As we have talked about previously, state governments did not have any restraint during the big money years of the housing boom. Instead of socking some of the money away for a rainy day, they created new vote buying programs and built shrines to themselves.  - Real Estate Bloggers

Read the whole post above.  Remember who did this to us this November.

Wenatchee Market:
Year to date, sales by volume continues at a lower pace than last year -down 26%. Sales by number is down 28%.  Number of homes on the market is at 588 indicating a 9 month supply.  As seen in the graph, Average Days on Market for all but one price range are over 3 months.  According to data pulled from the MLS, there have been no sales YTD in the range of $651,000-$700,000.  Building permits for single family homes has  decreased by 46%.  2007 YTD: 299 permits / 2008 YTD: 109 permits 

With Jumbo loans (loans over $417k)  being so difficult to get, it is not surprising the range of $651k to $700k is slow.  It is clear that builders are responding to the slowing market with a reduction in the number of homes being built, particularly spec homes.

Take a look at the whole report, they’re interesting to real estate geeks like me!  You can get access to all the old reports at www.pacapp.com

Lawmakers will explain property taxes, answer questions

OLYMPIA…With new property tax valuations hitting Chelan County homeowners’ mailboxes, Sen. Linda Parlette and Rep. Cary Condotta will participate in a public forum on property taxes June 24 at 6:30 p.m. in the Performing Arts Center at Chelan High School.

The meeting is organized by GoLakeChelan.com and the Lake Chelan Chamber of Commerce. Topics will include future property tax changes as well as tax and budget trends.

The issue of property taxes, say the 12^th District lawmakers, is raising ire among property owners who have seen their property taxes rise an average of 6.7 percent in 2005, 9.5 percent in 2006, and a staggering 15.8 percent in 2007, according to the Chelan County Assessor’s office, although many people’s bills have gone up much higher.

“Some of the assessments that people just received have gone up as much as two thousand percent,” said Parlette. “It’s no wonder people are so worried.”

Parlette and Condotta sit on the legislative committees that deal with tax and finance issues, and have been pursuing property tax legislation for several years.

“I have been trying to get the attention of other senators about the need to address property taxes since 2005 when 12th District residents came to me with valid complaints,” said Parlette, R-Wenatchee. “Over the past few sessions I have sponsored legislation that would have provided real and tangible property tax relief for property owners in our district. Those bills and other property tax relief measures did not pass, but we are not giving up, and meetings like this one are very helpful in drawing attention to the issue. In the state Senate, it is the Ways and Means Committee that will decide which, if any, property tax relief bills move forward. I invited the chair of that committee to join us on June 24, but her schedule did not allow it. The good news is that some of the Ways and Means Committee staff will travel from Olympia to give a short presentation on how property taxes work, hear the concerns of those I represent, and help me carry those concerns back to the committee chair.”  

“This issue is not new and is being aggravated by high gas and food prices,” said Condotta, R-East Wenatchee. “Homeowners want answers and they want information on how properties are assessed and taxed. There is a lot of misunderstanding and misinformation out there and equitable solutions are not simple matters. Like our Senator, I have supported greater safeguards to ensure families aren’t taxed out of their homes. I am looking forward to this forum taking place so we can outline our choices going forward and try to determine what our constituents desire.”

Constituents that need immediate assistance with their property tax assessments can contact their assessor’s office. Constituents with ideas for changes to state law can contact Parlette’s district office at (509) 663-9702 or Condotta’s district office at (509) 664-1274.

The Seattlebased left wing environmental group, Futurewise, has taken its anti-growth agenda over the mountains into central Washington. The group filed two lawsuits against Kittitas County within the last year alleging the County’s regulations violate the Growth Management Act (GMA). Although originally successful before the Eastern Washington Growth Management Hearings Board, Futurewise’s luck has come to a temporary end.

That’s because the Kittitas County Superior Court this month handed BIAW and Central Washington Home Builders Association (CWHBA) a major victory. The Court granted CWHBA and BIAW’s motion to stay (suspend) the Growth Board‘s decision that had struck down Kittitas County’s development regulations.

The issues?  Apparently both lawsuits are about whether Kittitas County allows too much growth outside its urban growth areas (Futurewise believes that they do).  In March, the Growth Board issued a ruling against Kittitas County’s development regulations claiming they violate the GMA because they allow rural densities of one home per three acres.  The Growth Board decision was that three acres zoning is “urban in nature” and that any density greater than one house per five acres are an automatic violation of GMA.  Excerpted from the BIAW article:

The Growth Board reached this strained reading of the GMA despite the fact the Act contains no bright line rule setting a maximum rural density.

In reaching its decision the Growth Board issued the harshest remedy in its arsenal, ruling Kittitas County’s development regulations are invalid. A finding of invalidity under the GMA means the development regulations are null and void on the date the Growth Board issues its decision. This ruling had the practical effect of imposing a building moratorium.

The BIAW and North Central Washington Home Builders were able to the decision to Superior Court and filed a motion to stay the Growth Board’s decision while the case was on appeal.  The stay was obtained and they did have to prove that they were likely to prevail on appeal to obtain the stay.  So, while the case is not over, it is indicative of the types of issues we may see with planning in Chelan County.

How does this impact us?  Locally, we have a Manson Sub-Area Plan Wenatchee looking at growth in the foothills and the Chelan Valley Sub-Area Plan underway right now.   In the Manson Sub-Area Plan there has been a “citizen’s proposal” to push a higher percentage of the population into the rural areas.  There is a public open house on the Chelan Valley Sub-Sub Area Plan right before the Tax Forum on the 24th.  Hopefully we won’t have these types of issues in Chelan county, but I’m sure Kittitas County did not intend to be in such a position either.

Okanagon county is showing a 20.47% increase in median price but sales volume dropped from 35 closings in May 2007 to 17 in May of this year. 

What is the good news in all of that?  There are opportunities for buyers!  The inventory of properties for sale is up and sellers are pricing aggressively.  Here are some comments from the NWMLS, printed with prior permission:

Northwest MLS Brokers Report Buyers
Slow to Take Advantage of Market Conditions

KIRKLAND, Wash. (June 5, 2008) – “If you’re a buyer, this is the time to take advantage of unique market conditions.” That’s the message one industry leader offered in reviewing the latest report from Northwest Multiple Listing Service summarizing housing activity for the month of May.

NWMLS figures show inventory remains plentiful (up nearly 22 percent from the same month a year ago, and up about 5.4 percent from April), with thirteen of the nineteen counties in its service area reporting double-digit increases from twelve months ago. At month end, the selection included 43,546 single family homes and 8,271 condominiums – with one of every five of those listings classified as newly built.

“There are such great opportunities for buyers right now to position themselves for the future,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Interest rates are historically low, there’s a healthy inventory of homes to choose from, and the new, higher conforming loan limits have increased housing affordability,” he noted, adding, “If you’re a buyer, this is the time to take advantage of these unique market conditions.”

Prices area-wide are showing moderate fluctuation. While median selling prices in most counties served by NWMLS are down from a year ago, many areas are showing stability and even increases. In 30 “sub-areas” the MLS tracks within King County, for example, 21 areas reported higher prices in May compared to April.

NWMLS director Diedre Haines, the broker at Coldwell Banker Bain’s Lynnwood office, said that office had twice as many multiple offer transactions in May compared to April (rising from six to 12). Last month, agents in that office wrote the highest volume of transactions since August, she reported. “I’ve stopped reading the papers,” she remarked, adding, “We’re seeing good increases in activity.”

Pending sales are down from a year ago, but nearly kept pace with April’s volume (down about 2 percent). NWMLS members reported 6,085 pending sales area-wide during May. That compares to 9,743 pending transactions of a year ago and 6,208 for April.

Pending sales of single family homes declined about 3.8 percent from April, while the volume of pending sales of condominiums rose nearly 8 percent from April to May.

“We still haven’t had summer hit us yet as the weather remains cool, wet and cloudy. I expect both temperatures and the market to heat up as summer approaches,” commented Dick Beeson, broker/owner at Windermere/Commencement Associates in Tacoma. “Open house traffic is picking up and buyers are coming off the sidelines to make buying decisions. Buyers are realizing that interest rates may creep up and they would be in a worse position if rates went up 1 percent than if prices fell 5 percent, he stated.

NWMLS director Mike Skahen believes the price drop has “already happened.” “It’s a great time to negotiate with sellers,” he suggests. Skahen, the broker at Lake & Co. Real Estate, Inc., reports a noticeable pickup in activity in the close-in Seattle markets where sellers are pricing competitively.

“We didn’t have a spring selling season this year,” he observed. When the press gets less negative, Skahen believes “It’s going to push buyers off the fence and they’ll regret having waited.”

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes approximately 31,000 brokers and agents. The organization, based in Kirkland, currently serves 19 counties, mostly in western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state.

Statistical Summary by Counties: Market Activity Summary - May 2008

May 2008 Single Family Homes + Condos	LISTINGS		PENDING SALES	CLOSED SALES
	New Listings	Total Active	# Pending Sales	# Closings	Average Price	Median Price
King	5,473	16,435	2,414	2,081	$494,868	$399,950
Snohomish	2,254	7,472	883	775	$357,363	$329,950
Pierce	2,092	8,548	971	759	$293,118	$259,739
Kitsap	639	2,834	258	225	$310,534	$263,000
Mason	209	956	78	67	$245,259	$188,000
Skagit	255	1,392	136	131	$300,925	$273,578
Grays Harbor	260	1,026	77	75	$172,208	$150,000
Lewis	196	814	46	37	$194,292	$185,000
Cowlitz	169	833	69	62	$171,623	$157,000
Grant	179	744	82	66	$185,578	$168,500
Thurston	629	2,248	361	297	$292,806	$264,000
San Juan	79	437	12	11	$1,076,273	$569,000
Island	232	1,229	91	74	$323,927	$302,500
Kittitas	159	737	33	26	$280,913	$258,450
Jefferson	91	566	24	19	$360,147	$325,000
Okanogan	68	466	43	17	$217,653	$180,700
Whatcom	622	2,351	268	238	$280,872	$255,000
Clark	167	870	92	60	$288,504	$266,950
Pacific	82	452	32	29	$187,849	$170,000
Others	321	1,407	115	109	$237,000	$209,000
MLS TOTAL	14,176	51,817	6,085	5,158	$378,835	$312,000

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	3706	4778	5903	5116	5490	5079	4928	5432	4569	4675	4126	3166
2001	4334	5056	5722	5399	5631	5568	5434	5544	4040	4387	4155	3430
2002	4293	4735	5569	5436	6131	5212	5525	6215	5394	5777	4966	4153
2003	4746	5290	6889	6837	7148	7202	7673	7135	6698	6552	4904	4454
2004	4521	6284	8073	7910	7888	8186	7583	7464	6984	6761	6228	5195
2005	5426	6833	8801	8420	8610	8896	8207	8784	7561	7157	6188	4837
2006	5275	6032	8174	7651	8411	8094	7121	7692	6216	6403	5292	4346
2007	4869	6239	7192	6974	7311	6876	6371	5580	4153	4447	3896	2975
2008	3291	4167	4520	4624	4526

©Copyright Northwest Multiple Listing Service, ALL RIGHTS RESERVED. This material may not be published, broadcast, rewritten or redistributed without prior permission.

One other great bit of information in the article is most agents spend a great amount of money on newspaper advertising, while they believe it is one of the less effective mediums.  However, newspaper advertising is most often asked about by customers.  The information below shows how very responsive to customer desires real estate agents are!

Though respondents indicated a significant portion of their listing budget was spent on newspapers, only 20.4% said they think this medium is “effective.” Some 49% said online ads were “very effective.”

Agents said online ads and signage are “more valuable” for promoting a property. But when asked what their sellers felt was important, 92.4% said sellers mentioned newspaper ads.

Many property owners who can’t sell their properties are renting them, causing a glut on that market as well.

However, that has created some great deals for vacationers who are seeing some great deals, better amenities and lots of extras compared to past years.  It is an interesting read on what is going on out there!

In Clark County, the market is showing further declines this year with values on the Mulitple Listing service showing even larger declines so far this year.

We have seen a slowing market in the Chelan area as well.  Average, even median values, don’t necessarily reflect the market value of the same home this year versus that same home’s value the last few years.  I will be anxious to hear at the forum on Monday whether the Chelan County Assessor is seeing any retreat in values as the market softens.

The article states:

Most Clark County homeowners will see a decline in their assessed property values when 2007 statements from the Assessor’s office are mailed out next week. It is the first drop in overall assessed values since the early 1980s.

The average decrease of between 2 percent and 3 percent is bound to create some confusion, as usual, said Mike Webber, residential appraisal staff manager for the Clark County Department of Assessment and GIS.

It appears that Clark County revalues properties each year and has had increases the last few years:

The latest assessments are in sharp contrast to last year when residential property values were increased an average of 12 percent, thanks to sizzling home sales in 2006.

By mid-2007, things had started to cool, with fewer sales, an increasing inventory of homes for sale and declines in median sale prices.

“There has been a modest decrease in the average price of a home in Clark County,” said Webber, who has worked for the Clark County Assessor since 1995. He said he could not recall a single instance when assessed values had declined in his 34-year career as a real estate appraiser in Washington and Oregon.

So, how did they go.  I asked Paul Thomas of Northwest Auctions to give me his summary of the builder auction.  Here’s what he had to say:

Overall, the seller feels that our May 31st Builder Liquidation Auction was a success. The auction marketing campaign produced tremendous exposure and visibility for his properties and four were sold in advance of the auction using the Buy Now program. Though none of the five high bids on auction day were high enough to be accepted by the seller, he is now in negotiations with the high bidders and with other interested parties in hopes of generating sales for the five remaining properties.  

From our perspective, we are also pleased with the results from the Buy Now program but auction day activity was considerably below our expectations. Though our web site traffic was exceptionally high before the auction, we had fewer attendees and much more subdued bidding than we expected.  

Even with 20-20 hindsight, it is impossible to tell whether the results of the auction were a result of a recent change in the Wenatchee market, bidder uncertainty about the auction process, bidder discomfort with the universally discouraging media portrayals of the current real estate market throughout the country or bidder unease regarding the increased difficulty of obtaining financing for a real estate purchase, whether at auction or via conventional sale. Most likely, each of these factors contributed to the results we saw on Saturday and we may never know for sure which had the most impact on the auction.  

One thing is certain; people paid attention to this auction! Our web site had over 140,000 hits regarding the auction during the four week marketing campaign- a new record for our company. Many people were aware of the auction- the seller even reported that complete strangers wished him good luck in the weeks leading up to the auction!  

To generate this sort of exposure for the properties is an extraordinary result, whether of an auction marketing campaign or any other sort of marketing effort. Hopefully, we will soon be able to announce that all of the nine properties were sold.  

I had a similar story on the developer auction, which was done by my company, Criterion Properties in conjunction with Selequity Auctions.  I am also the seller of that property.

We had an absolute auction scheduled.  We only had two registered bidders at auction time.  The terms allow the seller the option of cancelling the auction up to the time the auctioneer starts calling bids.  So, I cancelled the absolute auction and am in negotiations with both bidders who are genuinely interested and qualified buyers.

I have also had several more inquiries since the auction.  We also generated a tremendous amount of exposure for the property.  My expectation is that a contract will be written on the property in the next few weeks.

So, the stories are similar.  The Wenatchee market, while showing great interest in the process, did not generate the hoped for bidders for the auctions.  However, in both cases strong interest was generated from the marketing and qualified buyers have been brought to the seller and sales have been generated.

Also the sellers, in both cases, had the ability to manage the process and have sufficient control to make sure their interests were protected.  Qualified buyers have been brought to the seller.  As one of the sellers, I am happy with the outcome.  Just wait until we have one of these in a hotter market and see what happens!

My summary report is here.  The number of sales in May of 2008 were still a bit lower than last year, 15 sales compared to 19 last year.  There were some expensive homes that sold in 2008, two 4 to 5 bedroom homes sold at an average price of $1.49 million and one 6 to 7 bedroom home sold for $2.8 million.  Those types of sales drive average prices up and include some waterfront homes.  The most expensive homes that sold in May 2007 were 4 to 5 bedroom homes that averaged $524 thousand for the three in that range in 2007.  The average Days On Market for the homes that sold is up to 162 days from 134 days in 2007 for May.

I’m sure there are folks in many parts of the county who would be very happy to have their markets this strong compared to last year.  If you think our stable or increasing housing prices are a problem, and in some ways they are, at least we’re not in a market where prices are dropping 20 to 35%!