Home Market Update

The Standard & Poor/Case-Shiller home-price index released on Tuesday showed a glimmer of hope for the Seattle area housing market. The Seattle metropolitan home market saw a slight increase in the month of April. The index tracks data in 20 large U.S. cities, and Seattle’s data showed higher prices than data compiled for February and March. However, experts say this doesn’t mean much for the Seattle housing market. Seattle’s prices are still down 6.9% from last year, and the index as a whole showed a slight fall in prices.

Are Seattle Families Getting Smaller?

How do Seattle’s families compare to those in other U.S. Cities? To put it simply, they’re smaller. New census data shows that Seattle has the smallest-size families among 50 big U.S. cities. Moreover, we have the third highest amount of single living and the third-highest rate of “unrelated people living together”, according to a Seattle Times article. Because of the considerably weak housing market and flourishing rental market, families are purchasing homes out of King County, yet a high degree of solo Seattlites stay. Read more about the latest census data by checking out the full article.

Is this title misleading? Real Estate Sales Up in King County

If you skimmed the Seattle Times on Wednesday you might think so. Yesterday, I turned to this business section of the Seattle Times and saw the real estate article with the title: "Pending home sales fall as credits vanish." I was surprised with the title because the residential real estate market has been relatively strong at least in transactions that our company has brokered since the second half of last year. In addition, agents had recently reported to me that they had been losing houses for their clients to multiple offers, and this is after the market was suppose to slow down with the sunset of tax credits on April 30th. So the title seemed odd, and then I looked at the graphs and sales in June 2010 compared to June 2009 are up in all the areas listed in King County except Seattle. Sales in Seattle were down 6.2% (560 from 597), but up on the Eastside +25.8% (638 from 507), North King County + 29.6% (70 from 54), Southwest King County 12.8% (194 from 172) and Southeast King County 29.7% (406 from 313). So the title could be anything: "Sales up over last year"; "Real Estate market still strong"; etc. The paper decided to go in a different direction. In the end, the title was correct. The data backs up what the title states, so I cannot fault the Times, especially when I saw another local paper put the same spin on the numbers. Still, it made me think of the saying: "Figures lie, and liars figure."

High Property Taxes?

I read an article which had a summary of high property taxes on Forbes entitled "Where Americans Pay Most in Property Taxes" with a subtitle "A national look at the county-level costs levied by Uncle Sam." I thought the title and subtitle were both misleading. While I think the title is technically correct, it is misleading because it is based on taxes paid rather then the percentage of tax compared to the home value. So it is skewed towards counties where the value of the homes is high. So for example all the counties they highlighted in the "West" where in California (mostly in the Bay Area) where home values are very high, but then when I did a quick calculation I saw that the percentage based on the value of the home was relatively low (0.5% when as a rule of thumb it is usually around 1% in Seattle: approximately double). Do not get me wrong I think California pays a lot of tax: they have a high income tax and sales tax, but the point being the houses in those counties are worth a lot, thus they pay more property taxes.

As for the subtitle, I always thought Uncle Sam represented the federal government. Property taxes are levied by local governments; therefore, I do not think Uncle Sam has much to do with it.

Mortgage Market Stabilizing?

According to CNNMoney, the mortgage market may have started to turn around finally due to some new statistics that showed fewer borrowers delayed their payments on mortgages in the last three months of 2009. In 2009, the percentage of mortgage loans that were late was at 9.64%, which have fallen to 9.47% in the fourth quarter (National Delinquency Survey). Economic and real estate analyst’s say this is only a slight change, but this change does show a reduction in mortgages heading towards the foreclosure process.

National Average Mortgage Rates: (Provided by Bloomberg.com)

30-year Fixed: 5.09
15-year Fixed: 4.51
30-year Fixed Jumbo: 5.93
15-year Fixed Jumbo: 5.44

*These rates should not be relied on. Talk to your mortgage broker, bank, etc. for more information on interest rates.

Found it!

Here is the article I was looking for. Like I said in the previous post, the article basically says that Seattle's real estate market is in better shape than most because of our strict building standards and our geography (surrounded by water) limited the over building when compared to other cities.

See link for the entire article: http://www.businessweek.com/magazine/content/09_26/b4137033250949.htm