Tax credit brings house buyers out in October in King, Snohomish counties

The federal tax credit for first-time homebuyers pushed sales in the Seattle area to new highs for the year in October.

By Eric Pryne
Seattle Times business reporter
November 6, 2009

Give credit to the credit.

Home sales in the Seattle area reached new highs for the year in October, a burst real-estate professionals attributed in large part to the $8,000 federal tax credit for first-time buyers.

p>In King County, closed sales of single-family homes were up 33 percent from last October, the Northwest Multiple Listing Service said in a report released Thursday.

In Snohomish County the bump was even more dramatic: 42 percent.

Even condos finally came to the party. Closed sales in King County last month were up 18 percent, the first year-over-year increase since July 2007.

But at least some buyers were rushing to meet a deadline: The credit was due to expire Nov. 30. Congress this week approved legislation that extends it by seven months.

Will that turn down the heat for the next few months?

"It could be the catalyst that kills the buzz, because people have more time," said Dean Jones, president of the condo-marketing firm Realogics in Seattle.

Or it could push sales to new heights, he added: The bill establishes a new, $6,500 credit for many buyers who aren't first-timers. "It's too early to tell."

While more houses were sold in King County in October than in any month since August 2007, prices continued to slip. The median price of a single-family home that closed last month was $377,500, down from $392,000 in October 2008.

But the year-over-year decline — 3.7 percent — was the smallest in a year.

The median price of King County condos was down 8.7 percent, to $251,000. The median house price in Snohomish County slid 12.2 percent, to $292,725.

October marked the fifth straight month of year-over-year increases in house sales in King County.

A breakdown of the numbers reveals some surprises.

• Sales were up a whopping 54 percent on the Eastside — the county's most expensive area — and nearly 40 percent in Seattle.

• Sales declined in Auburn, Federal Way, Des Moines, Burien and SeaTac — all among the county's most affordable cities, places to which you'd think many first-time buyers would gravitate.

"I wish I had an answer for that," said Barry Crittenden, broker in Windermere Real Estate's Burien office. "I've been puzzling over that myself."

Perhaps, he said, lower prices and the first-time buyers' tax credit are allowing budget-conscious buyers to consider neighborhoods that are "a little more upscale."

On the Eastside, the tax credit has helped spur sales in neighborhoods south of Interstate 90, said Thadine Bak, broker in Windermere's Bellevue South office.

It also has created what she called "trickle-up" buyers: Homeowners looking for new, often more expensive homes once they sell their houses to first-timers. There has been a burst of interest recently in houses in South Bellevue in the $600,000-$700,000 price range, Bak said.

Eastside sales increased partly because sellers are getting more realistic in pricing their homes, said Mona Spencer, broker in John L. Scott's Redmond office: "They're finally getting it."

But the impact of the federal tax credit can't be understated, she added: "It gives [buyers] an incentive to go out and look."

Same goes for condos, said Jones, of the condo-marketing firm: "It's what's getting them off the fence."

The median condo sale price in Seattle actually was up 4.4 percent in October from the same month last year, hitting an even $300,000. The biggest increases came on Queen Anne and Capitol Hill.

But Jones and Ben Kakimoto, a condo specialist for John L. Scott, said sales in some new condo buildings aren't included in the listing-service statistics because developers market units directly.

If sales in those buildings had been included, Kakimoto said, the median October condo sales price would have been even higher.

For link to article, visit http://seattletimes.nwsource.com/html/realestate/2010212918_homesales06.html

Home sales rise 9.4 pct in Sept., beats forecast

Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.

By Alan Zibel
AP Real Estate Writer
October 23, 2009

WASHINGTON — Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.

Sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August, the National Association of Realtors said Friday.

That pace was the strongest in two years and beat Wall Street forecasts. Sales had been expected to rise to an annual rate of 5.35 million, according to economists surveyed by Thomson Reuters.

"There's a mini-boom going on in the housing market," said Thomas Popik, who conducts a monthly survey of real estate agents for Campbell Communications, a research firm.

Nationwide sales are up nearly 24 percent from their bottom in January, but are still down 23 percent from four years ago.

Prices, however, continued to be dragged down by foreclosures and short sales, where the mortgage exceeds the sales price. The median price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August's median of $177,300.

The inventory of unsold homes on the market fell about 7 percent to 3.63 million. That's less than an eight-month supply at the current sales pace, and the lowest level since March 2007.

Sales rose around the country, especially in the West, where they grew 13 percent from a month earlier. Foreclosure sales are booming in cities like Los Angeles, San Diego and Las Vegas.

First-time homebuyers and investors are snapping up those homes and taking advantage of low mortgage rates. These buyers can also take advantage of a tax credit of 10 percent of the sales price, up to $8,000, if the sale is completed by the end of November.

The tax credit is so important to some buyers that they are adding a clause to their contracts, allowing them to back out if the sale doesn't close by Nov. 30. However, economists note that bargain-priced foreclosures and low mortgage rates are making a big contribution to the sales boom.

"We think the housing market has touched bottom and it is now only a matter of time until home prices stabilize - something that we anticipate to occur in late 2010," wrote Joseph LaVorgna, chief U.S. economist at Deutsche Bank.

Prices could fall further because rising unemployment leads to more foreclosures. The jobless rate, currently at 9.8 percent is expected to rise as high as 10.5 percent next year, causing more people to fall behind on their mortgages.

"There's more supply that's going to come into the marketplace," said Stan Humphries, chief economist at real estate Web site Zillow.com. "That additional supply will outpace demand."

With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.

Realtors and homebuilders are loudly in favor, arguing that the tax credit is crucial to get the housing market back on its feet.

"We are not there in terms of removing the consumer fear factor," said Lawrence Yun, the Realtors' chief economist.

However, some analysts say the tax credit may not be as critical to the housing market as real estate agents suggest. "The group has an incentive to talk up the effects of the credit as it is urging Congress to extend it, and it therefore may be exaggerating the credit's effects," wrote David Resler, chief economist with Nomura Securities.

One potential roadblock to an extension also emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.

At a hearing on Thursday the Treasury Department's inspector general for taxes questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old.

For link to article, visit http://seattletimes.nwsource.com/html/businesstechnology/2010121720_apushomesales.html

Is real estate rebounding? Agents see positive signs, developers holding on

By Joshua Adam Hicks
Bellevue Reporter Staff Writer
October 19, 2009

You know the housing market is in flux when September beats April in home sales.

Real estate appears to be rebounding after an abysmal dip – one that turned into a ride for the ages and ultimately punished undisciplined buyers and lenders.

"This has been the whackiest year ever in real estate," said Anna Riley, a Windermere agent who specializes in West Bellevue homes. "Housing was at ground zero of the whole national debacle with the financial crisis."

What Riley saw in the past was an overheated market in which demand was so high that buyers were ready to close on homes without having them inspected.

"Prices were just ridiculous," she said. "If you were a buyer, it was unpleasant."

Even novice agents were making money hand over fist in those days, but Riley says she could sense an untenable situation.

"Nobody wants to walk on slipping sand, and unbalanced markets are like that," she said.

And so the market had to correct itself. But first it went from one bad extreme to another, with home sales hitting rock bottom around February.

What Riley sees now, or at least in the past 90 days, is a return to normalcy as housing demand has started to bounce back.

The agent website TrendGraphix.com shows a six-month inventory for West Bellevue homes listed under $1.5 million. There was a 22-month supply in that range during the worst of the recession.

"It's a perfect balance," Riley said. "It's a very good, healthy, dynamic market."

Kathy Estey, a managing broker for John L. Scott Real Estate, agrees. She says the market is trending in an unmistakably positive direction.

"Everything seems to be improving from a numbers standpoint," she said.

But there's still some disparity in just how balanced the markets have become. Some are leveling off more than others.

"I would say confidence levels are up across all price ranges, but not all have seen the same level of activity," Riley said. For homes between $1.5-$2 million, there was a 16-month supply on the market in September, according to TrendGraphix.com. That's high, but it's still better than the 29-month inventory that was hanging around for that price range last November.

Riley credits the market resurgence to three things: prices, which have dipped more than 10 percent at times; interest rates, which are at 40-year lows; and the stock market, which is boosting consumer confidence as it reaches its highest points since the start of the recession over a year ago.

Riley says it also doesn't hurt that The Shops at the Bravern opened in September, adding a luxury shopping venue to Bellevue's already burgeoning downtown.

"It's just a more interesting place to be," Riley said. "People who wouldn't have been willing to move from Seattle are coming here now."

Jim Cronkhite hopes that growing downtown allure will pay off for his Continental Condominiums, a former apartment complex located just behind Bellevue Square on 100th Avenue Northeast.

Cronkhite purchased his building in September 2007, when the market was still burning hot. It was too late to turn back once the financial crisis hit.

"You can't afford to buy it and hold it," he said. "You have to develop it."

Cronkhite converted his building into 39 condo units, each of which ranges in price from $250,000 to $500,000. He said he's seeing around 30 registrations per week for viewings.

"It's a tough market out there, but it's starting to firm up," he said. "I think people have gotten past the panic stage."

For link to article including photos, visit http://www.pnwlocalnews.com/east_king/bel/business/64848972.html

Washington Report: $8,000 Home Buyer Tax Credit

By Kenneth R. Harney
Realty Times
October 12, 2009

Quick passage by the House last week of a bill extending the $8,000 home buyer tax credit next year for military, diplomatic and intelligence personnel serving overseas increases the odds that Congress will agree to an extension, maybe even an expansion, of the entire credit program well into 2010.

The White House is also signaling that it sees the overall tax credit program -- currently set to expire November 30 -- as an important element in cutting the unemployment rolls and stimulating new jobs next year.

After an economic policy strategy meeting last week in the Oval Office involving President Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, congressional aides said Democrats generally support an extension of the housing credit.

Reid already has made clear he wants an extension. He is co-sponsoring a Senate bill that would do so for six months.

Congressman Charles Rangel, chairman of the tax-writing House Ways and Means Committee, sponsored the one-year extension of the credit for military and other personnel serving overseas, and is reported by aides as favoring an extension for the entire program.

The White House has not publicly committed to an extension, but has confirmed that the President is seriously examining that option.

An unexpected development that emerged following last week's White House meeting was the possibility of opening up the credit to a broader group of buyers next year - people who sell their current homes and buy a replacement home.

Though details were scanty, Capitol Hill sources said one option on the table would be to provide a tax credit -- most likely at the $8,000 level -- to replacement home buyers whose incomes do not exceed some limit.

The current credit phases out for single taxpayers with incomes above $75,000, and married purchasers earning $150,000.

A politically sensitive issue hovering over the entire debate on extending the housing tax credit is its cost - what it would add to the federal budgetary deficit. Mark Zandi, chief economist of Moody's Economy.com, estimates that widening the credit to all buyers through next August could cost the government upwards of $30 billion.

Rangel's 12-month extension of the credit for service personnel is estimated to cost more than $300 million, but it's mainly being paid for through an increase in penalties levied by the IRS on taxpayers who fail to file corporate or partnership returns.

The New York Times reported that one possible solution to the cost problem would be to divert money not yet spent out of 2009's $800 billion stimulus legislation.

For link to article, please visit http://realtytimes.com/rtpages/20091012_washingtonreport.htm

Garage Plus Storage GROUNDBREAKING this Friday 10:30am!

Spanaway, WA - In what has been hailed as an innovative use of land and recognized as the first of its kind in Pierce County, Garage Plus Storage has broken ground on a $52.5 million active use storage development in Spanaway. In is estimated that the project will provide over 150 construction jobs involving 40 separate area sub-contractors under the direction of BNR Development. With the recently reported unemployment rate at 9.2 percent in August for Pierce County, this project couldn't come at a better time. Construction on this 21 acre site will span nearly four years and result in 650 individually owned garage/storage units and an owner club house. Land preparation began last week with full scale construction to be underway by late October.

This is the first Active Use Permit that Pierce County has ever issued. "It is critical to recognize the significance of this type of permit," said Bill Donahoe of Solution Partners NW. "This unique concept will allow owner's unlimited access to their garage unit allowing the hobbyist or collector to actively work on their projects at their leisure." Other facilities that either rent or sell their units limit access of the user because by law users cannot actively work on their projects. Garage Plus Storage offers the only opportunity to own a garage/storage unit where hobbyist, collectors and small business owners may fully utilize their space.

"With occupancy at storage facilities running over 95% capacity in the country, the need is here... what we're offering our clientele is the opportunity to own their own unit, come and go as they please and build their own equity, not someone else's," said Dan Simon owner of Garage Plus Storage. "We have car collectors, woodworkers, boat enthusiasts, photographers, RV owners, landscapers, motorcyclists... you name it."

With the ground breaking ceremony scheduled for 10:30am on October 16th and full construction underway by the end of the month, this winter and the coming years just got a little brighter for 40 area contractors and their subsequent 300 employees and families.

For more information on Garage Plus Storage, visit www.garageplusstorage.com or call 877-875-PLUS.

Quote of the Day

In the middle of every difficulty lies opportunity. -Albert Einstein

Celebrate at Cascara in Redmond!

October 10, 2009
Fall Open House 1 - 4pm

• Patio homes from the low $200*
• Available to active adult families and individuals
• Step out your front door to local shopping, parks and the Golf Club at Redmond Ridge

425.367.4763
23906 NE 113th Lane
Redmond Ridge

QuadrantHomes.com/Cascara

Meet the Team! Come say Hi to Garrett & Kathy!

© Quadrant Homes 9/18/09. QUADRANT HOMES is a registered trademark of Quadrant Corporation. MORE HOUSE. LESS MONEY. is a registered trademark. *Cascara at the Villages Homes available only to income-qualified, active adult individuals and families. Qualification depends on income, size of homes and ages of occupants. Consult a Community Sales Manager for details. Prices and availability subject to change without notice.

Quote of the Day

Finite to fail, but infinite to venture. -Emily Dickinson

Home sales in September surge in King County but prices still declining

Home sales in King County continued their summer-long surge in September, while prices showed possible signs of stabilizing, according to statistics released today by the Northwest Multiple Listing Service.

By Eric Pryne
Seattle Times business reporter
October 5, 2009

Home sales in King County continued their summer-long surge in September, while prices showed possible signs of stabilizing, according to statistics released today by the Northwest Multiple Listing Service.

Countywide, buyers closed on 1,618 houses last month, a 14.3 percent increase from September 2008. It was the fourth consecutive month of year-over-year increases, a trend brokers and agents attribute partly to the $8,000 federal tax credit for first-time buyers.

The median price of houses sold in September — $382,160 — was down 7.9 percent from the same month last year. But the year-over-year decline was the smallest since December — in every other month this year, it has hit double digits, topping out at 17.3 percent in March.

More than 1,600 single-family homes have sold in the county in every month since June, a benchmark last surpassed in October 2007, when the real-estate downturn was just beginning.

"Our market has certainly come a long way since this time last year," Ron Sparks, managing vice president of Coldwell Banker Bain's Bellevue office, said in a prepared statement.

Condo sales in King County were down 12.9 percent from September 2008, and the median price of $245,000 was 9.9 percent lower.

In Snohomish County, closed single-family home sales were up 12.8 percent year-over-year, while the median sale price was $295,000, down 11.1 percent from September 2008

For link to article, visit http://seattletimes.nwsource.com/html/businesstechnology/2010005079_webhomesales05.html#

10 Hard-Hit Housing Markets That Are Ready to Rebound - Tacoma!

After slumping, home prices in these 10 cities are expected to rise over the next three to five years

As the historic housing crash continues to hammer real estate prices from coast to coast, many homeowners probably can't remember the last time their property's value actually increased. But even with home prices still falling at the national level, a number of hard-hit housing markets are gearing up for a rebound.

To pinpoint the cities most likely to go from slump to bump, we turned to Moody's Economy.com. Using S&P/Case-Shiller home price data, Moody's identified a handful of cities that took it on the chin during the crash-with property values dropping by more than 25 percent from peak to projected trough--but are expected to see strong home price appreciation in the relatively near future.

Celia Chen, the senior director of housing economics at Moody's Economy.com, says home prices in many of these slump-to-bump cities became overvalued during the first half of the decade but have since fallen, or are in the process of falling, to extremely affordable levels. "That will encourage buyers back into the market and lift prices up," she says. Here is a look at 10 hard-hit housing markets that are ready for a rebound:

1. Tacoma, Wash.: With about 200,000 residents, Tacoma is the second-largest city in Washington's lovely Puget Sound region. The city's abundance of government jobs, bountiful outdoor activities, and proximity to Seattle--just 32 miles away--helped drive home prices higher during the first half of the decade. But as the national housing crash picked up steam, Tacoma saw its real estate market decline sharply. Home prices in Tacoma dropped 24 percent from their peaks through the first quarter of 2009. Still, Moody's Economy.com expects the market to bounce back strongly, with home prices increasing 22 percent by the first quarter of 2012 and 41 percent by the first quarter of 2014. David Graybill, president and chief executive of the Tacoma-Pierce County Chamber of Commerce, says the area's large military presence and diversified economy will help to support rising home prices going forward. "We also have one of the nation's busiest ports, the Port of Tacoma, which is an international deep-water port," Graybill says. "And although most international trade is down currently, the long-term outlook is good."

For complete article, visit http://realestate.yahoo.com/promo/10-hard-hit-housing-markets-that-are-readytorebound.html;_ylc=X3oDMTFvcmJ1a2xuBF9TAzI3MTYxNDkEX3MDOTc2MjA0NjUEc2VjA2ZwLXRvZGF5BHNsawNyZWFkeS10by1yZWJvdW5k