October 9, 2007

Housing Sales Slump

Examines the effect of slumping sales on the Northwest housing market.

Rent vs. Buy: Tips from Kathleen Miller at Miller Advisors, Inc.

• Your house purchase is first as a home and second as an investment.
• Buy the house you can afford now.
• Evaluate your net cash flow in both renting and buying scenarios.
• Consider the impact of tax savings, interest rate changes and emergency fund needs.
• Consider associated costs of location and commute, today and in the future.
• If you purchase, hold for at least five years.
• Mortgage Calculator: http://www.bankrate.com/brm/mortgage-calculator.asp

Northwest Home Sales Slow, But Prices Hold
By Amy Phan

On the national scale, the housing market is at its worst slump in 16 years, and the financial future looks even dimmer with tighter credit and pending foreclosures. Here in the Pacific Northwest , home sales have slowed, but prices are holding steady. In fact, August prices saw a modest increase of .2%.

The housing market here is buoyed by an influx of mostly well-paid workers, according to Leslie Williams, President of Williams Marketing. Williams said the area is estimated to have a net migration of 40,000 people per year through 2010, with half of the increase in King County .

“So that means between now and 2010, we'll have 48 new households forming everyday, seven days a week, 365 days a year,” explained Williams.

Still, there has been a significant slowing in housing sales. Home sellers are seeing their for sale signs out 53% longer than they did last year, and that's given buyers some leverage they haven't had for years in Seattle's hot real estate market.

“It can definitely mean some good things for buyers. They can approach these sellers and negotiate. They can discuss some prices,” said realtor for John L. Scott Mark Tillman.

For buyers, it means being patient. Sandra Wikson expected her Newcastle house to be sold in three months, not the six months—and counting—her house has been on the market.

“I honestly thought we had three or four months because it's an amazing house, but it's been longer, and it may go through to next year,” said Wikson.

Tillman suggests sellers need to study the real estate market within their area and recognize that the things have changed.

“Six months ago, this problem didn't exist. But today, the market is different,” Tillman explained.

CEO Spotlight

Robert E. Story, Jr., President of Seattle Financial Group and Vice Chairman of Mortgage Bankers Association, provides local and national perspective on the sub-prime fallout in the mortgage industry.

Smart Money

Financial Advisor Kathleen Miller explains the trade-offs of renting versus buying a home.

Bulls and Bears

Market analyst William Smead discusses the impact of the housing downturn on investments.

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