My response to an article in the Puget Sound Business Journal

Here is a response I wrote to an article in response to Puget Sounds Business Journal article titled Seattle joings the ranks of ‘double-digit decline’ in home prices (http://seattle.bizjournals.com/seattle/stories/2008/12/29/daily7.html?surround=etf#tp_newCommentAnchor)

Let’s take a look at the facts. I too can care less about what the large real estate brokers are saying, However, I do think the data tells a compelling story.

If you would have bought the average home in Miami 5 years ago, according to the Case-Shilling data, you would be up 13.6%, in spite of the more than 28% drop in 2008. That’s because they have a crazy cyclical real estate market.

However, during the same period of time, an average home in the Seattle market would have appreciated more than 40%, in spite of this 10% drop in 2008. Why, because we benefit from a hybrid real estate market; we consistently have moderate increases in value and our when we do have decreases, they are at a much smaller amount.

Why does Seattle real estate market lag other cities…it’s not because of the time zone! It’s because of its economic strength. We are able to go 10 rounds with this recession before we started to wobble where others fell in the first round.

To suggest that we will just continue to drop like other markets does not take into account all the external forces that have gone into beating this recession during these 10 rounds, including the fact that beginning in January, the government is going to start buying back billions of dollars of bad loans, interest rates are at crazy lows, and there has been a huge injection of money into the lending sector.

Sure, things are bad right now, but we have held more value and have larger gains over the past 5 years than any other major market. We have survived while waiting for the “troops” to get organized and engaged in the war against this recession. Other places, like Arizona, San Francisco, Los Angeles and Miami did not.

Seattle is not only a great surviver of this recession, it’s a great fighter. For more information, please log on to www.HomesInTheSeattleArea.com.

BluePrint For Buying Your First House – Step 1

There are 3 Critical Steps in buying a house. One is the Funding Process. Where I’m I getting the money? Two, is the Purchase Process. What house am I buying? And three, the Closing Process. Making sure all the dots are dotted and all the T’s are crossed. Today we will discuss in some detail the Funding Process.

The Funding Process-this is the most important step of the 3 Critical Steps towards owning your own home, getting the money. So, just so you know how much your going to need, I’m going to talk about the 5 items you need to pay for or you need someone else to pay for (even better).

The Purchase Price:
normally you are looking at getting an FHA (Federal Housing Administration) loan. They will lend you up to 97% of the purchase price of the house. Even if the house appraises for more than the purchase price, they will only give you 97% of the purchase price.

The Down Payment:
This is normally the 3% that your FHA loan did not cover.

Your Closing Costs-Escrow Services
This is to pay the company that handles the transaction to do their thing. They prepare the necessary documents and forms, make sure the money is all there, and gets you title to your new home. This usually costs about $1,500,

Your Closing Costs-Title Insurance
Title insurance insures the policyholder in case there is something wrong with the title, like some old ancestor claims a right to your property. The seller needs to buy you a policy to protect you as the new owner. The buyer needs to buy your lender a policy to protect their loan interest. The cost of this is about $700.

The Real Estate Cycle in the Seattle Area

A couple of years ago, Christopher Cagan, Ph. D (a really smart guy) Director of Research and Analytics at First American Real Estate Solutions published a study called The Real Estate Cycle In 2006. I’m going to share with you what this report said about Seattle.

First of all, they start out talking about where they got their data (median sales-price index for existing single-family homes published by the National Association of Realtors®) and tells us they used proprietary analytical techniques (meaning secret stuff that no one else understands) to classify markets as cyclic, linear, or hybrid.

For example, many markets, prices exhibit a cyclic behavior profile, moving in waves of ten to fifteen years in length. These are desirable coastal markets, like San Francisco,Southern California, Miami, Honolulu, and New York City.

To read the rest of this article, and view homes in the Seattle Area that offer thousands of dollars in cash incentives and special first-time homebuyer financing, click on this link and register to see this valuable information for free!

Why The Seattle Housing Market Is Safer in a Recession

Earlier this year, Business Week’s Prashant Gopal wrote and article titled “Some Cities Will Be Safer In A Recession”. I’m going to summarize this article and share my thoughts on why they named Seattle as one of these cities.

As you can imagine, cities with a strong presence in health care, education, law, energy, and the government will do better in a downturn than those without. Why, because all of these items are considered by most of us as a necessity.

FHA Credit Requirments Are More Lenient For First-time Homebuyers in the Seattle Area

This is something you might not know: FHA credit requirements are more lenient than conventional loan credit requirements!

Past credit performance is considered a useful guide in determining an individual’s future actions. An individual who has made payments on past or current obligations in a timely manner represents reduced risk. Conversely, if the credit report shows continuous slow payments, judgments, and delinquent accounts, FHA credit requirements will require compensating factors and a reasonable explanation of the reason for the late payments.