Investors

Residential Housing Statistics in King County December 2009

I was just asked this week how is the Real Estate Market in King County since I mentioned earlier about Snohomish County. Well here is information which was requested about King County. Northwest Multiple Listing Service (MLS) reported as following statistics for Dec 2009. Jan 2010 stats will be published in the coming weeks. We still got 21 months of inventory in King County while Snohomish County got 19 months of inventory of homes for sale. UNITS ACTIVE PENDING SOLD DEC 09 UNITS 6,918 1,413 1462 DEC 08 UNITS 8,707 911 929 Total Unit +/- -1789 502 533 Difference DEC % -20.55% 55.10% 57.37% YTD 09 UNITS 33,744 23,019 16,022 YTD 08 UNITS 38,889 18,895 15,991 Total Unit +/- -5145 4124 31 Difference YTD % -13.23% 21.83% 0.19% As seen above chart, Residential active listings units dropped 20.55% from 8707 units in 2008 to 6918 units in December 2009 while Pending Residential units increased 55.10%, as Dec 09 pending listings were 1413 units compare to 911 units in December 2008.  There is a huge increase in sold units at 57.37%, 1462 units closed in 2009 vs 929 units in 2008.  Snohomish County Sold... 

Residential Housing Statistics in Snohomish County December 2009

What is going on with the real estate market in Snohomish County? As being a Snohomish County resident and a Real Estate Agent, I feel as I need to share the factual numbers which are published every month by Northwest Multiple Listing Service (MLS)  with my clients. I often get calls from my active buyers asking “when to buy”. My sellers are asking me “when you sell”. Each party wants to know how long to wait before pulling the trigger.  My answer is “when it is the right time for you, your budget and your family”.  Each person has a different life event that calls to buy or sell real estate. Northwest Multiple Listing Service (MLS) reported as following stats for Dec 2009. ACTIVE PENDING SOLD DEC 09 UNITS 3,533 628 654 DEC 08 UNITS 4,362 455 346 Total Unit +/- -829 173 308 Difference DEC % -19.01% 38.02% 89.02% YTD 09 UNITS 15,025 9,979 6,644 YTD 08 UNITS 17,483 7,693 6291 Total Unit +/- -2458 2286 353 Difference YTD % -14.06% 29.72% 5.61% As seen above chart, Residential active listings units dropped 19.01% from 4362 units in 2008 vs 3533 units in 2009 for the month of December while Pending... 

Historic Downtown Snohomish Living

As the Antique Capital of Northwest, Snohomish, WA is home to nearly 450 antique dealers. Snohomish, with a population of 9145, was founded in 1859 and is listed in  National Register of Historic Places. This quaint river-side towne is famous for its Historic Homes and Gardens. Snohomish architecture contains a delightful variety of styles.  As an example, Blackman House is a must see. A Dutch colonial style with Queen Anne Towers, it is located on the corner of Fourth Street and Avenue D. Snohomish architectural collections reflect Queen Anne Victorians, English Tudors and Dutch Colonials as a testament to the diversity of Snohomish pioneer residents. Historic Homes Tour are offered for those who appreciate a stroll among gorgeous historic homes.  Snohomish Garden Club held its 25th Annual Snohomish GardenTour on July 26th 2009 featuring gorgeous gardens among Historic Snohomish Homes on a lovely Sunday afternoon.  Do not miss this Summer’s 2010 Garden Tour. Historic Downtown was a busy hub for milling, timbering and farming in 1860s. Today, there are delightful varieties of charming shops on First Avenue where visitors can take a day and…   Discover antiques, collectibles... 

Investor 101: Putting it All Together

Putting the Basic Factors Together Sorry it’s been so long since the discussion about debt service coverage ratios, but it’s now time for the next part. In determining how you evaluate potential commercial projects/acquisitions, there are many factors including but not limited to: the capitalization rate aka cap rate; debt service coverage rates; cash flows; expenses; and deferred maintenance. Each one of these are important to the evaluation of not only the merits of purchasing but also whether or not it is a good short and long term investment. Since the criteria will vary depending on the project type (i.e. multi-family under or over 4 units, retail commercial, warehouse, mixed-use) specific criteria and how to evaluate them will be more thoroughly covered in the 201 series. In a previous blog, I related how easy it is to alter the value of properties by a more liberal cap rate than will be utilized in the appraisal. This means the cap rate is lower than it should be, with the result being a higher value than what may be used by the appraiser. Another way to alter the value is to not show the vacancy rate or all of the expenses. This has the effect of showing an artificially... 

Heating Bills a Thing of the Past?

I’m pretty sure if the power company offered you a month off from paying your bill, you’d say yes. It might not happen tomorrow, but according to an article I just read in a Sierra Club magazine, in a few decades looks like large power bills will be a thing of the past. As we all know, it’s possible to build homes and offices that will not only be energy self-sufficient, but will produce zero carbon emmissions. In the short run this might be more costly to build (which is why some elements of the building industry look on the movement to increase energy efficiency requirements in building standards with dismay) but in the long run it will more than pay you back for the investment… in other words, save you money. So where a Green-Built house might cost you however thousand dollars more now, it will more than pay you back over time in utility bill savings. So how do we make it practical and attractive not only to spend the $ up front for long term savings, but to include the more than 100 million homes and offices we already have in the new technologies that result in these long-term savings? Looks like the plan is in place. Economically it makes sense to retrofit.... 

5 Reasons Buyers Fail With Fixers

"Here lies Walter Fielding. He bought a house, and it killed him." These days, it is all too easy for  inexperienced buyers to become obsessed with getting the “best deal”.   I’m talking about  the “weekend warrior” buyer- the one who watches countless hours of HGTV shows that make it seem plausible that someone could seek out, purchase, remodel and flip a home for 25% profit in 30 minutes, or less. The “Hey, I bet I could do that, too!” type of buyer… There are lots of ways to cut costs when house-hunting. Buying fixers, frontier homes or former meth-labs has always been popular for those hoping to save money, and these days, short-sales and foreclosed (REO) homes are whetting the appetites of aspiring “investors” all across the country.  Certainly, there are good deals out there to be found, and there are smart ways a savvy buyer can save money. The seemingly-endless series of books, seminars, and TV shows based on that premise can attest to that.  However, in my experience as a real estate professional I have witnessed, first-hand, more than a few common mistakes that I think are worth pointing out.... 

What is a Buyer’s Agent and Why Do I Need One?

WHAT IS A BUYER’S AGENT AND WHY DO I NEED ONE?   Q:  How do Buyers’ Agents Get Paid?   A:  Their services are free to the Buyer.   Q:  How does that work?   A:  When the Seller’s Agent signs a listing agreement with the Seller, they negotiate a commission.  They then offer a part of that commission, usually half, but it varies, to the Buyer’s Agent.  This is listed in the Agent part of the MLS.  So when a Buyer chooses a home and purchases it, the total commission is subtracted from the Seller’s side of the totals, and is paid out to the Seller’s Agent and the Buyer’s Agent.   Q:  But if the Buyer’s Agent gets paid by the Seller, do they really work for me?    A:  Good question!  Actually the Washington State laws have changed.  It used to be that both parties worked for the Seller!  Even though you might pick out your own agent to tour and help you, they would still be obligated to guard the best interest of the Seller of any property you saw.  That was deemed unfair to the Buyer and the law has been changed.  The Buyer’s Agent by law owes the Buyer confidentiality and fiduciary loyalty… i.e. has a responsiblity... 

AMAZING lodge for sale in Chilliwack, BC

I was up in the Vancouver BC area last week and my friend Laura Howren took me with her to see a property she just listed in Chilliwack. For those of you who aren’t familiar with the area, it’s a city in the Fraser Valley region in BC about an hour and a half away from Vancouver (home to the 2010 Winter Olympics!!) with an abundance of recreational activities…hiking, fishing, golfing, water sports, you name it. This log home is currently a short term executive rental, rented out on a nightly or weekly basis, and is in a perfect location as it’s only 35 minutes to Harrison Hot Springs and 25 minutes to Cultus Lake, a popular camping destination. Think 26′ ceilings with ceiling-to-floor windows that take advantage of light, beautiful Hans Rhodes natural rock fire place, large recreation room in the daylight basement and a private master suite on the upper level…it’s literally the perfect Getaway! With the exchange rates today at $1.08, with US dollars it’s like getting an 8% discount right off the top of the purchase price. The listed price is $969,000 and the home has 3 bedrooms, 3 bathrooms, about 2600 sqft and is just shy of 2.5 acres,... 

Investor 101: What is a Debt Service Coverage Ratio?

Why do I need to know about the Debt Service Coverage Ratio? In the course of purchasing commercial property or large multi-family properties, investors will run into the “Debt Service Coverage Ratio” (DSCR) and wonder what exactly does it do and why is it so important to the lending institutions.  First of all, the DSCR is a quick measure of how many times the Net Operating Income(NOI) covers the debt payment.  Normally, most lending institutions want the coverage to be between 1.20:1 – 1.25:1 or in other words the NOI must be high enough to cover the debt payment on either an annual level or monthly level by 20%-25% more than the payment.  This is to ensure that the property makes enough money to pay the debt with some leeway for one-time expenses.  If you have a variable rate, the lending institutions will also “stress test” the calculation to see at what point changes to the  interest rate will cause the ratio will fall below what is acceptable for them.  Since most banks do not have a long term commercial real estate loan product, this is important for them to know as the loan terms may change every 3 – 5 years.  Now the calculation... 

Bank Owned Homes for Sale in Queen Anne

These days there is an interesting niche among available properties, and that is Bank Owned properties.  A client of mine that previously purchased a condo for his kids asked me to be on the lookout for a good deal as he needs a bigger home.  There are a lot of well-priced homes on the market right now as those who were hit by the slow-down in sales in the winter are making an attempt to be the “best, lowest priced” property in the neighborhood.  But in my experience, Bank Owned properties are usually among the lowest priced, and it doesn’t stop there as we can still negotiate.  Some are as-is although they have to put them in condition for a lender to approve a loan, which means no safety hazzards.  Often they are just fine, not even fixers, but usually could use a little “TLC” whether it’s a new coat of paint on some of the walls or some more extensive upgrades.  The price reflects the bank attitude that it will be the problem of the new owner.  We still do all the research on comparables to make sure we understand a fair value for the property, but it’s one of the best places to know you are going to find a lot of opportunity to get... 

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