I have some extra lights and decorations that I don’t want to keep packing up and storing every year 🙂 I called Hopelink here in Kirkland and they don’t know of a family that needs them, but people usually don’t go to places like that and say “I need a string of Christmas lights”.
If anyone knows of anyone who could use a little cheer and a few decorations, shoot me an email. The closer to Kirkland or Green Lake the better. I’m back and forth between the two frequently this week.
From the FOMC press release:
“The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent….
As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities.
…In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2 percent.”
Mortgage rates should continue to improve with the purchase of MBS. This is why you need to do as Kenneth Harney recommends in this Sunday’s paper:
“Ask your broker or loan officer whether you can lock in today’s rate but still have the ability to move down should cheaper money become available to you.
Not all lenders can accommodate such requests. Some brokers offer 60-day locks with that option; others may charge you”.
Seattle –Dec. 16, 2008—Real estate Web site Zillow.com today announced the launch of Zillow® Advice, an online resource for consumers to find answers to specific local real estate questions. Located in the “Advice
The Snohomish Valley at sunrise. ( Sunday, December 14, 2008. Looking South towards Mt. Rainier)
From the Washington State Department of Financial Institutions:
DFI Advises Homeowners To Verify The Licenses Of Anyone Offering Loan Modification Services Before Hiring Them
OLYMPIA – The Washington State Department of Financial Institution’s Consumer Services Division advises homeowners who are delinquent on their mortgage to be cautious about using the services of someone offering to help them work with their lender to modify the terms of their home loan.
The Department of Financial Institutions (DFI) has received a number of inquiries regarding the legality of providing this service in this state. While there is nothing inherently illegal about this business, those providing this service in the State of Washington must be licensed as loan originators, mortgage brokers, or consumer loan companies and be overseen by the Department of Financial Institutions. Additionally, under applicable law, the loan modification provider associated with mortgage brokers have a fiduciary relationship with the borrower and must act in their best interest.
“DFI is concerned that homeowners in desperate situations may pay substantial fees for loan modification services and not take advantage of the HUD-approved counseling services offered for free by numerous non-profits,
When I did my stats for King County for the month of November, my numbers were actually worse than those reported on Seattle Bubble. I have come to rely on Seattle Bubble as being the place where I can find the worst possible news about the housing market. But I have double, triple and quadruple checked my numbers, and I still come up with only 768 sales of single family homes in the month of November.
This from The Tim at Seattle Bubble: “What immediately jumped out to me was Closed Sales, which were down a whopping 43% YOY, coming in at just 869 SFH sales county-wide.”
My figures show a drop YOY of just over 46% from 1,427 sold in November of 2007 to 768 sold in November of 2008 for Residential Property in King County. While that is only a modest difference, when I look at condo sales YOY, the numbers are even worse and down 58% from 555 sales in November of 2007 to 230 sales in November of 2008.
A more significant factor is the % down from peak volume for any month of November. For Single Family Homes, that would be November of 2004. For condos that would be November of 2005. Based on my previous research, that variance is due to the fact that by November of 2005, many people were priced out of the single family home market, which pushed the peak sales into 2005 for condos.
For single family homes, November of 2008 sales are almost 70% lower than peak volume for the month of November.
For condos, November sales are slightly more than 70% lower than peak volume for any month of November.
The Tim correctly points out that “For comparison, that is lower than any month on record (post-2000).” However, I think it is more currently relevant to point out the relationship of November 2008 sales volume to a most recent lowest volume, that being January of 2008, I have shown this figure as a dot on the graph below, green for condos and purple for SFH.
Conclusion: Both single family and condo sales in Novmeber of 2008 are approximately 70% under peak volume, and 20% under the previous, recent low point of January of 2008.
Seattle Area Home Sales Volume
I’ll be moderating a panel of bankers on Dec 1, 2008 in Denver at the National Auctioneers Association’s convention. I present at 11:00 AM (Title: There Always Was a Subprime Market. View my slides here) and the panel starts after lunch. I’m preparing some questions for the panelists. Here’s what I have so far. Your suggestions are welcome.
1. When will you begin to lend again to borrowers who are other than prime?
2. What will happen if/when the FDIC runs out of money?
3. How are local, state-chartered banks preparing for the coming loan losses in the commercial and development sector?
4. How are loan modifications performing at your institution?
5. What do FHA delinquencies look like at your institution?
Enjoy! Mike is taking these from my Master Bedroom balcony in Kirkland. We’re “on Holiday”.
Before posting my thoughts of the week regarding where home prices are going, I have been doing a lot of thinking about “Rethinking the American Dream”. I found this post that I thought was worth sharing.
Now for proofs that people are buying at 2005 levels, even though sellers are not thinking about selling at those levels, to the same degree.
Let me explain what you are looking at in the graph above. In 2001, 83% of buyers were paying under $500,000. Economic models must hold something at a constant, in order to provide meaningful results. What I have held as a constant are the properties themselves. As we move through the years, only properties (condo and single family) built as of the end of 2001 are included, so we can see what people are paying for those same homes. Also, you have to look at a sample small enough to evaluate, in this case I used Bellevue which I feel is a large enough sample with somewhat cohesive property types in the sampling.
By 2005, only half of buyers could pay under $500,000 to buy those same properties vs 83% in 2001. The most dramatic change YOY was in 2006 vs. 2005 when the % dropped from 68% to 51%. Now look at the last two columns. We’re back to 2005 with 67% of people being willing and able to buy these same homes for $500,000 or less. In fact the % may end up being more than that, given pendings are based on asking prices vs. sold prices.
The last column shows that only 44% of people who have not sold their homes, and are still trying to sell them, are pricing at the levels that people are willing to pay.
It’s quite possible that by year end the statistics will show 2004 levels, but I expect that to correct back to 2005 through the 3rd quarter of 2009. Last quarter of 2009 is anyone’s guess at this point. Not enough data to predict that far out. Many of the current pending sales are bank owned and short sale properties. While some may consider that to be a relevant factor, it is not one I expect to change over the next 12 months. There will be at least as many, if not more, opportunities to buy at the lowest price levels over the next 12 months.
Clear Seattle Night, taken from Kirkland
I’ve never been able to take a night shot off my balcony, but Mike Santoro had his super digital camera with him and took this one for me. Enjoy!