The stock market can make quick turns up and down. If you're still brave enough to look, you know that well.
Real property by its very nature is steadier. More time and effort is required to buy and to sell. Illiquid is the term, even if you're buying waterfront.
The constant conversation topic is "where's the bottom?" Sellers and agents find it hard to set a "realistic" price on a home that a year ago could have fetched more. It's especially hard when you can point to real numbers on a spread sheet that show that the lot and construction costs exceed the current market value.
But, market value is what an informed buyer acting with free will is willing to pay. Right now buyers are skittish. Many homes are being sold today at what we perceive to be real deals--screaming bargains--if we're looking in the rear view mirror.
The question is, what kind of deal will they look like in a year from now. And the answer is, nobody knows.
The funny thing is that at the top of the market everyone wants to climb on board. We have lots of belief in the endless ride up. But, that may be the worst time to buy. At the bottom of the market, we're immobilized by our fears of the endless fall down. However, this may be a good time to buy.
So, the real question might need to be, where do I want to make my home? How long will I plan to stay? Do I need to move now? No one wants to overpay, but when you negotiate a careful price on a property in good repair that meets your needs, in this market it's best to take the long view.
Tuesday, December 9, 2008
Wednesday, November 19, 2008
"How is real estate on Bainbridge Island these days?"~
"How's real estate on Bainbridge?" If I had a dollar for every time I've been asked that in the past year, my personal economic situation would be lots brighter. It's a question I'm constantly analyzing for myself and my clients. I have pages of statistics and the news has lots of analysis.
Two studies came to my attention today regarding the real estate economy in the Greater Seattle area. One is a study reported in Forbes Magazine regarding the cities most likely to rebound and Seattle came in number one. http://www.forbes.com/2008/10/29/foreclosure-recession-cities-forbeslife-cx_dp_1029realestate.html The Urban Land Institute asked 700 real estate professionals about the best place to invest in commercial real estate. Our strong employment position put us at the top, and the assumption Forbes makes is that where the jobs are, residential real estate will rebound. That seems like a solid assumption.
I also think that our proximity to Seattle via the ferry gives us a strong opportunity. The South Lake Union development of the Gates Foundation and Vulcan (deep pockets both) and the growing biotech industry provide diversity beyond WaMu & Boeing. I think Bainbridge could offer much to new employees in the South Lake Union hub, and I expect to see more buyers next year coming from that locale, which could help offset what could be a sell-off from WaMu executives. That's the upside.
On the downside (because balance and reality are both good if sometimes painful things), the Seattle Post Intelligencer today ran a story showing that Washington was at the top of another, albiet less delightful, list. http://seattlepi.nwsource.com/local/388344_housing19.html It reports that the state's home sale price drop is the largest in the country.
Here's my take: We came late to this party/wake. I don't think we'll stay as long than other parts of the country and I think we'll go home earlier and likely more sober--and maybe feel better in the morning. We're having a tough time on Bainbridge right now because our prices rose too high in 2006 and early 2007 because of easy credit, scarce inventory and a strong second home market. We're now dropping because of high inventory in part driven by the over-build of condos and new homes, and because the majority of our homes require good equity and/or jumbo loans. The credit crunch has dried up the jumbo (over $417,000) loan market and slow markets elsewhere have dried up our pool of buyers. When credit opens up, when consumer confidence increases and when prices show signs of going up, the real estate market on Bainbridge Island will improve.
Which translates into this being a great time to buy, especially one of the new homes that is selling for far less than construction cost. Buying up in a falling market is always a good idea. And Bainbridge Island remains an amazing place to live.
Two studies came to my attention today regarding the real estate economy in the Greater Seattle area. One is a study reported in Forbes Magazine regarding the cities most likely to rebound and Seattle came in number one. http://www.forbes.com/2008/10/29/foreclosure-recession-cities-forbeslife-cx_dp_1029realestate.html The Urban Land Institute asked 700 real estate professionals about the best place to invest in commercial real estate. Our strong employment position put us at the top, and the assumption Forbes makes is that where the jobs are, residential real estate will rebound. That seems like a solid assumption.
I also think that our proximity to Seattle via the ferry gives us a strong opportunity. The South Lake Union development of the Gates Foundation and Vulcan (deep pockets both) and the growing biotech industry provide diversity beyond WaMu & Boeing. I think Bainbridge could offer much to new employees in the South Lake Union hub, and I expect to see more buyers next year coming from that locale, which could help offset what could be a sell-off from WaMu executives. That's the upside.
On the downside (because balance and reality are both good if sometimes painful things), the Seattle Post Intelligencer today ran a story showing that Washington was at the top of another, albiet less delightful, list. http://seattlepi.nwsource.com/local/388344_housing19.html It reports that the state's home sale price drop is the largest in the country.
Here's my take: We came late to this party/wake. I don't think we'll stay as long than other parts of the country and I think we'll go home earlier and likely more sober--and maybe feel better in the morning. We're having a tough time on Bainbridge right now because our prices rose too high in 2006 and early 2007 because of easy credit, scarce inventory and a strong second home market. We're now dropping because of high inventory in part driven by the over-build of condos and new homes, and because the majority of our homes require good equity and/or jumbo loans. The credit crunch has dried up the jumbo (over $417,000) loan market and slow markets elsewhere have dried up our pool of buyers. When credit opens up, when consumer confidence increases and when prices show signs of going up, the real estate market on Bainbridge Island will improve.
Which translates into this being a great time to buy, especially one of the new homes that is selling for far less than construction cost. Buying up in a falling market is always a good idea. And Bainbridge Island remains an amazing place to live.
Lifeline for Helpline: generous kids on Bainbridge Island~
We had a small parade on Bainbridge Island recently, as the entire studentbody of Ordway Elementary School marched down Madison Avenue. Four hundred kids walked unbowed from the weight they were carrying in their backpacks.
Their destination was Helpline House and their mission was to deliver the food they carried. The Kitsap Sun reports that the kids augmented the dwindling supplies in the Helpline food pantry with over 1,300 cans.
It's great to see the kids help, but it's even better for them to make the trek and see where the food goes, and to get a sense of the need. Some of the kids at the school self-identified as recipients of Helpline, and they shared how much it means to them to have the help available. These kids, too, gave back.
We live on an affluent island, for the most part, but tough times can strike anyone, through illness or job loss or divorce or unexpected events of other kinds. Sometimes there is simply more need than money.
Our schools, our families and our churches practice a mighty generosity. When I look at the library, the swimming pools, Helpline, and other organizations, I'm proud and grateful for the culture of giving we enjoy here.
Their destination was Helpline House and their mission was to deliver the food they carried. The Kitsap Sun reports that the kids augmented the dwindling supplies in the Helpline food pantry with over 1,300 cans.
It's great to see the kids help, but it's even better for them to make the trek and see where the food goes, and to get a sense of the need. Some of the kids at the school self-identified as recipients of Helpline, and they shared how much it means to them to have the help available. These kids, too, gave back.
We live on an affluent island, for the most part, but tough times can strike anyone, through illness or job loss or divorce or unexpected events of other kinds. Sometimes there is simply more need than money.
Our schools, our families and our churches practice a mighty generosity. When I look at the library, the swimming pools, Helpline, and other organizations, I'm proud and grateful for the culture of giving we enjoy here.
Monday, November 17, 2008
Ten days to a new home: real estate tips on Bainbridge Island~
I learned this week what is possible in real estate when you have a good team, collaboration and great communication. Motivation helps, too.
Conventional wisdom is that it takes between 30 to 45 days in escrow to successfully close on a house. This month I had a client who had sold their home, and for personal reasons needed to shorten the time to buy their next house--and we needed to simultaneously close on both houses the same day.
We did it! We went from "mutual acceptance" on the offer to closing in just 10 days. Here's how that was possible. The listing agent had already drawn preliminary title, and it was new construction, so the Seller didn't have to move out or find a new place to live. My buyer and I had done our homework looking at potential homes-they had narrowed their choices to 2 or 3--and were already familiar with the market. They didn't need a loan, and they used an excellent local mover (Hill Moving--giant shout out to them!). We had a great escrow company in Pacific Northwest Title, with Julie Hohenstein coordinating both closings with great efficiency and communication. We were able to get an inspection completed within days of mutual acceptance. (In busier days, it can take almost 10 days to get an appointment.) Things could have gone even faster if the Seller had had the home pre-inspected prior to listing, which I advise my clients to do.
The point is that in today's market, it's not always prudent to try to buy a house until you have yours sold. It takes courrage to sell your house without a clear idea where you're going to end up. But, if you've done your homework, as soon as you have an agreement to sell it's possible to write a "Pending Sale" offer on your new home and proceed quickly to closing. Know the marketplace, have a good team lead by an experienced agent, and preapprove any financing with full documentation for a smooth and even fun transition. It might be head-spinning and exciting, but it's very possible.
Conventional wisdom is that it takes between 30 to 45 days in escrow to successfully close on a house. This month I had a client who had sold their home, and for personal reasons needed to shorten the time to buy their next house--and we needed to simultaneously close on both houses the same day.
We did it! We went from "mutual acceptance" on the offer to closing in just 10 days. Here's how that was possible. The listing agent had already drawn preliminary title, and it was new construction, so the Seller didn't have to move out or find a new place to live. My buyer and I had done our homework looking at potential homes-they had narrowed their choices to 2 or 3--and were already familiar with the market. They didn't need a loan, and they used an excellent local mover (Hill Moving--giant shout out to them!). We had a great escrow company in Pacific Northwest Title, with Julie Hohenstein coordinating both closings with great efficiency and communication. We were able to get an inspection completed within days of mutual acceptance. (In busier days, it can take almost 10 days to get an appointment.) Things could have gone even faster if the Seller had had the home pre-inspected prior to listing, which I advise my clients to do.
The point is that in today's market, it's not always prudent to try to buy a house until you have yours sold. It takes courrage to sell your house without a clear idea where you're going to end up. But, if you've done your homework, as soon as you have an agreement to sell it's possible to write a "Pending Sale" offer on your new home and proceed quickly to closing. Know the marketplace, have a good team lead by an experienced agent, and preapprove any financing with full documentation for a smooth and even fun transition. It might be head-spinning and exciting, but it's very possible.
Friday, November 14, 2008
Celebrities and the rest of us living on Bainbridge Island~
The New York Times has an article today about how life has changed for the Obamas since the election---security walls three blocks out from their home, no more casual strolls, not even time to relax in his barber's chair.
It brought to mind how we on Bainbridge handle the celebrities who call our island home. We have a smattering of TV stars, both current and past, and a news anchor. We have what I call famous unknown folks, writers and philanthropists, scientists and truly wonderful people. They pass among us without extra attention and with the same courtesy and community welcome we all receive.
The other part of this is that when you take the time to learn the story of the person in line at the market or sitting at the next table at the bakery, you often find just how amazing that person's life has been, famous or otherwise. I think that creates a culture that's a little kinder, a little more accepting. Anyway, that's the way I see it. Cheers!
It brought to mind how we on Bainbridge handle the celebrities who call our island home. We have a smattering of TV stars, both current and past, and a news anchor. We have what I call famous unknown folks, writers and philanthropists, scientists and truly wonderful people. They pass among us without extra attention and with the same courtesy and community welcome we all receive.
The other part of this is that when you take the time to learn the story of the person in line at the market or sitting at the next table at the bakery, you often find just how amazing that person's life has been, famous or otherwise. I think that creates a culture that's a little kinder, a little more accepting. Anyway, that's the way I see it. Cheers!
Thursday, November 13, 2008
High school basketball on Bainbridge Island~
The sun is out today, brilliant, and the skies are clear after the steady sprinkles we've been having. The colors are so intense, especially the last leaves backlit in the sunshine. This is my favorite time of year.
What's coming up next is high school basketball. Practice starts Monday. The local papers today announced that two of our stars have signed with the future college teams.
Brittany Gray, 5'11" forward, is headed to Gonzaga where her big brother Steven is making a name for himself. Brittany set new records last year and will break some more this year. The Spartans Girls B-team went to the Class 3-A tournament last year and they have four starters back, so it could be a great year.
Ben Eisenhardt, the 6'10' center/forward, is headed to Seattle University. He's the tall talent the team will revolve around. His team has a new coach and most of last year's team were seniors, so this will be a building year, perhaps.
I think there's something in the water here. The kids are great and the excellence they demonstrate in every field is inspiring. Each year on Halloween I'm impressed with the kids who come to my door. They say "Happy Halloween," they take one piece of candy without being asked, and they always say thank you. Good work parents, kids, teachers and the whole community.
What's coming up next is high school basketball. Practice starts Monday. The local papers today announced that two of our stars have signed with the future college teams.
Brittany Gray, 5'11" forward, is headed to Gonzaga where her big brother Steven is making a name for himself. Brittany set new records last year and will break some more this year. The Spartans Girls B-team went to the Class 3-A tournament last year and they have four starters back, so it could be a great year.
Ben Eisenhardt, the 6'10' center/forward, is headed to Seattle University. He's the tall talent the team will revolve around. His team has a new coach and most of last year's team were seniors, so this will be a building year, perhaps.
I think there's something in the water here. The kids are great and the excellence they demonstrate in every field is inspiring. Each year on Halloween I'm impressed with the kids who come to my door. They say "Happy Halloween," they take one piece of candy without being asked, and they always say thank you. Good work parents, kids, teachers and the whole community.
Wednesday, November 12, 2008
Real estate values on Bainbridge Island: upside down & underwater?~
Yesterday's New York Times had a great interactive article about home values around the country. It seems Wells Fargo commissioned a study to see what the real picture is regarding the debt to current market value.
http://www.nytimes.com/interactive/2008/11/10/business/20081111_MORTGAGES.html
The gist of its message is that in some areas of the country, huge percentages of home owners owe up to 90% of what they could sell their homes for. And, some are "underwater," or as we who live on an island say, "upside down," with their banks. Mostly that is in California, Nevada, Florida and Georgia.
How are we doing in Washington? According to this model, the average homeowner in our state owes less than 60% of what his house could currently fetch in today's market. That's equity that will survive a couple of years of price drops and eventually, make money for the homeowner.
We hear in the national news about foreclosures and short sales (when the price a home sells for will not pay off the underlying debt plus closing costs.) We're seeing that on Bainbridge Island, but they are still a small percentage of our total number of listings. That's data I can track pretty well.
What I hadn't known is how much equity most of us have in our homes. If you bought here before 2006, or if you had a substantial down payment, you should still have good equity in your home. For most of us, even in this current market, our homes have made good money for us in the last decade.
In 1998 the average selling price on Bainbridge Island was just over $340,000. The average selling price year-to-date at the end of October 2008 is almost $790,000. (I prefer looking at the mean rather than the average. The mean gives a more accurate reflection of market trends, than average but we don't have historic data for mean.) Nonetheless, the picture is still clearly illustrated here.
Can you expect to sell your home today for more than it might have received at the height of our market, around spring of 2007? Probably not, and if your home is worth more than $600,000, you may have a particularly hard time selling right now because jumbo loans (over $417,000) are difficult to find. Which means the pool of buyers with a loan and enough cash in hand to buy your property is going to be small. Hard to hear, but true.
Here's what I remind myself when times get tough: this is my life today, but it won't always be my life. Bainbridge Island remains an amazing place to live. Seattle and Kitsap County's employment picture is strong. We're luckier than 99% of the people living now or ever on this gorgeous planet of ours.
Time to count our blessings instead of dollars (or sheep.) We'll sleep better. Cheers!
http://www.nytimes.com/interactive/2008/11/10/business/20081111_MORTGAGES.html
The gist of its message is that in some areas of the country, huge percentages of home owners owe up to 90% of what they could sell their homes for. And, some are "underwater," or as we who live on an island say, "upside down," with their banks. Mostly that is in California, Nevada, Florida and Georgia.
How are we doing in Washington? According to this model, the average homeowner in our state owes less than 60% of what his house could currently fetch in today's market. That's equity that will survive a couple of years of price drops and eventually, make money for the homeowner.
We hear in the national news about foreclosures and short sales (when the price a home sells for will not pay off the underlying debt plus closing costs.) We're seeing that on Bainbridge Island, but they are still a small percentage of our total number of listings. That's data I can track pretty well.
What I hadn't known is how much equity most of us have in our homes. If you bought here before 2006, or if you had a substantial down payment, you should still have good equity in your home. For most of us, even in this current market, our homes have made good money for us in the last decade.
In 1998 the average selling price on Bainbridge Island was just over $340,000. The average selling price year-to-date at the end of October 2008 is almost $790,000. (I prefer looking at the mean rather than the average. The mean gives a more accurate reflection of market trends, than average but we don't have historic data for mean.) Nonetheless, the picture is still clearly illustrated here.
Can you expect to sell your home today for more than it might have received at the height of our market, around spring of 2007? Probably not, and if your home is worth more than $600,000, you may have a particularly hard time selling right now because jumbo loans (over $417,000) are difficult to find. Which means the pool of buyers with a loan and enough cash in hand to buy your property is going to be small. Hard to hear, but true.
Here's what I remind myself when times get tough: this is my life today, but it won't always be my life. Bainbridge Island remains an amazing place to live. Seattle and Kitsap County's employment picture is strong. We're luckier than 99% of the people living now or ever on this gorgeous planet of ours.
Time to count our blessings instead of dollars (or sheep.) We'll sleep better. Cheers!
Community woodshop on Bainbridge Island~
Just this week I was commiserating with a client friend that in downsizing he was giving up his 200 square feet woodworking shop--where he built a sailboat & two gorgeous wooden kayaks, among other things.
"Wouldn't it be wonderful if someone opened a co-op shop?" I pondered. We love our toys, men especially, but living lightly on the land sometimes means we don't have room for what we love.
Great news! This morning's Bainbridge Review front page article announces a community woodshop that Roger Lauen is considering. The cool thing is that he's proposing that the members actually tackle the first project communally--building the shop itself.
My guess is that they're going to have men and women of all ages lining up to become members. Imagine a great building housing work benches, tools of all kinds, lockers, and I suspect, this being Bainbridge Island, a great big commercial-sized pot of good, hot coffee. Imagine the smell of wonderful island wood being sawn and shaped: cedar, cherry, alder, maple. Imagine the camaraderie, the stories being told, the skills being shared.
If you're interested, contact Roger Lauen at roggadfly@msn.com. Pick up a paper to read more. While you're at it, be sure to read Tom Tyner's piece on the election results. Cheers!
"Wouldn't it be wonderful if someone opened a co-op shop?" I pondered. We love our toys, men especially, but living lightly on the land sometimes means we don't have room for what we love.
Great news! This morning's Bainbridge Review front page article announces a community woodshop that Roger Lauen is considering. The cool thing is that he's proposing that the members actually tackle the first project communally--building the shop itself.
My guess is that they're going to have men and women of all ages lining up to become members. Imagine a great building housing work benches, tools of all kinds, lockers, and I suspect, this being Bainbridge Island, a great big commercial-sized pot of good, hot coffee. Imagine the smell of wonderful island wood being sawn and shaped: cedar, cherry, alder, maple. Imagine the camaraderie, the stories being told, the skills being shared.
If you're interested, contact Roger Lauen at roggadfly@msn.com. Pick up a paper to read more. While you're at it, be sure to read Tom Tyner's piece on the election results. Cheers!
Life on Bainbridge Island Is More Than Real Estate!~
This is my first post on my brand new blog. I've been living on Bainbridge Island since the end of the last century, and I've been involved in real estate here almost as long. I've been writing almost since I picked up a pencil--including fiction, poetry, literary reviews, magazine feature articles and newspaper columns.
Welcome to the intersection of three of my favorite things: Bainbridge Island, homes and homelife, and writing. Mix in some of my photographs and those from friends, and you have my blog.
It seems as though real estate is one of the top three topics of conversation I hear on Bainbridge and other places as well. When times were great, people talked about their equity. When times are lean, people talk about their equity.
My strong sense is we've focused so much in the last decade on our homes as property, and on property as an investment, that we've lost sight of the fact that our house is our home, the place that welcomes, shelters and refreshes us. The place where we build memories. And home, regardless of its market value, is carried in our hearts.
Bainbridge Island is one of the best places on earth to exerience the joys and sorrows that bind us in community. Many of my friends and "clients turned friends" have said when they landed on Bainbridge Island they knew they were home. It happened to me back in 1995 on my very first ferry ride. And now, every time I board a boat heading west, Bainbridge still says "home."
Welcome to the intersection of three of my favorite things: Bainbridge Island, homes and homelife, and writing. Mix in some of my photographs and those from friends, and you have my blog.
It seems as though real estate is one of the top three topics of conversation I hear on Bainbridge and other places as well. When times were great, people talked about their equity. When times are lean, people talk about their equity.
My strong sense is we've focused so much in the last decade on our homes as property, and on property as an investment, that we've lost sight of the fact that our house is our home, the place that welcomes, shelters and refreshes us. The place where we build memories. And home, regardless of its market value, is carried in our hearts.
Bainbridge Island is one of the best places on earth to exerience the joys and sorrows that bind us in community. Many of my friends and "clients turned friends" have said when they landed on Bainbridge Island they knew they were home. It happened to me back in 1995 on my very first ferry ride. And now, every time I board a boat heading west, Bainbridge still says "home."
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