The Seattle Real Estate Blog

2008-02-29T16:04:00.000-08:00

Sales are slow for new and existing luxury condominiums. Olive 8, the luxury project in downtown Seattle, placed an ad in last weekend’s Seattle times and sent out a mass email to prospective buyers with a special offer designed to boost their own sales in a time of economic pessimism.

In their ad, Olive 8 correctly attributes slow sales to psychological factors. David Thyer, president of Olive 8’s developer RC Hedreen, is loosely quoted in the ad,”…concern about the economy has many people taking a ‘wait and see’ attitude. People are afraid that they may buy a house today and find that it’s been reduced in price later this year”.

Data reported in the Seattle Times indicates that our local real estate market is slowly picking up, but this is less evident in our luxury home market than it is in other segments of our housing market. People buying luxury homes usually have more flexibility in buying or selling a home, so even though our market is turning, luxury home sales will recover more slowly than other types of home sales.

So Olive 8 is offering some price protection to their buyers. If you purchase a home at Olive 8 and prices for other units with the same floor plan are reduced before your purchase closes, then your price will also be reduced. This kind of purchase price protection is good for buyers and for our housing market. Buyers can rest assured that they won’t lose equity before construction is completed, and this peace of mind could encourage more home sales.

2008-02-08T12:51:00.000-08:00

Interesting article at SeattlePI.com today. It’s entitled, Economist: Seattle-area home prices manageable for typical workers. The chief economist for the National Association of Realtors, Lawrence Yun, spoke recently in Bellevue and named Seattle an up-and-coming “Superstar City” where average home prices are not directly dependent on average income for the area.

Many people think that if the average person or family cannot afford an average home, then people will stop buying homes. But despite the recent building frenzy, the population in Seattle continues to outgrow the supply of housing. There are enough people earning above-average incomes that the prices of homes in Seattle will remain stable until we build a lot more affordable housing.

The only way to make housing more affordable in Seattle is to build more of it. Our greater community, our “Superstar City”, needs to continue increasing density in order to maintain economic diversity.

The best way to increase density is to build more LEED-certified mixed-use high-rise towers in the city’s core neighborhoods and allow more density for high-quality LEED-certified townhomes in low-rise residential neighborhoods, and much more public transportation on rails is also necessary, but that’s another post for another day…

2007-08-15T11:32:00.000-07:00

Regarding yesterday's Seattle Times article: City may buy back land it sold to Vulcan

Developers should pay a significant portion of the cost of new infrastructure, but not all of it. The developer (in this case, Vulcan) should pay for mitigation of environmental impact and should pay much of the costs of new roads, new mass transit and new utility service. However, it's appropriate for the city or other municipal authorities to use tax revenues to help pay for upgrades and improvements (like a new power substation) in order to provide services for tax payers.

Funding for new infrastructure in the South Lake Union neighborhood comes from various sources, including the City of Seattle, Vulcan, existing property owners and new property owners in the neighborhood. This is as it should be.

People and businesses that own property in new developments should absorb a larger portion of the cost of infrastructure improvements because they will benefit more than other tax payers. This is exactly what’s happening in South Lake Union. In addition to paying property taxes, residential and commercial property owners in South Lake Union are paying for new infrastructure through a Local Improvement District (LID). Over the coming years, the LID will collect $25 million from all property owners in the neighborhood to help pay for the new streetcar. A similar mechanism is being used for funding improvements to the utility infrastructure in the neighborhood.

Increasing density and combining residential and commercial developments are effective means for reducing urban sprawl, minimizing the use of single-occupant vehicles and enhancing the quality of life for all Seattleites. The mixed-use development in South Lake Union is accomplishing these goals and has won the coveted 2006 Urban Land Institute's Award for Excellence, and all the new residential properties are designed to be LEED-certified. This is the best type of new development that can be done, and since our population is growing, we need new development.

We all share the benefits, so shouldn't we all share the costs?

2007-01-24T16:57:00.000-08:00

Market Update January 2007

I'm back! After a long hiatus, The Seattle Real Estate Blog is back in action! To start off, let's get up to speed with current market conditions.

Following are a couple of links to sites that I find very useful when researching economic data. I use them when I want to find out what other experts think will happen with our economy and real estate market in the near future.

When reviewing these sites, please keep in mind that real estate markets are primarily local markets, and factors that affect the health of our Seattle market are primarily local. National trends frequently paint a poor picture of what is happening in any one local market.

Of course, interest rates and a few other factors will affect all real estate markets in the country, but the effects will be different in each region. For example, an increase in interest rates would be far more detrimental to a slow real estate market like that in Sarasota, Florida, but would casue far less damage to a market like Seattle that continues to have healthy appreciation rates. (Fortunately, mortgage rates have been going down for the last couple of months. See below.)

Links From UW to Various Financial Reports and Updates

Report from the King County Association of Realtors

As you can see from these reports, the real estate market is expected to continue to be very healthy, though appreciation rates and sales volumes are settling to a more sustainable level. We have a very long ways to go before appreciation rates and interest rates return to historical averages, and the movement is currently very slow. In fact, interest rates for mortgages have been going down a little over the last couple of months. Appreciation rates are still very healthy for homeowners and pre-sale buyers in Seattle, and are still daunting for first-time homebuyers.

2006-08-23T14:27:00.000-07:00

4 Segments of Seattle's Urban Market

As I promised today in my blog post at the Seattle Post-Intelligencer, the statistics I pulled for a current market report are below. Please visit the Seattle Real Estate Professionals for analysis the following stats, and post a comment here if you would like more info about any aspect of Seattle's real estate market.

I only looked at the market in the neighborhoods where I do most of my business: Belltown, Queen Anne, Ballard, Fremont, Wallingford, Roosevelt, Ravenna, Montlake, Capitol Hill, Pioneer Square, Mount Baker, Leschi, Madrona and the Central Area. And I divided the market into four segments based on price: less than $300k, $300k - $699k, $700k - $999k and over $999k.

homes priced under $300,000
# current listings: 81 condos + 3 houses = 84 ttl
avg DOM for curr listings: 45 days
# new listings in last 30 days 43
# sold in last 30 days 52 condos + 4 houses = 56 ttl
avg DOM for homes sold in last 30 days: 29
# new listings in June 14
# sold in June 8 houses + 73 condos = 81 ttl
avg DOM for June solds: 34 days

homes priced $300k - $699k
# curr listings: 81 condos + 3 houses = 441 ttl
avg DOM for curr listings: 57 days
# new listings in last 30 days 203
# sold in last 30 days 57 condos + 96 houses = 153 ttl
avg DOM for homes sold in last 30 days: 39
# new listings in June 85
# sold in June 148 houses + 79 condos = 227 ttl
avg DOM for June solds: 27 days

homes priced $700k - $1mil
# curr listings: 28 condos + 55 houses = 83 ttl
avg DOM for curr listings: 74 days
# new listings in last 30 days 25
# sold in last 30 days 1 condos + 22 houses = 23 ttl
avg DOM for homes sold in last 30 days: 47
# new listings in June 20
# sold in June 36 houses + 6 condos = 42 ttl
avg DOM for June solds: 48 days

homes priced over $1mil
# curr listings: 20 condos + 54 houses = 74 ttl
avg DOM for curr listings: 118 days
# new listings in last 30 days 20
# sold in last 30 days 2 condos + 5 houses = 7 ttl
avg DOM for homes sold in last 30 days: 59
# new listings in June 15
# sold in June 16 houses +3 condos = 19 ttl
avg DOM for June solds: 101 days

2006-07-26T18:14:00.000-07:00

Neighborhood Report - Capitol Hill

Seattle’s real estate market continues to thrive in spite of the nay-sayers’ dire bubble predictions. Other markets around the country are cooling or are already flat, but that’s not the case with Seattle’s real estate market.

Seattle’s strong demand for mid-level and high-level employment and the geographic restrictions on our housing supply work together to create a shortage of housing. The recent easing of height restrictions on high-rise condominiums and increased density allowed in a number of Seattle’s urban neighborhoods will help ease the tension in our real estate market, but the full effects won’t be felt for a few more years. Even then, there will be only so much room between Lake Washington, Elliot Bay and the communities north and south of Seattle.

Our local economy doesn’t show signs of cooling any time soon. In an article for the Seattle Post-Intelligencer, John Cook explains that venture capital investment is higher in our state right now than its been in five years. Dan Richman recently wrote another article for the Post-Intelligencer where he talks about the stability of our labor market.

The continued strong demand for homes is evidenced by the high appreciation rates that homeowners and investors continue to enjoy. Multiple offers to purchase condominiums are still making many transactions look like sealed bid auctions, and the average time it takes to sell a house continues to be historically low.

Capitol Hill is a particularly strong market because of the innovative new condos being constructed there, and also because of its popularity among Seattle’s left-leaning urban professionals, hipsters and anyone else who wants to enjoy the central location, live music venues, clubs, bars, funky retail shops and pedestrian-friendly density.

From June 27 through today, three multifamily properties, 25 houses and 87 condominiums sold or were under contract. During the same period last year, five multifamily properties, 22 houses and 54 condominiums sold. This means that overall sales volume has increased on Capitol Hill by 42%.

The median price for Capitol Hill condos that sold this month was $313,450. Capitol Hill houses that sold this month had a median price of $729,000. The median price for Capitol Hill condos that sold during the same period last year was $262,500, and the median price for houses that sold during this month last year was $652,011. Over the last year, the median price of condos on Capitol Hill has increased by 19.4%! The median price of houses appreciated by a respectable 11.8%.

This is great news for anyone who already owns a home on Capitol Hill, but it’s not so great for renters who want to buy their own home instead of helping their landlord get rich. First-time homebuyers would do well to buy a home as quickly as possible so they don’t get priced out of Seattle’s housing market and so that they can start reaping the benefit of Seattle’s historically high appreciation rates.

2006-07-21T14:15:00.000-07:00

The Long Tail

Hyperion published a book by Chris Anderson, the Editor-In-Chief of Wired Magazine, entitled The Long Tail. This book discusses a new theory that could replace the steadfast 80/20 Rule in business.

Simply stated, the 80/20 Rule dictates that 80% of the benefit one receives in life comes from 20% of the effort they put forth.

This rule is applied to business by explaining that 80% of your revenue will come from 20% of the products or services you sell. Real estate agents have also observed that 80% of the return on marketing efforts comes from 20% of the marketing we do. The goal of any motivated entrepreneur is to determine which 20% of the marketing or products or services bring 80% of the benefits, then spend 100% of your effort on what was once only 20% of your activities. Capisce?

Chris Anderson’s theory, The Long Tail, explains that 80% of a businesses revenue no longer comes from 20% of the products or services sold. If the 80/20 rule is described by a bell curve of the products a particular company sells, where the highest point of the curve represents the sales volume of the most popular product and the lowest point of the curve represents the sales volume of the least popular product, The Long Tail theory concerns the long tail on the end of the bell curve.

That long tail is new to business; it wasn’t there before. Or more accurately, it wasn't nearly as long before. The Long Tail is so long that there is more revenue generated by selling the products that appeal to more unique tastes, even if the quantity sold of each product is far less than the quantity sold of the most popular product.

The Long Tail supports niche marketing. In fact, it promotes the idea of marketing to a number of niches simultaneously. As Chris Anderson points out, Netflix and iTunes are two perfect models of The Long Tail. They both earn far more revenue from the relatively obscure titles in their inventories than they earn from Hollywood releases or songs from the Top 40.

A vast inventory is easy to maintain if it can be stored digitally, but can The Long Tail apply to service providers like real estate agents? If you’re RE/Max, Coldwell Banker, Windermere or John L. Scott, perhaps you could have a stable of agents who specialize in various niche markets. But what about individual agents? Should we aim our marketing activities at the greatest common denominator, or should we target a niche?

I believe that the best way we can serve our clients is to specialize in a geographic area and only a few types of properties. For me, it’s the residential houses and condos in Seattle’s urban neighborhoods. I’m a specialist here, and that means I can provide far better service for my clients in Seattle than an agent from Tacoma who is trying to cover the tri-county area.

The 80/20 Rule applies at every level. Does The Long Tail apply to small businesses and individual entrepreneurs, or does it only apply to larger companies?

2006-06-22T14:28:00.000-07:00

Tight Real Estate Market - Strategy Makes all the Difference

This post is continued from the Seattle Real Estate Professionals blog at the Seattle PI.

The supply of available housing in Seattle is limited by geography and zoning regulations, and our area has a strong demand for highly skilled workers. This means that there are many people in our greater community whose wages are going up and who want to buy a house or condo, but there are not enough properties to go around. This is great for home sellers, but it makes life hard for homebuyers. The housing crunch is intense in the center of Seattle and the effects are felt throughout the county.

With market conditions as they are, seller’s agents can encourage multiple competing offers to purchase their clients’ property. This is simply done by making the property as visible as possible to potential buyers for 10 – 14 days, and then reviewing all offers simultaneously on a date that is chosen in advance. (To keep it fair and legal, the date to review offers is posted in the MLS listing for the property.) If the property isn’t priced too high, then multiple offers are likely to come rolling in, which in turn fetches a higher sale price than could have been achieved with a high list price. This process is very similar to a sealed bid auction, and the strategy is most successful in Seattle’s and Bellevue’s core neighborhoods. This strategy can also be used effectively with more desirable properties throughout King County.

Home buyers are forced to compete against each other on price and terms, but there are strategies that can be used to enhance the buyer’s position while minimizing their sacrifice.

When competing on price, buyers can use an Escalation Addendum. This is an addendum to the purchase and sale agreement stating that the buyer will beat all comparable offers by a certain dollar amount (i.e. $2,000), but will not pay more than a specific price for the property (i.e. will beat all offers up to $775,000). The buyer only needs to determine the subjective value of the property based on their intended use for it, the availability of comparable properties, their desired time frame for moving in and how long they plan to own the property, and then work with their agent to set the offer price accordingly.

Sellers generally prefer that buyers eliminate the inspection contingency that protects buyers from purchasing a home with hidden problems. They aren’t usually trying to hide defects in the property, but sellers don’t want to renegotiate the price after the inspection based on common superficial defects that are itemized by the buyer’s inspector. Buyers can protect themselves and enhance their position by hiring their inspector to examine the property before the offer is written and then waiving the inspection contingency.

A good listing agent knows how to take advantage of current market conditions to get the best price and terms for their client, and a talented buyer’s agent will help their client obtain the property they want while avoiding unnecessary sacrifices.

If you want to discuss buyer or seller strategies further, or if you would like specific information about buying or selling your home, please post a comment or drop me a line at christopherb@johnlscott.com.

2006-05-12T15:02:00.000-07:00

Multiple Offers I
The Seattle Real Estate Blog IX

Seattle’s real estate market is really picking up steam this spring. Last year we saw things heat up at this time, with more homes coming on the market and more buyers out there looking. Multiple offer scenarios were common. Many people thought that multiple offers would be out of favor for a few years, but they were wrong. Were looking at a higher demand for housing than we saw last year at this time, and our inventory of housing stock is at least 10% lower than it was at this time last year.

Seattle’s labor market is currently defined by a huge demand for mid-level and upper-level workers, and this translates into a strong demand in the middle and upper levels of our housing market. Geography and zoning restrict the amount of housing that can be constructed in Seattle. Though zoning is being changed and new higher density townhouses are replacing single-family homes in many areas around Seattle, and mid- rise and high-rise condominiums are replacing low-rise apartment buildings and single-family homes in the city’s core, high demand continues to outstrip Seattle’s residential inventory. Because of this, multiple-offer scenarios have made a strong and rapid comeback over the last six weeks.

If you’re familiar with art auctions or antique auctions and the way they work, you know what a sealed-bid sale is. This is where competing buyers submit bids privately, and nobody knows what their competitors are offering to pay. Savvy listing agents can set up the same scenario in a real estate sale. If the seller states that they won’t look at any offers until a specific date, then buyers’ agents can safely assume that there will be competing bids reviewed alongside each of their clients’ bids. In this scenario, it doesn’t matter whose bid was received first, all competing bids are evaluated against each other by the sellers and their agent.

To compete against an unknown offer, buyers are encouraged to include escalation clauses and waive common contingencies, like the finance contingency and the inspection contingency.

I’ll write more about multiple offer scenarios in a few days, so please come back to The Seattle Real Estate Blog if you want to read more about this subject.

All comments are welcome. If there is any topic you would like to see discussed in The Seattle Real Estate Blog, please don’t hesitate to include a request in your comment.

2006-04-21T14:18:00.000-07:00

New Construction II
The Seattle Real Estate Blog VIII

(This post is continued from our other blog at the Seattle PI)

New construction is great. Contemporary architecture and finished surfaces, low maintenance, up-to-date appliances and new lifestyles all come with the package. Another part of the package is a special set of issues that you should be aware of when looking for your new home or condo

Ø Is the home built green?
Green architecture is becoming more common, and it is a feature that is highly valued by many people in our region. This means that it’s easy to buy green, and green architecture appreciates in value very well. To learn more about green architecture, visit Leed's website, keep up on this blog or watch for green architecture posts at Seattle Real Estate Professionals. Some green architecture projects in our area are Hjarta in Ballard, Vineyard Lane on Whidbey Island and hundreds of new homes being constructed on the Issaquah Highlands.

Ø Use an inspection contingency and hire a professional inspector
Many agents say this is not necessary for new construction because the county inspects new construction before the sale can close. However, I always recommend that buyers hire a professional inspector and make their offer to purchase contingent on the results of the inspection. It’s better to find the flaws that county inspectors may have overlooked before the sale closes so these issues don’t become warranty issues later. It’s not common to find major flaws in new construction around here. But minor flaws are not uncommon, and they can become major headaches if they’re not addressed before you take possession of your new home.

Ø Be aware of the potential for construction delays
Most Purchase and Sale Agreements used by builders include a clause that protects the builder if construction is delayed. This makes sense because there are many factors the builder can’t control that can delay construction. Builders are typically indemnified for delays up to 30 days. After that, the buyer’s recourse is typically limited to a refund of their earnest money deposit if they terminate the transaction. Construction delays are common, and sometimes they can last six months or more. Be sure to take this into consideration when you’re planning your move.

Ø Use your own lender, not the lender recommended by the listing agents
Many builder’s have preferred lenders that are familiar with the construction project and have streamlined the lending process for a particular development, but my clients have always done better by shopping for a different lender. It is certainly more convenient to use the builder’s preferred lender, but you can save thousands of dollars by shopping around a bit. Ask your buyer’s agent to refer a couple of lenders, and read the WA State Dept. of Financial Institutions’ (DFI’s) Guide to Home Loans. This guide is extremely helpful for people who want to compare lenders and loan products, and for those who just want to have a better understanding of the lending process.

To read about more new construction issues, like using a buyer's agent, the danger of site registration, property walk-throughs and neghboring new construction, please visit our other blog at the Seattle PI.

2006-04-10T14:05:00.000-07:00

New Construction I
The Seattle real Estate Blog VII

A pre-sale purchase occurs before construction of the property is complete. For example, the condominium units at dwellRoosevelt are still under construction, but most of them have been sold already. The buyer must make an earnest money deposit (usually 1.5% or less of the purchase price) and come to mutual acceptance on a purchase and sale agreement with the seller. If there are no custom upgrades to be made, then there are no other payments due until closing.

This is a great way to leverage a relatively small investment for a healthy return. In the case of a $320,000 condominium unit at dwellRoosevelt, the earnest money deposit would be something like $4,800. The appreciation rate for two-bedroom condos at dwellRoosevelt, from the time they were listed in January through today, is approximately 7%. This means that an investment of $4,800 in January has brought a three-month return equal to $22,400. Sounds great, and it is, but this is only part of the picture. The investor could not simply walk away right now with $22,400.

The reason that no money other than the earnest money has had to be paid since January is that the down payment and the mortgage payments are not collected until the transaction closes, and the transaction cannot close until construction is complete and the condominium has passed the final building inspection. It's also important to note that interest on the mortgage does not begin to accrue until closing.

For more information about new construction or pre-sale purchases, please visit the blog Seattle Real Estate Professionals, keep watching The Seattle Real Estate Blog and subscribe to RSS feeds for both.

Thanks for joining the conversation!
~Christopher

2006-03-20T15:41:00.000-08:00

Green Architecture I
The Seattle Real Estate Blog VI

New development brings economic growth and increased density in our core urban neighborhoods, which in turn reduces our impact on the natural environment while making housing more affordable. Mixed use buildings that include retail and restaurants on the ground floor make life simpler and more convenient for people in the neighborhood while reducing the number of automobile trips people take to get their daily tasks done. Whether you’re a fan of Mayor Greg Nickels or not, his advocacy for increased housing density should be commended.

Green Architecture is coming on strong in Seattle, and this bodes well for all of us. The Seattle Public Library in Ballard was constructed with very high standards for having a low environmental impact. It has a green roo f, which reduces the heat island effect, reduces polluted runoff from urban streets into our streams and insulates the building from heat in the summer and cold in the winter. This and other green architectural features are finally becoming more common in Seattle.

Also in Ballard is a new green condominium complex that will be certified by Leadership in Energy and Environmental Design (LEED). The new Ballard condominium is called Hjarta, which is Icelandic for “heart”, and it is scheduled to be completed by the summer of 2007. At seven stories, this green building will be the tallest building in Ballard. Its design has much in common with the Ballard Library, including a green roof and the use of porous concrete paving to reduce runoff into our streams and reservoirs. This will be the first LEED certified residential building in Ballard.

For more information about Green Architecture and Sustainable Rmodel in Seattle, take a look at LEED’s certified project list, the City of Seattle’s Sustainable Building page, the Environmental Home Center and future posts right here on The Seattle Real Estate Blog.

As always, your comments are welcome. Please post your comments through the link below, or send email directly to christopherb@johnlscott.com.

2006-03-17T14:17:00.000-08:00

Marketing Luxury Real Estate I
The Seattle Real Estate Blog V

Selling luxury homes involves a special set of challenges that are not present in other segments of the real estate market. The most beautiful and unique homes are only available to a select group of real estate buyers, which means that the pool of potential buyers is relatively small. Luxury homebuyers are more likely to come from abroad or from other parts of the country, which means that signage and other local marketing practices are less effective for luxury real estate. It’s also true that exclusive homes frequently contain valuable art, furnishings, fixtures and finishes, so access to the property for co-operating Realtors and potential buyers must be limited. These challenges can be met and overcome by a talented and experienced Agent.

One way to increase the pool of potential buyers is to promote luxury property listings throughout the country and around the world. This kills two birds with one stone; reaching people in other geographical areas increases the pool of potential buyers, and the luxury homebuyers from abroad or across the country have easy access to information about the exclusive home. Residence International is a print magazine and a website that lists exclusive luxury homes, and it features articles about international communities and real estate markets. This magazine also contains information regarding relocation and international moving services. Other exclusive venues for promoting luxury properties include The Wall Street Journal’s nationwide and international editions, Christie’s Great Estates, John L. Scott's Quality Street Magazine and websites with international viewers like JohnLScott.com and BraxtanRE.com.

The problem with limited physical access to the luxury property for potential buyers with luxury home tastes can be solved with special promotional events. These periodic events not only confine buyer-related traffic to specific hours, but they also create exclusive happenings that many Realtors, luxury homeowners and luxury homebuyers will enjoy attending. The luxury home events accomplish two significant goals: they not only confine physical traffic to scheduled times, but they also create a celebrity status for the home while it’s listed for sale. A dedicated professional Agent will facilitate and finance the events, and an added benefit is that the homeowners can take advantage of the events to sell any art or furnishings that they choose not to take to another home.

For more information about Luxury Real Estate Marketing or anything else related to real estate, please keep watching The Seattle Real Estate Blog or visit BraxtanRE.com. I appreciate comments and suggestions for new topics. Thank you for your time and attention.

2006-03-06T13:49:00.000-08:00

Residential Market Report I
King County
February 2005 and February 2006
The Seattle Real estate Blog IV

I spent some time today reviewing recent King County figures for residential real estate sales. The month of February saw very little change in sales volume when compared to last year, and prices continue to appreciate. This is good news for homeowners and investors who want to sell homes this year, but the market is becoming increasingly exclusive and first-time homebuyers are being pushed farther out of Seattle's core urban neighborhoods.

In February 2006, 2,281 existing houses and condominiums sold with a median price of $344,950 and an average price of $412,324.

February 2005 saw 2,287 existing houses and condominiums sell with a median price of $309,950 and an average price of $381,595.

February's appreciation rates for residential real estate in King County remain strong. The average price of existing homes increased by $30,729, or 8.05%. The median price increased by $35,000, which translates into a hefty 11.29%.

It's true that Seattle and King County's real estate market is cooling a bit, but we continue to see healthy growth in the value of our homes. The period of the most rapid growth in the value of our residential real estate is past, and that means that this is an excellent time to sell and move up to your next home. And if you're interested in buying a second home in the city, investing in residential real estate or becoming a first-time homebuyer, the continuing growth of home values means you can afford a more desirable home now than you will be able to later in the year.

In upcoming posts I'll include graphical analysis of home values in Seattle and greater King County, along with more information about new construction and individual Seattle neighborhoods. If there's any specific information you would like to see here, please post a comment to this blog or drop me a line at christopherb@johnlscott.com.

2006-02-23T00:00:00.000-08:00

Special Event on Tuesday, March 16
Real Estate Investment: Fixers, Rentals, Pre-Sales and More
The Seattle Real Estate Blog III

If you have thought about buying a fixer to flip for a profit, but you're not sure how the numbers add up; or if you want to buy a rental property, but you're not sure if you can; or if you've already invested in real estate, and it may be time to trade up or leverage your equity, then we're hosting a meeting for you.

Learn how to work towards financial freedom by generating passive income. Real Estate Agent Christopher Braxtan, Financial Planner Jessica Hale and Loan Consultant Marshall Carter are hosting an informational forum on real estate investing. Whether you're exploring the idea for the first time or you're an experienced investor, you're invited to join us for an enlightening presentation followed by an open question and answer session. Your first drink and light appetizers are complimentary.

When: Tuesday March 14, 6:30pm
Where: The Bal Mar, which is located in Ballard on the corner of NW Market St and Old Ballard Ave.
RSVP: christopherb@johnlscott.com

For more information on this and other upcoming events, please contact Christopher Braxtan.

2006-02-19T14:16:00.000-08:00

First-Time Home Buyers - Financing - Credit
The Seattle Real Estate Blog II

Buying a home is easier than ever for first-time home buyers in the US. With the availability of zero-down loans, interest-only payment options, low interest rates and simplified loan applications, it makes little sense for most long-term renters to keep paying rent instead of paying for their own mortgage.

Until a few years ago, most people needed to make a 20% down payment and could only borrow 80% of the value of their home. Now almost all home buyers qualify for 10% down, 5% down and zero-down payment programs. The higher your down payment, the lower your interest rate will be. However, there are many factors that affect the interest rate on your loan.

The greatest factor affecting your interest rate is the almighty credit score. The federal government now requires the three big credit reporting agencies (Equifax, TransUnion and Experian) to provide you with a free copy of your credit report once each year, and it does not affect your credit score to take advantage of this. If you're thinking about purchasing a home, you need to know what your credit report looks like. There might be items in collections that you're unaware of, like a parking ticket that blew off your windshield before you found it or a forgotten phone bill your ex-roommate never paid. You need to get these items taken care of before applying for a loan. Unfortunately, the free credit report does not include your credit score, but you can purchase your score when obtaining your free credit report.

The best loans are available to people who have credit scores higher than 715. People with credit scores over 700 also qualify for prime loans, and anyone with a credit score of 680 can take advantage of zero-down and interest-only loan programs. Factors that affect your credit score include the amount of debt you have in relation to your credit limits and the minimum debt payments you're required to make each month in relation to your gross income.

The most important thing you can do to prepare for purchasing a home is improving your credit score. The simplest way to improve you credit score is to pay off debt, but there are many other ways you can improve your score. A good mortgage lender or a qualified financial planner can provide indispensable assistance when you're planning to purchase a home. Help with your credit score from a mortgage lender is usually complimentary, though they will hope that you continue to work with them throughout the home-buying process. Financial advisors usually work for a fee, and they can also refer you to a qualified lender who will help you get the best mortgage available for your individual financial goals.

There are two highly qualified people I can refer with confidence:

Ruby Grynberg is the owner and chief loan officer at Salmon Bay Community Lending. She offers complimentary courses on home purchasing for people with a variety of unique circumstances, like small-business owners and first-time home buyers. She's a broker who has access to hundreds of various loan products and is experienced at working with individuals at all levels of the real estate market. Contact Ruby through her email address or the telephone numbers listed on her website if you would like to discuss credit and home financing in greater detail.

Jessica Hale is a very talented financial planner with years of experience helping people achieve financial security. Like Ruby, Jessica has worked with individuals and families at all levels of the economic spectrum. Jessica can help you develop an overall financial strategy that includes eliminating debt, purchasing a home and ensuring a positive future for you and those who depend on you. Contact Jessica through the telephone number listed on her website if you would like a complimentary one-hour initial consultation.

Later this week we'll post more information regarding various types of financing as well as specifics for first-time home buyers. We want to provide the information you need, so please post a comment if there are any specific topics you would like to see discussed. You can also contact us or get more information at BraxtanRE.com.

2006-02-19T13:28:00.000-08:00

Ready to Pop?
The Seattle Real Estate Blog I

Today the Seattle Post-Intelligencer published an article by staff reporter Elizabeth Rhodes entitled Ready to Pop? This article pertains directly to the bubble issue we wrote about in the last post, and you can find the article in the Real Estate section on page G1 of the PI.

Lawrence Yun, the senior economist for the National Association of Realtors, was quoted throughout the article, as were economist and Publisher of the Puget Sound Economic Forecast Dick Conway and local labor economist Roberta Pauer. Yun stated that, "getting double digit appreciation will be an easy task for Seattle" for the next two years.

Yun cited the significance of our labor market, especially the quality of jobs that are available in Seattle, and the fact that our recent appreciation rates have been moderate compared to other west coast cities as factors encouraging the stable growth of real estate values in our fair city. A tight supply of existing homes and a shortage of available land for new construction were also cited in the article as important factors. While Yun's forecast for growth of real estate prices in Western Washington is more optimistic than the predictions of Conway and Pauer, all three agree that we are likely to significant continued growth in our region's real estate prices.

2006-02-15T16:49:00.000-08:00

One of the first items I'd like to address in our new blog is the sensational reporting on the real estate market that is published and broadcast by retail media outlets. The Seattle real Estate Blog is different from other media outlets. In this blog Braxtan Real Estate will publish the most accurate and current information about real estate in Seattle, regardless of how exciting or dull the news may be.

If you invest in real estate, or if you plan buy or sell your own home within the next year, the information provided by Braxtan Real Estate will be very valuable to you. This blog is your information resource for real property trends in Seattle, and it's your information resource for issues related to individual real estate transactions.

Most media outlets, from our local KOMO4 News and The Seattle Times to CNN and Forbes Magazine, are either exuberant about the real estate market or predict the popping of a "bubble". The reality of the real estate market is that it usually isn't very volatile. Historically, Seattle has seen few rapid corrections in the real estate market, these price fluctuations are rarely catastrophic and, with few exceptions, they don't last very long.

The prime factors that affect housing prices are regional unemployment, prevailing wages, population, housing supply, cost of construction and interest rates. If you own real estate and you want to see its value increase, you certainly want your region to enjoy low unemployment, high wages, a growing population, a moderate or low supply of housing, high construction costs and low interest rates. According to the Workforce Development Council (WDC) of Seattle-King County, we enjoy unemployment rates, prevailing wages and population changes that continue to push housing prices up. (Click here to read the WDC's report.) The cost of residential construction in Seattle is moderate, so it has a relatively neutral effect on housing prices. The one factor that has a slight downward press on housing prices is current interest rates.

The US Federal Reserve slightly increased interest rates throughout 2005. This has helped cool the housing market, and it has also made housing a little less affordable. Retail media outlets have myopically focused on this one factor, interest rates, and proclaimed the sky to be falling on homeowners and real estate investors throughout the US. However, interest rates remain historically low. According to Freddie Mac, "mortgage rates had fallen to their lowest level in more than a generation" by the end of 2002. (Read Freddie Mac's 2002 report) Currently, interest rates are increasing slow enough that Freddie Mac predicts "moderate home price gains" in 2006. (Read the 2005 report here.)

The frightening stories about Seattle's real estate prices are full of fiction and exaggerations, and they omit the facts we need to form an accurate picture of what's really happening. A bursting housing bubble? That's not what credible experts are predicting for Seattle. In fact, it's likely that housing prices will continue to grow in Seattle for the foreseeable future.

Post a comment! We want to provide the information you want, so please let us know what you would like to hear about.

2006-02-15T12:54:00.000-08:00

This is the premier edition of your real estate resource blog. Please check back tomorrow to find our first substantive posting.