Renate Scisney, RealtorŪ
Offering Performance - Not Promises !
Renate Scisney, RealtorŪ, ABR, CRS,e-PRO, SRES | (360) 710-4041 | renatescisney@yahoo.com
Why Is Now A Smart Time To Buy
Considering all of the negative press the housing market received in late 2007,it's more important than ever for buyers to separate fact from fiction when deciding on a time to buy a home.
FACT: The housing market is undergoing a natural cyclical correction.
It's impossible to ignore the ongoing news surrounding the downturn of the housing cycle. True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002. However, with homes taking longer to sell, the number of homes on the market has grown. the inventory of homes on the market ranges from 7 to 10.5 months as of November, 2007. This equates to good news for buyers who have more homes at more price ranges from which to choose.
FACT: Low mortgage rates give buyers more house for their dollar.
With the 30 year fixed rate hovering between six and seven percent a 45-year low qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment. For example, today if a buyer secured a 6.5 percent interest rate on a 30 year fixed loan for a $300,000 home(with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25 percent. In 1982, when the 30-year fixed rate was 14.6 percent,the same payment would have bought a house worth only $151,657.
FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest hit areas of the country that have seen a dramatic downturn in the market; among them, California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average. Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to default on loans. Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer homebuyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate. Washington has seen one in 1072 homes in foreclosure, and Oregon and Idaho have one in 1275 and 893, respectively.
FACT: Sub-prime borrowers get a reality check.
Then there are the problems that are affecting sub-prime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier sub-prime loans to fund the American dream. But, again, unlike the media's portrayal, the reality is that sub-prime loans comprise only nine percent of total loans nationwide and of those nine percent, less than 11 percent of those sub-prime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as is its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their sub-prime loans.
Where does all this leave the Pacific Northwest?
FACT: Real Estate is localized and the Northwest is one of the strongest housing markets in the United States.
Real estate valuation, appreciation and market activity have been and always will be very localized. Because each region of the U.S. is a microcosm with its own employment, geography and housing market dynamics in contrast to California, Nevada, Florida and Arizona, Washington, Oregon and Idaho homeowners are faring well. These days, the ups and downs of the real estate market is in the national news every day. But many parts of the country, like the Pacific Northwest, do not have the same negative news as California, Nevada, Arizona and Detroit, Michigan, because homes have appreciated at a steady clip in the Pacific Northwest. In fact, according to an August, 2007 article by the Associated Press, Washington state led the nation with the number of cities in the top 20 for (home ownership) appreciation. In order, they are: Wenatchee (up 23.54 percent), Longview (up 13.6 percent), Seattle/Bellevue/ Everett (up 9.89 percent), Tacoma (up 9.34 percent) and Spokane (up 9.3 percent). The Office of Federal Housing Enterprise Oversight (OFHEO) noted that from October 2006 to October 2007, Washington state's overall appreciation had increased 6.98 percent.
THE FACTS ADD UP: If you're in the market to buy, now is the time to "Buy Smart"
A number of factors have converged to make this the best buyers market the Pacific Northwest has seen in years.
FACT: The housing market is undergoing a natural cyclical correction.
It's impossible to ignore the ongoing news surrounding the downturn of the housing cycle. True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002. However, with homes taking longer to sell, the number of homes on the market has grown. the inventory of homes on the market ranges from 7 to 10.5 months as of November, 2007. This equates to good news for buyers who have more homes at more price ranges from which to choose.
FACT: Low mortgage rates give buyers more house for their dollar.
With the 30 year fixed rate hovering between six and seven percent a 45-year low qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment. For example, today if a buyer secured a 6.5 percent interest rate on a 30 year fixed loan for a $300,000 home(with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25 percent. In 1982, when the 30-year fixed rate was 14.6 percent,the same payment would have bought a house worth only $151,657.
FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest hit areas of the country that have seen a dramatic downturn in the market; among them, California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average. Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to default on loans. Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer homebuyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate. Washington has seen one in 1072 homes in foreclosure, and Oregon and Idaho have one in 1275 and 893, respectively.
FACT: Sub-prime borrowers get a reality check.
Then there are the problems that are affecting sub-prime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier sub-prime loans to fund the American dream. But, again, unlike the media's portrayal, the reality is that sub-prime loans comprise only nine percent of total loans nationwide and of those nine percent, less than 11 percent of those sub-prime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as is its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their sub-prime loans.
Where does all this leave the Pacific Northwest?
FACT: Real Estate is localized and the Northwest is one of the strongest housing markets in the United States.
Real estate valuation, appreciation and market activity have been and always will be very localized. Because each region of the U.S. is a microcosm with its own employment, geography and housing market dynamics in contrast to California, Nevada, Florida and Arizona, Washington, Oregon and Idaho homeowners are faring well. These days, the ups and downs of the real estate market is in the national news every day. But many parts of the country, like the Pacific Northwest, do not have the same negative news as California, Nevada, Arizona and Detroit, Michigan, because homes have appreciated at a steady clip in the Pacific Northwest. In fact, according to an August, 2007 article by the Associated Press, Washington state led the nation with the number of cities in the top 20 for (home ownership) appreciation. In order, they are: Wenatchee (up 23.54 percent), Longview (up 13.6 percent), Seattle/Bellevue/ Everett (up 9.89 percent), Tacoma (up 9.34 percent) and Spokane (up 9.3 percent). The Office of Federal Housing Enterprise Oversight (OFHEO) noted that from October 2006 to October 2007, Washington state's overall appreciation had increased 6.98 percent.
THE FACTS ADD UP: If you're in the market to buy, now is the time to "Buy Smart"
A number of factors have converged to make this the best buyers market the Pacific Northwest has seen in years.
- Rates are back where they were before the market turned, making monthly mortgage payments affordable.
- There is a wide selection of housing inventory, which is good news for buyers who now have even more properties to choose from to find the right home.
- Homeowners in it for the long-term nearly always come out ahead in building wealth.
- It's a good time to take advantage of a strong local economy.
- Home sales have slowed, giving buyers an advantage.
- It is a great time to Buy Smart!
