Tri-City Area and Real Estate Blog

If you’re interested in what’s happening in real estate in the Tri-Cities, check out our weekly real estate statistics. http://www.distinctiveprop.com/files/files/7.12.2010stats.pdf

If you have an interest in the real estate market here in the Tri-Cities and surrounding areas, please take a look at our weekly statistics for this week.

 http://www.distinctiveprop.com/files/files/6.21.2010Stats.pdf

Real estate activity picked up in July; homes sold in first half of year down 17%

Tri-City homes sales are picking up speed and the lower-priced market is starting to favor sellers, industry officials say.

“It’s nuts,” said Glen Clark, president of the Tri-City Association of Realtors. “If they’re priced well and the condition’s good, they’re selling in a week.”

The number of homes sold in the first six months of the year was down about 17 percent compared with the same time last year, from 1,517 to 1,261, according to the information from the association.

Activity picked up in July with 336 homes sold, compared with 298 in July 2008. That means total sales this year lag last year by about 12 percent through July.

But if no new homes priced at $150,000 or below came on the market, it would take about 3.3 months before that inventory was all sold, according to information from the Tri-Cities Multiple Listing Service. That’s based on the average sales pace in the particular price range in the last 12 months.

A market is considered balanced when the home supply would last about six months.

“We’re really liking the numbers. A lot of sellers are thinking they can sell, so more listings are coming on, but they’re selling.”

All homes priced between $150,000 and $200,000 would be sold in 4.2 months. And in the $200,000 to $300,000 range, it would take about 5.7 months to deplete the inventory.

The upper end of the market continues to struggle with oversupply. About a 13.5-month supply remains of homes priced from $400,000 to $500,000.

Unlike some areas of the country, prices in the Tri-Cities have continued to hold, according to information from the association.

The average sales price for the first half of the year was $185,500, down about 1 percent from $187,300 in the same time in 2008.

The median sales price, meaning half of the homes sold for more and half for less, also declined about 1 percent, from $164,100 in January through June 2008 to $162,600 during during the same time in 2009.

Building activity has picked up in recent months, said Jeff Losey, executive director of the Home Builders Association of Tri-Cities.

At the end of the first quarter the number of new home permits was off nearly 46 percent. By the end of June, permits were down 28 percent from the same time last year, from 720 to 519. And as of July 31, permits were off 18 percent, at 678 total for 2009.

“It’s still tough for builders to get money” for spec homes, Losey said. “If they are established builders that have a history of being able to sell their spec homes, they can get loans.”

While some consumer worry about the local housing market seems to have dissipated, real estate officials have expressed concern about new rules for home appraisals that went into effect May 1.

The Home Valuation Code of Conduct, an agreement between Freddie Mac, Fannie Mae, the Federal Housing Finance Agency and the New Your State Attorney General, is intended to ensure appraisers aren’t pressured to push up home values, according to the agency.

The code effectively cuts off communication between lenders and appraisers, said David Brown, a Kennewick appraiser. The purpose of the appraisal is to ensure for the bank that the price is reasonable.

More lenders are now working through third-party companies that hire appraisers, Brown said. They often look for the lowest bidder, raising concerns about quality, he added.

Plus, Brown finds the third-party companies, called appraisal management companies, take about 30 percent of an appraiser’s profit.

Information from the Federal Housing Finance Agency refutes that the new code favors third-party companies. “For the first time, the code places the same requirements for  for appraiser independence on AMCs as the limits placed on lender, according to a recent notice from the agency.

Brown also said more of his appraisals than before are coming in low, which he attributes to stricter underwriting standards. But when the appraisal ends up low, deals can fall through, he added.

Real estate officials agree that low appraisals recently have been an issue. The Federal Housing Finance Agency also reports the new rules aren’t to blame for low appraisals. “The code insulates appraisers from pressures that led to higher or lower appraisals and should now lead to more accurate valuations,” according to a recent notice from the agency.

Aside from some of the biggest regulatory changes in Brown’s 17-year career as an appraiser, he said the local housing market seems to be holding up.

“The Tri-Cities as a whole came through without many blemishes,” he said, adding oversupply isn’t a huge problem and employment remains strong.

The area hasn’t suffered the wave of foreclosures seen in other parts of the country where housing prices ballooned then crashed, which has helped keep home supply in check.

But notices of trustee sales, meaning homeowners have 90 days to get their payments current or to sell their homes before foreclosure, have risen more than 11 percent in the first half of the year compared to 2008.

Notices increased from 434 to 483, according to information from the Benton-Franklin Title Co. The foreclosure rate in the Tri-Cities in June was 0.9 percent, up from 0.6 percent a year earlier according to First American CoreLogic, a national real estate data and analysis company. That compares with a 1.3 percent rate statewide and a 2.63 percent rate nationwide.

The number of foreclosure filings from July 2008 to June 2009 was 1,856, compared with 1,821 in the prior 12 months according to First American.

Richland is rated among the top 100 best small towns to live in in America in the latest issue of Money magazine.

The magazine ranked Richland 51st in the country. The other Washington communities in the 2009 list are Mukilteo at 10, Sammamish 12, Newcastle 17, and Silverdale 92.

Money magazine researchers compiled the rankings of communities between 5,000 and 50,000 residents on factors including unemployment levels, crime rates, schools, housing costs, median income and quality of life factors.

Source: Tri-City Herald

The American Recovery and Reinvestment Act of 2009 authorized the tax credit, which provides up to $8,000 for qualified first-time homebuyers who close on a home from January 1 through December 1. Many homebuyers are able to take advantage of the credit.

The tax credit can be used by anyone who has not owned a home in three years and makes less than $75,000, for those who are single, or $150,000 for couples.

It provides a credit on 10 percent of the purchase price, up to $8,000. People will get it back on their taxes next year, which doesn’t help with direct costs, but the money does come back.

Alma Feil, HAPO COmmunity Credit Union’s mortgage director, said although HAPO’s mortgage department has seen an increase in loans, there’s a lot of confusion about the program and many first-time homebuyers don’t even know about it.

“A lot of people think it’s an upfront rebate and they don’t know that you get the credit after you buy the home,” she said. Feil said about 40 percent of the home sales are to first-time buyers.

Sales in the Tri-City home market from January through May of 2009 were down 18 percent, year-over-year and the number of homes under contract dropped 11 percent, according to the statistics from the Tri-City Association of Realtors. But area real estate professionals aren’t complaining.

“If this was 2001-2002, we would think it was a record year,” said Paul Roy, vice president of the Tri-City Association of Realtors.

Roy said the tax credit has made it more attractive to buy, especially for those who were already considerng a new home, but he doesn’t believe it is attracting buyers to the market.

“It’s an incentive, but I don’t think anyone makes an investment to move based on an incentive,” said Roy.

Roy said the Tri-Cities real estate market is in a very “interesting” place right now.

There’s new residents moving in looking for homes to buy, but inventory is tight, especially in the $300,00 home market and under.

May’s monthly inventory of available homes was 989, a 21 percent drop from May 2008 and the lowest inventory in more than five years.

“The buyers don’t have a lot of choices,” he said. “Houses that are hitting the market in the under $300,000 mark are selling quickly.” And banks aren’t doing a lot of lending for spec homes.

“If we could go back in time and builders could get loans to build, we’d be screaming,” said Roy. “We just don’t have a lot of choices for buyers.”

Source: Journal of Business

The Tri-Cities housing market has picked up quite a bit this year for the most part due to the $8000.00 first time home buyer’s tax credit. The commercial real estate market is still slow but we are hoping for it to turn around by the end of this year. Meadow Part Estate has two home on the market one that is being constructed at 133 Erica by Master Homes LLC priced at $214,900.00 the other 2980 Bruce Lee Lane is Bank Owned and priced at $255,950.00 If you would like to see any of these homes call me at 366-3916 and we can tour them.

Sid Hodge your neighborhood realtor

366-3916