The TRUTH about Today’s Market

Many media outlets have generated doom and gloom stories about the real estate market. While the situation may be less than terrific in some areas of the United States, such conclusions do not apply to Washington state. What is happening in Florida, southern California, and some states in the Midwest does not represent the market in Washington. Consider the following facts:

1) The market for homes in Washington is not keeping pace with the growth in population, which continues to climb at about 1.8% per year. Expected population growth is anticipated to increase by another 1 million people over this decade and to reach 6.8 million by 2010. Approximately 2/3 of that growth is anticipated to result from in-migration; the remainder represents expected growth of families already living in Washington state.

2) The real estate market in Washington state is a stable and responsible marketplace for home buyers.

3) Foreclosure rates today are the same as they were 10 years ago. Fewer than 1% of all mortgages end in default in Washington state. Although subprime, adjustable-rate loans represented 20% of loans nationally in June 2007, they represented only 6% of home loans in Washington state.

4) Home appreciation in Washington continues to outperform the rest of the nation with year-to-year price increases every quarter since Spring 1995.

5) Home prices in Washington state have increased, on average, 8.1% since last year. Some counties have experienced much higher price increases: for example, Chelan county has experienced a 29.8% increase, Okanogan county 24.5%, Douglas county, 22.2%, and Lewis county 19.3. In Whatcom county, Bellingham continues to experience 4-5% price increases over 2006. In some neighborhoods, price increases approach double digits.

6) The demand for median-priced homes continues to grow. In fact, the housing shortage is forcing some families to take on more debt than they is desirable; others are compensating with longer commutes than preferred, and affordable housing continues to be an issue of concern to many.

7) Loans continue to be available for all manner of purchases, including no down packages, VA, and FHA loans, and both first and second conventional programs.

8) Interest rates continue to hover at around 6.25% for borrowers with good credit. The so-called “liar loans” have disappeared in favor of the appropriate expectation that a borrower should be able to show proof of income and ability to pay a mortgage at the time of application and thereafter!

9) In Bellingham/Whatcom county in the first nine months of 2007, 3151 home and condo purchases occurred. In 2006 in the first nine months of the year, 3404 homes and condos occurred. Thus, 2007 represents home purchases only 7.5% lower than occurred in the first nine months of 2006. Does this qualify as doom and gloom? Not at all.

10) Buyers have many homes to choose from in all price ranges; in established and new neighborhoods; in town and in the country; on small lots, large acreages, and everything in between; and, from little studio condos to homes that truly can be called mansions.