Real Estate Information

Our market is showing signs of weakness during the last month.  Our sales from June to July 2008 dropped 32%.  This is the largest drop in sales that I have personally seen during a one month period.  When compared to last year at the same month, the sales for July 2008 are 40% less.  The new lending rules that went into effect during April 2008 maybe having an impact upon our home sales.  I personally believe that our number one issue is that we have plenty of home buyers but they are unable to purchase because they own homes elsewhere.  

Homes priced above $325,000 in the Tri-Cities are in excess supply.   It may take a few months for the more expensive homes to fall into alignment with the demand.

Our market sales for July 2008 were softer than most expected.  Our total sales through the multiple listing service were 221 homes.  This figure is 32% lower than the previous month and 40% lower than the same time last year. Our pending sales were 175 homes which indicated a drop of 17% from the previous month.  These figures imply that unless our sales volume increase, we should start to experience an increase in inventory. We only had a slight increase from June to July 2008.

From my perspective our economy continues to be strong.  We seemed to be adversely affected by external forces such as changing lending rules and the soft real estate market in other regions of the US.  Some local companies are having difficulties hiring skilled professionals because the potential employees cannot sell their existing homes to make the transition.

One of our strengths in the US economy has been the relative fluid work force.  When one area has a higher demand for workers than others, the workers in the past have simply sold their homes to move the new employment opportunity.  The rules seem to be changing.  With workers unable to sell their homes, we may see higher unemployment and lost business opportunities in the US.

In our local market, sellers must have their homes market ready and priced competitively.  This is not the time to be testing the market with a higher price.

Here are some interesting housing statistics for the year 2007 in Washington State.

The median age of first time home buyers was 31 years of age.

The median income of home buyers was $73,900.

Sixty-two percent of home buyers indicated that they had no children under the age of 18.

Twenty-one percent of the home buyers were single females and six percent were single males.

First time home buyers accounted for 41 percent of the total sales in Washington State.

Twenty-five percent of home buyers purchased newly built homes.

Seventy-two percent of the homes sold were single family dwellings.

The median price of homes purchased was $300,000

The typical home buyer purchased a home 1790 square feet in size.

These statistics further emphasize what a good value we have in our housing market.

Our market seems to be holding its own while many parts of the nation are facing what some may call a real estate correction.   The number of homes for sale is nearly identical to a year ago.  The same is true for the average days on the market.   We have seen about 20% fewer homes selling this year; however our average and median prices are showing gains.  Below $250,000 our market shows average activity.   Our softness in the market seems to be above $325,000.   It is an excellent time for home buyers in the Tri-Cities to move up to more expensive homes.

Normally a Buyer of residential real estate (1-4 units) in Washington State is entitled to receive a property disclosure statement from the Seller. The statement should provide the Seller’s understanding of the property’s condition.  In the event the disclosure is not received in a timely manner, the transaction can be voided by the Buyer at any time. Therefore, it is critical for home sellers to make this document immediately available upon receiving an offer.   Many agents place this information on-line through the multiple listing service.

The following transactions are exempt: (1) a foreclosure (trustees sale) or a deed-in- lieu of foreclosure [Note that this exemption applies only to the trustee’s sale and does not apply to the resale of property where seller took title to the property through foreclosure.]; (2) a gift or other transfer to a parent, spouse, or child of a transferor or child of any parent or spouse of a transferor; (3) a transfer between spouses in connection with a marital dissolution; (4) a transfer where a buyer had an ownership interest in the property within two years of the date of the transfer including, but not limited to, an ownership interest as a partner in a partnership, a limited partner in a limited partnership, a shareholder in a corporation, a leasehold interest, or transfers to and from a facilitator pursuant to a tax deferred exchange; (5) a transfer of an interest that is less than fee simple, except that the transfer of a vendee's interest under a real estate contract is subject to the requirements of this chapter; and (6) a transfer made by the personal representative of the estate of the decedent or by a trustee in bankruptcy.

Effective June 12, 2008 a new law becomes effective and identifies certain homes as being “Distressed Homes”

As a review “Potential Distressed Homes” are classified as

(1)    Owner occupied

(2)    Owner’s primary residence

(3)   Building is 1-4 units

Distressed Homes are classified as

(1)    At risk of loss for non-payment of taxes

(2)   In default under a mortgage

(3)   30 days behind on a mortgage or

(4)    Owner believes he and/or she could default on a mortgage within 4 months and informs a lawyer, real estate agent, lender, mortgage/ credit counselor.

 Agents (listing and buying) plus Home Buyers owe “fiduciary duties” to owners of Distressed Homes.   A definition of fiduciary duties as it pertains to real estate has not been firmly established.   What this means is that the Buyer for these properties owe a higher allegiance to the Seller than to themselves.   Accordingly, our office among many other offices is taking the position that we will not list or show “Distressed Homes”.   The liability for agents and home buyers is simply too great and becomes the potential for litigation.   Of course, as in any change, some agents will be totally unaware of the law and its impact upon their clients.   For those desiring to purchase a “By Owner” home without an agent, it is critical that an attorney be consulted prior to signing documents.   

We fully expect this law to be modified during the next legislative session.