Tri-Cities WA Real Estate News

Don Havre

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Tri-Cities, WA August 2008 Real Estate Market Report

by Don Havre

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.

Tri-Cities Experiences Softer Real Estate Sales July 2008

by Don Havre

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.

Washington State 2007 Housing Statistics

by Don Havre

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.

Tri-Cities July 2008 Market Report

by Don Havre

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.

Do All Sellers Provide Property Disclosures?

by Don Havre

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.

New Law Identifies Distressed Homes

by Don Havre

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.

MSN Money Reports on the Tri-Cities

by Don Havre
MSN Money reports quarterly housing data by Mean Statistical Area.   For Kennewick-Richland-Pasco areas the following are reported for the 1st quarter of 2008. MSN reported the Tri-City area increased an average value of 19.06% during the last five years, 2.97% last year and declined 1.71% during the first quarter of this year.
 
A primary reason is that new construction plays a major role in our housing data. Land costs and anything associated with petroleum have contributed to increased hard costs for builders.   The builders are being squeezed with high costs on one side and consumers on the other side showing price resistance to more expensive homes.    The lower end of our market has been fairly healthy while the upper end is showing definite weakening.  The upper end re-sale home prices may have to decline to meet the consumer demands.   Eventually, the new upper-end homes may have to decline in prices as well.
 
This combination may provide a buying opportunity for home owners in the Tri-Cites desiring to “move-up” to more expensive homes.
 

Distressed Home Consultants and the New Law

by Don Havre
Our governor recently signed a bill thereby making a new law dealing with distressed properties. The law has an effective date of June 12, 2008.  The intent of the law was to protect vulnerable property owners from scams to steal their equity. At the last moment the language of the bill was changed and thus, the law has “major” implications for sellers, agents and buyers of distressed properties.
 
Essentially listing agents and brokers, selling agents and brokers and even buyers can become “distressed home consultants” under this new law. A “distressed home consultant” owes fiduciary duties to the seller. “A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.   In Washington State the definition of fiduciary duties is not well defined as it pertains to real estate.
 
Now, you maybe asking yourself, how can a selling agent who is to represent the interests of the buyer have a fiduciary relationship with the seller? Even more importantly why would a buyer subordinate his own interests to the Seller? We in the real estate community do not have answers to these questions and can only draw the conclusion that the law makes for fertile testing grounds for litigation. The only winners appear to be the trail attorneys.
 
Accordingly, the only way we can protect ourselves and our buying clients from litigation is to refuse to become involved in “distressed property” transactions.   Many brokerage companies will be taking this position effective June 12th.   If a buyer desires to purchase such a property, we strongly recommend that legal counsel be contacted prior to signing a purchase agreement.
 
The unfortunate aspect of the law is that it was designed to protect the most vulnerable home owners and, in essence, has damaged them.   We fully expect the law to be changed next legislative session. Until then agents, brokers and buyers will have to be on guard.

Proper Pricing is Critical for Today's Sellers

by Don Havre
Home pricing is a subject that really needs to be understood by both buyers and sellers in today’s market. If one is selling, knowing the absorption rates and trends is critical for proper positioning in the market place. If sellers look at their home through “rose colored” glasses, they may find themselves sitting on the market for an extended period.   And when the home sells, it could be for well less than market value had they priced properly in the beginning.
 
The number one reason I find many home sellers price improperly is that they rationalize that they can always come down, but not go up. The problem with this cloudy thinking is that most buyers only search to the price point where they are qualified and not above.   The buyers who view the overpriced home normally buy a competitively priced home and congratulate themselves for buying a good deal.  
 
For more information on pricing in today’s market go to May’s podcast at http://www.talkrealty.com/donhavre
 

Market Data May 2008 for The Tri-Cities, WA

by Don Havre
Our market continues to be unusual. Our inventory numbers from March 2008 to April have remained unchanged at 1344 homes available for sale; yet our total sales continues to fall behind last year.   For the first four months of 2008, our total sales are approximately 18% less than they were a year ago at this time.   The days on the market before selling for both April 2007 and 2008 were 111 days.   These figures imply our market is just less active than the previous year. Fewer are selling and fewer are buying.
 
Our highest demand market segment is below $175,000 where we generally have less than five months of inventory. Our weakest segment is above $325,000. We generally have over a year’s supply of homes in this range. Home buyers may soon find some deals above $325,000. My recommendation to those in the re-sale market above $325,000 is that one needs to price conservatively and watch the market closely.

Displaying blog entries 131-140 of 198

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The Havre Team
The Real Estate Firm
7411 W Clearwater Ave, Suite B
Kennewick WA 99336
(509) 783-8400
(509) 783-2028
Fax: (509) 783-6934