Your link to Bellevue and its neighborhoods Supplement to Reporter Newspapers. Produced by the Marketing Department.
A Breath of Fresh Ideas
Master Builders Free Remodeled Kitchen + Bath Tour page 2
America's Changing Lifestyles Condos coming into their own page 3
Enriching The Value of Your Home The beauty and sophistication of stone page 4
The Housing Market
Where will it go next? page 8
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A Breath of Fresh Ideas…
In the Master Builders Free Remodeled Kitchen + Bath Tour!
Once again, the Remodelors™ Council of the Master Builders Association of King and Snohomish Counties has cooked up another exciting Remodeled Kitchen + Bath Tour, April 26 and 27 from 10 a.m. to 5 p.m. The annual event highlights the ingenuity and artistry of the participating remodelers who have worked with homeowners to transform their living spaces. Remodeling can be a great option for homeowners, particularly if a family loves their vintage home but their tiny kitchen or bath makes it impractical for their busy, modern family. Rather than moving from the home they love or pulling their kids from their schools, many families are opting to stay put and work with what they’ve got. Some families choose to maintain the period style of their homes but seek to create more workable floorplans; while other homeowners want to update the look and feel of their homes, or need to remodel to accommodate for changes in their lifestyle. Attending remodeling tours like the Remodeled Kitchen + Bath Tour, can stir up an abundance of ideas and inspiration for any homeowner looking to embark on their own home makeover. This year’s tour will feature 15 remodeling projects with a wonderfully diverse range of styles and features. These remodels incorporate clever use of space, environmentally conscious
April 26 and 27 from 10 a.m. to 5 p.m. Visit tour homes in Bellevue, Bothell, Issaquah, Redmond, Seattle and West Seattle
online: remodeltour.com
Courtesy of City Builders A remodeled kitchen from the 2007 Remodeled Kitchen and Bath tour
materials and fun new innovations as each remodeler solves the homeowner’s space and design challenges to transform old, out-dated rooms. The tour offers real-life examples of how remodelers have transformed these spaces while working with the owner’s budget and taste to make their
client’s dreams come true. The homes on this year’s tour are located in Bellevue, Bothell, Issaquah, Redmond, Seattle, and West Seattle. Tourgoers will see features like travertine and bamboo flooring, Wheatboard cabinets, Paperstone and recycled glass countertops and other
beautifully durable materials that are both earth-friendly and visually exciting. One of the unique aspects of the Remodelors Council tours is that each remodeling team is on hand to discuss their projects and answer questions about their work so visitors can get a realistic idea of what might be possible for their own remodels. Tour Committee chair, Mark Jones of Druhan Construction, Inc. notes, “If you’re thinking about remodeling your home, these tours are invaluable because you see how the new methods and materials actually look in a home. People see firsthand how their own homes can be literally transformed and so often, in addition to improving the beauty of the home and the quality of life for its owners, a remodel can add considerable resale value as well,” said Jones. The Remodelors Council hosts another tour every fall, the Remodeled Homes Tour, which features everything from whole house remodels and additions to just a few rooms. The Remodeled Kitchen + Bath Tour is free to the public. Passport tickets, which list the tour homes complete with addresses, project descriptions and photos, can be picked up at any Dunn Lumber location or consumers can visit remodeltour.com for details. – Master Builders Association of King and Snohomish Counties
Spring New Homes Tour Offers Special Savings
April 19 - 20 & April 26 - 27 Tour single-family homes, townhomes and condo communities! for more info: BuyNewBuyNowTour.com
The Master Builders Association of King and Snohomish Counties is presenting a new event this spring, the Buy New Buy Now Tour. This free tour will feature new homes and new home communities throughout King and Snohomish counties the weekends of April 19 - 20 and April 26 - 27. This new construction tour of single-family homes, townhomes and condos is a perfect way to see what the market has to offer in 2008. The homes on the Tour will be in all price ranges, with many offering green features such as Energy Star™ appliances, low emission flooring and paint and Built Green® certification. A special coupon is available for buyers of any of the tour homes worth $2,500 in savings. Tourgoers are also invited to enter to win an Outdoor Living Package at any participating tour home. With the increase in loan limits, low interest rates and a good inventory, builders are excited to present this convenient way to help buyers find the perfect new home.
This new construction tour of single-family homes, townhomes and condos is a perfect way to see what the market has to offer.
– Master Builders Association of King and Snohomish Counties Cover photo by: CamWest Development, Inc.
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With America’s changing lifestyles, condos coming into their own No longer considered just a secondchoice option for homebuyers who can’t afford a house, condominiums are giving the single-family home a run for its money as the primary preference for many new homebuyers. Shifting Lifestyles Changing lifestyles of Americans are often cited as the reason there are many more homebuyers than ever before choosing condominium units over houses. The U.S. Census Bureau saw a decline in the proportion of married-couple households with their own children from 40 percent of all households in 1970 to 23 percent in 2003. Demographics that are on the increase include single professionals, divorcees, partners without children and active retirees. Buyers who no longer need to factor in a yard or school district when they choose a home are not restricting themselves to traditional housing options. Condo Myths Debunked Also helping to increase growth in
the condominium market is the collapse of the myth that they are inferior in construction, with thin walls and low-grade carpet. Today’s new condos often have gourmet kitchens with top-notch appliances and come standard with high-end materials such as cherry wood floors and cabinets and granite or marble counters and vanity tops. Another advance in condo development is the increased focus on soundproofing units so a condo owner may be living in a building with hundreds of other people, but feel that they are in their own private, quiet oasis. Builders are combating noise issues by increasing the amount of drywall or using concrete or brick between units. Architects are helping reduce noise impact by designing buildings so that bedrooms in one unit do not share a wall with a higher-noise room such as a kitchen or laundry in the adjoining unit. Windows are also most often the way that noise travels in and out of rooms. To ease this frustration, builders may
Beth’s Real Estate Update
Windows are often the primary way that noise travels in and out of rooms. To ease this frustration, builders may install double-paned windows with a high Sound Transmission Class (STC) rating.
install double-paned windows with a high Sound Transmission Class (STC) rating which usually falls between 28 and 35 (single-paned windows have a STC rating of 20). Hassle-Free, Convenient Living Homeowners who enjoy the outdoors but don’t have the time or interest in maintaining a big yard find the perfect balance with green spaces on roofs and terraces of condominium buildings. Condo developments may
also provide lifestyle-friendly features such as swimming pools and fitness centers and quick access to restaurants, stores and cultural events without the need for a car. When you are making the decision to buy a new home, don’t count out a condominium. Your options will open up and you may find yourself enjoying this different way of life! – Master Builders Association of King and Snohomish Counties
By Beth Billington
Next Issue Date:
on the Eastside Your GUIDE to Buying & Selling HomesPresented by Reporter Newspapers
TAX QUESTIONS ABOUT YOUR RETIREMENT HOME
Wednesday, April 23
Serving the Greater Bellevue Community
How to begin exploring this important factor in your decision about where to move? Start with the “Taxes by State” guide at www.retirementliving. com. Be sure you read carefully. Arizona, for example, has a state sales tax of 5.6%; California’s is 7.25%. But local municipalities add to the sales tax, in some cases {Arizona} resulting in a comYou may be especially attracted to a state that bined rate of 10.7%, where California tends to top has no state income tax, for example—but you out at 8.75%. should look closely at the other ways you will be taxed in that state. In many cases, local property This website also features great information taxes, sales taxes, gas taxes and estate taxes may about other aspects of retirement living. For assismore than make up for the missing state income tance call Beth at 450-5208 and visit her website taxes. Look, too, at the way businesses are taxed. at www.bethbillington.com. Those who plan to run their own businesses in their new residential area may face inflexible B&O” Beth Billington is a Realtor® with Coldwell (Business & Operations) taxes based largely on the Banker Bain in Bellevue, WA. business’s gross income.
Reach 42,000 HHs & 96,000 Readers Online marketing packages available for purchase at homes.bellevuereporter.com Simplified Home Loanscall
For a free mortgage planning session, please
425-652-3911
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One of the crucial things to research before deciding where to move for your retirement years is what tax consequences the move may have—not just the process of moving but also the year-toyear, day-to-day expenses created by the tax codes in your new home.
Ask your account executive for details!
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Nothing enriches a home's value like the beauty of stone Whether used indoors or outdoors, stone adds warmth and character that no other building material can deliver. Once, only the very wealthy could afford homes graced by the sophistication of stone. But with today's manufactured stone veneer products, stone's exquisite looks are within the reach of a wide range of homeowners. When homeowners are faced with the challenge of how to make their homes stand out, manufactured stone is a solid solution. StoneCraft™ manufactured stone veneer comes in several options, which look like natural stone, but is easier to install and more affordable. Manufactured stone adds limitless potential to outdoor living areas. Picture a patio of inspired Fieldstone, which projects a warm strength, with an adjacent outdoor fireplace, barbecue pit and waterfall hewn from gorgeous River Rock, whose rounded edges and earth tones impart both country charm and a sense of permanence. Surrounding this elegant setting could be a privacy wall built from stunning Lake Stone, Quartz or Monarch styles. Inside, nothing adds a homey, rustic charm to a family room or den like the rugged look of stone. Imagine a fireplace and even interior walls crafted of Heritage stone, for a warm, classic feel. Envision a kitchen boasting walls of bold, beautiful Ledgestone, with its clean linear appearance with varying heights and depths. Back outside, manufactured stone provides curb appeal unlikely to be matched by any other home in the neighborhood. Measured against ordinary brick or siding exteriors, a home graced by traditional Fieldstone brings additional substance and
Offering rugged sophistication, warmth and charm, manufactured stone veneers add to the handsomeness of kitchens, baths, hearths and home exteriors.
said Jonathan Wierengo, Director of Marketing for The Tapco Group™, maker of StoneCraft. “In a world of cookie cutter houses with siding or brick facades, manufactured stone brings a customized beauty to any home, and it's a smart investment that pays nice dividends in the years to strength. This stone imparts an eye-catching Euro- come,” added Wierengo. pean charm to even the most contemporary con- StoneCraft is a division of The Tapco Group™ and a U.S. Green Building Council Member. For struction. Nine styles with a variety of colors are avail- more information, visit www.stonecraft.com or call able from StoneCraft. “These products provide 1.888.580.6448. a distinctive ‘Texture for Living™’ to your home's exterior, and come with a 50-year limited warranty,” – www.HomeImprovementTime.com (HIT)
Those scary-sounding housing stats don't tell the whole story
These scary-sounding statistics don't tell the whole story, however. Nationally, even 1.2 million foreclosures, if that many occurred, would represent less than 1 percent of U.S. households, which number approximately 128 million, according to the U.S. Census Bureau. HOMES.BELLEVUEREPORTER.COM More than 60 percent of households didn't have HOMES.MI-REPORTER.COM a mortgage in 2000, also according to the Census Bureau. Of those, 35 million were mortgageless HOMES.KIRKLANDREPORTER.COM because they were renters; another 26 million Part of the PNW Homefinder Network owned their own home outright. None of those folks were in danger of losing their homes to Agent Packages • Broker Packages • A La Carte Options including: Banner Ads, Video Ads, Spotlight Homes, Preferred Agent foreclosure. Listings, Agent Profile Pages, a Directory and much more! Another potentially worrisome figure is the number of adjustable-rate mortgages that are Call 425.453.4270 for more information or expected to reset to higher payments, which may be unaffordable for those borrowers, in 2008 and to get started in this program! 2009. Approximately 51 million mortgages were outstanding in the United States at the end of 2006, again according to the Census Bureau. LoanPerformance recently tracked approximately 5 million ARMs, and found that 1.3 million, or 35 percent, of the 3.7 million prime ARMs, and 2 million, or 92 percent, of the 2.1 million subNo Desk Fee prime ARMs were scheduled to reset this year or next year. Northstone Real Estate Inc.
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Foreclosures are up. House prices are down. Mortgages may be toxic. But just how bad is the current housing crisis, really? And should you be worried about your own situation? The current trends, which include significant jumps in the numbers of foreclosures and overdue mortgage payments, certainly aren't pretty, though finding accurate and useful numbers is a challenge. More than 1.28 million properties were the subject of some 2.2 million foreclosure notices in 2007, according to RealtyTrac, an online marketplace for foreclosure properties. Those filings affected only 1 percent of the nation's households, but the 2007 total increased a whopping 79 percent compared with 2006. Loan delinquencies also rose steadily throughout 2006 & 2007, according to LoanPerformance, a unit of First American CoreLogic. In November 2007, the most recent month for which data were available, more than 25 percent of borrowers who had a subprime interest-only, payment-option or negative amortization type of loan were more than 60 days late on their payments. More than 21 percent of borrowers who had a traditional 30-year fixed-rate or similar type of subprime loan were more than 60 days late as well. Not all “60-day lates” result in foreclosure, but overdue payments certainly suggest homeowners are overextended.
GET THE ADDED EXPOSURE YOU NEED TO INCREASE YOUR SALES!
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Preventing tax-stress syndrome
Sarah on “A Place for Everything” The best way to prevent TRSS (Tax-Related Stress Syndrome) is to start wrangling all the basic paperwork and documentation like receipts early. If you've ever tried to sort through a shoebox full of receipts in one sitting, you know that making sense of such a stack in retrospect can be quite a challenge. If you don't have a place for receipts and tax files, chances are you will lose something important, which can cost you unnecessarily on your deductions, or worse, get you in hot water with the IRS. So it is absolutely critical that you have at least a place to put your taxrelated items. We recommend an accordion file - they're cheap, easy and portable like the Tax.filer from But-
1. Ready, Set, Go! Make the commitment to start properly organizing your tax information as soon as the first tax form comes in the house. It may seem like just setting down that little piece of paper for now is no big deal, but gathering all those little pieces in all those little places becomes a huge task come February (or March or April).
2. Take Notes Before you file any receipt or tax- related paper away, put a star next to items that have tax implications. Things to consider would be charitable contributions, interest income earned, tax payments made, home- office purchases or state tax returns. All it takes is a few seconds to jot down a note about a particular receipt - whether it's for a medical expense, a charitable contribution or a miscellaneous deductible expense. 3. Try Teamwork Make sure that your partner is on toned Up. But even a shoebox is pref- One great trick for reducing anxiety the same page. A lot of relationships erable to no filing system at all. is to remind yourself that you don't are made up of one person who plans have to do it all yourself. If you're feel- in advance and one who, well, doesn't. Alicia on “Maintain Perspective” ing overwhelmed, speak with an ac- Get your significant other to un An old family friend used to be fond countant who can help put you on the derstand that if you spend all winter of saying, “The anticipation of a shot right track. tracking down receipts, you are going can often be worse than the shot it- To get ahead on the looming April to have less time helping with cookself.” The same holds true for taxes. 15 deadline, here are a few simple tips ing, cleaning and running errands. But sometimes, that anxiety can be par- that will better help you prepare for alyzing, especially around tax time. tax day. – Scripps Howard News Service
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Of all the times - nap time, mealtime, play time - tax time is the least enjoyable. But it is as constant as the northern wind and must be dealt with. Sadly, burying your head in the sand and avoiding the work now only creates more of a headache for you come April. If you said to yourself on tax day last year as you made the midnight sprint to the post office, “Why didn't I organize these things a little bit at a time over the course of last year? This entire process would have been so much easier and less stressful...,” well, now is the time to get ahead of the curve.
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Sculptures can enliven your house Putting art on walls is a common solution to the accessorizing aspect of interior design. Art completes our walls with beauty and color, complementing the rest of the decor. But if a feeling of motion is desired with something that adds more than a flat portrait, a sculpture is the answer. The sculpture's three-dimensional form adds zest, movement and liveliness to a room. Sculpture has a life of its own. Like a piece of furniture, it is free standing. Its front, sides and back are visible. It adds dimension within the room. Unlike furniture, you can't sit on it and a drink cannot be placed on it so it is not usable but nonetheless, sculpture has a purpose of its own. It interacts with the room and the room's inhabitants. The right sculpture might even evoke conversation, particularly if the art is a focal point in the room. For sculpture to emancipate itself from other ordinary accessories, it needs to have a special place in the room. This type of art needs a special backdrop such as a boldly colored wall to set the stage, or a niche in the wall to surround the sculpture. A pedestal, a table or a designated place on the floor (if the sculpture is too big for a pedestal) are other places where a sculpture can be displayed and can breathe and be admired. A room that is rather neutral can be transformed into one of interest with the right sculp-
ture. The geometry, color and texture of the sculpture will add the missing element. A single piece of sculpture, if perfect, might be all that is necessary. Often though, several pieces that are complementary in some way, are better than one. In many cases, sculptures combined with other accessories are good. For example an abstract sculptured stone sitting atop a short pile of books with a vase of flowers nearby will complement each other and the entire room. A tall sculpture accompanied by a cascading plant will not only create interest but will also add dimension and geometry to the space. Another example is a lamp, a bowl (empty, with fruit or candy or with potpourri) and the right sculpture will work wonders for a blase room. A series of three or five items is always better than two or four. For some reason an odd number of accessories tends to create more interest than even ones. The above examples revolve around the 'three' idea. If the space such as a cocktail table needs more than three items, try this idea: Three candle holders, a wooden turtle and a cocktail table book. Those five pieces or similar ones should do the trick. Got the idea? Now get creative. – Scripps Howard News Service
One man’s junk is another man’s treasure Tips for a successful garage sale
• Advertise in the local paper. Most papers will • Make all sale items as attractive as possible beforeinclude the ad in their online edition as well. Be sure hand. Polish furniture and freshly launder clothing to include special objects such as bunk beds or a and bedding. barbeque grill in your ad. • Display some of the more interesting items at the • Put up advertisements on bulletin boards at your end of the driveway to act as a magnet to bring local grocery stores and community centers. people in to the sale. • Keep pets in an enclosed area or on a leash for • Create an area to help sell old tools or lawn and their safety and the safety of customers. garden equipment and automotive items. • Have a cash box with change to start. A good rule • Put anything not for sale out of sight. In the case of thumb is to have two $10 bills, four $5 bills and of large items that are difficult or impractical to 25 $1 bills plus coins. move, mark them clearly as NOT FOR SALE. • Don’t accept checks. Most people expect to pay • When selling electrical appliances, make sure in cash. A much better plan is to offer to hold the to have an outlet or long extension cord handy item for an hour to give the customer time to go to so buyers can test the items. a bank or ATM to get the cash. • Put clearly marked prices on everything. • Have plenty of grocery bags on hand for sold items. Also have newspaper to wrap breakables, • When selling a large quantity of children’s clothand if possible, several empty boxes for a collection ing or small toys, consider having a “fill a bag for of sold items that would be awkward in grocery a set price” deal. bags. • Put anything not for sale out of sight. In the case • When selling books, cassettes, CD’s, and DVD’s, of large items that are difficult or impractical to arrange them in a box so they can be easily read. move, mark them clearly as NOT FOR SALE..
Homemade garage sale signs are inexpensive and a good way to attract traffic to your sale.
• Consider creating a kid’s table or children’s toy area. • Post an “ALL SALES FINAL” sign to avoid any hassles later on. • Don’t forget to be a good neighbor and take down signs once your sale is over. – Tips provided by Master Builders Association of King and Snohomish Counties
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Answers to common homebuying questions Q: Shouldn’t I wait until home prices go even lower to buy? A: No. Just as no one can accurately predict the peaks and valleys of the stock market, the same holds true for housing. If you wait for what you think is the absolute best deal, you could end up waiting for years. All the market fundamentals show that now is a good time to buy – prices are down, interest rates near historically low levels, and there are lots of homes to choose from. Q: Doesn’t it make sense to wait out the market until I can get the same price on my home that my neighbor got when he sold a year ago? A: No. It’s always better to trade up in a buyer’s market. While the value of your house has fallen, the prices of higher-end homes have also dropped. Here’s an example: Your neighbor sold for $300,000. Let’s say values in your area drop 10 percent, so you could get only $270,000 for your home today. You have your eye on a home that previously sold for $500,000, but now is selling for $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000. But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are the move-up home would also increase in price 10 percent to $500,000. That’s a $200,000 price difference. So by selling today, you would actually save $20,000. Q: Interest rates keep going down. Shouldn’t I wait until they go even lower before I buy? A: Interest rates for 30-year, fixed-rate mortgages are currently below 6 percent. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be multi-millionaires. Q: I have $10,000 to invest. Should I put that money in the stock market or buy a home? A: Purchasing a home is the best long-term investment. For example, say you use that $10,000 to purchase a $250,000 home, and the house appreciates three percent during the first year. That means after one year, the house would be worth $257,500 – a gain of $7,500. By contrast, putting the same $10,000 in the stock market and posting a similar five percent gain would only net a $500 return on investment. And don’t forget the tax incentives. In most instances, all of the mortgage interest and property taxes you pay can be fully deducted from your gross income to reduce your taxable income. These deductions can result in thousands of dollars of tax savings. Q: I can’t afford the type of home that I want. Is it best to wait or keep renting? A: The sooner you make the jump from renter to homeowner, the quicker you begin to create and build up wealth for your family. Once you become a homeowner, you are able to take advantage of the tax deductions that homeownership offers, and you begin to build equity in your property. Your best strategy may be to scale back expectations for your dream starter-home. After a few years, you can use those equity gains to sell your starter home and move into a bigger house. – Master Builders Association of King and Snohomish Counties
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Where will the housing market go next? Three months into 2008, the bad news about the residential real estate market keeps rolling in, and most analysts agree the bottom so many predicted last year remains elusive at best, and years away at worst. "I think we are a ways from the bottom -- and a long way from any indicators that would even hint at an upturn," says Mike Simonsen, CEO of Altos Research, a real estate data firm based in Mountain View, Calif. "It's a gigantic mess," agrees Lewis Goodkin, president of Miami-based real estate analysis firm Goodkin Consulting. "You had people who wouldn't have been able to qualify for a mortgage with normal underwriting rules using these introductory rates to buy more house than they could afford, says Goodkin. "You had builders selling to people who they would not have sold to under normal underwriting rules, which made their profits go up and then they plowed more money into creating more supply. You had speculators looking at housing as if it were a security, and the lenders having this attitude that they weren't going to have to deal with this because appreciation would allow people to refinance their mortgages, and the appreciation would protect everyone," Goodkin says. "But it was all B.S." As more houses went up for sale, prices continued to come down. When people got to the point that their selling price couldn't cover their mortgage, the first wave of foreclosures hit. The market began to crumble and housing went from leading the nation's economy to dragging it down. Since 2006 wave after wave of adjustable rate mortgages reset at dramatically higher interest rates, says Chris Porter, manager with John Burns Real Estate Consulting in Irvine, Calif. Facing foreclosure many chose to sell and as listings flooded the market prices began to slip. That sparked another round of selling -- this time among investors who had switched from stocks to real estate with hopes of financial salvation through flipping. Even as the housing market disintegrated, major housing analysts across the country spent much of the early months in 2007 predicting better days were in sight, a prediction Simonsen says seemed reasonable at the time.
"At the end of 2006 we actually observed some good strength in the economy. The stock market was up, the economy felt strong. Everyone expected housing would follow," he says. "Even though there was some risk, the ratings agencies fooled the market and the investors into thinking housing was rock solid," says Lawrence Yun, chief economist for the National Association of Realtors (NAR). "It was the speed and the scope of the losses that nobody expected." Most statistical indicators show 2008 won't be much better. The NAR predicts another 5 percent drop by the end of the year and an even bleaker for new homes -- an 18 percent price loss for 2008. "I am not really excited about the outlook. Not until late '08 or '09 at the earliest," Goodkin says. "And even then, when the real estate market does come back, it won't be where it left off. We will probably be looking at a landscape that is 30 percent or more below its peak of '05." Yun says he sees stabilization on the horizon. Most sub-prime mortgages have already left the market either through foreclosure or through quick sales, he says, and a stimulus package from Congress has the potential to give housing a bump. Plus, Yun says, a renewed interest in loans insured by the Federal Housing Administration will likely give lower-income buyers and people with dinged-up credit a way to buy in to the market. Simonson agrees that a bottom to the market isn't on the immediate horizon. "My gut says no. I don't see any catalysts for a reversal in the market," he says. Porter feels any recovery may take longer on the homeowner side. "Homeowners aren't quite ready to give up the equity they believe they have," he says. "They know the home down the road sold for $400,000 a year ago, and they can't adjust to the idea that they can't get the same thing for their home today." "It is absolutely a buyers market," Goodkin says. Buyers who do their homework and study their market will find terrific values, he says. "As long as you are buying the house as a primary residence, and you are selective, there are good values out there and you won't get hurt." – Scripps Howard News Service
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B ELLE V U E
real estate review
W e d n e s d a y, A p r i l 9 , 2 0 0 8
A Down Housing Market
Offers Some Surprising Homebuying Advantages The housing boom of recent years is clearly over and the down market that prevails today has raised some serious challenges for homebuilders, who are most concerned about selling off the homes they have in inventory. But conditions are hardly a bust for prospective homebuyers, who will find opportunities today that didn’t exist a couple of years ago when homes were flying off the shelves and builders were selling them faster than they could build them. The speculators who flooded the market in search of overnight gains are gone, and with them the excessive exuberance that at the height of the boom had prospective homebuyers scrambling for properties in a raucous seller’s market. When they found homes they liked, buyers in the hot markets had little choice but to pounce on them or lose them, often finding themselves engaged in a spirited bidding war that would push the price significantly above the seller’s original asking price. Today, the tables have turned dramatically. It’s a buyer’s market, and families looking to buy can shop at their leisure and deliberate over what home comes closest to filling their needs and desires. There is an abundance of new housing to choose from, with energysaving features, green products and other amenities that demonstrate the big strides the industry has taken in recent years in applying cutting-edge technology to residential construction. And builders are in a generous mood, offering a range of concessions – from upgrades to help with financing – aimed at making that sale so they can turn their attention to preparing for the return of more robust times when the market starts regaining its strength in a year or so. The trade-off for today’s buyers is on
HOUSING STATS continued from page 4
That 92 percent sounds like a big number, but the total number of ARM resets amounts to 3.3 million loans, or 2.6 percent of U.S. households. Further, national numbers tend to mask regional variations, which show that homeowners in some cities have suffered far more than homeowners in other cities have. That's the case because real-estate markets are highly localized, says Rick Sharga, vice president of marketing at RealtyTrac in Irvine, Calif. “Even in states with high foreclo-
the mortgage financing side, where conditions have tightened considerably from the easy lending standards available during the boom. Buyers hoping to obtain a mortgage without being able to document their income, for instance, are probably out of luck, and real down payments are now the rule rather than the exception. And that may not be such a bad thing, because too many households got caught up in the enthusiasm of the buying spree prevailing during the boom, and didn’t pay close enough attention to ensuring that they would have the ability to repay the loans they were signing. There are some serious problems in today’s mortgage market and the availability of financing is not what it should be, particularly in the subprime and jumbo loan markets. However, the majority of homebuyers will be obtaining conventional, conforming mortgages, which have remained
largely unaffected by the shakeout in lending to borrowers with blemished credit histories. In Washington State, available loans are limited to $567,500 for singlefamily homes and conform to other standards that enable the lender to sell them to the government-sponsored enterprises, Fannie Mae and Freddie Mac, which then package the loans and sell them to investors. Mortgages insured by the Federal Housing Administration, requiring as little as three percent down payments, may be well-suited to first-time home buyers or those who don’t quite measure up to the credit requirements that lenders are now setting for conventional conforming loans. The most important thing for wouldbe buyers is to work with the builder to find the mortgage that will enable them to buy the house of their dreams at a cost that fits their budget. In today’s market, new homes are available
sure rates and real-estate values falling through the floor, you are going to find pockets, neighborhoods, where things are fine,” he says. RealtyTrac recently ranked 100 metropolitan areas in terms of the percentage of households that entered some stage of foreclosure in 2007. At the top of the list were six areas where 3 percent to 5 percent of households had experienced foreclosure-related activity: the Detroit metro area; Stockton, Calif.; Las Vegas; Riverside-San Bernardino, Calif.; Sacramento, Calif., and the Cleveland metro area. At the bottom of the list were six smaller areas where less than 0.2 per-
cent of the households experienced foreclosure-related activity in 2007: Richmond, Va.; the Allentown, Pa., metro area; Honolulu; McAllen, Texas; Syracuse, N.Y., and Greenville, S.C. What's more, the underlying causes of housing-market distress differed even among the most harshly impacted states, according to CoreLogic's January 2008 forecast of U.S. residential mortgage risk. In California, the primary factors were “significant declines in home prices, increasing foreclosure rates, a relatively high proportion of nonconforming Alt-A and subprime adjustable-rate mortgages, low housing
in a range of prices, and good financing options remain, even in instances where there may be some challenges. Today’s housing conditions separate the speculator out to make a fast buck from the earnest buyers who have traditionally been the mainstay of the market, looking for housing as a place to live and build equity and financial security as the family grows. Housing prices increased at a record clip during the boom, doubling in some places, and that was clearly unsustainable. The market is settling back now, with some decline in housing prices that are relatively small compared to recent price gains and that will help to restore a sorely needed measure of affordability. Buyers who are shopping the market now will find that this is working to their advantage, allowing them to obtain housing they might not have been able to put their hands on when the market was in overdrive. Housing has always been a cyclical business, with its ups and downs. As surely as the market has slowed today, it will start picking up speed again. Projected increases in the U.S. population and household formations alone ensure growing demand for housing in the decade ahead. For families who desire to move to a new home, the best time to make that move may be now – before the competition returns. No matter what is being said about the current housing downturn, there are some surprising opportunities out there. Prospective buyers owe it to themselves to at least go out and look at what’s available, and they may very well discover some unexpected advantages to turn their homebuying ambitions into a reality. – Master Builders Association of King and Snohomish Counties. affordability and investor speculation that boosted housing demand.” But in Michigan, “persistent economic distress and a high incidence of mortgage fraud” were at work, according to the forecast. If you have an adjustable-rate mortgage, find out when your interest rate will reset and how much your new payments will be. If you won't be able to afford those payments, contact your lender to discuss any other options that may be open to you. “Act before you find yourself delinquent,” Sharga says. “If you wait until you are in trouble, it may be too late.” – Scripps Howard News Service
B ELLE V U E
real estate review
Know WHAT To Do In Today’s Real Estate Market
As the spring selling season moves into high gear, the housing market is upending the conventional wisdom that guided buyers and sellers during the housing boom. The changing dynamics have impliDebbie Walter cations for a wide Realtor® - RE/MAX NW variety of players in the real-estate market. Some brokers are advising sellers to price their homes in the bottom 25 percent of comparable properties. People looking to enter the market for the first time are being told not to expect double-digit appreciation rates and don’t expect to use their homes like a credit card by tapping into lines of credit. Such strategies aren't entirely new, but with the number of homes For Sale climbing across the country, consumers and professionals need to adjust how they think about their local real estate market. According to the National Association of Realtors, there is about 30 percent more homes on the market than last year, with inventory reaching its highest level in 10 years. What this new environment means for buyers and sellers varies from market to market. Fortunately, for the local Puget Sound area, our economy is alive and well. Housing is still a great place to invest your monthly living allowance. People continue to move to our area every day and King County’s unemployment rate is the lowest in the state at 3.7 percent. What follows is a look at what this “new market” means for different groups of buyers and sellers.
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house comes across as a good value relative to other homes on the market. “Pricing is absolutely critical right now,” says Theresa Dzwonkowski, Broker of Kirkland’s RE/MAX NW Realtors. In determining a home'svalue, Dzwonkowski considers everything from the height of the ceiling to the quality of any renovations and whether the front door creates a good first impression. “A great thing to do is to look at properties that are priced comparably to yours and ask, ‘Which would you rather buy?’ ” she says. Overpricing has many logical and emotional downfalls, but the worst reason is an overpriced homes may never even catch the eye of their intended audience. Also, listings typically generate the most excitement and interest in their first few weeks on the market. The longer a home sits on market, the more buyers ask “what’s wrong with it?”. “Many real estate agents are counseling clients to price their homes in the bottom half of comparable homes and to cut their asking price by 3 percent to 5 percent if the listing doesn't generate several showings or written offers within three to four weeks” says Dzwonkowski. Realtors are also telling sellers to fix problems that buyers might have overlooked in a more heated market. From a seller’s perspective, it may not make sense to repaint scuffed up walls because the return on the investment may likely be minimal. But from a buyers’ perspective, which is what matters most when you want or need to sell a home, if the buyer walks into a home that isn’t completely turn-key, then they can simply walk right back out and view ten other homes. Joe Stumpf, national spokesman for a top-producing real estate organization says, “You don't want a seller to leave issues that could be a total turnoff to a buyer. There are too many other choices for a buyer, so make sure you make the home look its very best from Day 1.”
Sellers Say goodbye to the days when sellers could simply look at what their neighbor's house sold for and then list First-TimeBuyers theirs for 10 percent more. Brokers As the housing market cools, are advising sellers to make sure their first-time buyers have the opportu-
nity to negotiate for a lower price, a more flexible move-in date, or incentives such as seller-paid closing costs. Top-producing real estate agents are being very successful negotiating with sellers to help with closing costs.
Investors As the housing market changes, investors used to seeing quick profits in once red-hot markets may need to be more patient. The decision to sell or rent can be tricky, particularly if the rental income isn't enough to cover the mortgage and other carrying costs. Rental homes typically don't show well and often must be vacated and given a fresh paint and new carpet before they are put on the market. Many sellers are turning to stagers to give a vacant new home personality. Rebecca Grainger, co-owner of Staging Masters Inc., uses air-filled mattresses, high-end bedspreads, hangs news towels in the bathrooms, and rents furniture for key rooms. “We're making it look like a model home,” she says. The return is a quicker sale which equates to more dollars to the bottom line. A question we Realtors are often asked, “What makes it a ‘buyers’ or ‘sellers’ market? Are there set standards for determining this?” Answer: While there are no set standards, a buyers or sellers market generally reflects local pricing, local economy, consumer confidence and sales trends. When local economy is booming, values are rising and unit sales are strong, that's typically seen as a sellers market. When consumer confidence is down, prices stall and home sales drop, purchasers have more leverage in the marketplace so that is generally regarded as a buyers market. So if you have been considering a move-up, first time purchase or investment property and are a well-qualified and pre-approved buyer, NOW is an excellent time to be in the market. Make sure to consult with a professional and full-time Realtor who can advise and guide you towards a smooth and successful adventure. – Visit debbiewalter.com for more info.
Bellevue Real Estate Review Advertising Contacts: McKenzie Lukecart Bellevue Real Estate Account Executive p: 425.453.4287 e: mlukecart@reporternewspapers.com
Bruce Baker Bellevue Real Estate Account Executive p: 425.453.4273 e: bbaker@reporternewspapers.com
Deanna Jess Kirkland/Mercer Island Real Estate Account Executive p: 425.822.9166 e: djess@reporternewspapers.com
William Shaw Reporter Newspapers Marketing Director p: 425.453.4211 e: wshaw@reporternewspapers.com
Top Tips For Home Buyers Provided by Debbie Walter 1: Check your credit report for accuracy and completeness. Buyers with inaccurate information on their credit report may have a hard time obtaining financing or are offered loans at higherthan-market interest rates. The Fair Credit Reporting Act gives consumers the right to a free credit report from each of the three nationwide credit reporting companies every 12 months. Access your free credit report at annualcreditreport.com. 2: Use the Internet wisely. National Association of Realtors (NAR) research shows that 77 percent of all recent buyers used the Internet to search for homes. Many buyers use the Internet to research mortgage lenders. Be careful when sharing financial or other personal information over the Web – predators can steal this data and the user’s identity. Realtors® can refer buyers to reputable, reliable lenders they trust and do a high volume of business with. 3: Educate yourself about mortgages and mortgage fraud. Many mortgage products are available in today’s market, but not all of them work for all buyers. NAR warns consumers against exotic loans and predatory lending practices that can poison the home buying process and trap unsuspecting borrowers into years of financial hardship. According to Fannie Mae, mortgage fraud has increased five-fold in the past 10 years. To protect yourself, work with a Realtor® who knows the local market and can explain the different financing options and their implications. 4: Hire a real estate professional. When you’re buying a home, would you know what to do if your financing fell through the day before closing? As a buyer, you want someone who knows the market and who has experience handling the particular needs of home buyers, whether it’s identifying homes and neighborhoods, negotiating for the best deal, or coordinating the 20+ steps between contract acceptance and closing. Realtors® who have earned the Accredited Buyer Representative (ABR) designation, Graduate Realtor Institute (GRI), Certified Residential Specialist (CRS) have demonstrated their commitment to and expertise in serving home buyers. To earn the above designations, Realtors® must successfully complete state accredited courses that covers agency, service delivery, marketing and promotion, and negotiation and risk management; take approved elective courses, and have completed a high number of transactions.
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B ELLE V U E
real estate review
W e d n e s d a y, A p r i l 9 , 2 0 0 8
Where will she hold her slumber parties?
E XC LUSI V ELY PR ESE N T ED BY
Windermere Real Estate
featured home of the week
CLYDE HILL
WEST BELLEVUE $2,998,000 The Grant…set among 5 other Lochwood-Lozier new construction homes. Stunning views of Seattle, Lk WA, & the Olympics. Schools, parks & downtown Bellevue are just moments away. Meticulous construction of this contemporary home is of the highest quality, including soaring ceilings & spacious floorplan. Rich hardwood floors, custom built-ins, top-of-the-line appliances, rec room, media room. Master suite sanctuary w/sitting room, spa bath & private deck. 4BR/3.75BA. MLS #28044727 Steve Erickson 206-295-8485, serickson@windermere.com
ENATAI $2,795,000 Welcome to this urban lodge retreat where the city views, lifestyle flexibility, style & amazing outdoor living spaces of this home are guaranteed to exceed all expectations. From the luxurious main floor master suite to any of the 3 additional bedrooms, 4 baths, bonus room, office, flex room, loft, & the unparalleled gourmet kitchen – you’ll be sure to find room for every need w/amenities around every corner. Just a minutes jaunt to Downtown & all that Bellevue has to offer. MLS# 28037927 Julie Scozzafave 425-417-3566, www.Scozzafave.com
WEST BELLEVUE – APPLE VALLEY $2,095,000 Adam Leland homes presents this 2008 masterpiece in Apple Valley. 4 bedrooms, 2.5 baths, air conditioning, den, bonus and 3-car garage. Gourmet kitchen with eating nook that looks out to sunny outdoor living space, Sub-Zero refrigerator, double ovens, custom cabinets and granite counters. MLS #28028006 John Kritsonis 206-498-0288, www.johnkritsonis.com
CLYDE HILL VIEW HOME $1,995,000 This Clyde Hill remodel is light and bright and has all the right spaces! Gorgeous chef’s kitchen with granite countertops, Viking range, Sub-Zero refrigerator and wine cooler. Main floor master suite is the perfect retreat! Gorgeous landscaping includes lush plantings, Koi pond, large patio and fenced backyard. Fantastic views of Lake Washington, the Olympic Mountains and Downtown Seattle! 4 Bed, 3.25 Bath, 3800 sq ft. MLS# 28033964 Nate Short 425-891-5842, www.MRCLYDEHILL.com
CLASSIC AND SPACIOUS IN YARROW POINT $1,750,000 Spacious best describes this 5 bedroom home on one of Yarrow’s finest streets. Bathed in natural light, this home features an open floorplan. The professional chefinspired kitchen features top quality stainless appliances, granite counters, large island and custom cherry cabinets plus an outdoor play yard just steps away. Melding classic sixties materials such as terrazzo floors and used brick accents, with new finishes of stainless steel and granite the home reads classic yet modern. MLS #28037887 Wendy Paisley 206-650-5812, www.wendypaisley.co m
MEDINA $1,498,000 Private, gated entry. Mid-Century modern architecture w/West facing Lake, City & mtn views. 4 Bedrooms, 3 ½ Baths. Walls of glass, 14’ cedar wood ceilings & accents of travertine throughout. Entry courtyard & outdoor living spaces w/specimen landscape for beautiful views thru every window. Gorgeous eat in kitchen w/slab granite counters, a view of the lake & a brick fireplace. Single story living w/full apartment below. Big price reduction – NOW ONLY $469 per sq. ft. MLS# 27185006. Justin W. Richards 425-765-8088, justinrichards@windermere.com
GATED IN GLENDALE! $1,349,000 Noble architecture, timeless beauty, thoughtful elegance & lushly landscaped grounds seamlessly coalesce at this wonderful 4 bd, 2.5 ba garden estate. Nestled in a private gated enclave, this peaceful garden oasis offers both comfortable & classic living options at their finest. New pricing on this beautiful property makes the home an amazing value. Located just minutes from Microsoft & the best of Bellevue, enjoy life in one of the Eastside’s favorite neighborhoods! MLS#28042464 Anna Riley 425-761-8836, anna@westbellevue.com
EDUCATION HILL-REDMOND $1,300,000 Luxury meets Comfort. Indisputable good taste is exhibited throughout this substantially upgraded Buchan-built home in North Education Hill’s Whistler’s Ridge. Nearly new, this lovely home shows like a model. Substantial crown moldings, Italian porcelain tile floors, soaring coffered ceilings & oil-rubbed bronzed hardware abound. Four bedrooms, office & rec room provide space for everyone’s favorite activities. Additional roughed-in space for Media Room or whatever your heart desires. Quiet cul-de-sac location and spacious yard. MLS # 28040882 Betsy Weyer 425-444-3305, BetsyWeyer.com
This magnificent estate transcends the common; perfectly positioned on a half acre that rests atop the city to offer commanding panoramic views of the Seattle Skyline, Lk Washington, Bellevue, and the Olympic Mountains. This beautiful property provides absolute luxury living. Flawlessly concealed from sight in one of the most adored neighborhoods of Clyde Hill. A superbly designed home that encourages entertaining with substantial living spaces and floor-to-ceiling windows enabling the dramatic views to be admired. MLS# 28019809 Judie specializes in marketing and selling West Bellevue homes for over twelve years and provides her clients with complete dedication, skill and expertise. She lives in West Bellevue with her husband Tim and her daughters Suzanne and Catherine. She is a leader in the industry and Judie O’Brien, has achieved the highest level of professional achievements and 425-452-8656 judie@judieobrien.com recognition. Contact Judie for a www.OBrienRealEstate.com confidential meeting to discuss your real estate opportunities.
Julie Scozzafave 425-417-3566 www.scozzafave.com julie@scozzafave.com
Steve Erickson 206-295-8485
serickson@windermere.com
Betsy Weyer 425-444-3305 BetsyWeyer.com
Anna Riley 425-761-8836
anna@westbellevue.com www.westbellevue.com
Justin W. Richards 425-765-8088
justinrichards@windermere.com
windermere.com
$4,180,000
Wendy Paisley 206-650-5812
Wendy@wendypaisley.com www.wendypaisley.com
John Kritsonis 206-498-0288
www.johnkritsonis.com
Nate Short 425-891-5842
www.MRCLYDEHILL.com
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