wondered? Looked like a reunion of the Lost Boys.

Well, the only thing to do was to knock on the door, so I did. The oldest of the Lost Boys answers the door. I mention that I called about showing the house? Naturally, he did not get the message, but says it is okay to take a look around, so my buyers and I go inside and start looking around. The first thing to hit us is the odor of dog feces, cigarette smoke, stale beer and rotting garbage.

And they say real estate is a glamorous job? Anyone who has worked foreclosures or short sales more than once (which I have) would recognize this house as a "distress case." Normally if it looks like this, or smells like this, for a showing, the sellers have issues--financial ones usually go hand in hand with "other" issues.

First stop was the kitchen. There we found two large dogs eating dog food directly from the 50 lb. bag. We noticed that both of the double ovens were open, with the heating units on. I asked the young man about it and he announced that, "oh yeah, the furnace is not working."

Okay.

Next stop was the living room, where in the middle of April, the Christmas tree was still up. It was a real tree, not a plastic one, so it was completely dried out and had dropped pine needles all over the floor. It reminded me of nothing so much as the Charlie Brown Christmas tree. Shoot, evidently Pig Pen was living here so we even had some of the characters.

Continuing our tour of this lovely home, we went into the family room, which was built around a beautiful large fireplace. Every inch of floor in the room was covered in linens, dirty clothes and so forth, such that you could not see or feel whether the floor was carpet or hardwood. When I kicked aside a pile of clothes to see what kind of flooring was in evidence, I unearthed a large, petrified pile of dog poop.

Soon enough we had seen what we needed to see. The home was in terrible shape cosmetically, but beneath it all you could see that it was a lovely, well-built home.

And the signs of distress were so clear that I went home and did a little research on my own. I discovered that in addition to being behind on his negative amortization home loan, the owner was also subject to two tax liens totalling almost $80,000 and a judgement from the person who sold the house to him for an additional $5,000.

So, knowing all this, we decided to go to the seller with an offer that reflected the condition of the house, and explained to him that this would be a short sale situation. In fact, it would have been short whether he got full price or not. So I carefully explained our offer to him, and explained to him what would have to be done to actually sell his home. I explained to him that although I represented the buyers, I would be available to help him as he tried to clear title to his home so my buyers could purchase it.

After a few days of deliberation, during which time the contract expired, he finally accepted the offer. Now, we had 30 days to see if we could clear the tax liens, judgements, and get the lender to accept a short sale. Naturally, it was my job to make sure that all this happened. So, I was on the phone with the seller nearly every day, making sure that he had done his part, offering to run and fax documents around for him, and whatever needed to be done to make sure we got to closing.

Considering the situation, the actual short sale negotiation was relatively uneventful. The IRS worked out a payment plan and removed the lien, the judgement released their interest, and the bank accepted the short sale. The big trick was getting to talk to the right person at the lender, but a clever conversation with someone in the customer service department got me talking to someone at the right level to make a decision and we were able to get agreement.

The big hitch turned out to be with the buyer's lender. The appraiser had been pretty appalled at the general condition of the property and took some pictures, which made their way back to the buyer's lender who at the last minute (1 day before our scheduled closing) decided that they wanted to put some conditions on the closing. One of which was, that the property had to be cleaned up and the appraiser had to come back to take pictures showing that this had been done.
I explained the situation to the sellers who basically ignored it. So, the buyers and I were down there at 8am on the morning of closing cleaning up the property--it took 8 large contractor bags just to clean up the beer cans on the property. 8 LARGE CONTRACTOR BAGS of beer cans people. That is hundreds, maybe thousands, of beer cans.

Anyway, we got it cleaned up, the appraiser came back, the buyer's lender cleared the condition and we were good to go with releasing documents.

So, I go to the signing appointment with the buyers, all went well with no issues. That night, I went to the signing appointment with the sellers and a mobile notary, and we get down to signing all the paperwork when suddenly the seller stands up and asks, "hey, we aren't going to be able to move the washer dryer out before the buyers take possession, so can we come back for it?"

Well, you could, except that the washer dryer goes with the house. You signed a contract that said so. Which I explained to you line by line and point by point. Which you then looked at for over a week. During which time the contract expired...remember that?

I pulled out the contract and showed him where the box for "washer dryer stays with house" was checked. I showed him his initials next to the box.

"Well, I don't read contracts, I just assumed that it would be okay if we kept the washer dryer."

Finally he decided that it wasn't worth not closing on the house, just to keep the washer dryer.

Meanwhile, now that we actually could close, the seller realized he was going to actually have to move. The seller had found a place to move, but was working at a job site about 50 miles away on the day of closing, so his son, in his late teens or early twenties, was entrusted with the task of making sure that all everything was ready to go when the movers got there. The seller asked, since I was going to be there cleaning up, if I could maybe check in just to make sure things went according to "plan."

Now, the son was largely responsible for the aforementioned beer can issue, so I wasn't too sure that entrusting him with this job was the best of ideas. Sure enough, it wasn't. When I arrived that morning, the son was passed out (hungover I assume) in the master bedroom, none of the other kids were anywhere to be found and not one thing had been packed. The seller had left a list of what was to be moved and what was supposed to stay, which I made sure the movers had. They executed it to the best of their ability. About an hour before they finished, the son finally wakes up and starts pitching in. This only happened because the movers started moving the bed he was sleeping in, with him still in it.

We closed, my buyers took possession and everything seemed well until I get a call about a week later.

The seller, since he couldn't take the washer dryer with him, simply decided that he would go to the house to use it. My buyers asked if I could please discuss the matter with him.

I did, and that was the last we heard from him.

Carnival of Real Estate is Up

2007-07-09T11:29:00.000-07:00

And my first submission to the carnival, "Salesperson or Consultant?" is listed! I didn't win, but glad I submitted anyway. Thanks Marty Van Diest of Wasilla Valley, Alaska for hosting the Carnival!

Everett Photoblogging--A Day at the Waterfront

2007-07-08T22:33:00.000-07:00

We had a beautiful weekend here and so I thought it would be a great time to get out and take a few pictures with my new camera.

We tried to go to Jetty Island in Everett but it was a popular idea and we couldn't get on the ferry. Lesson? Get there early!

We may have missed the ferry but we were still determined to get some sun on our poor pale bodies. Lots of people were just hangin' out at the marina playing frisbee, fishing off the dock, working on their tan, picknicking, and waiting for the ferry to Jetty Island. So we just hung out at the Marina.

After we got tired of being at the Marina, we went up the hill to Grand Avenue Park to take in the view of the Everett waterfront. Eric just wanted to lay down and stretch out in the sun for a while.

While he made like a cat in a sunbeam, I took a bunch of pictures. I love North Everett! It is so beautiful. Here's a shot of Grand Avenue Park at the corner of Grand and 19th, with Puget Sound stretching into the distance beyond.

Grand Avenue is pretty spectacular itself. The neighborhood is about 100 years old, and this is where all the mill owners and wealthy citizens of Everett once lived. It's still a very nice neighborhood, with lots of beautiful old homes.

This next picture is the Jetty Island Ferry, its name is "The Queen's Launch." It holds about 30 people and runs every half an hour. It is free but there is a suggested $1 or $2 donation to keep it going. It is run by Argosy Cruises.

And here is Jetty Island. You can see there is a small dock on the Jetty side--if you have your own boat, kayak or raft, you don't have to rely on the Ferry to get there. The Jetty is about 2 miles long--plenty of nice sandy beaches for everyone to enjoy, plus they have nature walks and activities scheduled through Labor Day. If you are lucky, you will see the resident Ospreys, and on breezy warm days, the local kitesurfers will be out. No kitesurfers on this day--they usually come out in the later afternoons when the breezes come up.

Next week if the weather is nice we will go to Jetty Island and actually go to the beach!

10 steps to improving your credit score

2007-07-08T17:54:00.001-07:00

1. Pay off or pay down your credit cards. However, do not consolidate your credit cards or close accounts. Pay them off or down, but keep the accounts open. Length of established credit is one of the criteria that affects your credit. Longer is better.

2. Make payments on time, every time, even if it is just minimum payments. Responsible credit behavior over time is what the credit agencies want to see. It will take about 2 years of consistent effort to improve a poor payment history. Collections, judgements and other such actions will take about 7 years to age completely off your credit report. Two years of responsible credit behavior, however, should be enough to go from bad credit to reasonably good credit.

3. Your FICO score depends in in part on the percentage of available credit used. In this post by Ardell, she explains how the percentage of used credit affects your score. This is important information. Basically, for every 10% of your available credit that you use, you will lose 10 points on your FICO score. That means 50% of available credit used costs you 50 points--depending on your score this could mean the difference between "A" credit, and sub-prime. Paying off or paying down your credit card will make a substantial difference in your score.

4. Don't open a lot of new accounts at once, and don't make a lot of credit inquiries (such as on purchases of cars, boats and homes where your credit report will be "pulled") within a short period of time. These will affect your score negatively.

5. If you are having trouble making ends meet, call your creditors and see if there is a way to work out a payment schedule or lower your payments. You can also meet with a credit counselor, but make sure they are a legitimate credit counseling agency. If you're wondering how to know whether a credit counselor is legitimate or not, read this article from the Federal Trade Commission.

6. If shopping rates for a new loan, do your rate shopping within a short period of time. This will tip off the scoring system that your rate shopping is for a single loan, rather than several and it will have less of a negative impact on your score.

7. When checking your own credit, the best way to keep the inquiry off your credit score is to order your credit report directly from the credit scoring agencies. Lenders will often be willing to pull your credit report for free but be aware that it does show up as a loan inquiry on your credit.

8. Don't open new cards just to have additional credit, or thinking that this will have a positive effect on your ratio of used to available credit. Using credit responsibly means using it only as necessary and not getting overextended with your credit.

9. Keep your balances as low as possible. Yes, this is basically a reiteration of the point about paying down your balance and using credit as little as possible, but the higher your balance, the lower your score will be. The very best credit behavior is to pay off your balance every month.

10. Use credit, but use it responsibly. Credit scores treat someone with no or very little credit history as a higher risk than someone who has shown they are able to have credit and use it responsibly. So, it's not necessary to close your accounts or try to live a credit-free life, you simply need to remember that your credit score reflects the credit establishment's assessment of your past handling of credit, and the likelihood based on your past credit behavior that you will pay back your obligations on time. If you treat your credit responsibly over time, you will have demonstrated to lenders that you are a good risk. This takes time, but is worth the effort.

Mukilteo Market Stats - June

2007-07-06T14:11:00.001-07:00

Here are the market stats for the month of June in Mukilteo.

Sales activity was strong, with twice as many properties going under contract and closing in the month of June as were listed. However, we had a fairly large backlog of inventory coming into June, so even with the increasing sales activity, we still have a 2 month supply of inventory as of June 30.

As an aside, we calculate supply by looking at the number of listings on the market and dividing by the number of listings that went under contract or sold during a given period. Last month, we had a 2.5 month supply of inventory, which means that at the current rate of sales, it would take 2 fewer weeks to sell through the entire stock of housing inventory in Mukilteo than it would have during May. This tells us that things have in fact picked up for the summer.

I would classify this as a healthy market, if somewhat slower than last year (last year we only had about a 1 month supply of inventory). A balanced real estate market (a market that is neither a buyer's market nor a seller's market) occurs when there is about 2 to 4 months of inventory, though some would classify as a buyer's market any inventory levels of more than 6 months, and a seller's market as inventory levels of more than 6 months. Clearly, here in Mukilteo we are in a balanced market that leans towards still being a seller's market. But, with inventory levels up over the last two years, buyers definitely have more leverage than they have had in some time.

One sector of the market that plays a big role in how days on market numbers as a whole pan out is properties over $1,000,000. These properties comprise about 10% of the market in Mukilteo, and typically, we expect to see longer market times in this sector of the market. And this is what we are seeing. Currently, it is taking an average of 130 days to get properties in this price range "under contract" and it is taking an average of 139 days to get them to sell. But we have several properties in this price range which have been on the market in excess of 250 days, which has increased days on market figures for Mukilteo as a whole.

That's my analysis, here's the data. All statistics are hand calculated by me, using NWMLS data, and include Mukilteo (in city limits) ONLY for the period June 1, 2007 through June 30, 2007:

Active Listings
Listing Count: 92 (this includes ALL listings currently on the market, regardless of date listed)
Average Time on Market: 88 days
Median List Price: $622,475
Average $ Per Square Foot: $259

There were 25 new listings in the month of June

Under Contract (includes Contingent, Active STI and Pending)
Listing Count: 21
Average Time On Market: 55 Days
Median List Price: $579,900
Average $ Square Foot: $252

Sold Listings
Listing Count: 29
Average Time On Market: 123
Median Sale Price: $620,820
Average $ Square Foot: $238

This graphic shows the breakdown of time on market for properties currently listed. Last month, about 54% of our inventory was less than 30 days old. This month, we are seeing more balance between new and older listings.

Mukilteo July Goings-On!

2007-07-06T11:35:00.000-07:00

Mukilteo Chamber of Commerce just sent out its Chamber calendar for July. Here it is!

By the way, you don't have to be a member to attend a function (if there is a charge you just pay a dollar or two more), and it is a great way to meet all the business-people that make Mukilteo special.

After Hours Social

Hosted By: Sound Accounting Solutions (Troylyn Goldsberry) & Loan Network (Kathryn Hale)Address: 829 2nd St #4 (old town Mukilteo)Phone: 438-2920
Date: Thursday July 12th
Time: 5:30-7:30pm

Please join us for our July After Hours Social to be hosted by chamber member Sound Accounting Solutions & office partner Loan Network. Hope you can stop by for some appetizers, wine, beverages, networking and enjoying the summer evening with fellow chamber members.

General Membership Breakfast Meeting

Date: Thursday July 19thTime: 7:30 am
Place: Harbour Pointe Golf Course

Cost: $10 (Members) & $12 (Guests) * please make checks payable to The Pointe Restaurant

Guest Speaker: TBD“5” minute chamber speaker: NW Double Agents (Jeanmarie Trapp & Gordon Matheson with John L. Scott – Mukilteo)

Raffle tickets are 4 for $1.oo and proceeds benefit our scholarship fund.

Mukilteo Family YMCA
Groundbreaking Celebration

Date: Wednesday, July 11thTime: 5:00-7:30pm
Place: Mukilteo YMCA – 10601 47th Pl W.

Program: 5-5:30pm = Member BBQ & Social Time5:30-6:00pm = Groundbreaking Celebration: 6:00-7:30pm = Community Celebration & BBQ continue

Celebrate the expansion of the Mukilteo Y!

Volunteers Needed – Mukilteo Lighthouse Festival

The Mukilteo Lighthouse Festival Association is looking for volunteers to help out with:

· The Run-A-Muk (August 25th between the hours of 7am-10am)

· The Tour-de-Muk (August 26th between the hours of 7am-11am)

Please contact Kathy Wisbeck or Mimi Landsberg and staff @ the Lighthouse Festival office @ 353-5516 or info@mukilteofestival.org

Also--don't forget the Art Walk in Old Town on the last Wednesday of the month, and Farmer's market at Rosehill Community Center every Wednesday afternoon!

Your credit score

2007-07-06T11:12:00.000-07:00

Following on the tails of last week's post about lease-option purchases, I wanted to say a few things about credit scoring and what to do if you are thinking of buying a home but are faced with credit challenges.

The first and most important thing you can do, is sit down and get a full understanding of your situation. People are very funny about their credit. Some people with clean credit think that they have terrible credit (they were late with a payment once, 5 years ago, and think that the lender will never forgive them for it!). Other people have terrible credit and are completely oblivious. But one thing I've noticed is that when people have credit problems, they are sometimes so afraid of what they will find on their credit report that they choose not to find out what their situation is by getting a copy of their credit report.

This is like thinking you have AIDS and not getting an AIDS test. Realize that getting a copy of the test, or your credit report will at worst confirm your suspicions. Best case scenario is that you find out you were worried for no reason.

Anyway, it's important to face the music about this. Only when you understand the problem can you create a plan to solve it, and only with a plan can you put this problem in your past. This is about gaining control of your financial life, and the fact that you have bad credit is not an indictment of you as a person. I'm not sure that it's fair to say that everyone has had credit problems, but certainly, there are many people out there who have faced these problems and successfully put them in the past.

So, the first thing you should do is get your hands on a copy of your credit report. Sometimes if you are really upfront with a lender about your situation and tell them that you want to work on your issues, they will pull a copy of your credit for you at no charge. If you are not comfortable with sharing this information with anyone else, you can also order your credit reports from MyFico.com for about $16 dollars.

Go ahead and order reports from all three credit bureaus--Experian, Equifax and Transnation. It sometimes happens that things show up on one bureau but not on another. At this point, you want to know everything, so get a report from each bureau.

Now that you have the reports, you need to understand how your credit score affects you. First thing to know is that your lender is going to qualify you based on your middle score. That is, if you have scores from the 3 agencies of 650, 690 and 700, the lender will use the 690 score.

What does that mean? The lending industry is always changing but typically if you have a score above 680, you are what most lenders consider a pretty good credit risk. You should be able to qualify for better rates, and you should have many lenders and loans to choose from. Between 620 and 680, you are considered to have average credit. You can get a loan pretty easily but your rates won't be as good as "A paper." Below 620 but above 580, you are what most lenders call "C paper." You are falling into the subprime category--fewer loan programs to choose from, and the lenders see you as a higher risk so they charge a higher rate of interest.

Recently, the sub-prime and prime lending markets have really tightened up, because many of the subprime loans written under the lax lending standards of the last few years have gone into foreclosure. Because of this, there has been a shift away from sub-prime and back towards safer government loans such as FHA and VA for people with credit issues. These offer fairly competitive rates and can be good for people with credit challenges.

In my next post, I will talk about how to improve your credit, and how long it takes for changes you make now to take effect.

Mukilteo / Everett News Roundup

2007-07-05T10:54:00.000-07:00

Here is some of the latest news for the Mukilteo / Everett area:

July 5th marks the opening day for the Jetty Island Ferry. If you have never visited Jetty Island, you are in for a treat as it is a great family day trip and arguably Snohomish county's best beach. The ferry only runs to the island from now until Labor Day, so don't miss your chance to enjoy the sandy beaches, warm water, and natural beauty of this great beach. You can also observe the local kite surfers, who flock to this beach and park for its predictable westerly afternoon breezes.

The Mukilteo Art Walk is seeking artists to display their works at the next Art Walk on July 25th.

Lease Option Purchases

2007-06-29T16:08:00.000-07:00

One of the conversations that I always find difficult in my job is when a person comes to me wanting to buy, but is unable to because of credit issues. It's frustrating because I can really sympathize with people who are in this position, but unfortunately, I can't give them a lot of good alternatives to solving the problem. The reality is that it takes time to establish a poor credit history, and it takes time to turn things around. But people are always hoping that there is some quick-fix or a secret way to improve their credit, or some way that they can buy a home without having credit history be an issue.

Keep in mind that having poor credit doesn't always mean that a person is totally irresponsible. Sometimes it does, but there are a lot of other reasons why a person can have a low credit score. So, when I am having this conversation, I don't judge and focus mainly on what to work on going forward so that the client can achieve their goal of buying a home.

One of the things that comes up with some frequency is the idea of a lease option purchase. The client may have seen TV commercials or signs up by the road saying things like "Bad or no credit? Let me help you Lease to Own."

Folks with credit issues will ask me if I think this is a good alternative for them. Unfortunately, I have the unenviable task of saying no, given what I know about these kinds of deals.

Why? Well, typically on a lease option purchase you are putting a buyer with credit problems together with a seller who has an overpriced or otherwise unmarketable property. Think about it--if the seller could unload the property today, rather than a year or two from now, why would he choose this route? And if the buyer could buy today, why would they choose go this route either?

While sometimes it can work out, more often it is a recipe for disaster.

Let's look at the seller's side first. Most sellers will only consider doing a lease option if they are unable to sell in a normal-financing transaction. And why would that happen? Because the seller did not price his property at a level where there is market demand--in other words, it's overpriced.

That's one scenario. Another involves a seller who doesn't even try to sell his property in a normally financed transaction. This is the serial lease-option seller, and he is basically hoping that your lease-option purchase falls apart. Here's why.

In a lease-option, the buyer pays an earnest money deposit just like if they were going to buy the property outright. This is usually between $5,000 and $10,000 depending on the purchase amount. This is non-refundable, as compared to the deposit amount on a normal lease, most of which is refundable.

So, the buyer hands over his earnest money, and then pays rent for a year or two while trying to clean up his credit.

If all goes well, at the end of the lease period the buyer gets a loan and buys the home. But very often, this doesn't happen. Frequently, the credit problems are bad enough or the bad credit behavior is ingrained enough, that the buyers are not able to get their credit cleaned up enough in the period of the lease to qualify for a loan they can afford. Or, perhaps the buyer discovers there is a problem with the home and decides not to buy it. If this happens, at the end of the lease the buyer may have to walk away from the transaction. That means they also walk away from their deposit.

At this point, the seller may do another lease option, and collect another deposit from another buyer.

The serial lease option seller can put his property on the market over and over again, collecting $10,000 from each buyer, in addition to rent money. The property is making him money whether the individual buyer is able to close or not.

Sellers can lose out with a lease-option too. Sometimes the buyer decides to back away from a lease-option purchase for other reasons besides credit. If the market happens to be weak at the end of the lease period, the seller may have to put the property back on the market at a lower price. But, if this is the case, at least he has the earnest money amount from the first buyer.

Now, I'm not saying that there is never a time when a lease-option couldn't be the right course of action, and I'm not saying that every one of these transactions fails. What I am saying is that both the buyer and the seller need to control their risk by having their eyes wide open about what they are getting into.

And for buyers with credit issues, the truth is that the best way to resolve those problems and be able to buy a home of your own is to find out what factors are affecting your score negatively, and resolve those issues. This approach takes time, but it is the best and safest way to go.

Everett/Mukilteo Summer Fun

2007-06-28T11:25:00.000-07:00

With school FINALLY out and 4th of July right around the corner, I thought this would be a great time to post some community calendar information. Here are some fun summer activities that are going on in or near Mukilteo and Everett during the summer months.

4th of July Celebrations

Everett Community Parade sponsored by the Everett Jaycees: 11 am on Wetmore and Colby Avenues, between Wall and 26th Street.

Family Freedom Fest at the Everett Navy Station: Tour the aircraft carrier Abraham Lincoln, and enjoy all the other fun events! All day.

Thunder By the Bay: 10:15 over Port Gardner. Best viewing is at Naval Station Everett, Grand Avenue Park, Harborview Park, 10th Street Boat Launch, and Legion Memorial Park.

For all the activities the City of Everett has planned on the Fourth, visit their website.

Family Fourth at Lake Union (Seattle)

Fourth of July-Vars (Seattle)

Farmers Markets

Edmonds Farmers Market, Saturdays from 9 to 3 at the 5th and Bell parking lot

Everett Farmers Market, Sundays from 11 to 4 in the Lombardi's parking lot on W. Marine View Drive

Mukilteo Farmers Market, Wednesdays from 3 to 7 at the Rosehill Community Center in Old Town

For a complete list of farmer's markets in the Puget Sound area, check out this link at the King county website.

Garden/Home Tours

Mukilteo Garden and Quilt Tour from 10 - 5, rain or shine, on July 14th.

Arts & Entertainment

Mukilteo Artwalk--last Wednesday of the month in Old Town Mukilteo. See Mukilteo Arts Guild website for more details. Through September.

Open Mike Night--Every Wednesday evening from 6 to 8 pm at Whidbey's Coffee in Old Town Mukilteo, through Sept. 12.

Concerts

Mukilteo Chamber Concerts in the Park--August 4, 2 to 8 pm in the Harbour Pointe Village Center.

Snohomish County in 2040

2007-06-27T12:20:00.000-07:00

The Puget Sound Regional Council has released Snohomish County growth projections for the year 2040. The City of Mukilteo is expected to nearly double in size as compared to 2000 census numbers, as is downtown Everett. North Edmonds, on the other hand, is projected to be one of the slowest growing areas in the county.

To see how your Snohomish County neighborhood is expected to change, click here:

HeraldNet: Your Neighborhood in 2040

Mukilteo Multimodal Terminal Stalled

2007-06-27T11:48:00.000-07:00

According to the Mukilteo Beacon, The planned Mukilteo Multimodal Transit Station, which was supposed to combine the Mukilteo Ferry terminal with a bus and train station for Sound Transit routes, has run aground. A "significant funding gap" exists, which means that the project is being delayed for an indeterminate amount of time, pending environmental and feasibility studies that could push completion to as late as 2011 or 2013.

Aside from funding, issues also exist with the site currently being proposed, which is prone to liquefaction during an earthquake.

This is unfortunate for Mukilteo's waterfront businesses, residents of the Old Town area, and for Whidbey Island ferry riders, as the current ferry terminal / bus station is unable to handle current and projected traffic levels. On Friday afternoons, it can be extremely difficult to get from South Mukilteo to Old Town and the waterfront due to the amount of ferry traffic using the Speedway from Olympic View Middle School to the turn at Mukilteo Boulevard.

Now, anyone who knows me, knows that I am a girl who believes in public transit. But I would say that currently, public transit really underserves the City of Mukilteo. To use the Sound Transit train means driving either to Everett or Edmonds stations, and then having very few ride times to choose from. Buses serve the area more often, but still provide limited options in terms of routes. And ferry traffic is a nightmare for residents on both sides of the water.

Salesperson or Consultant?

2007-06-26T08:57:00.000-07:00

Real estate is a funny business. There are so many different kinds of people involved in it and so many different ways for people to manage their business that I think it can be very difficult for people who are new to the industry to figure out how they can be successful in this business without selling their soul.

The challenge is, if you got more than 5 Realtors or mortgage folks together in a room and asked them what their role/job is, you would probably get 5 different answers.

That said, it really boils down to TWO basic philosophies. You are either a salesperson, or you are a consultant.

The salesperson is the guy or gal who really just wants to get you to sign on the dotted line, and doesn't care what happens after that. They don't care if the house is a piece of crap, or in a declining neighborhood, or what kind of mortgage you've gotten yourself into. All that matters is getting you under contract, and collecting their check. After closing, you will probably never hear from the salesperson again, because he has moved on to greener pastures.

On my "sunny optimist" days, I would like to believe that there are fewer of these people in our industry than the industry's detractors think. On my bad days, I fear that our industry will be destroyed by the "salesperson" attitude, no matter how many or how few of them there might be, simply because when an individual has a bad experience, it has a much stronger power over their actions and perceptions than a good experience. They say that if you have a good experience you will tell three people, and if you have a bad experience, you will tell ten people. So, obviously, the bad experiences have a lot more power over the minds of the average consumer than the great experiences that some individuals may be having.

For this reason, the salesperson is constantly trying to find new clients who haven't heard about his crummy service, rather than cultivating the relationships he already has, and ensuring that each and every client has a positive experience. He can't slow down and take the time to educate and inform his clients, he's too busy looking for the next kill.

The consultant type, on the other hand, is really more focused on making sure that his clients' needs are met--both with regard to the home or mortgage product they buy, and also with regard to the service they receive during the process. The clients' wants are important too. The consultant is interested in helping you solve problems both before and after the sale. The consultant understands that his job is really about relationships. He needs to be able to stand behind whatever he's sold you, so that he can look you in the eye after the sale is over and continue to be the person you choose when you need his services.

The consultant will take responsibility for you, help you understand the pros and cons of whatever choices you may be facing, and generally display a level of caring that goes beyond a simple salesperson/customer relationship. He will refer to you as his client, most likely, rather than as a customer. He sees his role as that of a trusted advisor (the definition of "fiduciary," a concept which the real estate industry is moving away from at its peril). He is focused on the relationship, the experience, and the service, rather than making the sale or cashing the check. He is focused, quite simply, on you.

I got to thinking about this today because of these two posts:

Blown Mortgage: The Responsibility of Mortgage Brokers...

Rain City Guide: Buyer Beware...

In our industry, we have the ability to enhance, or RUIN, people's financial lives, and that is a responsibility that must be taken seriously. I believe that only as a consultant can a Realtor or mortgage broker provide services that reflect the serious nature of the business that is being conducted.

What's Wrong With This Picture?

2007-06-25T20:53:00.000-07:00

Yet another new feature of this blog is "What's Wrong With This Picture," which will be where I feature a picture that is just wrong, wrong, wrong, and explain the reasons why.

For the inaugural WWWTP post, I submit the above picture. For the last couple of years I have driven by this business and its sign advertising "Mortgage Loans, Real Estate Services and Quality Auto Sales." Below these bullet points, the sign assures us that these are "Affordable Luxury Cars." In the same location (and presumably run by the same people) is a drive through coffee stand, auto repair shop, and a stereo/audio store.

I know that there are several real estate brokerages that combine the role of the real estate agent with that of the lender. But really, isn't this taking taking things a bit too far? Real estate brokerage, mortgages, used cars, auto repair and a drive through espresso stand all in one location really seems a bit excessive. Lending and real estate are both complicated enough without combining them. And it's bad enough people think of real estate agents as being on par with used car salesmen, do we actually have to BE used car salesmen to boot?

Well, that's what I think is wrong with this picture. If you see a picture that is just wrong, wrong, wrong, send it to me and maybe it can be published here!

Best of Everett/Mukilteo: MidCentury Modern and Northwest Contemporary

2007-06-24T17:28:00.000-07:00

Midcentury modern is one of my favorite architectural styles. Though the period of 1945 to 1975 is normally associated with the commodification of architecture--see the great number of split-levels, tri-levels and ranch homes built during the period--there were some very innovative things going on during this time. In 1945 John Entenza, publisher of Arts and Architecture magazine, sponsored the Case Study House program in Los Angeles, which prompted promising young architects to experiment with new designs and ideas. The works created as part of this program influenced an entire generation of architects and builders, and their work continues to be influential today.

Architects and designers such as Richard Neutra, Pierre Koenig, Charles and Ray Eames, and Eero Saarinen, and many others designed homes that emphasized open space, relationship to the outdoors, and the use of economical building materials. Immediately post-war, building materials were somewhat limited leading to a heavy reliance on wood and glass, but as industrial materials developed during the war became available for residential construction, new materials and techniques such as steel frame construction began to be used. This in turn allowed builders to experiment with a variety of angles and rooflines, providing more flexibility to the design.

What differed from pre-war construction methods and architectural styles was that rather than hiding the construction materials being used, they became part of the design itself. The use of exposed metals, concrete, wood and glass showed that this was a new era, with a new aesthetic.

Mid-century modernism continues to influence today's architecture, through its emphasis on the use of natural light and materials, its use of open/flexible spaces in the home, and its whimsical touches that echo the future-looking ethos of the post-war era. Mid-century modern was also about making good design available to the masses, so homes in this style are often not expensive.

Another unique feature of midcentury modern architecture is the way the style was adapted according to the tastes and available building materials in various regions of the country. Here in the Northwest, mid-century modern is the progenitor of our own Northwest Contemporary style, which shares most of the features and aesthetics of mic-century modern, but because of the availability of wood as a building material, and our role internationally as a major lumber exporter, the use of wood as the primary building material is more pronounced. Whereas Neutra might have used exposed industrial steel to frame his glass houses, a Northwest Contemporary home would be framed in exposed cedar, with extensive use of pine, cedar, teak or douglas fir paneling as a design element. Many other design elements remained the same, including low or no-angle rooflines, emphasis on bringing in natural light, and a sense of relationship to a home's outdoor spaces.

Here is my favorite midcentury home currently available on the NWMLS in my area, which includes Mukilteo and Everett. I'll be covering other properties that typify this style, both on the market and not, as I discover them.

1308 Maryland, MLS # 27102852

What makes this such a great example of mid-century modernism? Teak accents including a living room wall paneled in teak, built-in cabinetry throughout the home, doug-fir flooring, Roman brick masonry (oh-so-'50s), floor to ceiling windows to bring in natural light year-round, and original 50's tile bathrooms. There is also a covered patio area that allows you to enjoy outdoor living year-round. The home has more than 2400 interior square feet and an enormous 16,000 square foot lot with mature landscaping. And the price tag, $384,950, makes it a great value, well in keeping with the modernist ideal that great architecture should be within reach of everyone.

Neighborhood Review: Harbour Pointe Village

2007-06-22T08:37:00.000-07:00

Another new feature I'm bringing to the blog is "reviews" of different neighborhoods/subdivisions in the areas I serve, i.e., Mukilteo and Everett. I think this is interesting information for anyone considering buying a home in the area, and it helps with the "I don't know what to write!" problem that I have been having. Structure is good, at least it is for me.

The first neighborhood I'm reviewing is called Harbour Pointe Village--it happens to be the neighborhood where I live.

Harbour Pointe Village is a newer subdivision of about 250 homes in the planned community of Harbour Pointe in South Mukilteo. It's rather unique in Mukilteo in that it is the only community of moderately priced homes (under $650,000) that is situated on the Harbour Pointe Golf Course, and it is the only neighborhood in Mukilteo that has adopted some of the principles of New Urbanism, such as Walkability, Connectivity and Increased Density, into its design.

Homes in Harbour Pointe Village range from about 1,800 square feet up to 2,400 square feet, with lot sizes ranging from 3,000 square feet up to about 5,000 square feet. About 25% of the homes face directly onto Harbour Pointe Golf Course, and as you would expect, these homes tend to come in on the upper end of the price range for the neighborhood.

The homes were built between 2000 and 2003, by well-known local builders John F. Buchan Homes and Lozier. Both builders typically build more high-end homes, and therefore the finishes in the subdivision are of a quality you would typically expect to find in a more expensive neighborhood, such as 10 foot ceilings, extensive millwork, high-quality hardwood flooring, etc. The homes built by Lozier tend to be more "modern" on the inside with more flexible floorplans and clean lines throughout, where the Buchan floorplans and finishes tend to be a little more traditional with formal spaces.

One of the most interesting things (at least to me) about the neighborhood is that it is styled in the manner of some of the older Seattle neighborhoods such as Capitol Hill or Queen Anne, with alley access in the rear and home facades facing directly onto the street. This gives the homes a friendlier street feel and encourages more neighborly interaction than the typical suburban home that has a garage in front taking up 2/3 of home's street "face."

Another unique feature of Harbour Pointe Village is the use of public green spaces. Certain of the homes in the neighborhood face onto a "village green" that increases privacy between the homes and counteracts the effects of the smaller lot sizes typical in the neighborhood. If you live on one of the greens, you get the advantages of a large yard, without the responsibility of caring for it, since these spaces are maintained by the Homeowners Association.

I really enjoy living in the neighborhood for several reasons. The design of the homes in the neighborhood is really great, and reminds me of the neighborhoods where I used to live in Seattle. Tudor-, Dutch Colonial-, Federalist- and Craftsman-inspired homes are intermingled with more modern ones, which prevents the neighborhood from having an appearance of "sameness" while still retaining an overall sense of unity.

The neighbors are friendly, which is important, and there is quite a bit of diversity in terms of life-stages and ethnicity. There's a nice mix here of families, dual-income-no-kids couples, and retirees so no matter where you are in life there are other people in the neighborhood who are similar to you. Yet, there is enough diversity to keep things interesting.

Another nice feature is that The Village is walking distance from elementary, middle and high schools, as well as Village Center, a small area with restaurants and shops. This gives residents the ability to get out of their cars and enjoy some of the benefits of a more urban-feeling setting.

Mukilteo Market Stats - May

2007-06-21T15:32:00.000-07:00

I am bringing a new feature to this blog, which if nothing else will ensure that I post here at least once a month. I've decided to begin posting market statistics for the city of Mukilteo once a month--I'm starting with the month of May 2007.

In case anyone is wondering, now is a great time to buy real estate. And it's a good time to sell too, as long as you list your home at a reasonable price. By reasonable I do not mean LOW, I simply mean a price that is in line with the market. The reality is, 20% increases in housing prices every year are not sustainable unless we are all getting 20% raises every year, which I would submit we are not. I think we are moving out of that crazy seller's market, which is a good thing, as buyers have been getting the short end of the stick for several years now.

The big difference I am seeing between this year and last is that there is a lot more inventory on the market. Some of it is selling quickly, and some of it is not. Overall however, time on market is definitely up as compared to this time last year. Oddly, sale prices are up as well.

The usual relationship between time on market and sale price is that as time on market increases, sale price decreases, time on market being a pretty good indicator of demand for housing. But that pattern is not what we're seeing this year. We have a lot more supply than last year. But that doesn't necessarily mean oversupply, because if you were paying attention last year, you would have noticed that we had too few homes listed, which was driving prices up. Now we have lots of homes listed, but demand is still healthy enough to prevent any reductions in price. However, buyers definitely have a lot more homes to choose from.

Having more choices means buyers can now be more selective. Homes that aren't in good condition or that are over-priced are now sitting on the market, where a year or two ago, buyers' desperation to get into a home meant that even overpriced, ugly houses weren't too difficult to sell. One thing to note is that 57% of homes in Mukilteo that were on the market in May sold within 30 days. That is still a market where if your home is well-prepared and priced correctly, you are still very likely going to be able to sell it without much difficulty. Note also that Mukilteo has a lot of luxury properties, and those tend to take longer to sell.

By and large we're not seeing prices come down, but as you would expect we are seeing some fairly significant reductions (5% or more) among homes that have been on the market longer than 90 days. I would submit that those homes were overpriced anyway, and the price reductions are bringing them in line with where they should be.

That's my analysis, here's the data. All statistics are courtesy of the NWMLS, and include Mukilteo (in city limits) ONLY for the period May 1, 2007 through May 31, 2007:

Active Listings
Listing Count: 89
Average Time On Market: 90 Days
Median List Price: $582,450
Average $ Square Foot: $264

Under Contract (includes Contingent, Active STI and Pending):
Listing Count: 19
Average Time On Market: 86 Days
Median List Price: $595,845
Average $ Square Foot: $294

Sold Listings
Listing Count: 21
Average Time On Market: 90 Days
Median Sale Price: $434,000
Average $ Square Foot: $247

Here are a couple of statistical charts, courtesy of NWMLS. The first one shows the breakdown of how our inventory in Mukilteo is aging. You can see that even with all the inventory, 57% of listings still sell within 30 days. The second chart shows the relationship between list and sale price, illustrating that price reductions are tied to time on market.

Staging - It Works!

2007-06-19T15:24:00.000-07:00

For about two years now, I've been an Accredited Staging Professional Realtor. Staging plays an important role in how I help my listing clients sell their properties quickly, but for some reason I have never blogged about the topic here.

Recently, I had a couple of great opportunities to prove to myself how effective staging is, as far as reducing time on market and attracting top-dollar offers. One listing was a home that had marketed previously without staging, the other listing was my own personal home. I'm not going to get into what we did on our personal home in this post, but will at some point in the future.

The listing I want to talk about was a wonderful home in a nice neighborhood that had been listed and failed to sell. Clients contacted me to find out what my suggestions were. When it had been listed originally, it was sort of oddly furnished and mostly filled with kids' toys, so buyers were having a hard time understanding how to use the spaces of the home. It was in a neighborhood which usually attracts buyers who have sort of upscale aspirations.

It seemed to me the lack of furniture and the confusing use of the rooms was putting buyers off from making an offer, so we determined that we would address these issues.

To do so, we gave the home a thorough cleaning and did some patching of interior paint. Then, we brought in furniture to show how the rooms could be used, and also to attract our "aspirational" buyers. We did some simple decorations using items that I and the seller already owned to make the home as appealing as possible.

When we returned the listing to the market, we received a full price offer in less than 6 days. This was a great result since typically in this neighborhood, it takes upwards of a month to get an offer and the house was listed at the highest per-square-foot price ever in its neighborhood.

Here are some before and after shots.

Here is a "before" shot of the dining room of this home, taken from the stairwell. You can see from this picture that it was not entirely clear what the space should be used for. It was also not a great picture to put on the Multiple Listing Service, because of the way the banister of the stairwell cuts off the bottom of the shot. It makes the room appear oddly shaped.

Here is an after shot of the dining room, showing the furniture and accessories we brought in to show off the use of the space. The professional photography also made a difference because we were able to get an angle on the room that shows how it flows to the rest of the house, and the lighting is better. Brown and neutral tones along with place settings and exotic flowers give the room a warm, modern feel.

Here is a "before" shot of the living room, before staging. You can see that although it appears neat and clean, there are children's toys and no real furniture in the space. The photograph doesn't provide any real feel for the dimensions of the room either.

This is a shot of the living room, after staging. It's a different angle on the room than the before shot, but you can see that we brought in furniture and arranged it to illustrate how the space could be used as a living room. We also took care to take the photograph in a way that illustrated the great open floor plan of the home, and provided an appearance of spaciousness for the MLS listing.

Everett Riverfront Development

2007-02-15T22:37:00.000-08:00

As a lifelong resident of North Puget Sound I have long had a healthy dose of skepticism about any real estate development deals of city plans that are announced, but it does seem that the City of Everett is building a good reputation for itself on the planning and execution of the city's revival of the downtown area. It's a completely different place than I remember when I was growing up, and I think there is a lot to be proud of with the way the city has changed in the last few years.

Here is the latest grand plan for redevelopment of the Snohomish River waterfront, to complement the redevelopment on the Port Gardner side.

Snohomish County's Best Architecture

2007-02-15T17:05:00.000-08:00

Okay, so you're thinking "what architecture? Snohomish County has architecture?"

Yes, we are out here in the 'burbs but we do have some examples of good architecture. Architecture that fits in with and enhances its environment. Some of the great architecture is residential, and some of it is public. Today I will focus on public buildings.

Several of the best works of architecture in Snohomish County are new. They are in downtown Everett, and symbolize the revitalization of Everett's downtown.

Here is a short list:

Snohomish County Jail

Snohomish County probably has the best looking jail in the country. It won an Honor Award for Washington Architecture from the Seattle chapter of AIA in 2005, which stated,

"the unusual urban placement and innovative form of a corrective
facility introduce a new way of conceiving the process of rehabilitation as a
civic function. Having this building in the middle of the city helps us all to
overcome our reservations about incarceration, transcending connotations of the
jail as a place removed from society and hiding transgressors. The designers and
the client have challenged conventions here, and we commend them for it."

Hm. Well, I'm not sure that I've overcome my reservations about incarceration, but I will say it's a very nice looking jail.

University of Washington-Bothell/Cascadia College

This also received an award from the Seattle Chapter of AIA, back in 2003. What they found commendable about the project was:

Extended eaves shade and shelter the pedestrian walkways while the lively
structural rhythms make an allegorical reference to trees

Everett Station

Reminiscent with it's rounded roofline of a European train station, the Everett Station was designed both as a transportation hub and also a gathering place. The Amtrak Cascade and Empire Builder lines stop here, as well as Sound Transit's daily Seattle commuter train and multiple bus lines. It's also home to the University Consortium, classroom space that is shared by Everett Community College, the University of Washington, Western Washington University and Washington State University. Don't miss the art gallery space inside.

Everett Events Center

With "sail" structures on the roof that give the building height, as well as reminding us of Everett's standing as home to a Navy homeport and one of the largest marinas on the West Coast, the Events Center pays tribute to and enhances its surroundings in Everett's downtown. As host to the Everett Silvertips, minor league basketball, arena football, and a variety of concerts and events, it is playing an important role in the revitalization of downtown.

AIA Top 150

2007-02-14T15:20:00.000-08:00

Just finished looking through the American Institute of Architects' America's Favorite Architecture survey results and am happy to report that Seattle has 2 entries. Predictably, Rem Koolhaas' Seattle Public Library made the list and is ranked 108th. Less predictably, by me at least, is Safeco Field by NBBJ at 135th.

On the one hand I suppose we are lucky to see two entries since Seattle is not a city noted for its architecture (not that some of it isn't great). On the other hand it seems like there are some important structures from our city missing. What about the Space Needle? It is certainly iconic if nothing else! Or the new "Blob"--The EMP by Frank Gehry?

Professionalism in Real Estate

2007-02-13T01:00:00.000-08:00

Reba Haas over at Rain City Blog wrote and excellent post about the sometimes contentious relationship between real estate agents and attorneys. She was responding to an attitude in the industry that attorneys are deal killers and that agents therefore avoid using them when they should, and as a result wander dangerously close to the unauthorized practice of law. She wrapped up her post with this:

This brings me to a subject I want to blog about in the near future -
raising the level of professionalism of the real estate industry in general.
That, and getting agents to stop those old sayings of things like “buyers are
liars and sellers are worse.” When I got in the industry 4 years ago I
couldn’t believe people in the industry said stuff like this around me all
the time. It seems like an ”us vs. them” mentality. How messed up is
that!?!? If you’re a professional you don’t walk into a meeting with a
prospective client with this kind of mindset and I’m glad that I don’t.

I have to agree with Reba. I have always thought this kind of thing was just appalling. These are your clients you are talking about, and to bad-mouth them is kind of like bad-mouthing your boss. It's a bad idea. In fact, it's worse than bad-mouthing your boss because this is such a competitive industry. Why not try having a little gratitude for the fact that you have a client? Why not also try improving your skill at working with buyers so that they don't end up in a position of wanting to lie to you? Why not provide better service so your relationships with listing clients will be stronger?

I know of some agents who seem to actually resent having to work and provide service to their client. This is a tough industry to be successful in, but the ones who will be successful are the ones who are good at building real relationships with their clients. It's hard to do that if you only care about the check, don't enjoy the work, and most importantly, don't enjoy the people.

Guide to Everett

2007-02-10T21:13:00.000-08:00

I just posted my "Guide to Downtown and North Everett" with Everett's top 10 places over at my website (www.sandykaduce.com). I posted my favorite places in categories, so there are more like 30 individual favorites. I bet you didn't know it was possible for a former Seattleite and self-admitted snob to HAVE 30 favorite places in Everett! Well, it is!

This brings me to the topic of tonight's blog post--why do people always diss Everett? When I was growing up, and even when I first moved to the north end, I always looked down my nose at Everett. Everyone I knew did. And maybe our reasons for doing that made sense 20 years ago. But in the last five or ten years Everett has really transformed. Yet, people still think of it as the blighted, dying, blue-collar mill town that it was in the 1970s and 80s.

Some background might be helpful. My family has its roots in Everett--my grandfather was a personnel manager at the Weyerhaeuser mill in the late 1960s, and my family lived in Eastmont from 1967 to 1970. So, my family remembers living in Everett near the end of the time that Everett's downtown core was still a thriving community. Throughout the '60s and 70s as people moved to the suburbs and became more dependent on cars, businesses one by one moved out of downtown to malls in outlying areas. Then the lumber industry went into decline in the 1970s and '80s. By the time I was in my teens, downtown Everett was nearly a ghost town, full of empty storefronts, pawn shops, and plasma donation centers.

However, the city government and concerned citizens recognized the value in preserving and reviving the historic core of downtown Everett. Beginning in the mid-1980s, the city government worked hard to attract jobs to the area. A major success was the Navy's decision to build a homeport here. A variety of other projects and measures encouraged development and revival in downtown, most notably, the construction of the Everett Events Center and Everett Station. So far, it's working. It's not a 100% recovery--there are still a few empty buildings, mainly because a few absentee landowners have chosen not to invest in retrofitting and upgrading their buildings, so they sit empty. But, most of the storefronts in downtown are now filled with a variety of thriving businesses.

But, because Everett had a bad reputation for so long, many people still think it's the dying mill town it once was. The good news is, because of that you can still buy a decent house in Everett and not spend a fortune on it. Yes, Everett is still a blue-collar place in some respects but that kind of diversity is part of being an actual city, rather than a suburb or bedroom community. Part of being a real city is having rich and poor, young and old, white, black and all shades in between.

Everett is a success story and I think in five years, everyone will know about it. Right now, it's still something of a secret. If you've never been here (and most people who don't live nearby haven't--we are very parochial here in Puget Sound) you wouldn't know what you're missing. The word is starting to get out, but it's happening slowly. Maybe that is a good thing.

A few years ago I never thought I would say this, but I love Everett. There is a great community of people here, it has a lot of cultural and entertainment opportunities, and abundant natural beauty, yet, it is a diverse community that hasn't lost touch with its blue-collar roots. I like that about Everett. That's what keeps it from turning into a sterile, "Disneyland for the rich" like other neighborhoods that have similar attributes. Everett is a city in its own right, with all the good and bad that goes with that, yet it has a friendly, small-town feel and an energy that I, and many others enjoy.

Everett may be a secret now, but I doubt it will remain one for long.

A Marketing Process for Selling Homes

2007-02-07T19:50:00.000-08:00

I came to real estate from the consulting world, where everything is done via a defined process. I've spent most of my career in real estate trying to develop and apply a strategic process to marketing the homes I list.

I like to break it down into stages that take place before, during and after the time a seller lists their home for sale. To my mind, the preparation is really what will determine whether you are successful in selling it. Everything else--pricing, promotion, etc., will depend on how well prepared the property is.

The first step in the process is to understand your target market. In real estate, the question we must answer in order to be effective as listing agents is, "who is the buyer that will buy this home?"

Not every home appeals to every buyer out there. You wouldn't market a high-rise urban condominium in the same way you would market a retirement community, suburban residence or a luxury estate. Each of these has a different target market and has to be marketed differently.

So first, you have to identify your target market and understand what is important to them. What makes them get excited about one house, or product, over another? What is the best way to reach them? How do they make decisions? Once you know the answer to these questions, you can proceed to the next steps--developing the plan to attract the targeted buyers, implementing the plan, and then measuring your results.

Let me give you a real world example of how the preparation and target marketing part of this works.

I recently had a listing appointment with a seller whose listing had expired. They called and invited me to come and present a marketing plan to them and identify some of the reasons why their house hadn't sold.

The home was a lovely newer construction home on a greenbelt, with a low maintenance yard, in an upwardly mobile neighborhood. Most of the families have young children, and two parents working. They tend to stay in these homes for 3-5 years. It's a mid-price commuter neighborhood in an affluent area, surrounded by homes selling for as much as twice what these homes sell for. The neighborhood is on a golf course.

All of the above tells us a lot about our target market. They see this neighborhood, with it's smaller, attractive and conveniently located homes, as a good stepping stone towards the lifestyle they aspire to. This is the kind of neighborhood where staging makes a big difference because its not just about the four walls, it's about the life they envision living once they are in the home.

Unfortunately, the home had not been staged in its previous listing. In fact, because the family didn't have much furniture, most of the spaces in the house were used as play areas for the kids. The previous agent had taken pictures of the home with kids' toys cluttering the shots. Poor lighting exacerbated the problem, making the home appear dingy in pictures. The home still had the original flat finish builder's paint and was in need of some color treatments to bring life to the rooms. And furniture was needed to help buyers understand the potential of the rooms and how the home could fit their lifestyle.

The marketing plan for a home like this one would have to solve the issues of room usage, clutter, lighting and color. The price for the home needs to be right as well. And the home needs to be marketed to those buyers who are most likely to buy. For the demographic looking at this type of home, internet marketing is probably the most effective tactic.

People often ask, "can't buyers look past that and use their imagination?" The answer is no. Buyer's need to be shown that a home is right for them. Without furniture, without some color, without a feeling of space and light, it is hard for a buyer to imagine what their life will be like when they are living in the home. Without good pictures, it's hard for buyers to understand why they should come to see THIS house, when there are others on the market that may look more inviting.

This all comes down to packaging and preparation. You have to package your product so that a buyer can appreciate what it has to offer. To do it, you have to understand who your buyer is, and how to appeal to them. This is the kind of expertise that makes the difference between selling for full price, selling for less than full price, or not selling at all. And it's what home staging is all about.

Top 10 Staging Tips

2006-12-08T14:24:00.000-08:00

Thinking of selling your home? Want to get the most money possible in the least amount of time?

Then staging is your friend. Here are my top 10 tips for staging any home.

1. Make sure your home is CLEAN. I mean, spotless. You need to be looking at your home the way buyers do, and you would be amazed at the kinds of they notice. One of the things they notice is dirt. Grime. Dust. Cobwebs. These will literally distract buyers from the positive qualities of your home, and cost you offers. It may make sense to hire a professional housecleaner and have the home professionally deep-cleaned, including around, under and behind everything. Have carpets and windows cleaned, and scrub any walls that may be dirty.

2. No CLUTTER! Don't leave papers or anything else on flat surfaces. Countertops, tables, floors must all be kept neat and free of unnecessary items.

3. COLOR is important. Your home doesn't need to be "real estate beige," but if you have any wild colors on the walls, the time to tone them down is before you sell. Same goes for purple carpet. Offering a paint or carpet bonus doesn't work because buyers "only buy what they can see." If there are 2 similar homes on the market and one needs paint, the one that needs paint will sell last.

4. "If you can smell it, you can't sell it" So, take it easy with cooking those spicy dishes while your home is on the market. Keep the catbox clean and take out the garbage EVERY DAY. I know, you probably already do that, but this message is for those who don't. I have seen buyers pass up homes that they otherwise loved because of strong odors. So don't let this happen to you.

5. "If you can't see it, you can't sell it" This is another Barb Schwarz-ism that sums up very nicely the ill-effect of overgrown landscaping and indoor plants. Don't let them overshadow what you want buyers to see (your home).

6. Deferred maintenance--take care of it BEFORE going on the market. You will have the luxury of shopping for the best price, rather than going with the only contractor who can replace your roof before you close (rush jobs cost more). If you don't know what needs to be done, talk to your realtor or have a home pre-inspection done.

7. Vacant vs. "vignettes" If you're trying to sell your home vacant, it probably makes sense to consider leaving a few pieces of furniture and decor behind, in order to help buyers see how furniture fits in the rooms, and how the space can be used. Buyers have a hard time warming up to vacant rooms.

8. Go outside and look at your home from the street. How does it look? Grass should be mown, hedges trimmed, weeds weeded. Flowers are an inexpensive way to improve your home's curb appeal and provide contrast and texture to a yard that otherwise doesn't catch the eye.

9. Clean out your closets and garage, and STORE all your extra stuff while you are on the market. It doesn't make sense to stage the entire house and exterior and then leave a pile of stuff in your closet, waiting to fall on the next unsuspecting buyer. It detracts from the overall impression of the house, and makes it seem as if the home doesn't have enough space. Don't give buyers a chance to think this--if you don't need it while you are on the market, hire a POD (portable on demand storage) to get rid of it until you sell. You may even find that after going a few weeks without the stuff, you don't need or want it after all. Moving is good for helping us sort the wheat from the chaff!

10. Make sure your MLS pictures look great. If your agent doesn't take great pictures (ask to see samples!) have them hire a professional so that all your hard work staging doesn't get overlooked on the MLS due to bad pictures.

Staging Success Story

2006-10-15T22:43:00.000-07:00

About a year ago, I received my designation as an Accredited Staging Professional Realtor. What that means is that I have taken and passed a two day course on staging homes and helping sellers prepare their properties for sale.

Staging is one of the best ways to ensure that a home sells quickly and for the most money possible. The reason it works is that buyers have a hard time using their imagination to see what a property would be like if they lived there. All they can see is what it looks like now. And most of us don't live in our homes the way they need to be when we sell them.

Staging a property isn't just about making sure it's clean and clutter free. It's not about bringing in expensive furniture and decor. And it doesn't have to cost a lot of money.

It's about identifying what excites buyers and what turns them off, and solving any issues a house might have, BEFORE it hits the market.

Recently I got to work with a seller through the entire process of preparing their home for sale. Believe me, what we started with and the end result were two completely DIFFERENT things.

The home was a cute little rambler in a relatively inexpensive, but nice and safe, neighborhood. The best way to classify the homes in the area is that they are starter homes. They sit on very nice sized lots and are close to Boeing and other amenities.

Anyway, the seller had owned the home since it was built in 1984 and had never updated it. Carpet and paint were worn and dirty, and the entire house was cluttered and messy. To get top-dollar, it needed fresh paint, new carpet, and a thorough scrubbing from top to bottom.

Fortunately, the sellers were on-board with staging and willing to put in the work. They also went a little further than necessary, putting in a new mid-price kitchen with Corian countertops, new cabinetry and new flooring. This added value to the home, but wasn't strictly necessary from a staging perspective.

The sellers also worked on the home's curb appeal, making some changes to the landscaping that enhanced the view from the street.

This was the end result.

Average market time for comparable homes in the area was more than 30 days. This home sold in a week with multiple offers. The total amount spent on staging, upgrades and deferred maintenance was less than $8,000, but brought a price more than $40,000 higher than comparable, unstaged properties in the neighborhood had received.

That's the power of preparation and staging!

Here is a link to the full photo gallery.

Catching up the blog

2006-09-26T17:28:00.000-07:00

Once again, I have gone too long between posts and now there are a bunch of things going on that I should probably write about here.

First in my announcements would be the fact that I was recently elected to the board of Habitat for Humanity. It's a volunteer position, and it's my first board position so I am pretty excited about it. I've been volunteering on the site selection committee for several months and really enjoying that, even though it is not easy to identify properties that are suitable for Habitat in our current high-priced market.

I'm really excited to be helping with the work Habitat does. In my job, I have the ability to have an influence on people's lives on a day to day basis, but the work that Habitat does really changes lives. It's "important" and I feel great about being a part of it.

I've also been traveling a lot recently, including a trip to Thailand where there recently was a bloodless coup. The military overthrew the elected government of the prime minister. We arrived "in-country" 2 days after a bomb threat against Prime Minister Thaksin, and left 2 weeks before the coup. I read the newspapers while we were there, and it was pretty clear something was brewing.

But happily there was no unrest in the air of the resort that we stayed at in Hua Hin, though.

Cool tools for finding property information

2006-05-29T00:43:00.000-07:00

Here in Snohomish County, we are fortunate enough to be able to find a whole lot of real estate information online, for free, through the Snohomish County website. Snohomish County actually has won prizes for their website because of its extensive collection of online public records, and the tools are invaluable for anyone who's interested in buying or selling real estate in the county. You don't have to be a professional to use the site, either. It's all public information and free.

You can look up property information in a variety of different ways. For instance, if you drive by a parcel and are wondering who owns it and what they paid, you can search for it using satellite mapping of the county. If you know the street it's on but not the street address, you can use the map to find it. The property lines are overlaid the display in either the map or satellite imaging mode. So if you know the property is 3 parcels south of a particular intersection, you can look for it that way. Or, if you know the street number you can enter that into the search mode.

Once you find the property, you can click on it and all the tax information will come up, including the owner, date of sale, what they paid for the property, the assessed value, etc. This is valuable if you want to make an offer to the person who owns the property. Just write them a letter and send it to the address on the records. A lot of times, you can pick up a property this way for less than you might find one on the MLS. At any rate, if it's a particular type of property you are looking for that is hard to find, it opens up the possibilities beyond just what's on the MLS.

Another type of information that Snohomish County makes available is notices of foreclosure sales. For investor buyers, this is a great tool for identifying distressed properties for rehabs or flips. I use it all the time and love it. I check the notices, move over to the mapping and assessor's information to check further data on the property, pull up a radius search in the MLS to determine the loan-to-value outstanding on the homes, and then compile all of this information into a report that I email to my investor clients once a week.

Anyway, these are just a few of the tools that are out there, public and free, that anyone can use to find out property information. I'm sure other counties offer similar information though I think Snohomish County's site is one of the most robust and comprehensive. Anyway, if you have any questions about how to use these sites, feel free to contact me at sandy dot kaduce at gmail dot com for a tutorial.

Snohomish County Online Property Information (SCOPI) - this page takes you to the property mapping. Once you find a property using the map, you can click on it for a link to the county Assessor's online tax records.

Snohomish County Online Public Records - This is where you can go to find out about foreclosure notices and other types of public filings. Also, marriage records are available here if you are doing any genealogy projects, although I am not sure how far those go back. Also, if you ARE interested in doing genealogy and your search leads you to Snohomish County, you should know that a lot of historical records prior to 1910 are missing due to a fire at the original county courthouse. Little-known historical trivia!

Foreclosures, Pre-Foreclosures and Short Sales

2006-05-26T12:23:00.000-07:00

I have had an interesting week, working with a investor buyer who is trying to acquire a property that is in the foreclosure process. We weren't able to get the seller to bite on my buyer's bid, but nevertheless, it's been a very interesting few days.

When I very first got into real estate, I met a woman who worked for one of the big title companies who said to me something that at the time I thought was just a terrible thing to say, but now I realize was quite prescient. She said that I should be saving my money so as to be able to invest in the wave of foreclosures that she predicted was coming. Not being the kind of person who WANTS to profit from others' misfortunes I thought this was pretty heartless but in retrospect, I think she was right on the money.

Unfortunately, the last 4 or 5 years have seen lenders really lowering their standards as far as who they will lend money to. In one sense, it's good because it has allowed a lot of people to qualify to own their own homes who years ago would have been turned away. But it also means that a lot of people are in homes they can't afford, with 3 and 5 year ARM loans that are approaching the end of their fixed period. And, a lot of loans are what are called "no docs" loans, which means that people can claim a means of payment that may or may not exist, just to get into the house of their dreams. There are also negative amortization loans, which, rather than paying down interest and principal, actually ADD interest to the outstanding principal against the home. So, your interest rate is 2% as far as what you pay for now, but the extra interest (4% or more) is added to the principal, and counts against any equity in your home. So, when you sell it you end up owing money!

These loans suck. They prey on people who don't have a lot of income, have poor credit, and are not very financially savvy. Not surprisingly, the chickens are starting to come home to roost.

Back to my investor client. He was looking for a property that met a very specific, difficult to find set of criteria, and it so happened that I found a house that was a perfect fit. So we went out to take a look at it. Something about the house (perhaps it was the dirty diaper that greeted us at the bottom of the basement stairs, or the dead pet rabbit in the backyard? Don't believe anyone who tells you that real estate is a glamorous profession!!) made us feel that something about the place wasn't right. When you've been in enough houses, you start to get a feel for when a divorce, a death or financial problems are part of the picture. Anyway, we did some research and sure enough the house was subject to a pending Notice of Trustee's Sale. In other words, it was in foreclosure.

A search of the county records will usually tell you if a Notice of Sheriff's Sale, or a Notice of Trustee's Sale has been recorded against a property. Typically, if you haven't made a payment for 6 months, and you haven't made any arrangements with your lender to catch up on your payments, your lender will begin foreclosure proceedings. The first step is one of the two above Notices. I would explain the difference but that would get us into a discussion of different ways to hold title and it would probably be boring.

Anyway, these Notices are intended to inform the public that the house will be sold at auction unless the "arrearage" is "cured" or cleared up before a certain date. Here in Washington, that certain date is 11 days before the auction. Any money from the auction will go to pay off the creditors with a claim on the house. If the situation is bad enough, there won't be enough money to pay them all, and some of them will remain outstanding against the house, and the new owner can end up taking them on. This is a risk you take when you buy a house at a foreclosure sale. You also don't get to inspect the property.

A seller can stop the sale from happening if he is able to make arrangements with the lender, or if he is able to sell the house for enough money to pay off all outstanding debts recorded against the house before the cure date. If he gets an offer to purchase the house but it isn't enough to pay off all the debts, then he has to get his creditors to agree to a payoff that is less than they are owed. This is called a short sale.

If none of these things occur, the house will go to auction. The lender doesn't really want this to happen because the price they get at auction is often less than they are owed, plus, they aren't in the real estate business. They are in the lending business, which means what they really want is just to be paid back. But, if this is the only way they can get what they are owed they will do it.

From an investment perspective, buying a property at auction or on a short sale can be a good way to pick up a house for less than the market price. However, there are risks involved. For instance, you can get stuck with any outstanding liens against the house, or there can be problems with the house that are expensive to fix, such as needing a new roof. But if the price is right, a lot of investors are willing to take this risk in order to reap the profits on a flip. A lot of the time it works out pretty well.

Unfortunately, this particular house was also subject to more liens and judgements than the house itself was worth, and it was still the seller's right to accept or reject an offer to purchase the house. So, in order to obtain clear title, we needed to work with them as well as their lender to get them to accept our offer. The only way the sellers could pay off all their creditors and also pay closing costs would be if a buyer paid more than $50K over the fair market value of the house. My buyer wasn't going to do that.

So, we came in with a pretty low offer that was enough to pay off the first mortgage but not the home equity line, and we offered to pay closing costs. If we'd have gotten the sellers to agree it would have just been the beginning of the process. Sometimes it can take months to get a lender to agree to a short payoff. Doing so can be to their benefit--actually foreclosing on a property costs a lender quite a bit of money in terms of legal fees and so forth, so sometimes it makes more sense to cut their losses before it gets that far.

It can also be to a seller's advantage, because it reduces the damage to their credit rating of having a foreclosure recorded.

And it is obviously to a buyer's advantage, because they don't have to overpay for a property or take on the seller's debts.

But it's a complicated process and a lot can go wrong. Unfortunately, we didn't get out of the gate with this one. The seller didn't go for it--maybe they were not desperate enough yet! But it was a real eye-opener, and gave me something to talk about in ye olde blog. These sellers were a perfect example of WHY we will probably see a lot more of this kind of transaction in the years ahead. They had no way to make a payment (no verifiable income!) yet, they received a loan for a $400K house, then a 2nd home equity loan just 7 months later. They had a no down payment, negative amortization loan, and this wasn't even the first time they'd been in foreclosure!

Home Pre-Inspections and Doing the Right Thing

2006-05-02T12:35:00.000-07:00

One of the areas where real estate agents can provide a good deal of value to sellers is in the process of preparing a home for sale. In recent years, many homesellers have realized what developers have known for years--proper preparation is a huge part of getting ready to sell. It's not just about making sure the beds are made and the grass is mowed and the furniture nicely arranged, it's also about making sure that you don't get blindsided somewhere down the road with having to address "delayed maintenance," or those maintenance tasks that were put off until later or half finished. Your home needs to be ready to sell in all respects, not just the cosmetic details.

That is why I recommend to all my sellers that they have a home pre-inspection done. It serves several purposes, and costs very little relative to what NOT having one done can cost--think rescinded or low-ball offers. The first purpose it serves is to help you identify any major or minor jobs that need to be done. Just because a problem is identified--such as failing siding or a roof needing repair--doesn't necessarily mean you have to address it, but it gives you an opportunity to determine your strategy for dealing with any issues. Forewarned is forearmed, as they say.

The second purpose it serves is as more of a marketing tactic. A good real estate agent will often create for your home a "marketing book" that contains all the pertinent information about your home and neighborhood. Buyers love these--they love being able to go through them at their own pace and learn about the house in question. In the ones I provide, I usually have a few pages about the town and neighborhood, the schools in the area, all the title information for the house itself, pictures of the home and flyers, mortgage information. When a seller has a pre-inspection done, we also include the pre-inspection and a letter detailing all the work the seller has done to prepare the home for sale. It shows the buyer that the seller is pro-active and not just waiting to sell the house to the "greater fool." It can actually encourage a buyer to make an offer on your house as opposed to another, because the home has been better cared for and the seller will be more reasonable.

Some sellers, of course, feel that this is unnecessary and of course, it's their house and ultimately they have to decide how much they are willing to do to get it ready to sell. In some cases, it might make even make more sense to sell a house in more of an "as-is" condition and not worry about doing the fixing up. Some buyers are looking for a "fixer-upper" and if your house falls into that category, then you want to let the buyer take on the expense and hassle. That's where they are going to add the value and take the profit. However, if you would rather take the profit yourself and get the best price you can, it's something to consider. Just realize that you will not be able to get "top dollar" for a house that is not in "top dollar condition."

The other argument I sometimes hear is, "well, it's a seller's market and with so little inventory out there, buyers are just lucky to buy whatever they can." This kind of falls under the "a sucker is born every minute" category of thinking. A year or two ago, maybe you could get away with thinking this way, but since rates have started to go up, we are in a different market. It's still a fast paced market, but buyers are being much more careful about what they buy and making sure that they are not committing to a house that will be a money pit. They are not desperate to get into a house this week or this month just because interest rates happen to be low and there isn't much to choose from. Rates are good, but not good enough to create a "feeding frenzy" type of atmosphere. This is a good thing. The kinds of price increases that real estate experienced in the last few years will inevitably slow down as interest rates go up. Sanity will and must return to the real estate market.

Sanity is good, peeps.

Everyone wants to get as much money out of their house as they can, but sometimes in our haste to save a few dollars, we can actually end up costing ourselves in the long run. The cost of an average home inspection is $300 to $400 dollars. The repairs themselves can be considerably more. But these expenses pale in comparison to what it may cost if you lose a deal based on inspection issues, fail to recieve any offers, or if your home is sold with undisclosed and unrepaired issues and a buyer decides to sue.

Ultimately, doing the right thing always pays. And as Wilford Brimley would say (anyone remember him?) "It's the right thing to do."

More on Volunteering

2006-05-01T20:54:00.000-07:00

So, one of the big things I have wanted to talk about in here is some of the other organizations I have been getting involved with. One of the reasons I wanted to get into real estate is that it's the kind of job where you have the opportunity to be involved in the community. As I mentioned, I joined the Chamber of Commerce for Mukilteo, and also have been working with Habitat. I am pretty excited about both of those--I think the Chamber puts on some great events and obviously, Habitat is a great organization too.

The third thing I am excited about is the Mukilteo Lighthouse Festival. The Festival is basically Mukilteo's "Town Party" and it's an all volunteer event and a very big deal. Because it's all run by volunteers they basically need all the help they can get. So I told them that I would be willing to help out however I could--they took me up on it and now I am the "Sponsor Recognition Chair." Wow! You volunteer to help and you end up as a chairperson!

Okay, so really this is not that big of a deal. The first thing on my agenda is...THANK YOU NOTES! Later I'll be coordinating certificates and plaques for sponsors, and making sure everyone is recognized on signage and so forth. But it sounds impressive doesn't it, being a chairperson?

All joking aside, it's always amazing how many people it takes to make one of these things come together smoothly. I just have one little piece of it, and there are at least 20 other people who also are volunteering, and there is still more to do. It'll work out though...these things always do. Maybe not perfectly but the only people who ever notice the glitches are the ones running the show.

Anyway, next time you are at a festival or other volunteer-run event, think about how every single thing that you see requires someone to donate time or money to the cause. Most of the time, no one is getting paid to make sure things work out like they are supposed to, and of course, most of the time and effort people put into it has to be in addition to whatever the volunteers do for a living. Kind of amazing they run as smoothly as they do!

Construction Is Not For Wimps

2006-04-30T19:10:00.000-07:00

For many years, I have thought that Habitat for Humanity was an organization that I wanted to get involved with, but working 10-12 hour days at my old job made it virtually impossible to do much about it other than wish for the time or the money to support the organization in a way that would be meaningful.

As a real estate agent, time is still an issue but it's more feasible than it was previously, to volunteer. So I have gotten involved with Habitat, and I'm so glad I did. I think I've mentioned before that affordable housing is a big issue with me, so I am glad to be in a position where I can help an organization I believe in work towards the goal of helping people own their own homes who otherwise wouldn't be able to.

I am working with the Site Selection/Construction committee and I am also taking the Cornerstone Training Class so that I can work as a team leader on job sites. Cornerstone Training basically provides an overview of construction techniques so that volunteers can work more effectively on job sites and also, so that they can provide leadership as needed to guide untrained volunteers as to how to perform their tasks safely and effectively.

My first day of Cornerstone Training opened my eyes up to several facts. One is, hammering a nail properly is not as easy as it looks. There is actually a right and a wrong way to do it, and all my life, I have been doing it wrong. The second thing I learned is that my fear of circular saws CAN be overcome, but I will need to work on my upper body strength if I'm ever going to be much use with one. They are heavy, and make my arms and wrist hurt. But I am still proud of myself for overcoming my fear of using one.

The third is, that working construction for 5 or 6 hours will really wipe you out if you are not used to it. I am still very sore today!

The last thing I learned is that there is a lot to know about construction, and I think it will help me in my job to have more of a ground-up understanding of how houses are built. I can already think of several things (for instance, why it matters which way you lay down a flooring joist) that I understand better now than I did before my first day of training. And the opportunity to learn about things you ordinarily might not, is one of the great things about volunteering.

What I Did On My Mexican Vacation

2006-04-29T21:33:00.000-07:00

In short, I did as little as possible.

Last Saturday, Eric and I left for a much needed vacation in sunny Los Cabos, Mexico. We spent most of our time curled up on a lounge chair in the sun drinking pina coladas and working on our tans. Or, in my case, working on my sunburn and future skin cancer, since I don't tan. Although it was later in the season than the last time we were there, for some reason I found the weather much more agreeable.

I should mention that last time we were there we got engaged, so the place has a special significance for us. I just love it there.

In addition to vegetating on the beach, we also went into town and did a little sightseeing. Being in real estate I couldn't help but be curious about what is going on with real estate in the area. There is a new development that is going in just north of San Jose called Puerto Los Cabos. They are building the development around a new marina which has already been dug. Should be nice. As far as the town itself, I find San Jose much more charming and fun to visit, as it is less overrun with American tourists and has the small town feeling of colonial Mexico.

The other new development that is going in down in Baja, which I think is going to be pretty cool, is in the town of Loreto about 300 miles north along the Sea of Cortez from Los Cabos. It's called Loreto Bay. Loreto was a colonial Spanish town which was the original seat of the California missions, and was also the original seat of government for Baja California until the provincial government was moved to La Paz, so there is a lot of history there.

One of the things I particularly like about Loreto Bay is that it is emphasizing sustainable development both from an environment as well as an economic and social development perspective. To me, this is really important, as these developments SHOULD, ideally, promote a better quality of life for the local residents and workers as well as those who buy homes there...unfortunately, they often don't. Development in Mexico often seems to occur willy-nilly without regard for the long-term effects on the environment or on the types of jobs created.

Also, Loreto Bay is attempting to create an Urban Village type environment which will be more oriented around walking than on driving. This is in contrast to Los Cabos where American car culture has definitely been transplanted and there isn't quite the infrastructure to sustain it. Also, bad for the environment and creates more people dependendent on fossil fuels.

So that's my little Mexico Real Estate report. One thing I have noticed is that in the real estate business, you are never really "on vacation." It's more of a busman's holiday!

Food for Thought

2006-04-20T20:11:00.000-07:00

Here in Mukilteo one of the big questions on everyone's mind centers around the Multi-Modal Transportation Hub that is being built down on our waterfront. The idea is to tie the ferry terminal, buses and our new Sounder commuter train together in one station, thereby improving the ease of commute for residents in the area.

Jay Inslee, our state representative, discussed the issue at today's Mukilteo Chamber meeting. Rep. Inslee has been a big supporter of this transportation hub, as am I, so it was interesting to hear what he had to say about it. He also talked about his Apollo Energy Bill which is a multi-pronged approach to helping break America's dependence on fossil fuels.

As Inslee said, American dependence on fossil fuels isn't just an economic issue it's also a security issue, as it makes us susceptible to the slings and arrows of whatever happens to be going on over in the Middle East. Inslee sees transportation, energy and security as intertwined and to solve any one of them, you have to solve all three.

I'm not meaning to get all political here, the point I am trying to make is that as gas prices top $3.00 a gallon I hope we will see a better, more integrated approach to energy and transportation policy as well as sustainable living. The reality of the matter is that high housing prices and quality of living issues do mean that a large proportion of the population will choose or be forced to live a long distance from work, which is not bad in and of itself. What is bad, is having those individuals make that commute in individual vehicles, which in many cases are not fuel efficient and emit large amounts of greenhouse gases.

Later on, I was asked by one of the chamber members if I thought there was a "bubble" in the real estate market. My response was that I didn't think that what we are seeing this year is a bubble bursting, at least not here in this area. We have a good hiring market and a limited amount of land to work with, so that insulates us somewhat from any real "bursting." But what I have seen is a softening of the market at least as compared with last year.

I also told her that I thought it was a good thing too, because affordability is starting to become a real issue. The kinds of rises in home prices that we have seen in recent years cannot be sustained forever or it becomes impossible for first-time buyers or those who are not wealthy to purchase a home. Which is a little bit of a self-fulfilling thing, given that home-ownership is the best way there is to build wealth--it's kind of like how you can't get a job until you've had a job!

So, a slight softening is a good thing. If the market never does anything but go up, eventually it prices out everyone but the rich. It's better in the long run to see things return to a more "sane" and businesslike environment. Better for buyers, and ultimately better for sellers too (as sellers in their turn are also buyers!)

That's all for now...it's good to be back!

Choosing Sides

2005-11-10T00:02:00.000-08:00

One of the not-so-great things about working in the particular market that I do, is that because a lot of the homes out here in the 'burbs were constructed within the last 15 years or so, we see a lot of the faulty construction issues that were common during that period. The major one being LP siding.

Today I had the interesting experience of touring 2 homes in succession that had failing LP, and in both cases neither the sellers nor their agents were aware of it. One agent claimed that it couldn't be LP, because the house was built in 1988, and LP was only sold in 1994 - 1995. In fact, the product was sold and put on more than 800,000 houses nationwide between the period of 1985 - 1995. The earlier product, that is, pre-1992, was the most prone to failure, so in fact, this agent's house is a sitting duck, and he just doesn't know it yet! But, since the failure of the siding is plainly visible to the untrained eye (i.e., mine), I'm sure he will soon find out...

As a Realtor, it only takes one listing with LP siding for you to become something of an expert on the subject because it can be the cause of so much heartache for your sellers. Heaven help the naive seller and agent who go merrily traipsing along, assuming that because the LP "looks okay" to them, that all will be well. There are a lot of different stages of failure, and some are not immediately apparent. The process of breakdown begins with tiny cracks, and without vigilant maintenance of the LP, you may have these cracks which allow water to seep into the siding, and not even know it.

I think it usually pays to know what you may be looking at up front, so a pre-inspection of the property can be beneficial, and having been through it once, I would now recommend any seller with LP siding have this done. In some cases, I can visually determine if damage exists, but I can't as easily determine the extent of the damage...or "how bad is it really?"

That's a big distinction, depending on whether the moisture has penetrated behind the siding and into the actual structure. Is it a matter of replacing all siding on the house, or is it possible to paint, seal and caulk the siding to keep minor damage from progressing? A pre-inspection can help answer these questions, and will allow you to formulate a plan to deal with the problem. The way I look at it, you'll either end up paying for it up front, or in the form of a price reduction or failed sale when the problem is uncovered.

In Washington state, sellers are required to disclose if there is LP (or and fiber-board type siding) on their home, and if the siding has begun to fail, most lenders will not lend on the home. (Clearly, the agent mentioned above either didn't read his seller's disclosure, or maybe the sellers don't know either! ) This can make it extremely difficult to sell, even if the siding only has minor damage, simply because most buyers do not want to put themselves in the position of buying a home knowing that there is a $10K-$15K repair job that will have to be done...and with LP and a lot of similar siding products, it is not a question of IF it will need to be replaced, but when. So, if a homeowner has this siding, they will most likely end up having to make some sort of arrangements to deal with this problem.

I guess the long and short of it is, if you are a real estate agent or a homeowner whose home contains these products, it pays to educate yourself about the products, know your options and have a plan for dealing with any problems that may arise.

The Golden Rule in Real Estate

2005-11-01T22:46:00.000-08:00

I was just thinking about a situation that came up recently, and wanted to write a little bit about how I think the golden rule applies in real estate. And no, I'm not talking about that golden rule that says, "he who has the gold makes the rules," but rather, the one that says you should do unto others as you would have others do unto you.

Every real estate agent out there, no matter what company they work for, has the ability to pretty much decide how they are going to do business. Obviously, we all have to obey the law, but within the law, there is a lot of grey area. There are things you can do that are legal, but may not be ethical or proper.

For instance, is it ethical to undertake an action that serves your own client well, but basically "screws" the person on the other side of the table?

For instance, say you are working with an out-of-town investor client who wants to buy a property. Maybe this investor doesn't even come to town to see the properties before making offers. Maybe their agent simply selects three of the best, then the buyer makes offers that are subject to inspection on all three, and no disclosure is made that this is the case. After inspection, the buyer rescinds two of the three offers, selecting only the house that is in need of the least repairs.

Smart, right? But what about working in good faith?

When this is a buyer's strategy, the seller usually doesn't know about it, and then when the inspection is disapproved and the transaction terminated, they now have a house that is less marketable because other agents all know that this is a house where something went haywire during inspection. It's a pretty crappy thing to do to a seller who is working in good faith and would have been willing to make the repairs. It could end up costing them thousands of dollars.

As the buyer's agent, maybe your thinking is that the only person that matters here is your own client. But remember that under the Washington Law of Agency we are required as agents to act in good faith towards all parties. This isn't to say that an agent can't still be a tough negotiator, and get a great deal for their client...neither of those things is precluded by acting n good faith.

I guess the way I look at these things is, if I wouldn't want to have someone do something to me, I'm not going to say it's okay to do it just because it's good for business.

Renovate versus buy new?

2005-09-21T11:43:00.000-07:00

In the last few weeks, one topic has come up repeatedly among people I've talked to who are thinking of buying a new home, so I thought I would mention it here. With home prices rising so fast, people are really excited to hear about the values of their own home, but when they think of what the money they will clear in a sale will actually buy them in today's rising market, the excitement tends to fade a bit.

In a lot of cases, people ask, "well, what if I stay put and take the money I might have used to buy a new home and use it to renovate the one I'm already in?"

The answer from a realtor's point of view is that it depends why you are doing it. Do you want to stay put because you love the house, love the location, love the schools and can't imagine living anywhere else? Are you thinking it will increase the value of your home? Or are you doing it because you are concerned about the cost of a new mortgage?

Whether you decide to renovate or move, the cost to do either can be considerable. Some factors to consider in your decision include:

Do you need more space, or a larger yard?
Do you want better schools, parks and community facilities?
Do you want to be closer to family or friends?
Are you looking for less expensive housing or wanting to downsize?
Do you want a better neighborhood or a new lifestyle?

Before deciding to renovate, make sure the improvements you are considering are not overimprovements. Consider the neighborhood and market prices of comparable homes in the area. If your home is currently worth $300K and you are considering spending $80K to renovate, will the home be marketable in the $380K range? If not, you may be taking on a great deal of additional debt that you may not be able to recover upon sale. It might be time to accept that this home may have met your needs once, but perhaps it is time to consider moving to a home that fits your needs now.

My advice as a realtor to those faced with this choice is to speak with a contractor and get a valid cost estimate for the improvements you are considering. Then speak with a realtor to find out whether there are any homes currently on the market that meet your needs better than your current home, and ask whether the planned improvements would add enough to the value of the home to merit the cost.

A general rule of thumb is to never spend more than 25% of the value of your home on renovations or improvements. Kitchen and bathroom renovations are usually a safe bet, because they often add more to the value of the home than they cost to accomplish, but other types of renovations can be riskier.

Some guidelines for those considering renovations include:

It costs 50 percent more to demolish a brick wall than timber
It is cheaper to extend out than up
Swimming pools rarely add value (especially in Seattle!), though in some parts of the country, most notably Florida and California, not having one can detract from value
Architects cost less than you think and can actually save you time and money
Get at least three quotes from reputable builders and contractors, check references, and check their work
Consider all your options thoroughly--including moving to a new home--before making a decision.
If you are doing the work yourself, be sure to get a permit! This will ensure that you don't run into any marketability issues later--and this point is absolutely critical for those on septic considering adding bedrooms to their home.

Here's some more information on the cost vs. value of a variety of remodeling projects.

Seattle Mayor Pulls Support From Monorail Project

2005-09-17T10:57:00.000-07:00

Transportation issues aren't really my forte, but there is something about the whole monorail project that has never made sense to me. I don't have an issue with the cost, because it seems like any large-scale transportation project of this nature, whether it's monorail or light rail or roadway improvements or whatever, is going to cost a lot of money and take a long time to pay off. The problem I have had with it is that the proposed monorail project would not really do very much to alleviate what I perceive to be the major traffic problem facing the Seattle metropolitan area.

Combine that with the fact that we have a light rail system also going in. Now to me, as a person living in the 'burbs, it makes more sense to have one mode of transport capable of alleviating our traffic problem not just in the city, but out in the 'burbs as well. And, as a person who has at one time or another done just about every commute you can think of (Eastside to Seattle, Queen Anne and Capitol hill into the city, Capitol Hill to Eastside, Bothell to Kirkland, Fremont to Kirkland, Mukilteo to Kirkland and even Whidbey Island to Seattle!) I don't think the in-city commute is the most pressing transportation problem. The more pressing problem is the people sitting in stop and go traffic from Seattle or Bellevue to points as far north as Marysville and Arlington, as far east as North Bend, and as far south as Pierce County.

People who do those commutes don't do them just because they like their cars, they do them because decent affordable housing is hard to find in Seattle. A family looking for a 3 bedroom house with a yard and in a good school district that only has $300K to spend is going to have a hard time finding that in the city. So they feel they are forced to make the longer commutes. Snohomish county is now one of the 5 fastest growing counties in the nation and Pierce is right up there as well. So you end up with more and more people making these long treks every day. Bus service out to these areas exists but it can literally take hours both ways, only runs at limited times, and just isn't a very viable option for most people.

So, we have these huge traffic jams on I-5 and I-405. It's even a problem for businesses like Boeing that have to use the roadways to move products around. So, it isn't just a quality of life issue for the people who've "chosen" to live in these areas, it's a jobs issue as well.

So just to throw my hat into the ring on this, I'm in favor of the light rail system, and would rather see us spend 11 billion to make that a viable option (for instance, more service on the north-south lines so that it actually becomes convenient to use, and getting the east-west lines built), than continue putting that money into a transportation system that only benefits a small number of neighborhoods.

Over-improvement

2005-09-14T12:18:00.000-07:00

We had my husband's parents in town last week, and it is always fun when they come to visit. Went to Whistler for a couple of days and hiked around, watched crazy mountain bikers...it was lots of fun.

While they were in town, we got to talking about the house they just built. It's a beautiful log home, built overlooking a river and 200 acres of federally protected original prairie that the family owns. My parents built the home for a retirement house, because it's near their parents and brothers and sisters. The area has great pheasant hunting as well, so there is some business potential for using the house as a hunting lodge.

Sounds great, right? The only downside is that building costs overran their original loan and when they went to the bank to try to get a second loan, the bank would not lend them any more, since they already had a loan out for about the max of what comparable properties in the area were selling for. It had nothing to do with whether they were good for it or not, or how nice the house was, it simply had to do with the bank being unwilling to take the risk on further improvements to the property in a market that might not support it.

People over-improve their homes all the time, and that's okay as long as they are clear that the improvements are for their enjoyment and that they may not recoup their costs. It's important to remember that there are improvements the market will bear, and ones that it won't. If you have the nicest home in the neighborhood, that may not mean that you can sell your home for significantly more than your neighbors. The value is in the enjoyment of the property while you live there.

To know if your improvements are over-improvements, it helps to make sure you understand whether the local market will pay for the work you have in mind. Talk to a real estate agent or appraiser that specializes in your neighborhood and ask what the value of your planned project will be when completed. Then decide if you want to do the improvements for your own enjoyment or not.

2005-08-22T14:33:00.000-07:00

First of all--welcome to my blog! I hope that this will be a great resource for you if you are looking for information about what is going on in the north King and south Snohomish counties, which are the primary areas that I work with as an agent with Windermere Real Estate in Mukilteo.

I'm a long time resident of the Puget Sound area (born and raised here), and as such I never cease to be amazed at the changes this area has undergone in my lifetime, which doesn't span THAT long a period of time (I'm in my 30s). One of the things that particularly gets my attention is our current real estate market which is, as anyone will tell you, a crazy one at times.

One topic that comes up with great regularity is whether or not the current trend in rising prices is just the market at work, or if it is a bubble that is about to pop. Anna, of the Rain City Guide, recently discussed this in her Seattle-based blog, saying that frankly, she doesn't find such talk to be all that interesting. She and I both tend to be in agreement with David of the City Comforts blog, that Seattle has space limitations that are largely behind our rising prices, and since those limitations are not going away, we are somewhat insulated against a popping bubble type of scenario. In other words, the rise in prices is simply the law of supply and demand at work. Other cities, such as Las Vegas, are also experiencing rising prices but pricing there is more affected by outside forces such as speculation that lead to rising prices but may not be supported by the market once those forces pull out.

That's a lot for a first entry, so I will close with this comment, which I initially posted over at Anna's site:

...Two thoughts. One is, to me a “bubble” signifies a rise in prices that is brought about by outside forces and which is not sustainable over a long period. The behavior of housing prices in places like Las Vegas is a good example, where you see a lot of outside investors coming in and driving up prices beyond what the area might normally be able to sustain. This is not the case here in Seattle because the forces driving up prices are inherent to our market. The little usable space and unhospitable topography combined with growth restrictions result in a lack of supply, and a relatively healthy employment base and low mortgage rates results in lots of demand, therefore, prices go up. Even when rates go up and we go through challenges with the local economy, the long term trend will still be upwards…barring any sort of economic or natural disaster.

As an aside, it cracks me up that folks are freaking out about bubbles when we are sitting right in the middle of one of the most seismologically active regions of the world, less than 100 miles from one of the worlds most dangerous volcanoes… It seems like if you want to worry about something, Mt. Rainier blowing up or a 7-9 richter-scale earthquake might be just as valid a concern.

The other is, the rise in prices is not limited just to within the Seattle city limits–we’re seeing it across the eastside and Snohomish county as well. I think one of the things we are going to see over time if Seattle can’t get this traffic situation figured out and as gas prices keep going up, is a real solidification of the neighborhoods and suburbs, with folks making more of an effort to keep their commute distances as short as possible. People will be trying to live and work in the same place. We’re already seeing this to some extent as what used to be bedroom communities (Bellevue, Redmond, Kirkland, etc.) have grown to become commercial centers, and as gas prices continue to rise people will be forced to make choices about where they are going to work and live. Which, frankly, is why I don’t particularly mind that gas prices are now topping $3 a gallon. The sooner we get to the point where people stop thinking it’s okay to drive their cars 100 miles a day roundtrip, the better for the environment and for people’s sanity too!