Brandon Nelson
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Archive for the 'Market Info' Category
What Can Be For Sale, and Have a Buyer, But Can’t Be Bought?
Everything’s for sale. Every home you pass on your way to work can be bought, for a price, whether it’s listed or not.
But that doesn’t mean every seller will actually work with you to achieve a sale… even when the seller’s home is LISTED FOR SALE!!!
Take a HUD-owned home some buyers are trying to buy right now. HUD, or the Department of Housing and Urban Development, has homes for sale in all 50 states. You can log onto their website and see the homes — many of them very good deals — and then have a Realtor “bid” for a home on your behalf.
It’s not the same as making an offer with a stack of paperwork, like we do with regular MLS-listed homes. Yes, the HUD homes for sale in Bellingham are listed on the MLS… but HUD has its own set of rules.
A pre-approved buyer wishes to buy a HUD home, right now. So we’ve input all the information the HUD website asks for, including the terms of our very strong offer, and topped it off with a call to the HUD-hired listing agent. This all took place last Sunday.
Today is Friday, and you know what we’ve heard?
Nothing. La Nada. Zilch.
The HUD-hired listing agent told me up front that, if we don’t get the house, we’ll never even hear back from HUD.
Let me comment on that before moving on with the story. So… my clients and I go through the process of offering the largest sum of money 99% of the population will ever spend on anything, to take this liability of a house off HUD’s books, and if we’re not the winning bid, we don’t even get a “Thanks for playing!”?
It’s an automated system, I understand. And I’m no computer programmer, but how hard would it be to write a couple lines of code that tell the automated system: “If a bid is not chosen, e-mail that bidder to say, “Thanks for playing! But you lost.”" Seems pretty simple to me. But hey, I’m not a programmer. Or the US Government.
Yes, on with the story. We made a very strong offer on Sunday, waited patiently ’til Wednesday, and heard nothing. The listing agent hadn’t heard anything either, I was told when I called her. The ”listing” is still live on the MLS and live on HUD’s website.
So we offered again, on Wednesday afternoon.
Now it’s Friday. And we’ve heard… Nothing.
Meanwhile, HUD (read: taxpayers), are keeping the power, water, sewer, and taxes paid on this abandoned house as its condition slips further into disrepair, day after day.
The moral of this tale is this:
Everything is for sale. But not everything can be bought. Sometimes, not even things a seller NEEDS to sell, has listed for sale, has marketed to sell, and has a reduced price.
And yet all you hear is how the market is soft.
Comments: Please leave a comment.How REOs and Short Sales Affect the Market
How do REOs affect the overall real estate market? Well, more and more, in my experience, they can steal the thunder from non-distressed, “regular” listings by either coming on the market markedly below market value, or if they’re not selling they can suddenly drop the price through the floor and garner a flurry of offers. (The first three REO offers I helped clients make this year were 1 of 4, 1 of 4, and 1 of 7 offers on the properties, respectively. We ended up getting two of those three.)
So if you’re a seller, and suddenly your neighbor’s house with the same view and similar size and layout comes on the market as a lower-priced REO, is that going to steal some buyer-traffic and interest away from your home? Very probably.
If you’re a buyer, and you see an REO in the neighborhood you want to be in, offering 3% closing costs and a 2-year home warranty with any acceptable offer, are you going to focus your attention on that home? Very probably.
Now, there’s no need to panic. We’re not talking Martian invasion here. But it certainly warrants knowing your neighborhood stats and whether distressed home listings and/or sales are ubiquitous enough to affect your buying or selling strategy.
Let’s look at some numbers:
- Total number of detached single family, sold REOs in the past 6 months, in B’ham and Sudden Valley: 51.
- Total sales of non-REOs, same time frame, same areas: 557.
- Highest REO sale price: $675K.
- Lowest REO sales price: $99.8K.
- Average REO sale price to list price: 99.68%!
- Average sold REO price per square foot: $134.14.
- Average sold non-REO price per foot: $161.88.
- Total number of active REO listings right now: 22.
- Average price per foot: $126.83.
- Total number of non-REO listings right now: 489.
- Average price per foot: $199.91.
Bellingham Price Point: $350K
A couple weeks ago I was in San Francisco visiting family, and I picked up a copy of the San Francisco Chronicle. Inside was an interesting insert called, simply, “Real Estate”. On the 3rd page was a column that explores a particular price point, either for a segment of the rental market, or for homes for sale.
In the edition I was holding, the subject was rental properties and the price point was $3000/month. In San Francisco, three G’s will apparently get you a newer 2-bedroom, 2-bathroom apartment with views “from the building” (but not necessarily from the unit) with plenty of stainless, granite and hardwood.
For $3K/month in Bellingham, you could probably find a newer custom home w/ Bay views in Edgemoor with all those same finishes and no one stomping on your ceiling during the wee hours… but that’s the subject of another post.
For this inaugural post focusing on “Price Point” I wanted to show what $350K – give or take $10K — can get you in and around Bellingham and Sudden Valley.
First off, in this price point, according to the NWMLS, there are:
*16 active listings in Bellingham and Sudden Valley
*6 currently pending sales
*20 that have closed in the past 6 months.
Those 16 active listings have been on the market for an average of just 187 days, and they range from 4 days to 850 days on the market!
On average, that $350K will get you 2218 square feet, for which you’ll spend just over $173/foot. In that group, though, you can spend as little as $95/foot or up to $251/foot. And you can buy a home over 100 years old, or brand spanking new!
Of the 20 that sold in the past 6 months, 11 dropped their price (by as much as 20%) before selling. Collectively, they closed for 97% of their final list price. The smallest home in the group was 1360 square feet, but it was on nearly 5 acres. The largest home was 3263 square feet. All 20 had either 3 or 4 bedrooms, and the group’s average market tiime was 99 days.
The reason I began this new “column” on the NW Way of Life blog with the $350K price point is because that’s the average list/sale price — give or take a few grand — of ALL Bellingham home sales in the past 6 months. It’s the bullseye. We’ll range outward from there next time.
Comments: Please leave a comment.Running Out of Inventory
Every month, First American Title in Bellingham sends us the statistics below, showing all sales activity in Bellingham and the County areas. It compares December and year-to-date totals from ‘08 and ‘09.
December of ‘08 was grim, with the global markets recently coming unhinged as banks began folding and government bail-outs ramped up. The heavy snowfall in Bellingham certainly didn’t help matters either.
So it’s no big surprise but-still-great-news that December ‘09 just ROCKED over ‘08 with sales volume climbing from just over $21 million to just over $29 million!
The other trend you’ll find on this chart is the severe drop-off in new home sales, down 59% year over year for the month of December. We’re running out of new home inventory! And when demand gets strong enough, some bank out there is going to start lending spec house money again, guaranteed. 2010 is the year, just wait and see!
Enjoy the stats, and call me with any questions.
FHA No-Flip Rule Waived
Last summer, a buyer client of mine chose for his first house a beautiful 2-story home in the Whatcom Falls neighborhood. The price was right on, it had been cleaned up and upgraded, and the buyer was pre-approved, ready to go, 100% let’s get ‘er done!!!
Then we hit a wall. The lender couldn’t get the loan funded because the seller hadn’t owned the property for a full 90 days. It was an investor who had bought the house at the courthouse auction for roughly 75% of what my buyer wanted to buy it for.
Yes, the investor was going to make a profit! As well he should, for having taken the risk, paid cash for the house, made the upgrades, listed it fair and square on the open market, the whole enchilada. My client knew it and was totally fine with it. He is a busy professor who had no interest in becoming an expert investor and was happy to get the house at fair market value.
But for FHA to insure that loan, the title had to “season” with the seller for 90 days before we wrote up the contract, to protect “unsuspecting” buyers. In the end, we just laid low for an extra two months, re-wrote the deal, and got it closed.
But as of February 1st, 2010, the 90-day “No Flip Rule” will be temporarily lifted for a period of 1 year to stop stifling deals just like my client’s. There are some restrictions, including:
In my opinion, this temporary waiver is cause for celebration. Flipping houses can be an absolutely legitimate business, and there’s no reason to penalize investors and cause them to pay additional holding costs just to meet some random government mandate. After all, who decided 90 days would protect “unsuspecting consumers” from shady investor/flippers anyway? Why not 60 days? Why not 180 days?
From Feb 1, 2010 to Feb 1, 2011, sellers will be able to sell to buyers getting FHA-insured loans without the 90-day flip restriction.
Comments: 1 Comment »How Many Months of Inventory in Bellingham?
This graph shows one of the primary metrics of Bellingham’s real estate market: the number of months of inventory. It dates back to October 2008, and it doesn’t take a Harvard educated economist to tell it’s been on a steady decline.
Look, for example, at November 2008. In that month Bellingham had 13.3 months of inventory. A basic way to interpret it would be to say that in that month, for every 13 houses listed, one was selling.
Now look at November 2009, and you’ll see we had 5.1 months of inventory. One sale for every 5 listings. Anything better than 6 is considered a seller’s market. 5.1 is solid!
No question, November ‘09 was a hot, HOT month. THICK were the fears that the first time home buyer tax credit was about to expire. It’s estimated that, nationwide, fully HALF the homebuyers in November will be applying for the tax credit. Of course, you know it’s been extended. Now, you have through April 30th to be under contract. The tax credit also now includes a $6500 credit for existing homeowners who sell after at least 5 years of ownership before buying.
Months of inventory is also important for a seller to know, as it shows how much competition exists. If you were selling, would you rather go up against 13 other houses, or 5?
Comments: Please leave a comment.It’s A Freekin’ REO FRENZY!
I wrote last week about the difference between REO and Short Sales. I guess focusing attention on that category of homes had a “law of attraction” effect, because the last 3 offers I’ve written for buyers have been on Bellingham REO properties.
And they’ve all had multiple offers. There are some banks and asset managers out there who are just blowing the bottom out on the prices of some of these properties, and in Bellingham, believe you me: There are buyers ready to pounce like lions on a stack of sirloins!
The first of the three properties had been listed for a month or so, then dropped the price off a cliff to less than $90/sq. ft. This is Bellingham city limits, west of I-5. That is, “core neighborhood” material. For comparison, the average single family home in the same area, in the final quarter of ‘09, sold for $195/foot.
We were one of four offers on that one. Read the rest of this entry »
Comments: 4 Comments »November Sales Numbers
First American Title compiles this data monthly from actual recorded documents. They send it to us agents, and because I love this kind of information, I love sharing it with you.
If you find this type of spreadsheet boring, I’m sorry. If you’re fascinated by it and find that “numbers tell a story,” then you’re like me. 
Enjoy:
Year to date Bellingham Home Sales
Ahhh… statistics!!! If you love real estate, then you love statistics! Here’s an interesting batch of numbers now: Bellingham home sales, year to date, and a comparison of the same time period in ‘08. This is just good, statistical fun!
2009 Bellingham Home Sales
- Number of homes sold so far: 872
- Average price: $339,132
- Average time on market: 92 days
- Highest price home sold: $2,000,000
- Lowest price home sold: $39,900
- Total dollar volume: $295,723,008
2008 Bellingham Home Sales
- Number of homes sold in the same time period in ‘08: 855
- Average price: $359,952
- Average time on market: 93 days
- Highest price home sold: $3,300,000
- Lowest price home sold: $70,000
- Total dollar volume: $307,759,387
Where would your house fit in?
Note: This session of “Good clean fun with numbers” has been brought to you courtesy of the NWMLS.
Comments: Please leave a comment.Bellingham Home Sales for October
Every month, First American Title sends us at RE/MAX the sales data for the previous month. It shows monthly and year-to-date sales totals, average prices, volume change as a percentage — and all of it is broken down into property types.
The most obvious trend to spot is that new construction home sales have declined more than 60% since last October. In October ‘08 there were 10 Bellingham sales of new construction. In October ‘09 there were 3.
It’s not exactly big news that new construction is almost non-exisitent. Banks generally aren’t loaning on new construction (definitely not on spec houses). They’re still selling off brand new construction short sales and bank-owned properties, and won’t even think of lending until that inventory dries up. The word “speculation” doesn’t go over well at all with lenders or their investors right now.
Used single family homes, however, are up almost 25% over October ‘08. There were only 82 sales last Oct., while Oct. ‘09 saw 109 sales. The first time home buyer tax credit DEFINITELY played a roll in that jump. In fact, it’s no coincidence that across the entire U.S., the National Assocation of Realtors predicts that the First Time Home Buyer Tax Credit has been responsible for bringing in 25% more first time buyers than if there hadn’t been an incentive.
At any rate, here’s a look at the entire chart for October. Give me a shout if you’d like to know where YOUR house would fit into this chart.
