http://tomderose.com/en-usFri, 03 Feb 2012 13:08:00 GMT10GDRSSFeeds v1.0http://tomderose.com/blog/2012/02/03/home-buying-could-soon-beat-home-renting<div>In the past few years, falling home prices have sent many would-be buyers to the sidelines. However, record low interest rates and rising rents may soon prompt some of them to take a second look at buying. Much of the decision to buy a house still depends on your personal finances and preferences, your career or family life, or level of financial security. But if you’re comparing just the cost of owning and renting, buying a house may soon be the better choice.<img style="width: 385px; height: 238px" alt="" align="left" src="http://tomderose.com/images/rent_vs_own.jpg" width="385" height="238" /><br /> Until recently, home ownership was no bargain compared to renting.&nbsp;&nbsp;However, a&nbsp;33 percent drop in home prices, a plunge in mortgage rates and 15 percent rise in rents since the housing crash has evened the scales. Today, the median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check. If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.<br /> </div> <div>But that analysis doesn’t include the total cost of owning versus renting. A full accounting includes&nbsp; closing costs, maintenance, insurance and property taxes, tax savings from mortgage deductions, gains or losses from home equity, among other factors. Renters have to think about broker fees and future rent hikes. Both have to make assumptions about future trends in housing prices and rents.</div> <div>&nbsp;</div> <div>When you take those factors into account, someone who plans on staying put for seven years would come out ahead by about $9,000 if they bought a median-priced home rather than being a tenant in a median-priced rental.&nbsp;This&nbsp;calculation assumes that rents keep rising by about 3 percent a year and that house prices stay flat in 2012 and 2013 and begin rising in 2014 at about 3 percent a year. If house prices fall further, all bets are off. In that case, the renters come out ahead.</div> <div>&nbsp;</div> <div>Even if these assumptions are accurate, there won't be a buying stampede. Most first-time buyers or households who lost a&nbsp; home to foreclosure don’t have the down payment. They may also have trouble getting a mortgage without a credit score of 700 or more — a higher bar than the 650 score that was the norm for the past two decades. A large share of the population has dropped out of the pool of potential buyers. Given that the choice between owning and renting a home is a luxury than many Americans simply do not have, the fact that this does appear to be the time to buy will have only a minimal effect on actual sales.</div><P><a href="http://tomderose.com/blog/2012/02/03/home-buying-could-soon-beat-home-renting" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/02/03/home-buying-could-soon-beat-home-renting#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/02/03/home-buying-could-soon-beat-home-rentingFri, 03 Feb 2012 13:08:00 GMThttp://tomderose.com/blog/2012/02/01/searching-for-a-home<div>There are many options for finding a home to buy. The easiest, and most comprehensive, is to go to a real estate website and do a search. You can use mine, or any other realtor's site, or any of the national sites. You can search by city, price range, location in a particular area (map search). Some sites all for more search criteria. This search will privide you with a list of all homes currently listed for sale with a realtor.</div> <div>&nbsp;</div> <div>Another good way to find a home is to drive around where you think you want to live and look for yard signs. This is a great way to look for homes because you find homes where you want to live, and you see the home, not just pictures of the home, and the context in which the home is situated--what is around it. You can record the address of homes that interest you and search for additional information on the internet. Or you can call a realtor and ask for additional information. </div> <div>&nbsp;</div> <div>Most homes have open houses, usually Sunday in Bellingham (Saturday in Lynden and Mt Vernon). It's great to tour several open houses in an afternoon. You get a great sense of each home and can compare one to the other. You are free to walk around each home and grounds. Take your time to determine if it fits you.</div> <div>&nbsp;</div> <div>You can contact a realtor, tell him or her what you are looking for. The realtor will do a comprehensive search and can email the resultant listings to you based on your search criteria. </div> <div>&nbsp;</div> <div>If you like any of the homes you've seen, call me, or another realtor, to make appointments to see the homes. The realtor can provide you with all sorts of information about the homes you want to see--what has sold like it recently and for how much, what other similar homes are on the market, how long the home has been on the market, and so on.</div><P><a href="http://tomderose.com/blog/2012/02/01/searching-for-a-home" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/02/01/searching-for-a-home#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/02/01/searching-for-a-homeWed, 01 Feb 2012 11:49:00 GMThttp://tomderose.com/blog/2012/01/31/obtaining-financing-to-buy-a-home<div>If you think you want to buy a home, one of the first steps to take is to talk to a mortgage loan officer. You can talk to one at a bank or credit union where you have an account. Or contact me and I'll give you the names of the loan officers that I consider to be the best in town. And when getting a loan these days, you want a good loan officer. To get a mortgage, you need income history, a good credit rating, cash for a down payment and closing costs, and an income to debt ratio that indicates you can afford to have a mortgage and make payments. </div> <div>&nbsp;</div> <div>Lenders require paperwork that documents every facet of your financial life: taxable income, assets, rent payments and more. Here's a list of items you may need to document income.</div> <div>&nbsp;</div> <strong> <div><strong>All Borrowers</strong>:<br /> - Uniform Residential Loan Application (form 1003). This form is completed by the applicant and the lender. It is used to provide information on the type of mortgage, property, borrower, borrower's employment, borrower's income and expenses, borrower's assets and liabilities.&nbsp; <br /> - Last 1 year of your W-2's, 1099's (2 years if 100% financing USDA) <br /> - Last pay stub,&nbsp; indicating year to date earnings (30 consecutive days) <br /> - Last 2 months complete official bank and investment statements. <br /> - Homeowner's insurance agent name and number <br /> - Current mortgage statement(s) <br /> <br /> <strong>Self Employed</strong>:<br /> - Last year's complete business and personal Tax Returns (including all schedules) <br /> - Year-to-date Profit and Loss statement, prepared by CPA and signed by applicant <br /> </div> <div><strong>Home Purchase Information<br /> </strong>- Copy of signed Purchase and Sale agreement <br /> </div> <div>&nbsp;</div> <div><strong>Additional Items that May Be Neded</strong>:<br /> - If divorced in past 2 years,&nbsp;copy of divorce decree <br /> - Copy of current rental/lease agreements on all rental property owned <br /> - Copy of Social Security card(s) <br /> - Military:&nbsp;Certificate of Eligibility and DD214 </div> <strong></strong></strong> <div>&nbsp;</div> <div>The following information provides details for some of the items listed above.</div> <div><br /> <strong>Bank, investment and tax documents<br /> </strong>Borrowers generally must supply bank and investment account statements for the last 30 days.&nbsp;</div> <div>&nbsp;</div> <div>Borrowers also must sign IRS Form 4506-T, which allows the lender to get a transcript of the tax return from the IRS. This practice "has become an industry standard as fraud prevention," says Brad Blackwell, national sales manager at Wells Fargo Home Mortgage. Don't try to amend a prior year's tax returns to show more income. That's now a no-no.</div> <strong> <div><br /> <strong>Profit-and-loss statement<br /> </strong></strong>Self-employed borrowers may have to submit a current-year profit-and-loss statement, especially if the year is more than half over or they haven't filed their prior year's tax return. <br /> <br /> <strong>Gift letter, paper trail<br /> </strong>Borrowers who receive a cash gift toward their down payment should be prepared to provide a letter from the "giftor" that declares the gift isn't a loan. A copy of the giftor's bank account statement showing the funds, a canceled check and the borrower's own statement showing the funds also may be required. <br /> <br /> <strong>Other documents, letters<br /> </strong>Renters must supply 12 months of canceled rent checks and bank statements showing the rent was paid on time. Renters without that documentation can provide the landlord's name and contact information for payment verification. </div> <div><br /> <strong>Loan documentation tips</strong></div> <ul> <li>Bring in documents early. Doing so can speed up the process. (loan officers tell me that getting docs from buyers slows the process more than any other step). Also, never cross out, white-out or alter any information on a document.</li> <li>Always provide every page of every document -- even the pages that say "This page is blank."</li> <li>Remain ready to supply updated documents.</li> <li>Documents expire after 60 days, So if homebuyers take a long time in their house-hunting effort,&nbsp; they will have to bring the most current paycheck and that type of thing. </li> </ul><P><a href="http://tomderose.com/blog/2012/01/31/obtaining-financing-to-buy-a-home" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/31/obtaining-financing-to-buy-a-home#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/31/obtaining-financing-to-buy-a-homeTue, 31 Jan 2012 11:29:00 GMThttp://tomderose.com/blog/2012/01/30/where-to-live-in-bellingham<div>When you decide to buy your first home, your first decision may be where you'd like to live. (maybe&nbsp;your first thought may be:&nbsp;"what can I afford" or "can I afford to buy a home"--more information on this in a future post). <br /> </div> <div>&nbsp;</div> <div>You may chose to live in Bellingham. If you do, click <a href="http://tomderose.com/index.cfm/page/62771/Living_in_Bellingham.html" target="_blank">information on Bellingham</a>. This web page contains information on schools, arts, recreation, and other.&nbsp; </div> <div>&nbsp;</div> <div>Also, you have a choice of 21 distinct neighborhoods in Bellingham from which to chose. Click <a title="Bellingham Neighborhoods" href="http://tomderose.com/index.cfm/page/52134/Bellingham_Neighborhoods.html" target="_blank">information on neighborhoods in Bellingham</a>. The information is on the Bellingham Neighborhoods tab of this website. </div> <div>&nbsp;</div> <div>You may chose to live in other nearby communities such as Ferndale or Lynden. Do a Google search for any city to obtain information about it. </div> <div>&nbsp;</div> <div>Or, you may decide that you want some land around you. There are parcels of land--one, two, five or more acres from which to chose. Most of these parcels are outisde of Bellingham. Each parcel tends to be unique. The best way to find a home with land is to look at what's for sale. Contact me if you'd like to receive a list of properties that are currently available. </div><P><a href="http://tomderose.com/blog/2012/01/30/where-to-live-in-bellingham" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/30/where-to-live-in-bellingham#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/30/where-to-live-in-bellinghamMon, 30 Jan 2012 15:13:00 GMThttp://tomderose.com/blog/2012/01/29/first-time-buyers-what-you-need-to-know<div>A series of entries will be posted this week on information useful to first time buyers (and any buyers for that matter):</div> <ul> <li>Choosing where to live</li> <li>Choosing the kind of home you will want to buy</li> <li>Seeking financing, becoming qualified for a mortgage</li> <li>Searching for a home, working with a real estate broker</li> <li>Making an offer on a home, negotiating price</li> <li>You have an accepted offer, not what</li> <li>Inspection</li> <li>The process to closing and taking possession of your home </li> </ul><P><a href="http://tomderose.com/blog/2012/01/29/first-time-buyers-what-you-need-to-know" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/29/first-time-buyers-what-you-need-to-know#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/29/first-time-buyers-what-you-need-to-knowSun, 29 Jan 2012 10:41:00 GMThttp://tomderose.com/blog/2012/01/18/distressed-home-sales-in-2011<div><strong>"Distressed" Home Sales in Bellingham 2011</strong></div> <div>&nbsp;</div> <div>Many home buyers have asked me about buying a short sale home or a bank owned home. These buyers have heard that they can get a great deal by buying a "distressed" home--either short sale or bank owned (foreclosure). </div> <div>&nbsp;</div> <div>The first graph shows that 804 homes (residential, existing) were sold in Bellingham in 2011. Of this total, 649 were not distressed, 94 were short sales, and 56 were bank owned (foreclosures). Therefore,19% of all homes sales, 150,&nbsp;last year were distressed sales.&nbsp;Distressed home sales account for&nbsp;quite a big percentage of all home sales. </div> <div><img style="width: 504px; height: 107px" alt="" align="left" src="http://tomderose.com/images/sales_2011.jpg" width="504" height="107" /></div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;The second graph shows the median sale prices of homes sold in 2011:</div> <ul> <li>median sale price for all homes was $260,000</li> <li>median sale price for all non-distressed homes was $285,000</li> <li>median sale price for all short sales was $209,000</li> <li>median sale price for all bank owned homes was $191,000. </li> </ul> <div><img style="width: 249px; height: 293px" alt="" align="left" src="http://tomderose.com/images/median_sale_price_2011.jpg" width="249" height="293" /></div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>Obviously, the median sale price of distressed homes is considerably below the median sale price of non-distressed homes. Based on experience, the difference in sale price has to do with the following factors:</div> <ul> <li>distressed homes may have differred maintenance or been abused.</li> <li>distressed homes are sometimes rented and not managed very well leading to rough treatment by tenants</li> <li>nearly all bank owned homes are vacant for a long time, sometimes an entire year. This can result in mold in the house and other issues (homes don't do well when they are vacant, especially when vacant through the winter).</li> <li>many distressed homes would be in the lower price ranges even if they were not distressed </li> </ul> <p>In answer to the buyers' question about getting a deal on a distressed home. The answer is a qualified "yes". Generally, when a home is priced below what its market value should be, it's for a reason. And often with distressed homes, the reason is that the home has significant issues such as mold. However, in many cases, the issues are cosmetic and a buyer willing to fix the cosmetic stuff can get a great deal on a home. Even if the house has to be gutted, it still may be a good deal. Drywall is relatively inexpensive. Opening walls and installing new drywall isn't necessarily a reason for not buying a home if it is priced accordingly.</p><P><a href="http://tomderose.com/blog/2012/01/18/distressed-home-sales-in-2011" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/18/distressed-home-sales-in-2011#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/18/distressed-home-sales-in-2011Wed, 18 Jan 2012 15:34:00 GMThttp://tomderose.com/blog/2012/01/17/factors-related-to-condo-association-dues-hoa<div>When buying a condo, it's important to consider condo association dues (HOA). The dues can be a substantial part of your expenses. They always are at least an expense to factor in when considering buying a condo.&nbsp;</div> <div>&nbsp;</div> <div>HOA dues vary widely. Some $300,000 condos have HOA dues of $160/month. Some $300,000 condos have HOA dues of $300/month or more. Some 1000 ft condos have HOA dues of $160/month; some are over $400/month. </div> <div>&nbsp;</div> <div>HOA dues typically cover the cost of some utilities--water, sewer. Some cover cable. Some cover heating. All cover the cost of maintenance and upkeep. This includes the cost of landscaping, upkeep on common areas--hallways, window washing, parking, club house/room. HOA dues cover the cost of repairs of all exterior surfaces. And all associations must keep some reserve funds for unexpected expenses--roof leak, basement leak, broken window, etc. Many associations hire a property manager or management company to oversee maintenance and upkeep. This can be a substantial part of expenses.&nbsp;</div> <div>&nbsp;</div> <div>One of the problems facing condo owners these days is that HOA dues were based on the market value of the condo when it was built--typically in the early to mid 2000s. A $500,000 condo with $400/month HOA dues was not unreasonable. But now that condos have decreased in price, that $500,000 condo may have a market value of $325,000, but the HOA dues are still the same. Buyers may balk at $400 dues on a $325,000 condo, and they often do.</div> <div>&nbsp;</div> <div>When buying a condo, be sure to factor into your costs the HOA dues. They can amount to thousands per year, easily $5000/year. That becomes a substantial outlay associated with home ownership. Also keep in mind that the dues cover some utilities that you don't have to pay separately. And the dues also cover exterior and common area maintenance that you don't have to think about.</div><P><a href="http://tomderose.com/blog/2012/01/17/factors-related-to-condo-association-dues-hoa" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/17/factors-related-to-condo-association-dues-hoa#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/17/factors-related-to-condo-association-dues-hoaTue, 17 Jan 2012 11:11:00 GMThttp://tomderose.com/blog/2012/01/16/condos-for-sale-in-bellingham-january-2012<div>Currently there are 132 condos for sale in Bellingham. They range in price from $84,000 to over a million. The map below shows there locations.</div> <div>&nbsp;</div> <div><img align="left" src="http://tomderose.com/images/condos_for_sale_2012.jpg" width="473" alt="" /></div><P><a href="http://tomderose.com/blog/2012/01/16/condos-for-sale-in-bellingham-january-2012" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/16/condos-for-sale-in-bellingham-january-2012#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/16/condos-for-sale-in-bellingham-january-2012Mon, 16 Jan 2012 16:02:00 GMThttp://tomderose.com/blog/2012/01/15/condo-sales-in-bellingham-july-december-2011<div>&nbsp;</div> <div>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<strong> list price &nbsp; &nbsp;sale price</strong></div> <div>1251 Nevada St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $97,900 &nbsp; &nbsp; $60,250&nbsp;</div> <div>4239 Wintergreen Cir &nbsp; $85,000 &nbsp; &nbsp; $76,000</div> <div>1306 Orleans &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $84,900 &nbsp; &nbsp; $76,490</div> <div>3401 Redwood Ave &nbsp; &nbsp; &nbsp; $119,900 &nbsp; $79,250&nbsp;</div> <div>4225 Wintergreen Cir &nbsp; $89,900 &nbsp; &nbsp; $89,900</div> <div>1370 Orleans St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$99,000 &nbsp; &nbsp; &nbsp;$93,000</div> <div>4244 Wintergreen Cir &nbsp; $115,000 &nbsp; $100,000</div> <div>2303 Michigan St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $125,000 &nbsp; $100,000</div> <div>3333 Redwood Ave &nbsp; &nbsp; &nbsp; $103,950 &nbsp; $101,500&nbsp;</div> <div>1251 Neveda Street &nbsp; &nbsp; &nbsp;$129,950 &nbsp; $102,000</div> <div>3700 Alabama &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $125,000 &nbsp; $107,000&nbsp;</div> <div>639 W Horton Wy &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $144,900 &nbsp; $109,000</div> <div>901 N Forest St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$115,000 &nbsp; $110,000&nbsp;</div> <div>690 32nd St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$135,000 &nbsp; $115,000</div> <div>3700 Alabama St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $127,500 &nbsp; $116,000</div> <div>819 High St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $127,000 &nbsp; $116,500</div> <div>4234 Wintergreen Cir &nbsp; $124,900 &nbsp; $120,000</div> <div>512 Darby Dr &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$124,900 &nbsp; $120,000</div> <div>1028 Indian St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$145,000 &nbsp; $125,000</div> <div>1031 N State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$148,000 &nbsp; $130,000</div> <div>3700 Alabama St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $129,000 &nbsp; $130,000</div> <div>2347 Michigan St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $179,000 &nbsp; $134,000</div> <div>690 32nd St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $165,000 &nbsp; $134,900</div> <div>921 High St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $199,900 &nbsp; $138,500</div> <div>4257 Wintergreen Cir &nbsp; $150,000 &nbsp; $138,500</div> <div>901 N Forest St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$155,000 &nbsp; $139,900</div> <div>251 W Bakerview Rd &nbsp; &nbsp; $149,900 &nbsp; $142,000</div> <div>4626 Celia Wy &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $150,000 &nbsp; $144,000</div> <div>5030 Festival Blvd &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$169,900 &nbsp; $149,500</div> <div>5076 Festival Blvd &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$157,900 &nbsp; $150,000</div> <div>5030 Festival Blvd &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$165,000 &nbsp; $150,000</div> <div>2700 Old Fairhaven Pkwy$163,500 &nbsp; $150,000</div> <div>910 Harris Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$169,000 &nbsp; $150,500</div> <div>960 Harris Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$165,000 &nbsp; $158,000&nbsp;</div> <div>4035 Eliza &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$164,500 &nbsp; $160,000</div> <div>251 W Bakerview Rd &nbsp; &nbsp; $164,900 &nbsp; $161,500</div> <div>1310 10th St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$219,900 &nbsp; $170,000</div> <div>1233 Northwind Cir &nbsp; &nbsp; &nbsp; &nbsp;$219,000 &nbsp; $170,000</div> <div>4148 Deemer Rd &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$189,900 &nbsp; $172,500</div> <div>4949 Samish Wy &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $181,000 &nbsp; $173,000</div> <div>3993 Gentlebrook Lane $249,500 &nbsp; $175,000</div> <div>375 Tremont Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $180,000 &nbsp; $175,000</div> <div>414 Boulevard &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $199,950 &nbsp; $175,000</div> <div>541 W Kellogg Rd &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $179,900 &nbsp; $177,450</div> <div>363 Tremont Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $199,900 &nbsp; $182,000</div> <div>414 Boulevard Dr &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$189,000 &nbsp; $186,000&nbsp;</div> <div>&nbsp;2914 Pacific St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$205,000 &nbsp; $190,000</div> <div>924 N Garden St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$220,000 &nbsp; $190,000</div> <div>2331 Fir St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $229,500 &nbsp; $198,000</div> <div>1224 Harris Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$215,000 &nbsp; $202,000</div> <div>2236 W Birch St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$215,000 &nbsp; $205,000</div> <div>3429 Deer Pointe Ct &nbsp; &nbsp; &nbsp; &nbsp;$224,000 &nbsp; $209,000</div> <div>3595 S Grace Lane &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$235,000 &nbsp; $210,000</div> <div>509 Clover Lane &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $219,000 &nbsp; $215,000</div> <div>1342 Whatcom St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $229,000 &nbsp; $218,000</div> <div>1405 Cowgill Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$244,900 &nbsp; $224,900</div> <div>5056 Festival Blvd &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$269,000 &nbsp; $225,000</div> <div>1400 Whatcom St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $229,000 &nbsp; $225,000</div> <div>705 N State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $269,999 &nbsp; $235,000</div> <div>4553 Village Dr &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $250,000 &nbsp; $235,000</div> <div>2407 Princeton Court &nbsp; &nbsp; &nbsp;$289,000 &nbsp; $239,000</div> <div>4659 Wade St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $265,000 &nbsp; $242,500</div> <div>4877 B N Village Lane &nbsp; &nbsp;$249,900 &nbsp; $244,000</div> <div>3111 Newmarket &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $244,000 &nbsp; $244,000</div> <div>1014 11th St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$273,000 &nbsp; $250,000&nbsp;</div> <div>2729 Cody Cir &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $269,900 &nbsp; $250,000</div> <div>1014 11th St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$259,888 &nbsp; $250,000</div> <div>2743 Cody Cir &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $264,900 &nbsp; $252,500</div> <div>720 11th St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$269,500 &nbsp; $257,800</div> <div>1354 A E Village Lane &nbsp; &nbsp; $265,000 &nbsp; $265,000&nbsp;</div> <div>1243 Northwind Cir &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$324,900 &nbsp; $280,000</div> <div>510 S State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $337,950 &nbsp; &nbsp;$330,000</div> <div>1101 McKenzie Ave &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$389,000 &nbsp; &nbsp;$355,000</div> <div>431 N State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $525,000 &nbsp; &nbsp;$425,000</div> <div>313 S State &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$549,900 &nbsp; &nbsp;$450,000</div> <div>231 S State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$700,000 &nbsp; &nbsp;$599,000</div> <div>1314 Twelfth St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $1,095,000 &nbsp; $820,000&nbsp;</div> <div>507 Bayview Dr &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $1,050,000 &nbsp; $915,000</div> <div>472 S State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $995,000 &nbsp; $995,000</div> <div>472 S State St &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; $1,350,000 $1,200,000&nbsp;</div><P><a href="http://tomderose.com/blog/2012/01/15/condo-sales-in-bellingham-july-december-2011" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/15/condo-sales-in-bellingham-july-december-2011#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/15/condo-sales-in-bellingham-july-december-2011Sun, 15 Jan 2012 10:15:00 GMThttp://tomderose.com/blog/2012/01/11/housing-imperils-job-gains<div><strong>Housing Price Slump Keeps Workers Who Want to Relocate Tethered to Their Homes</strong> <div>The prolonged U.S. housing bust is threatening to claim yet another victim: the nascent recovery in the labor market. New data released showed just how bad the housing market remains. Home prices in 20 major metropolitan areas fell 3.4% in October from the previous year, according to the S&amp;P/Case-Shiller Home Price Index. It was the 13th consecutive month for year-to-year decline. </div> <div>&nbsp;</div> <div>The job market, by contrast, has finally been showing signs of improvement. The unemployment rate fell to 8.6% in November, the lowest level in more than 2&#189; years, and recent weekly reports have suggested the trend continued in December. Furthermore, more and more companies are hiring and have plans to hire soon.</div> <div>&nbsp;</div> <div>The problem is that workers who have to move to a different part of the country in order to start a new job can't leave their home.&nbsp;In many cases, they owe moer on thier home than they can sell it for. In order to sell, they have to write a big check that they can't afford to write. So they can't leave their home, can't more to secure their job, and therefore, stay put. &nbsp;</div> </div><P><a href="http://tomderose.com/blog/2012/01/11/housing-imperils-job-gains" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/11/housing-imperils-job-gains#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/11/housing-imperils-job-gainsWed, 11 Jan 2012 14:07:00 GMThttp://tomderose.com/blog/2012/01/10/possible-influences-on-housing-in-2012<div>(from the Wall St. Journal)<br /> What does 2012 hold for the housing market? For one, the story will be local. While many housing markets rose together during the boom and fell together during the bust, they're exiting the downturn at different speeds, and so it's not very useful to talk about a "national" housing market.</div> <div>With that caveat in mind, here is&nbsp;a look at five key issues that will help determine whether prices stabilize and sales improve in the coming year:<br /> 1. <strong>Confidence and jobs</strong>: The housing market badly needs the economy to add more jobs to stimulate demand for home purchases and to prevent mortgage delinquencies from rising. The good news is that with prices down by 30% from their peak and mortgage rates at their lowest recorded levels, housing is more affordable than it has been in decades. But many would-be buyers are worried about buying today if prices are going to be lower tomorrow. Others don't want to buy a house until they have more evidence that they're not going to get laid off or see their hours cut back.</div> <div>2. <strong>Foreclosures</strong>: Whether home prices hit a floor this year also relies on how banks manage a huge overhang of foreclosed homes that they haven't yet taken back and resold. Banks and other mortgage investors own around 440,000 foreclosed properties, but there's another 3.4 million loans in foreclosure or serious delinquency. Because banks are faster to cut prices to unload inventory than are mom-and-pop sellers, home values can fall further as the share of distressed sales rises.This is one reason why policymakers at the Federal Reserve and elsewhere are talking about converting some of those foreclosed homes into rental properties. </div> <div>3. <strong>Rents</strong>: Apartment rents are rising as vacancy rates drop to levels that are already lower than the low point in 2006 during the previous economic cycle. If low mortgage rates aren't enough to give urgency to would-be buyers, rent hikes could accelerate buyers' decisions to take the plunge.<br /> 4. <strong>Mortgage credit and rates</strong>: Federal policymakers have taken extraordinary steps to keep mortgage rates low and federal-backed entities are responsible for backing nearly nine in 10 new mortgages. But it's still hard for many buyers to get a loan because banks are demanding lots of documentation of borrowers' incomes, and appraisals are tanking some deals. When appraisals come in below agreed upon sales prices, sellers must drop prices or buyers must put down more cash. Banks will need to put their legacy-loan problems behind them before there's much easing in lending standards. Other wildcards remain on the lending and rates front: will the Federal Reserve initiate another round of buying mortgage-backed securities--a step known to some as "quantitative easing"--to lift the economy? Will continued litigation and demands that banks buy back defaulted loans from mortgage titans Fannie Mae and Freddie Mac lead them to be more stingy with mortgage credit? And will other lenders move in to fill that void? Will the government do more to juice up refinancing programs? Will rates rise as the government attempts to draw back private capital by raising the fees that Fannie and Freddie charge to lenders?<br /> 5. <strong>Regulation</strong>: Many analysts don't expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012. Dodd-Frank Act lending rules that have yet to be spelled out by regulators will influence how banks price loans that are bundled and sold into securities. Another set of rules will determine how banks must satisfy provisions for them to determine that a borrower has the ability to repay a mortgage. Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments. This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency.</div> <p>&nbsp;</p><P><a href="http://tomderose.com/blog/2012/01/10/possible-influences-on-housing-in-2012" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/10/possible-influences-on-housing-in-2012#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/10/possible-influences-on-housing-in-2012Tue, 10 Jan 2012 09:50:00 GMThttp://tomderose.com/blog/2012/01/06/good-news-in-home-salesThe National Association of Realtors released its pending home sales index figure last week, and for the second month in a row, the index is up. What's more, the index has broken 100. That's significant because the only other time the index has hit 100 in recent years is when the home buyer tax credit was available. "It is the natural, organic power of great affordability conditions and job creation that is bringing the index level up," says NAR Chief Economist Lawrence Yun. "This is a very encouraging sign." <br /><P><a href="http://tomderose.com/blog/2012/01/06/good-news-in-home-sales" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/06/good-news-in-home-sales#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/06/good-news-in-home-salesFri, 06 Jan 2012 16:48:00 GMThttp://tomderose.com/blog/2012/01/04/first-time-buyers-and-investors-lead-home-sales-part-4<div><strong>Blame&nbsp;the Real Estate Recovery&nbsp;on the&nbsp;Echo Boomers</strong></div> <div>Long-term real estate trends are strongly influenced by demographics and the buying cycle. New generations buy certain kinds of real estate as they age.</div> <div>&nbsp;</div> <div><strong>Apartment Rentals</strong></div> <div>The leading edge of the echo baby-boom generation, born from 1976 to 2001, will be moving into apartments and stimulating the demand for rental properties. As you can see in the graph below, this cycle began in 1998, took off in 2002, and will peak around 2015. Because there is very little new construction, rental properties will come from investors buying owner-occupied homes and turning them into rentals. </div> <div><img style="width: 275px; height: 216px" alt="" align="left" src="http://tomderose.com/images/25.5_yr_birth_lag_01.jpg" width="275" height="216" /></div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div><strong>Starter Home Buying</strong> </div> <div> <div>The demand for starter homes by baby boomers made for one of the hottest real estate markets in the 1970s and 1980s. As we can see in the graph below, the demand for starter homes by the echo boomers began around 2009 and will continue to be vigorous for quite some time. This market activity was curtailed by the poor economy in the past few years, but seems to be moving ahead and the buying cycle suggests. </div> <div><img style="width: 276px; height: 226px" alt="" align="left" src="http://tomderose.com/images/33_yr_birth_lag_01.jpg" width="276" height="226" /></div> </div><P><a href="http://tomderose.com/blog/2012/01/04/first-time-buyers-and-investors-lead-home-sales-part-4" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/04/first-time-buyers-and-investors-lead-home-sales-part-4#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/04/first-time-buyers-and-investors-lead-home-sales-part-4Wed, 04 Jan 2012 16:30:00 GMThttp://tomderose.com/blog/2012/01/03/first-time-buyers-and-investors-lead-home-sales-part-3<div><strong>Buyers Are Turning into Renters</strong> <div>Renting continues to&nbsp; be more competitive,and rental rates continue to rise.&nbsp;Vacancy rates continue to be very low. Here are data that show why investors are buying homes and condos and converting them into rental units in Bellingham. </div> <div>&nbsp;</div> <div>The number of single-family homes sold in Whatcom County in 2010 was 2,014, the lowest annual total since 1987. The peak year was 2004, when 4,454 were sold. The median price for those homes sold in 2010 was $255,000, the lowest annual total since 2004.</div> <div><br /> In 2010 Bellingham permits provided a net gain of 67 residential units, way below any year in the past quarter century. To provide context, five years ago Bellingham had a net gain of 1,723 residential units, the vast majority (1,485) coming from either condos or apartments. The annual average net gain of residential units between 2000 and 2009 was nearly 768 units. </div> <div>&nbsp;</div> <div>The most popular price point in 2010 was in the $226,000-to-$250,000 range, which had 248 sales. At the $150,000-and-under range, 168 homes sold in 2010, down from 186 in 2009.</div> <div>&nbsp;</div> <div>The number of condos sold locally in 2010 totaled 357, the lowest annual number of units since 2000. The median price of those units sold was $189,900, about the same as 2009. Nearly two-thirds of those condo units sold in 2010 were in Bellingham.</div> <div>&nbsp;</div> <div>At these relatively low prices for homes, investors can buy them and rent them and expect a reasonable cash flow and return on their investment. </div> </div><P><a href="http://tomderose.com/blog/2012/01/03/first-time-buyers-and-investors-lead-home-sales-part-3" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/03/first-time-buyers-and-investors-lead-home-sales-part-3#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/03/first-time-buyers-and-investors-lead-home-sales-part-3Tue, 03 Jan 2012 13:42:00 GMThttp://tomderose.com/blog/2012/01/02/first-time-buyers-and-investors-lead-home-sales-part-2<div><strong>Demogrqphic Characteristics of Home Buyers</strong></div> <div>First time home buyers accounted for 50% of all home sales in 2010. Record affordability and the first-time home buyer tax credit are both largely responsible for this. The share of first time single male buyers was 15%. The share of single female buyers was 23%. Married couples accounted for 48% of first time buyers. The median age of first time buyers was 30 in 2010. The largest share of first time buyers was between 25 and 34 years of age. </div> <div><img style="width: 448px; height: 237px" border="0" hspace="5" alt="" vspace="5" align="left" src="http://tomderose.com/images/first_time_buyers_1.jpg" width="448" height="237" /></div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>Some people believe that first time buyers and investors will lead the housing recovery, that all recoveries in the past were lead by first time buyers and investors. The argument for the increase in first time buyers is that they are the first to feel confident about the recovering economy. That feeling of confidence is coupled with relative low cost of homes--home are way more affordable for first time buyers than they have been in many years. </div> <div>&nbsp;</div> <div>My personal experience supports this belief in first time buyers gaining confidence and wanting to buy their home. They no longer want to rent. They recognize the good prices on the market. They are confident about their work situation--job stability and good income. </div><P><a href="http://tomderose.com/blog/2012/01/02/first-time-buyers-and-investors-lead-home-sales-part-2" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2012/01/02/first-time-buyers-and-investors-lead-home-sales-part-2#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2012/01/02/first-time-buyers-and-investors-lead-home-sales-part-2Mon, 02 Jan 2012 13:22:00 GMThttp://tomderose.com/blog/2011/12/29/first-time-buyers-and-investors-lead-home-sales-part-1<div><strong>We May Be Headed for a Recovery in the Economy and in Real Estate Sales&nbsp;</strong></div> <div>This is the first entry in a series on what appears to be the beginning of a recovery in the economy and in real estate. Of course, as I've said elsewhere on this blog, we won't know if we are really in a recovery until several months into it. Then we can look back and see that "yes, in fact, we are in a recovery". </div> <div>&nbsp;</div> <div>However, there are numerous indicators that suggest a recovery is underway: unemployment is decreasing, new claims for unemployment are decreasing, companies are hiring and plan on hiring more people, sales during the Christmas season were up from last year, Europe is making some progress with its economic problems, people seem to be more positive about the economy and their personal finances. </div> <div>&nbsp;</div> <div>This series of entries will look at several topics related to a recovery in the real estate market: </div> <ul> <li>first time buyers,</li> <li>investors,</li> <li>cyclical trends in real estate. </li> </ul> <div><img style="width: 74px; height: 84px" border="0" hspace="5" alt="" vspace="5" align="left" src="http://tomderose.com/images/first_time_buyers.jpg" width="74" height="84" />First time home buyers are beginning to enter the market. These buyers are not lured into buying by Federal programs. Rather, they appear to be confident in their own economic condition, they are recognizing good prices in the market place, interest rates are 4%. They are deciding they want to own rather than rent. <br /> </div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div><img style="width: 76px; height: 90px" border="0" hspace="5" alt="" vspace="5" align="left" src="http://tomderose.com/images/investors.jpg" width="76" height="90" />Investors are buying homes to put them into the rental market. Because so many would-be home buyers have not purchased homes, and because there has been very little new construction of rental property, the rental market is very strong. Bellingham has what is close to a zero vacancy rate. Investors are seeing this and buying homes for rentals. </div> <div>&nbsp;</div> <div>&nbsp;</div> <div>Thirdly, there appears to be a cyclical trend in real estate. This trend is the result of the age of dominant generations at any time. For example, baby boomers are going into retirement, selling their big homes, and buying smaller homes. This is "soft science" at best but appears to hold true in the past 60-80 years. And the theory behind the trend predicts that we are in a recovery.</div> <div>&nbsp;</div> <div>&nbsp;</div><P><a href="http://tomderose.com/blog/2011/12/29/first-time-buyers-and-investors-lead-home-sales-part-1" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/29/first-time-buyers-and-investors-lead-home-sales-part-1#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/29/first-time-buyers-and-investors-lead-home-sales-part-1Thu, 29 Dec 2011 14:47:00 GMThttp://tomderose.com/blog/2011/12/22/happy-holidays<div>Everyone have a wonderful Christmas and great New Year. I will be devoting time to family, friends, skiing, eating. On January 1 look for the first of an upcoming series of entries on what appears to be a recovering real estate market, and a recovering economy. Yahoo. What could be a nicer gift for 2012. </div> <div>Tom </div> <div>&nbsp;</div> <div><img style="width: 192px; height: 153px" alt="" align="left" src="http://tomderose.com/images/Christmas.jpg" width="192" height="153" /></div><P><a href="http://tomderose.com/blog/2011/12/22/happy-holidays" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/22/happy-holidays#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/22/happy-holidaysThu, 22 Dec 2011 12:55:00 GMThttp://tomderose.com/blog/2011/12/20/condo-owners-lament-part-3<div><strong>Waiting to Rent or Sell, Summary</strong></div> <div>Some condo associations maintain a list of owners want to rent. In one association, the complex's waiting list of owners who want to rent is at 39, compared with zero in 2004. Condo associations don't want the percentage of rentals to go too high. They don't want it to turn into a renter community. Some have a hardship policy in place. Owners have to be almost destitute to be on the list. Some associations patrol for owners who rent units out of turn. </div> <div>&nbsp;</div> <div>Real estate attorney Seth Weissman questions the basis of lenders' concerns when it comes to mortgage loans --- the notion that renters are detrimental to a condo community. "You could live on a street where 100 percent of the homes are rented, and when you go to apply for a mortgage, no one is asking you, 'Well how many rentals are on the street of this single family home?' " he said. However, Weissman hasn't seen any movement on the federal level, or among private lenders, that really address the problem. That keeps&nbsp;condo owners&nbsp;waiting to sell or reach the top of the leasing waiting lists. </div> <div>&nbsp;</div> <div><strong>Postscript</strong></div> <div>Somone just commented to me: "this latest series of entries is quite negative and you don't offer any suggestions for what to do about it". The purpose of this blog is to educate buyers and sellers about real estate. In this market, some information is negative. Having said that, I will say that sellers of homes or condos in this market must accept the fact that their home isn't worth what it was worth 3 years ago. Some prople who are "upside down" can't afford to sell. But some can. The only good news in this market is that the loss you take on the sale of your home will be offset by what you gain on your next purchase. Home prices are down almost everywhere. If your home is worth 20% less that it was, the home you will buy is also worth 20% less than it was. </div><P><a href="http://tomderose.com/blog/2011/12/20/condo-owners-lament-part-3" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/20/condo-owners-lament-part-3#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/20/condo-owners-lament-part-3Tue, 20 Dec 2011 12:50:00 GMThttp://tomderose.com/blog/2011/12/19/condo-owners-lament-part-2<div><strong>Can't Sell, Can't Rent, Can't Finance</strong> <div>A crucial part of the owner-occupancy cap is the effect it has on securing mortgage loans. Most lending agencies such as Fannie Mae, Freddie Mac and the Federal Housing Authority, have restrictions on the rental ratio because they are wary of lending in what could be an unstable community. However, the FHA sometimes eases its rules to allow loans in communities at least 50 percent owner-occupied. And a Freddie Mac spokesman said there is no owner occupancy requirement if the deal is for a condo in an established community that will be the buyer's primary residence. Lenders that use caps seek information from condo association officers during the loan approval process, and fudging can constitute mortgage fraud --- a felony. </div> </div><P><a href="http://tomderose.com/blog/2011/12/19/condo-owners-lament-part-2" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/19/condo-owners-lament-part-2#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/19/condo-owners-lament-part-2Mon, 19 Dec 2011 12:59:00 GMThttp://tomderose.com/blog/2011/12/17/condo-owners-lament-part-1<div><strong>Can't sell; Can't Rent</strong></div> <div>Most condo associations limit the number of leases; and in turn, many condo owners feel trapped.&nbsp;For example,&nbsp;owners of a studio condo bought in 2005 while students: With plans to start a family, they haven't been able to sell --- even after dropping the price. If they owned a single-family home, their choice would be a no-brainer: rent it out and move on. But like so many other&nbsp;condo owners, they can't do that because of a condominium association rule that limits how many units in a development can be rented. Such rental caps, typically 25 to 50 percent, are intended to ensure mostly owner-occupied communities. Lenders often won't make loans for condos in communities where rental caps are exceeded. And in fact, many lenders themsleves limit rentals to 50%. So in today's tough market, the caps can leave condo owners with no options.</div> <div>&nbsp;</div> <div>Owners of another condo are No. 33 on a waiting list to rent their home, up from No. 45 three years ago. They tried to get a hardship approval from their condo board association to lease their space but were denied because they can pay their mortgage and aren't moving because of a job transfer. These owner's dilemma is shared by others, stuck in a condo they haven't been able to sell and can't rent under the rental cap rule. Similarly, another condo owner has been waiting nearly three years for a chance to rent out her condo. "Here I am, stuck in a condo that I don't want to live in anymore, unable financially to sell it, blocked from renting it by my homeowners' association," she said. "I find myself in a darned if you do, darned if you don't situation."</div> <div> <p>Most condo association boards want to balance maintaining an owner-occupied community ... but they also don't want to penalize or harm their members who are in tough spots financially. However, many boards are allowing hardship leases because the alternative is a likely foreclosure.</p> </div><P><a href="http://tomderose.com/blog/2011/12/17/condo-owners-lament-part-1" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/17/condo-owners-lament-part-1#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/17/condo-owners-lament-part-1Sat, 17 Dec 2011 16:09:00 GMThttp://tomderose.com/blog/2011/12/13/rental-housing-part-8<div><strong>The Outlook, Summary</strong></div> <div>&nbsp;As the economic recovery takes hold, rental demand is likely to remain strong thanks to the aging of the echo-boom generation into young adulthood--the years when they are most likely to form independent households. The recession has apparently led many young adults to delay living on their<br /> own, given that the percentage of households with additional adults (persons age 18 and older other than the household head and spouse) was up 0.9 percentage point in 2008-9. This translates to 1.1 million households, which may even underestimate the extent of doubling up because surveys <br /> may miss transient residents. As job growth picks up, more of those under age 30 should head out on their own and add to rental demand. </div> <div><br /> Although the baby boomers will not contribute much to overall rental demand, they will change the age composition of the renter population. With substantial growth in the number of elderly renters, demand for housing that meets their needs--including subsidized rentals--will increase accordingly.</div> <div><br /> Future immigration trends will also affect growth in rental households. Immigrants tend to be young adults, and foreignborn households of all ages are more likely than native-born households to rent. After slowing during the 2000s for the first time in more than 30 years, immigration will likely rebound once the economy picks up steam. Stricter government controls may, however, keep future inflows below pre-recession levels.</div> <div><br /> Attitudes about homeownership are another unknown. The ongoing weakness in house prices appears to be making renters wary about buying. In addition, a multitude of other factors--including impaired credit from the foreclosure crisis and deep recession, stricter mortgage underwriting standards, and continued uncertainty about the direction of the economy--make renting a more common choice. Nevertheless, with home price declines and low interest rates pushing affordability<br /> indexes to record levels, homebuying activity could siphon off some rental demand.</div><P><a href="http://tomderose.com/blog/2011/12/13/rental-housing-part-8" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/13/rental-housing-part-8#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/13/rental-housing-part-8Wed, 14 Dec 2011 14:14:00 GMThttp://tomderose.com/blog/2011/12/12/rental-housing-part-7<div><strong>Erosion of the Affordable Supply</strong></div> <div>New construction helps to keep the rental supply at sustainable levels not only by meeting the needs of additional households, but also by replacing losses from the aging stock. However, newly constructed units are usually more expensive than existing ones, which drives up the average overall cost of rental housing. In 2009, construction and land costs for units in new multifamily structures averaged about $110,000, and the median asking rent was $1,067. To be affordable to the median renter in 2009 (at the 30-percent-of-income standard), however, the rent would have to be much lower at $775 or less.</div> <div><br /> At the same time, many lowest-cost rentals are being permanently lost from the stock, largely because the rents they earn cannot cover the costs of adequate maintenance. In fact, despite the net addition of 2.6 million rentals, the number of units with rents of $400 or less in 2009 inflation-adjusted dollars fell from 6.2 million in 1999 to 5.6 million in 2009. Many of the losses were due to demolition and other forms of permanent removal. By 2009, nearly 12 percent of the low-cost rentals that existed in 1999 had been lost--twice the share for units renting for $400-799, and four times the share of units renting<br /> for $800 or more (see graph). Many of the low-cost rental units that remain are in older, more at-risk buildings.</div> <div><img alt="" align="left" src="http://tomderose.com/images/low_cost_rentals.jpg" width="409" /></div> <div>&nbsp;The growing number of low-income renters adds to the pressure on the affordable stock. Between 2003 and 2009, the number of renters with very low incomes (below 50 percent of area medians) jumped from 16.3 million to 18.0 million. Meanwhile, the number of housing units that were affordable to households at that income level, in adequate condition, and not occupied by higher-income renters fell from 12.0 million to 11.6 million. The affordable housing shortage for this group thus widened sharply from 4.3 million to 6.4 million units.</div> <div><br /> The shortage of affordable rentals was even more acute for extremely low-income renters (earning less than 30 percent of area medians). In 2003, there was one affordable, available, and adequate unit for every 2.5 extremely low-income renters. By 2009, one unit existed for every 2.9 such renters. As the rental market continues to tighten and the competition for low-cost housing intensifies, the gap between the demand for, and supply of, affordable rentals will only increase.</div><P><a href="http://tomderose.com/blog/2011/12/12/rental-housing-part-7" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/12/rental-housing-part-7#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/12/rental-housing-part-7Mon, 12 Dec 2011 12:05:00 GMThttp://tomderose.com/blog/2011/12/10/rental-housing-part-6<div><strong>Multifamily Mortgage Markets</strong></div> <div>Multifamily lending surged from 1998 to 2008, nearly doubling in volume from $430 billion to $830 billion in real terms. By 2009, though, lending activity slowed to a trickle as delinquency and foreclosure rates soared and credit markets tightened. Performance has been particularly dismal for loans held<br /> in commercial mortgage backed securities (CMBS), where the share of delinquent or foreclosed loans doubled from about 7 percent in 2009 to 14 percent in 2010. In stark contrast, the share of troubled multifamily rental loans is 5 percent for banks and thrifts, and just 1 percent or less for Fannie Mae,<br /> Freddie Mac, and FHA. </div> <div><br /> The climb in multifamily loan delinquencies has led to stricter underwriting standards, especially among private lenders. According to the Federal Reserve survey of senior loan officers, standards for multifamily and commercial real estate loans started to tighten in 2005 as mortgage markets began to implode. </div> <div><br /> With private lenders restricting the flow of credit, the GSEs and FHA have accounted for nearly all of the growth in multifamily lending since 2008. From the fourth quarter of 2007 to the fourth quarter of 2010, their share of outstanding multifamily debt was up 30 percent. In fact, the multifamily loan volume for Fannie Mae and Freddie Mac more than doubled over the past decade, making them the largest lender in the market. FHA also expanded its multifamily lending substantially, bringing the total volume to nearly $11 billion in 2010 and accounting for nearly 25 percent of the market last year. With this increase, the number of rental units financed with FHA support tripled from about 49,000 in 2008 to more than 150,000 in 2010. </div> <div> <p>Fannie Mae and Freddie Mac, however, cannot guarantee construction loans and have therefore been unable to prop up lending in this market segment. The limited availability of funding for acquisition, development, and construction (ADC) financing may slow the development of rental housing as demand picks up. The credit crunch has been particularly tough for smaller builders, who generally have more difficulty securing ADC financing because they rely primarily on local banks for loans. Large commercial builders, in contrast, can access credit from capital markets. 52 percent of smaller builders (with less than $1 million in revenues) had put multifamily rental projects on hold until the financing climate improves, compared with 35 percent of larger builders with more than $5 million in revenues.</p> <p>Nonetheless, fewer firms are now delaying new multifamily construction projects. From the third quarter of 2009 to the fourth quarter of 2010, the overall share of respondents putting projects on hold fell from 57 percent to 43 percent. FHA may be helping to support this rebound, having raised its multifamily lending for new construction and substantial rehabilitation nearly four-fold, from $1.0 billion to $3.8 billion, between fiscal years 2008 and 2010.</p> <p>With vacancy rates falling and rents increasing by late 2010, cash flow and property values are improving for the first time in years. The National Council of Real Estate Investment Fiduciaries (NCREIF) reports that net operating income for apartments rose 8.7 percent from the fourth quarter of 2009 to the fourth quarter of 2010. And Moody's/REAL commercial property price index indicates that, although still 27.6 percent below their 2007 peak, apartment prices jumped 19.7 percent from the trough in the third quarter of 2009 to the fourth quarter of 2010. With this turnaround, multifamily delinquencies and foreclosures may recede and owners may find it easier to refinance or extend their loans. Although the multifamily mortgage market is still weighed down by thousands of distressed loans, burgeoning demand for rentals should bring better credit conditions for developers.</p> </div><P><a href="http://tomderose.com/blog/2011/12/10/rental-housing-part-6" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/10/rental-housing-part-6#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/10/rental-housing-part-6Sat, 10 Dec 2011 10:55:00 GMThttp://tomderose.com/blog/2011/12/08/rental-housing-part-5<div><strong>Additions to the Rental Supply </strong></div> <div>Despite the recent growth in rental demand, new multifamily production has lagged. Completions of rental units in multifamily structures (with two or more units) dipped to their lowest level in 17 years, totaling just 124,000 in 2010 after averaging 224,000 per year from 2000 to 2008.</div> <div>&nbsp;</div> <div>But not all rental housing is in multifamily structures. In fact, single-family homes make up a significant--and growing--share of the stock. Switching of single-family units from the for-sale inventory to the rental stock not only provides needed housing for renters, but has also helped to stabilize the homeowner market by reducing the excess vacant supply. Between 2005 and 2009, the net addition of 1.7 million households lifted the single-family share of occupied rentals from 31.0 percent to 33.7 percent. Moreover, about 22.6 percent of the 2009 singlefamily rental stock had been owner units just two years earlier.</div> <div>&nbsp;</div> <div>Overall, the shift of units from the owner to the rental market has more than offset the slump in new construction, explaining why vacancy rates rose despite the falloff in production and the significant influx of renters. Additions to the rental stock from existing owner units have soared since 2005, exceeding 1.8 million from 2007 to 2009 and far outpacing the number contributed by new construction.</div> <div><br /> <img style="width: 317px; height: 181px" alt="" align="left" src="http://tomderose.com/images/rental_units.jpg" width="317" height="181" /></div> <div>&nbsp;Although multifamily rental completions declined in 2010, production may be about to revive. After bottoming out in 2009 at just 92,000 units, a low not seen since World War II, multifamily rental starts picked up slightly to 101,000 units in 2010. While a promising upturn, last year&#239;--starts were less than half the 232,000 units averaged each year in 2000-8, and even further below levels in the 1980s and 1990s.</div> <p>&nbsp;</p> <p>The recovery in multifamily production is already spreading to a broad range of metros. In fact, markets in some of the states hardest hit by the foreclosure crisis posted some of the largest increases in multifamily permits in 2010, including San Jose, Los Angeles, and Miami. Other metros that saw a large jump in permits were Seattle and Chicago.</p><P><a href="http://tomderose.com/blog/2011/12/08/rental-housing-part-5" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/08/rental-housing-part-5#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/08/rental-housing-part-5Thu, 08 Dec 2011 11:37:00 GMThttp://tomderose.com/blog/2011/12/07/rental-housing-part-4<div><strong>Rents</strong></div> <div>Rents appear to be on the rise. After flattening in 2009, nominal rents began to increase in the second half of 2010. Rent concessions (free or discounted rent incorporated into the lease term) also dropped from 7.6 percent to 5.2 percent of asking rents over the course of last year. Similarly, nominal rents for professionally managed properties with five or more units (adjusted for concessions) were up 2.3 percent from the fourth quarter of 2009 to the fourth quarter of 2010, outpacing overall price inflation and partially offsetting the 4.1 percent drop in the previous year.</div> <div><br /> While the overall trend in rents is positive, increases vary across the country. The largest gains are in metropolitan areas with some of the highest rents and lowest vacancy rates. In traditionally tight markets such as New York, San Jose, and Washington, DC, nominal rents climbed by more than 5 percent in 2010. In contrast, the average increase was just 1.7 percent in the West and 2.5 percent in the South. These regions are home to the only 3 metro markets (of the 64 tracked) where average rents actually fell last year: Las Vegas, Fort Myers, and Tucson.</div><P><a href="http://tomderose.com/blog/2011/12/07/rental-housing-part-4" target="_blank">Permalink</a> | <a href="http://tomderose.com/blog/2011/12/07/rental-housing-part-4#comments" target="_blank">Comments</a></P>Tom DeRosehttp://tomderose.com/blog/2011/12/07/rental-housing-part-4Wed, 07 Dec 2011 18:07:00 GMT