Tag: economics

Underwater Homes and Such

Carl Setzer

Over the past few years I’ve heard so very much about “underwater homes”. When one owes more than the home is worth, the choices seen a bit stark. Short-Sales, foreclosures, bankruptcies, and other dire options were what got press, and agents talking. There was one option, though, that didn’t get mentioned: nothing. Keep pushing your mortgage and wait for the market to recover value.

The past several years have seen significant value growth. And Seattle has been central in that growth trend. We’ve gained back most, if not all, of the recession’s value erosion. Now, that’s not universal. There are areas in western Washington which haven’t gained that much. Seattle/Bellevue is the epicenter, which price increases dropping moving outwards.

Now, if you must move (job relocation, etc), you can’t afford your mortgage (adjustable rate resets, interest only terms off and principle comes due, etc), and you owe me than your home’s value, there are options. Don’t panic! But don’t seek one of these options if you simply are worried about home value. If you like where you live and it meets your needs, stay there. Prices will recover, and soon.

This Week In Economic News

Carl Setzer

This week has some key indicator announcements which should tweak the markets. They may be national numbers, but they do impact at the local level.

 

Economic Calendar for the Week of Dec 8 – Dec 12

 Date Time (ET) Release For Consensus Prior Impact
W
Dec 10		 10:30 Crude Inventories 12/6 NA –3.689M Moderate
W
Dec 10		 14:00 Federal Budget Nov –$59.0B –$135.2B Moderate
Th
Dec 11		 08:30 Initial Unemployment Claims 12/6 295K 297K Moderate
Th
Dec 11		 08:30 Continuing Unemployment Claims 11/29 2.350M 2.362M Moderate
Th
Dec 11		 08:30 Retail Sales Nov 0.4% 0.3% HIGH
Th
Dec 11		 08:30 Retail Sales ex-auto Nov 0.2% 0.3% HIGH
Th
Dec 11		 10:00 Business Inventories Oct 0.3% 0.3% Moderate
F
Dec 12		 08:30 Producer Price Index (PPI) Nov –0.1% 0.2% Moderate
F
Dec 12		 08:30 Core PPI Nov 0.1% 0.4% Moderate
F
Dec 12		 09:55 Univ. of Michigan Consumer Sentiment Dec 89.5 88.8 Moderate

 

Mortgage Qualifications Ebb & Flow

Carl Setzer

Since the beginnings of “the financial crisis”, lending rules tightened massively. I’ve been hearing that these criteria have been loosening, at least slightly. Then I have these message in my inbox:

 

Loans

 

Not Tax

 

Though getting lending more accessible is desperately important to rebuild the housing market, I don’t want to see a return to the “fog the mirror” qualification process.

 

My sincerest hope is that we can find some type of middle ground. However, society and pendulum swings are massive forces to be dealt with.

Real Estate

Carl Setzer1 Comment

As I’m looking over a statistical analysis of the active properties in Snohomish County, there are a few details that I find interesting.

  1. 5+ bedroom homes are selling quite fast (averaging 83 days on market)
  2. They’re selling faster than 3 bedroom homes (89 days)
  3. In third place are 4 bedroom homes at 94 days
    1. I would’ve expected them to sell faster than 5+…
  4. 2 bedrooms are the slowest sellers at 134 days on market
  5. Condos are selling faster than houses
    1. 2 bedroom condos are averaging 55 days
    2. 3 bedrooms are going in 58 days

It’s good to see condos taking off. I would expect the lack of inventory has been driving that. With all the details, though, involved in closing a condo, I’m surprised they’re closing faster.

Go figure!