New Increase for VA Loan Limits

New Increase for VA Loan Limits

Last week I reported that the maximum VA loan amount was $359,650 in Kitsap County WA. I’m happy to report that the VA has just increased this amount for Washington and Oregon to $417,000.

This means that our service members if qualified, have a better chance of keeping up with the housing market as prices have gone up significantly over the past year. As a whole Kitsap County home prices have gone up 20%.

VA and FHA Loan Limits in Kitsap County WA

VA and FHA Loan Limits in Kitsap County WA

The VA and FHA loan limits are different throughout the U.S. This is the upper amount that a buyer can go to when using an FHA or VA loan.

VA $359,650
FHA $215,650

For more information about qualifying for a government loan see your Realtor or a Lender.

New Real Estate Loan Limits

New Real Estate Loan Limits

Fannie Mae just raised its loan limits:

Single Family       Was $359,650     Now $417,000
Two Family       Was $460,400     Now $533,850
Three Family       Was $556,500     Now $645,300
Four Family       Was $691,600     Now $801,950

Loans greater than this would fall into the jumbo loan category and will usually require different qualifications and higher interest rate.

Real Estate Statistics for Kitsap County 12/11/2005

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 12/112005

925 Active Listings
49 Homes went Pending last week
51 Average Days on Market

$277,488 Average List Price
$275,681 Average Sale Price

99% List price to sale price ratio

18.9 weeks of inventory

Learn more about Defining Your Market.

Remodeling your home: Cost vs. Value Report

Remodeling your home: Cost vs Value Report

Did you know that on average remodeling your bathroom may recoup 102.2% of your investment? On the other end of the spectrum remodeling your home office may only garner a 72.8% return of your money spent.

Here is a brief list:Bathroom 102.2%
Minor Kitchen Remodel 98.5%
Siding Replacement 95.5%
Adding an attic bedroom 93.5%
Deck addition 90.3%
Basement remodel 90.1%
Window replacement 89.6%
Roofing replacement 84.7%
Family room addition 83.0%
Home office remodel 72.8%

Please note….these are national averages. Contact your Realtor for a copy of Decembers Realtor Magazine which has more detail as well as a break down based on region and city.

Though you may often only consider needing your Realtor when it comes time to buy or sell a home here is an example where they can offer an ongoing service.

Real Estate Statistics for 11/27/2005

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/23/2005

907 Active Listings
32 Homes went Pending last week
51 Average Days on Market

$277,143 Average List Price
$275,382 Average Sale Price

99% List price to sale price ratio

28.3weeks of inventory

Learn more about Defining Your Market.

Existing-Home Sales Show Markets Cooling

Sales of existing homes eased in October, with a moderate decline in both single-family and condo sales, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales—including single-family, townhomes, condominiums, and co-ops – were at a seasonally adjusted annual rate of 7.09 million units in October, down 2.7 percent from September’s pace of 7.29 million. Sales were 3.7 percent above the 6.84 million-unit level in October 2004.

David Lereah, NAR’s chief economist, says markets are getting into better balance between demand and supply. “We are returning to more balanced markets between homebuyers and sellers, one that places buyers on a more even footing. Housing activity has peaked and is coming down a bit, and we expect further cooling in the coming months. We feel confident that housing is landing softly as rates continue to rise.”

The national median existing-home price for all housing types—including single-family, townhomes, condominiums, and co-ops—was $218,000 in October, rising 16.6 percent from October 2004 when the median price was $187,000. The median is a typical market price where half of the homes sold for more and half sold for less.

Total housing inventory levels rose 3.5 percent at the end of October to 2.87 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace.

“The rise in inventory means that buyers will have a wider choice available to them, and the significant price appreciation over October last year shows that demand is still there, as markets continues to balance themselves,” says NAR President Thomas M. Stevens from Vienna, Va. “Buyers know that housing is a good investment,” says Stevens, senior vice president of NRT Inc.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.07 percent in October, up from 5.77 percent in September; the rate was 5.72 percent in October 2004.

Single-family home sales dropped 2.5 percent to a seasonally adjusted annual rate of 6.23 million in October from 6.39 million in September, but were 3.3 percent above the 6.03 million-unit level in October 2004. The median single-family home price was $216,200 in October, up 16.6 percent from a year ago.

Existing condominium and cooperative housing sales fell 4.4 percent to a seasonally adjusted annual rate of 862,000 units from a pace of 902,000 in September. Last month’s sales activity was 6.7 percent above the 808,000-unit level in October 2004. The median condo price was $229,800, up 15.3 percent from a year ago.

Regionally, existing-home sales fell 1.2 percent in the West in October to a pace of 1.64 million, and were 3.8 percent higher than October 2004. The median price in the West was 316,000, up 16.2 percent from October 2004.

Total existing-home sales in the South declined 1.8 percent to an annual sales rate of 2.76 million units in October, and were 7 percent above October 2004. The median price in the South was $196,000, up 18.1 percent from a year ago.

Existing-home sales in the Midwest fell 1.9 percent to annual pace of 1.58 million units in October, and were 1.3 percent higher than a year ago. The median price in the Midwest was $170,000, which was 10.4 percent higher than October 2004.

Total existing-home sales in the Northeast declined 7.4 percent to a pace of 1.12 million units in October, and were unchanged compared to a year ago. The median existing-home price in the Northeast was $252,000, up 10.5 percent from a year ago.


Editor's Note: For more housing statistics, visit NAR’s Economic Research Division at

Access to information like this is one of the benefits of being a Realtor.

Housing Stats for 11/20/2005

Watching stats like these will help you determine what kind of a market you are in.

For Kitsap County Washington as of 11/20/2005

953Active Listings
72 Homes went Pending last week
52 Average Days on Market
$278,189 Average List Price
$275,704 Average Sale Price
99% List price to sale price ratio
13.23 weeks of inventory

Learn more about Defining Your Market

Helping Home Sellers With The Square Footage Question

Your client is ready to buy their dream house, but they question the square footage listed on your flyer and want to know how exactly is was determined. What do you do? And what if it’s inaccurate?
Due to lack of well-defined standards, and always-evolving definitions of square footage, agents typically rely on a previously calculated assessment figure which may have come from a county tax authority, a private appraiser, the seller, or a builder’s blueprints. However, often times, these figures don’t agree.
Due to discrepancies between county, seller and appraiser square footage figures, you should always indicate that the square footage represented in any advertising materials is “approximate” or “deemed reliable but not guaranteed.” If a discrepancy in square footage figures does arise, a buyer should be advised to investigate the sources, and seek advice from a qualified appraiser.
Redmond, Washington real estate appraiser Alan Pope says “square footage is often broken down into “finished” and “unfinished” living space. “Finished” living areas are described as “covered with sheetrock and wallpaper or paint.” A heated area is also a good indicator of finished space. Areas like attics or basements, which are “potentially liveable” are classified as “unfinished.” Finished and unfinished areas are added together for the listed square footage total.”
Square footage is calculated by using the home’s exterior measurements to the
even foot. An appraiser measures the entire perimeter, noting all measurements on a sketch. Many assessors now use a laser measuring device. The appraiser starts with making a sketch of the entire perimeter, delineating “finished” versus “unfinished” at the end of the process.
To calculate area data, the home is broken down into the basic shapes of rectangle, triangle, or circle. The analysis can take fifteen minutes for a rectangular ranch house, or up to three hours for more intricate homes. A conscientious appraiser then adds his or her calculations together to ensure they “compute.” Alan likens square footage calculation to “building a puzzle – from the outside in.”
A few general notes—which may differ by county or state:
  • A split-level entry way is only counted once.
  • Though potentially it could be divided into upstairs and downstairs space, a two-story cathedral ceiling living room is counted once.
  • Areas not directly accessible from finished living space such as storage sheds, breeze-ways, covered patios and detached cottages are never included in the square footage total.
  • Garages are generally not included in square footage figures.
  • Closets in a finished area are included in “livable space,” whereas a furnace closet in the basement would be calculated as “unfinished.”
  • An area with a low ceiling, such as a loft, is measured only where ceiling height is at least four feet.
  • For an attached dwelling such as a condominium, square footage measurements can be made from the inside surface of the wall, with an extra six inches added to compensate.
As an agent, it is important that you do not take a square footage stance. However, if the issue is important to your buyers, they need to make it a condition of purchase, and seek a professional to determine measurements.

Housing Bubble Questions and Answers

In past posts we've discussed the housing bubble. Here is an article I ran accross from the National Association of Realtors.

What is a housing bubble?

As broadly interpreted, a housing bubble refers to an unsustainable gain in home prices. The premise is that a price bubble is at risk of “popping,” resulting in a loss of equity.

Has there ever been a national housing price bubble?

No, not since good recordkeeping began in 1968. There was a national decline in the 1930s during the Great Depression; however, home prices were not a prime concern in that era. The greatest issues were essentials such as food, clothing, employment and shelter of any kind. Declining home prices were a natural result of a general economic collapse caused by the stock market crash in 1929.

What is the “normal” rate of home price growth over time?

Since 1968, the national median existing-home price has increased an average of 6.4 percent per year. However, that includes a period of high inflation. A better frame of reference is in relation to the overall rate of inflation. Home prices typically have increased 1.5 percentage points faster than the rate of inflation, as measured by the Consumer Price Index.

What are the biggest factors that drive home prices?

In simple terms, it gets down to supply and demand. The inventory of homes available for sale has been historically low since 2001, which is why home prices have been rising at above normal rates.

In a balanced market between home buyers and sellers, there typically is a six-month supply of homes on the market. Over the last four years, the supply has hovered around 4.5 months. By contrast, in the recessionary period of 1990-1991, there was in excess of a 9-month supply.

What conditions are necessary for home prices to soften or decline?

Generally, two conditions are necessary for price softness in a given area: an oversupply of homes available for sale, and adverse economic conditions – generally a weak local job market. Sometimes these conditions occur against a backdrop of overall economic weakness, recession or high interest rates.

Where and when have home prices declined in the past? What were the general market conditions?

Most metropolitan areas, especially in the Midwest and South, have not experienced price declines in the era of modern recordkeeping. In the period from the mid-1980s though the early 1990s, many metros in the Northeast and on the West coast saw localized declines. Typically, this occurred in large population centers with very little capacity for growth. When housing shortages developed during a period of high demand, prices grew at sharp double-digit rates – often over 20 percent per year – for several consecutive years.

After local economic conditions declined in those areas, home sales stalled and the inventory of unsold homes rose, which eventually led to price softness or decline.

How long have home prices declined in the past?

Although there are exceptions to any general finding, most metro areas that experienced price declines were relatively short lived (several years). Most homeowners who went through such downturns -- but stayed in their home for a normal period of homeownership -- still netted healthy gains when they sold. People view homeownership as a long-term investment as opposed to the kind of quick-in, quick out investment that Wall Street is fond of. Unlike stocks, homeowners don’t panic sell simply because a home down the street sold for less.

Home prices tend to be sticky on the downside -- usually a single digit decline in any given year following a sustained period of double digit gains. Very few people buy at the top of a market and then sell in a short timeframe. After several years, home prices level and return to normal appreciation patterns.

Should we be concerned that home prices are rising faster than family income?

No. There are three components to housing affordability: home prices, income, and financing costs – the latter are historically low.

During the last four-and-a-half years of record home sales, there has been a shortage of homes available for sale. As a result, home prices during this period have risen faster than family income. However, in much of the 1980s and 1990s, the reverse was true – incomes rose faster than home prices.

On a national basis, according to the Housing Affordability Index published by the National Association of Realtors, a median income family who purchases a median-priced existing home is spending a little over 20 percent of gross income for the mortgage principal and interest payment. In the early 1990s, a typical mortgage payment was in the low 20s as a percent of income, and in the early 1980s it was as high as 36 percent. Overall housing affordability remains favorable in historic terms.

What are the prospects of a housing bubble?

There is virtually no risk of a national housing price bubble, based on the fundamental demand for housing and predictable economic factors. It is possible for local bubbles to surface under the right circumstances, but that also is unlikely in the current environment. There are tight supplies of homes available for sale in most of the country, and labor markets have been improving. In other words, the two conditions necessary for price softness do not exist in most of the country.

The strong underlying demand for homes results from the simple fact that the population is growing faster than the supply of homes. In addition, it is highly unlikely that the cost of construction will decline. In fact, construction material shortages are expected to continue and the cost of building and development is trending up.

Baby boomers remain in their peak earning years. Echo boomers – the children of the baby boom generation – are just entering the period of life in which people typically buy their first home. The echo boom is the second largest generation in U.S. history. Considering the median age of a first-time buyer is 32, echo-boomers will be a big factor over the next decade. In addition, immigration has been strong for many years. Census data shows that immigrants eventually achieve homeownership rates higher than do native born Americans – this also will be a strong factor in housing demand in the future. Also, minority ownership rates have been trending up.

All this means the demand for housing is historically high and is one of the reasons 2005 will be the fifth consecutive year of record home sales. Even in an economic downturn, the demand remains. If conditions become unfavorable, home buying may be postponed, but a general price decline remains highly unlikely.

What is likely to happen with home prices?

The forecast is for mortgage interest rates to rise slowly over the next year, which will have a minor breaking effect on home sales. The good news is that will help inventory levels to recover and allow the market to come into a closer balance between buyers and sellers.

In other words, a general slowing in the rate of price growth can be expected, but in many areas inventory shortages will persist and home prices are likely to continue to rise above historic norms.

Real Estate Stats for Kitsap County WA 11/6/2005

Watching stats like these will help you determine what kind of a market you are in.

For Kitsap County Washington as of 11/6/2005

935 Active Listings
50 Homes went Pending last week
52 Average Days on Market
$276,924 Average List Price
$274,861 Average Sale Price
99% List price to sale price ratio
18.7 weeks of inventory

Learn more about Defining Your Market.

Are you Prepared for a Downturn in the Real Estate Market?

We have become spoiled. Whether real estate agent or real estate seller we have come to rely, even become lazy with this fast paced market. Well times could be changing! Over the past few months, in Kitsap County Washington I’ve noticed the inventory begin to grow. Nothing drastic yet, just a small dust cloud on the horizon. It could be that we are just going into the winter months, could be that interest rates have been moving upward, could be gas prices are high, could be the ¼ hike in prime yesterday……could be a little of a lot of things. None the less a few of the signs are there.
So… does this affect me?

If you are a Seller:
You may not sell your home in 4 days. Historically in Kitsap County 60 days was the norm. Only in the past couple of years have we seen such quick sales. You may not want to over price your homes as much as you have grown accustomed to. In fact if the market turns sharply the worst place you can be is to find yourself chasing the market down. Few Sellers have the guts to cut prices fast enough to get ahead of a falling curve. Make sure you’ve covered the basics: Interview and choose the best agent. Don’t base your decision solely on the lowest commission. Many low commission, low service companies have sprung up in this market and they may not have the resources, momentum or tools to market your home or provide you with the personal service a normal market demands.

If you are an Agent:
Pricing - Have the tough love discussion with your seller about pricing. In the past you may have been able to over price a home by 10 to 15% and get away with it. The theory was to just wait…..the market will rise to meet our price. This is dangerous thinking in a changing market.

Marketing – Get back to basics. Priced right. Staged to the 9s. Host Brokers opens…..feed the ones that are working with the buyers. Make sure you have a good web presence. Take lots of pictures. Write three ads and rotate them in the local paper. Identify and work the top selling agents in your market.

Your own business – In a normal market buyers and sellers do not spring up as perhaps they have been. Again…..get back to basics. Return all calls by the end of each day, call 20 people every day, send thank you notes every day, communicate regularly with everyone in your sphere of influence, work un-represented sellers (there will be more of them…aka FSBO), watch your hot sheets and call expired and withdrawn listings, circle prospect every listing, 50 people, 4 mailings, 4 phone calls.

After having read this post you may think I think the market is falling……not true. In Kitsap County we are due to slow, after all anything is slower compared to the crazy market of this past year. Regardless of why it is a little slow now, as professionals we need to keep our ear to the ground for change in the market. We owe it to our selves and most importantly to our clients not to get caught in a falling market without letting them know. Stay tuned……I promise it will change!!!!!

Real Estate Statistics

Watching stats like these will help you determine what kind of a market you are in.

For Kitsap County Washington as of 10/31/2005

933 Active Listings
51 Homes went Pending last week
51 Average Days on Market
$273,723 Average List Price
$274,119Average Sale Price
100+% List price to sale price ratio
18.29 weeks of inventory

Learn more about Defining Your Market.

Books to Recommend

Over the past week I've had several requests for books that I would recommend. Here is a list of books that I've given to our agents over the past few years as Christmas gifts. As with any book, there are going to be some people who love it, a few that hate it and most who enjoy it. I think I've been able to get everyones attention in one way or another over the years with this list.
Please......let me know what you think and if you have any that you would recommend.

Frankly Reading Book List

Housing Stats 10/23/2005

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/23/2005

890 Active Listings
84 Homes went Pending last week
52 Average Days on Market

$273,981 Average List Price
$273,672 Average Sale Price

100-% List price to sale price ratio

10.59 weeks of inventory

Learn more about Defining Your Market.


I was just cleaning out some old paperwork and found some notes for a class I put on some time ago. Thought I’d share…….

A person’s ability to focus can allow them to accomplish amazing things.

Focus on the right things in the right balance…..Wow!

What sets one real estate agent apart from the others is their ability to focus.

Without your own focus you are just living a life, day to day on someone else’s terms.

So many tasks, so many people, so little time…’s all about focus.

Joining a real estate office......a few thoughts.

The Process: Beware of the broker that does not have a process or is winging it. You will want to meet at least 2 or 3 times before you make a hiring decision. Keep in mind that you are hiring the broker just as much as they are hiring you.

Size of the office:
First off let me define size from my perspective.
Less than 15 agents is a small office. (a high percentage of offices in this country fall into this category)
16-30 is a medium small office.
31-60 is a medium office
61- 80 is a medium large office
81+ in my opinion is a large office
125+ is a Mega office

Size is not as important as energy, synergy or momentum. I’ve seen offices that have 75 agents and feel dead. I’ve also been with offices that have 20 agents that feels totally energized and driven. What you want to see is a balanced office. One that has a few new agents as will as some old timers. Within that group you want to see even earnings. An office in which you have a few big hitters and a bunch of low producers will not work for the long term. Even though our industry has 10% of the agents making 90% of the money you want to try to find a balanced office.

Market Share:
Having a strong market share means momentum for the office. It means business is rolling through the office and that you have a better chance of getting into that business stream. The make up of the office is more important then market share it holds. I know of several offices that are number one in their market place but they are no fun to work in. An office may hold market share only because they have more agents. What is more important is the success per agent. If an office you like has the energy, an enthusiastic manager, the tools to help you ramp up your business but is only ranked #2 or #3 in the market, go for it. If an office is full of energy and growing, market share will take care of it self. I’ve always prided my office in being number 2 in market share, but number one in individual agent production.

New agent training:
Understand one thing going in……It is always up to you. A good broker will give you the tools, teach you the concepts and offer support, but they will not do it for you. You are in business for your self, start thinking that way.

The worst of the brokers will welcome you aboard, shake your hand and say here is your desk, here is your phone, here is the phone book, now get busy. What you are looking for is a company that will offer real tangible support ie:
Post licensing classes
Weekly training
Personal time with the broker
Staff advisor or mentor program
Other agents you can model that are successful

Business Models:
Boutique or single office: This model represents one end of the office spectrum. Can be cozy and friendly though may lack support that a larger office might be able to afford. May be better for an experienced agent.

The true sense of this model means the core company is no longer interested in selling real estate on a day to day business. Not unlike McDonalds, their goal is to sell and open new restaurants, then sell all of the products to support the new franchise. It becomes the mission of your local McDonalds owner to sell burgers. This model seems to maximize the best of the two extremes. (OK so I’m biased. I co-own three offices that fall into this category) Offices in this category are usually owned by local owners. They often own their own buildings, they are the decision makers and can implement changes a lot easier then the corporate model.

We are talking the mentality here not the necessarily the business type. This represents the other end of the spectrum. There is one main office with one owner for a group of offices. Managers in each of the offices must get corporate permission to make decisions or implement new ideas. Top down management with new ideas starting at the top and filtering their way down. Though your image may be enhanced by a consistent marketing message and you will tend to have more tools and services available, you give up flexibility and ability to change.

Be aware that different business models seem to attack different agent types. Get an idea what type of agent is being attracted to the office or company you are interviewing with.

Talk with local escrow officers to get an idea what agents seem to be the most prepared, most professional and seem to do the best job. This may lead you to a company that matches your ideals.

Click here for a list of 10 questions to ask a potential Broker.

10 Questions you will want to ask a Broker Before You Hire Them.

You have just earned your real estate license and now you are looking for a broker and company to work with. Here are 10 questions to ask

1) How long have you been in the business? (The person, not the company)

2) Why are you still in the business?

3) Why did you choose to work for this office and this company?

4) What do you do to help a new agent get started?

5) Thinking of your last 5 new agents that you’ve hired:
a) How many are still at the office?
b) How much did each of them earn so far?
c) What did they do to become successful?
d) May I talk with two of your new agents?

6) Thinking of the agents you have:
a) How many agents are in your office
b) How many do you want?
c) How many have left in the past year?
d) Why did they leave?
e) May I talk with 2 of your experienced agents?

7) What is your business model? How much does it cost me and what do I receive in return?

8) What makes you different from your competition?

9) What do you look for in an agent? What are your expectations of me?

10) When I have a problem or a challenge how do I get your attention? How do I get guidance from you? Evenings, weekends?

The answers to these questions will help you decide whether or not you want to work with this broker. Don’t forget….while they are interviewing you… are interviewing them. You want to make the right decision, the first time.

Now that you have your real estate license.

You have your real estate license…… what???

In the state of Washington a new licensee must place their license with a Broker in order to practice real estate. This can be a daunting decision. How do you choose a broker or company to work with, what do you look for, how do you choose?

Imagine you want to go swimming. You have found a group of indoor pools. You need to figure out which pool you want to jump into. You don’t want just any pool, you want one that is clean, warm, not too crowded, one that has dry towels and nice showers. Sounds easy right……now you have to choose by looking in the windows you can’t actually go in. If you are lucky you might be able to ask some of the swimmers who are leaving the pool. You ask questions to try to get an idea what its like at that pool. You know that once you make the decision you are going to be jumping into the deep end, so you want to make sure you make the right decision, the first time.

Trying to figure out an office to join can be the same way. If you take the time it can be a little easier in that you will want to interview the manager. You will want to talk with several agents who are working for that office. Talk with a couple of long time agents as well as a couple of new ones.

This is not a time for quick decisions, even though the broker may be pushing you to join. I’ve had agents ask me if it is hard to get a job once you have a license. The challenge is not getting a job offer (many brokers will hire you on the first meeting because they just want to put another license on their wall) the challenge is trying to decide why you might want to work for a broker that is so willing to hire you after only one brief meeting.

Click here for a list of books that I recommend to agents just starting the business.

Housing Stats for 10/9/2005

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/09/2005

917 Active Listings
50 Homes went Pending last week
50 Average Days on Market

$271,515 Average List Price
$271,198 Average Sale Price

100-% List price to sale price ratio

18.34 weeks of inventory

Learn more about Defining Your Market.

A Tool For Real Estate Investors

The process of purchasing an investment property can at times seem overwhelming. Especially if it is something you've not done before or only once or twice a year. On the face of it, isn't it just like buying any other house?............No!

You actually use a different side of the brain to process the purchase of an investment property than you do when buying your own home. The motivations, concerns and thought processes are different. In fact there is a whole new language involved. Annual Operating income, Cap Rate, Gross Operating Income, and Cash on Cash are some of the words and concepts that you need to understand to make a sound investment decision. After all you could put your money in a CD, Stocks, Bonds or Mutual Funds. When considering a real estate investment you are asking yourself "Why should I put my money here? Will I do better than if I invest it in something else?"

One way to answer this question is to sit down with a potential investment and break out a piece of paper and a pencil. The upside to this method is that it takes no batteries, electricity or computer (though a calculator would be handy).

A much easier way in my opinion, is to use a software program that you load onto your computer, especially helpful if you are going to compare several properties or investments to each other.

I've come across an excellent program that does just that. It is called Star Analyzer from a company by the name of Wondering Star

Just like any new program it does takes a few minutes to get used to the layout and the information it needs. However once you input your first potential investment it quickly becomes apparent how useful this tool is. It will allow you to input multiple potential real estate investments. It will then compare these to each other, as well as to other financial investments. It is wonderful to input once then use often. You can also play "what if" scenarios. What if I put more down. What if I charge more rent. It will also carry your investment and its returns out into the future so that you can see how much you are making in lets say ten years.

Star Analysis even comes with its own mini investment course as well as a trial period to get you settled in. I highly recommend that you check it out at I use it as I help investors as well as for myself.

See a demenstration:

California Home Prices May Be Moderating (October 6, 2005)

If the CALIFORNIA ASSOCIATION OF REALTORS ®' 2006 forecast proves accurate, home prices in the state will rise at less than half the rate they've gone up during each of the past four years. And that would be good news for homebuyers struggling to attain ownership there.

Only 16 percent of households could afford the median-priced home, which was $540,900 in July, according to CAR. A year ago, the median price was $461,740. In nearly a half dozen regions, only one in 10 households or fewer can afford the median-priced home, CAR says.

But based on the forecast, not all areas of the state will continue to experience the unprecedented double-digit median price increases of the past five years, says CAR Vice President and Chief Economist Leslie Appleton-Young. Some high-cost areas, especially those in the more costly coastal regions, face a potential leveling off of median price gains compared with the 10 percent gain we expect for the state as a whole."

That predicted 10 percent gain caps out at $575,500.The Golden State's perpetual supply-demand imbalance pushed home prices up 25.16 percent in the year ending in the second quarter of 2005, and 109.7 percent in the last five years, according to the Office of Federal Housing Enterprise Oversight.

In California, each year ends with an approximate 50,000 shortfall in housing units, based on the number of new households (250,000) and the number of new housing units constructed (an estimated 200,000 this year), CAR says. CAR economists say the supply-demand imbalance will continue to drive the market, but at a much moderated pace next year.

The association's annual forecast also calls for sales to fall by 2 percent. That's a switch, too. In July, sales were up 1.3 percent compared with July 2004.California's high-cost areas, including the Los Angeles, San Diego, and San Francisco Bay Area markets, could see even higher rates of constrained sales, and home price appreciation less than 10 percent, says Appleton-Young.

By Broderick Perkins for REALTOR Magazine Online

I receive this type of information from The National Association of Realtors about real estate all over the United States. I'll pass it on to you as appropriate.

Housing Stats 10/2/2005

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 10/02/2005

893 Active Listings
64 Homes went Pending last week
50 Average Days on Market

$271,363 Average List Price
$270,973Average Sale Price

100+% List price to sale price ratio

13.4 weeks of inventory

Learn more about Defining Your Market.

Determining a Value for Your Home

Determining a Value for Your Home

From time to time it is important to come up with a value for your home. You might be checking your insurance coverage, thinking about remodeling, taking out a home equity loan, questioning your last tax assessment or getting ready to put your home on the market.

Despite what internet marketers would have you believe it is not as easy as point and click. You need to have a real live person look at your home, look at homes currently on the market or have sold, look at current market conditions and actually put pen to paper to come up with a value. In that light there are two options; a licensed real estate appraiser or a licensed real estate agent. Each is different in what they look at and how the information can be used.

A licensed real estate appraiser will look at your home and then compare it to homes similar to yours that have sold and closed. They typically look for homes that are geographically close to yours, are similar in structure both in style/layout as well as size. The appraiser will then make adjustments to the comparables to bring them in line with the subject property to mathematically arrive at a value for your home. They do take into account current market conditions but are looking at value based on today at this moment, and back 3 months. Though you may be told differently appraisals have some flexibility based on the purpose of the appraisal. Appraisals done on your home so that you may take out a home equity loan will typically be more generous than an appraisal done as part of the sales process. A simple explanation would be that the bank is loaning money to you based on your credit and good standing and taking the equity in your home as secondary. During a home sale the value would be more primary.

I have been involved with sellers who have asked me to sell their home and have been disappointed when I’ve shared with them that their homes value is lower than the value of an appraisal that they had recently received for a home equity line of credit. There is a good article in September 2005 Consumer Reports outlining this issue.

A licensed real estate agent would be able to provide a value, or price range through a comparative market analysis (CMA) also know in some areas as a Broker Price Opinion (BPO). Though real estate agents take into account many of the things that an appraiser does they are looking at it from a little different angle. Not only is an agent looking at what happened in the past, but they are also trying to look into the future so that they can help you as the seller come up with a price that will sell your home, given the current market conditions. Real estate agents look at homes that have sold, homes that are pending as well as homes that are currently active in the market. They also take into account current inventory, absorption rates, competition in your price range, stratification of the market, list price to sale price ratio as well as interest rates.

A typical house sale or purchase will require a CMA/BPO to help you price or make an offer on your home as well as an appraisal so that a loan can be issued. Some legal situations require an appraisal instead of a CMA. Real estate agents work closely with appraisers so should you need one just give your agent a call.

Updating you on the current value of your home is one of the many services your real estate agent can provide.

Housing Stats 9/26/2005

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 9/26/2005

873 Active Listings
69 Homes went Pending last week
50 Average Days on Market

$270,637 Average List Price
$269,978 Average Sale Price

100% List price to sale price ratio

12.6 weeks of inventory

Learn more about Defining Your Market.

Real Estate Agent Designations…. Alphabet soup or substance?

You are thinking about buying or selling a home. You’ve interviewed several agents and have noticed that a couple have a series of letters after their name like; GRI, CRS, CRB, AB, ABR, SRES, ASP or E-Pro. What does this jumble of letters mean and does it make a difference to me as a consumer? The answer in short is……yes!

As a licensed real estate agent in the state of Washington, an agent has to have completed and passed a 60 clock hour course and then have passed the state exam. Additionally once an agent is licensed they are required to complete another 60 clock hours of education for their first renewal and for subsequent 2 year renewals must complete 30 clock hours of education. An agent can continue their career indefinably by meeting these basic minimum requirements.

The agent who has one or more designations after their name has gone the extra mile to learn more about our industry. They have gone above and beyond the basic minimum requirements. Theoretically now they should be able to use this additional knowledge and education to help you accomplish your goals of buying or selling real property. Of course this is dependent on the person and is why I highly recommend that you interview several agents before making a choice if you have not already established a relationship with an agent that you are confident in.

For a full list of all of the designations please go to:

Fix it before you List it!

Thinking about listing your home for sale? Do a walk through with your agent a week or two before the list date. We spend a lot of time talking about “Staging” your home for sale, but what about repairs?

Generate a list of things in your house that need fixed, repaired or replaced before you put it on the market, here’s why:

  1. Potential buyers will guess high for the repair, usually 3 times higher than actual cost. They will then try to reduce the price by that inflated amount.

  2. When the home is inspected it will show up on the inspection report which here again calls into question cost of repair plus one more task that you as the seller may have to accomplish prior to closing.

  3. When the appraiser comes out the needed repair will only call for closer scrutiny. Example: moss on the roof. A perfectly good roof may be called into question only because the moss on it drew the appraiser’s attention to it, thus forcing him to call for an additional roof inspection.

The goal is not to try to hide anything, rather to address items that are likely to be brought into question and may jeopardize a good offer or at least slow down the closing.

Regarding disclosure, you are typically better off to disclose any issues up front. Buyers will typically feel short changed or taken advantage of if they learn of a pre-existing problem late in the transaction. Most states have a property disclosure statement that needs to be provided by the seller. Filling one out fully and honestly will protect you as the seller by reducing legal issues down the road with the buyer. Talk with your agent or your real estate attorney for specifics in your area.
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Tomorrows Generation of Home Buyers are Here Today!!

Who are they? They are the Echo Boomers or X Gen. They were born between 1982 and 1995. They are between the ages of 10 and 23. They are the children of the Baby Boom crowd.

This group of 80 million have never known a time without a computer. They are more tech savvy then any previous generation. Much of their lives revolve around what their parents would consider gadgets, and doodads their grandparents never would have dreamed of. (Fortunately a few did or we would not have them today.)

This group will affect what a house looks like, how it functions, how we build them and how we sell them. In order to serve the Echos a typically older crowd of real estate professionals will have to change how they work, how they meet and how they communicate with their new buyers.

Wired, audio, security, networking and of course high speed internet.

Speaking of high speed, this generation wants quick and constant input. Prompt returned e-mails, updated photos, daily updates on their transactions. Their consumer pressure and improved electronic communication will decrease the time it takes to buy a home. What is now a 4 to 6 week process will become condensed into a 1 to 3 week transaction.

They are more likely to find and choose their Realtor from a web page, because their friend sent them an IM or through a Blog.

The home they choose will have been viewed from every angle without having even visited the house. They will have viewed virtual tours, a photo walk thru and downloaded pictures from space. They will know who bought it, when and for how much via information available on the internet.

Their offer will jump from electron to electron over miles of wire as it makes its way between buyer, seller, agents, lenders, appraisers, title and escrow....and these buyers would have it no other way.

Real Estate Statistics for Kitsap County Washington

Watching stats like these will help you determine what kind of a market you are in.
For Kitsap County Washington as of 9/11/2005
812 Active Listings
79 Homes went Pending last week
51 Average Days on Market

$266,052 Average List Price
$265,489 Average Sale Price

100% List price to sale price ratio

Learn more about Defining Your Market.

Our Economy, Interest Rates and The Housing Market

There has been a lot of guess work going on about our housing market, how it will be effected by interest rates, the economy, gas/oil prices and now the affect Hurricane Katrina and the devastation of the Gulf Coast.

Situation Analysis:
1) Interest rates have continued to stay low and have gone down over the past few weeks.
2) There are more people buying houses today then ever before. Many Baby Boomers own homes and are now buying second homes.
3) The Echo Generation, children of baby boomers, are now reaching home buying age with the leading edge now being 23 years old.
4) Oil prices are higher then they have ever been before.
5) Our nations economy is under a great deal of stress due to the war in
Iraq and now recovery from Hurricane Katrina.

Since there is no way that one person can be an expert in all of these areas I look to people whose opinion I trust. In this area it would be David Lereah, Chief Economist for the National Association of Realtors.

David Lereah, NAR’s chief economist, said Tuesday that shortages of building materials, made worse by the need to rebuild in areas hit by Katrina, will increase construction costs.

“Given the general tight inventory of homes available for sale across the country, rebuilding in the region of the
Gulf Coast will place additional pressure on overall home prices,” Lereah says. “As displaced residents try to get back on their feet in new locations, home sales have spiked -- along with rental demand -- in regions surrounding the disaster zone.”

In addition, mortgage rates are likely to rise more slowly as the national economy absorbs the hurricane's $100 billion-plus blow, keeping sales brisk, Lereah said.

Lereah boosted his estimates of new and existing home sales for the year, seeing records for both. He said resales of previously owned homes should climb 3.4 percent to 7.02 million units in 2005, up from last month's estimate of 6.98 million for the year. New home sales should increase 6.7 percent to 1.28 million, up from his prior forecast of 1.26 million.

I've had the opportunity to meet David at functions hosted by The Washington Association of Realtors. He is a pretty sharp guy whose job it is to track this stuff. If you see him quoted in news articles take note.

Remember.......Much of the world would love to have the option to buy or sell a home but they can not. Americans have the greatest home ownership opportunity in the world!!!!!!

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Are You Thinking About Becoming A Real Estate Agent?

Becoming a real estate agent is just like starting your own business, however most do not approach it with that mind-set.
8 or 9 out of 10 agents don't make it their first year.
10% of the agents make 90% of the money.

Having said that, real estate is one of the more exciting and rewarding businesses you can get into provided you come in with your eyes wide open. See The Three Bridges discussion in my web site.

Ask lots of questions of friends who are agents, talk with local brokers.

Read books about getting into real estate.

Start saving your money so that you have start up capital to start your new business.

Stay tuned to this Blog for more information about becoming an agent and tips for new agents.

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If your house is not selling - A Rule of Thumb

Even in a Sellers market you will find that there are some houses that just don't sell. It can be the price, the condition or the terms......bottom always comes back to price.
A rule of thumb I've taught my agents for years:
> If you are getting no showings, thus no offers you are more than 5% high.
> If you are getting showings, but no offers than you are 3 - 5% high.
> If you are priced right you will get both showings and offers.

Bubble Babble

Bubble Babble

“Bubble babble” is how Matthew Gardner refers to the increasing speculation that the Puget Sound housing market is heading for a drastic downturn. Gardner is a principal in Gardner Johnson, a Seattle-based land use economics firm that monitors Northwest real estate trends. “It’s a bit like Chicken Little,” he says. “You tell bad news to enough people and they may start believing it.” Gardner’s confidence in the strength of the Puget Sound market is fueled by a number of factors:

1) More people are calling the Puget Sound area home
For the past 20 years, the region has seen steady increases in population each year. Those increases have included years of local economic decline. The area has attracted a well-paid, well-educated workforce—a good foundation for economic growth and, therefore, demand for housing.

2) Local job growth is increasingLast year 47,000 new jobs were created in the area. 33,000 new jobs are projected for 2005 and similar numbers are forecast for 2006. It’s interesting to note that even with the negative employment numbers that accompanied the local dot-com bust era of 2000 to 2003, housing prices during those years still experienced significant appreciation.

3) A limited supply of land keeps demand for housing high
The geography of the Puget Sound area, framed by mountains and water, puts natural constraints on the amount of developable land. The Growth Management Act also limits which land can be developed. Both these factors also serve to restrict the speculative development that is flooding other hot markets. The result? A housing market where demand has continued to exceed supply.

4) For an area of its size, the Puget Sound region is still affordable
Home prices here appreciated 12 percent in 2004 and similar increases are expected for this year. While high, those numbers seem modest when compared to 2004 figures that saw home prices in San Diego shoot up 37 percent and Las Vegas prices soar 52 percent. The median price for a home in San Francisco is $630,000, nearly double what it is in Seattle. In fact, Seattle is actually more affordable than Portland. While the median price for a home is greater in Seattle than Portland ($321,000 vs. $223,000), larger average income levels in Seattle offset the difference in home prices.

5) Real estate is not a liquid asset
Unlike stocks, it takes more than a phone call or key stroke to sell a home. Consequently, the real estate market experiences fewer fluctuations than other types of investments.
If not a bubble, what does Gardner see on the horizon? Puget Sound real estate appreciation has outstripped income growth, so he doesn’t believe the current levels can be sustained. This year is on track to see an increase in home prices of about 12 percent. Gardner anticipates similar appreciation in 2006. After that he expects price escalation to slowly taper off and settle into growth of 4–6 percent per year, which he considers part of the natural flow of the real estate market cycle.
His advice? “If you find something you like and can afford, buy it. Whether it’s $200,000 or $2 million, a house is a major purchase. It should be considered a home first and an investment second.”

Though I didn’t write it….it’s still good stuff. This article was in our Windermere Weekly Publication.
Defining a Buyers Market or a Sellers Market

It has been said that 5 months or 20 weeks of inventory is neutral territory between the much discussed buyer or sellers market. Before entering into the housing market as either a buyer or a seller it is important to determine where your market is.

If you have less than 20 weeks of inventory, as Kitsap does, then it is a sellers market. If you have more than 20 weeks then it becomes more and more of a buyers market the higher the number becomes.

Kitsap County Washington currently has 11 weeks of inventory. In other words, we have an absorption rate of about 70 to 80 houses a week. We currently have about 782 listings on the market. We are clearly in a sellers market. What does this mean to buyers and sellers?

To Buyers:
1) Realize the market you are in and plan accordingly.
2) Plan to place a strong offer if you really intend to get the house.
3) A strong offer means:
a) You are pre-approved with a lender and have a letter to that affect.
b) Try to tender a conventional offer, FHA or VA unfortunately are viewed as weaker offers.
c) Provide for a respectable earnest money amount. This does not mean $500 or $1000 as
has been customary in our area. If you are putting 20% down on your conventional loan,
show some of that to the seller. Put 10% or more up as earnest money.
d) Put a significant amount down on the loan. 20% will eliminate PMI.
e) Trim down any additional requests you might have of the seller. This does not mean
however that you should not have an inspection. Inspections protect all parties involved.
f) Offer a closing date or other terms that may accommodate the seller. Your agent should be
able to glean these details from the listing agent.
g) Your real estate agent should present the offer to the seller and the listing agent. If the
seller is out of area your agent should at least meet with the listing agent face to face to
present your offer.
h) If you have to sell a home before you can buy this next home you are at a distinct
disadvantage....consider a bridge loan. Talk with your lender.
i) And a sellers market make your best offer right off as you may well not get
another chance to better your offer. There will probably be multiple offers.

To Sellers:
a) Strategize with your agent how to deal with multiple offers.
b) Don't get greedy, it is better to have an offer a few thousand dollars less that actually
closes then a larger offer that doesn't.
c) Don't be in a hurry....though time is of the essence. If an offer comes in that does not have a
response time until the next day...wait it out. If another offer materializes then you can bid
the two.
d) My opinion.....It is better to counter offer on the best of several offers then do a
simultaneous counter offer to several offers. Discuss this with your agent.
e) There is often talk or chatter about agents who are about to write up an offer. Stick with
what you have in front of you. The bird in the hand beats two in the bush.
f) Don't second guess yourself. Human nature leads us to wonder, "Wow, if we got an offer
this fast maybe we under priced and could get a boat load more for our house??" Do the
research, have your agent do the research (that’s what they do), figure out your expenses
and your needs. Pick a price that works for you and is logical in your current market. Stay
focused on the goal....why are you selling in the first place and what is your next step.

Last....Be Happy! Much of the world would love to have the option to buy or sell a home but they can not. Americans have the greatest home ownership opportunity in the world!!!!!!