Are foreclosure rates up?

Over the past several months you have probably heard and read numerous reports about the "sub-prime meltdown" and rising foreclosure rates. Rest assured that the sky is NOT falling -- especially not in Seattle/Washington. Here are some significant facts:

FACT: the foreclosure rates in Washington State today are the same as they were 10 years ago. Fewer than 1% (yes, ONE percent) of mortgages end in default in our state.

FACT: As of mid June, sub-prime, adjustable-rate loans represented 20% of loans nationally, but just 6% of home loans in Washington.

FACT: Home appreciation in Washington continues to out-perform the rest of the nation with year-to-year price increases every quarter since the spring of 1995. Home prices in Washington have increased an average of 8.1% since the same time last year.

CONCLUSION: The real estate market in Washington State, and Seattle in particular, is still VERY STRONG! There are many reputable lenders who can quickly and easily give you accurate information about your ability to obtain a home loan. If you need recommendations, just give me a call and I can give you several names from which to choose.

(Scroll down to the end of the page for an explanation of sub-prime loans.)

Life in South Park

A front-page story in today's P-I (Section B) focuses on the South Park neighborhood. If you don't know where it is, you are not alone. It lies east of Hwy 509 and south of Roxbury (roughly speaking). It is what I call a "developing" area -- lots of good people, but not a lot of money. Public perception of the area has not been particularly positive in the past, which is a shame because it's probably undeserved. On the bright side, it has kept property values in South Park lower than other areas of the city, making it a good investment. If you are disappointed by what your money can buy in the westerly neighborhoods of West Seattle, you may want to give South Park a look.

Make an offer!

That's the tune that every listing agent is singing right now. For the first time in perhaps a dozen years, buyers are more difficult to find than sellers in the Seattle market, giving them newly-found negotiating power. Buyers should not be afraid to make low offers. Other than a little time and emotional energy, it costs nothing to make an offer. The seller may not accept your offer outright, but they will probably at least give a counteroffer, rather than a flat "no." Remember the old adage, "It never hurts to ask." On the other hand, don't expect to see any fire sales. This is still a very strong market and sellers who price at market value most often achieve 98-100% of their asking price.

Too many condos for sale?

The front page story in this morning's P-I asks, "Will condo wave swamp the market?" http://seattlepi.nwsource.com/realestate/ (Must be a slow news day.) It's a valid question, but in my opinion, not one with many immediate consequences. The article focuses solely on condo construction projects in downtown Seattle. Ironically, that is probably the area of the city where demand is strongest so the "danger" is lowest. Neither does the article give any consideration concerning price points.

Here in West Seattle, both new construction of condos/townhomes (I'm using the terms interchangeably here), as well as condo conversions are happening at an incredible pace, with no signs of slowing. Delridge Way, from the West Seattle bridge, all the way into White Center, has seen particularly heavy development because the land was relatively cheap up until a couple of years ago. You can currently take your pick from literally dozens of brand new 2-3 bedroom condos along that corridor for around $270K. One reason that these will all eventually sell is because condos/townhomes are the new starter homes; they are a way to get into home ownership at a somewhat affordable price point in order to build equity for a future purchase of a larger home. Banks rarely finance the building of small homes any more.

So, are developers building too many condos in West Seattle? Possibly, but that's just one more bit of good news for buyers because the sellers are likely to accept below-list offers.