The Homes & Land of Whidbey Island
After a long, wet winter, we all look forward to the warm days of spring. With cherry and apple trees in bloom, the early morning chorus of birds and gray whales feeding on ghost shrimp in Saratoga Passage, spring is a time of wonder, hope and new beginnings. I hope you take a few moments to read about island living and real estate or just my wandering thoughts as I reflect on the joy, great fortune and privilege of living in the Pacific NW and on Whidbey Island.
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I live on an island, so of course there are lots of waterfront homes Almost everyone thinks they want a ocean waterfront home, including surfers, executives, moms with kids, people with dogs, and many of my best friends. But sometimes a waterfront home is not the right answer, and it is certainly worth asking yourself a few questions before you start looking at homes.
Waterfront homes give you an unparalleled view. With that view there is sometimes wind. Wind off the water carrying saltwater and sand directly to your windows, siding, and roof can cause a shortened life span for these products, which results in earlier replacement. There are some beaches that get enough wind and sand blowing that windows become pitted and ruin the view. Many of these homeowners end up replacing windows because of the loss of clear view every year.
Waterfront on the ocean or sound gives beachcombers the right to cross in front of your home. It doesn’t bother you, I hear you say, but what about the the stuff they drop on your beach, and the chance they decide to take a closer look at your dingy or crab pot sitting on your patio? If you don’t mind a loss of privacy when you are in your yard this is probably fine. After all they have to put up with you looking at them.
Waterfront home insurance is something you won’t shrug your shoulders at. It is expensive, and if you have a loan on the house you will have to carry a pretty comprehensive policy for flooding. You will most likely want to carry one anyway because water can be extremely destructive.
All this said, it is really a matter of weighing the benefits against the negatives. Waking up to the sound of the waves lapping on the sand, watching the sun rise or set across the blue water, and enjoying the sound of ocean birds, building sand castles…. Hmm, I guess it is just a matter of perspective and knowing what you are getting in to.
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Getting a home sold takes more planning and savvy today than in the past. It is more important than ever to find ways to make your home stand out and get the attention of serious buyers. You may think a few worn out or broken things shouldn’t make a difference, but everything matters to a buyer. Anything that causes a buyer to think there may be MORE things that need repair, updating or remodeling takes them one step further from making an offer on your home.
So here are the 4 Most Important Tips to prepare your home for sale.
1) Put the shine on. Be sure all the carpeting is clean and fresh smelling, the tile and grout repaired or replaced if chipped, and replaced if outdated. If you have hardwood floors, you might refinish surfaces to restore the luster. Fixtures from lamps to faucets need to be in working order. Replace light bulbs with the highest wattage the fixture allows. If possible, install rheostats to set the right moods in some rooms.
2) Fresh Paint It is amazing what fresh paint can do for your home. Stick with neutral warm colors. Be sure to clean up paint spills and drips. You may not want to do all rooms in the house, so pick the ones that the buyer sees 1st, and those that it will make the most dramatic change.
3) Doors and Windows The condition and quality of your doors and windows is important to potential buyers for two primary reasons: security and energy-efficiency. So it’s essential to ensure your doors and windows are working properly and are in good condition. Worn out screens and hardware should be replaced. Remember 1st impressions, and the front door is one of them.
4) Front Yard and Driveway Re-do old landscaping. Pull out aged shrubs and dead head plants. Fresh topping on garden areas, a new coat of paint or stain on the fencing, and a new mailbox with the house numbers on it. Easy access to the entrance. Possibly flowers or herbs in pots by the front door.
Depending on your budget and energy these things can be done at various levels. But the important thing to remember is that it all makes a difference. You may be fine living with it like it is, but a buyer may not want to, and it may make a difference between an offer and a lost sale for you.
Don’t hesitate to contact me if you would like additional suggestions or a review of your home for a specific list of ideas.
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In keeping with the spirit of the holidays and the winter solstice, the National Association of Realtors issued a news release yesterday announcing a continuing rise in the sale of existing homes in November 2011. We can all hope that the housing market may at long last be moving in a positive direction. Challenges lie ahead for certain, but a bit of good news is as welcome as a sunny day in December like we are having today!
Here’s a portion of that news release below; if you wish to read it in it’s entirety, Click Here >>
Existing-Home Sales Continue to Climb in November
Washington, DC, December 21, 2011
Existing-home sales rose again in November and remain above a year ago, according to the National Association of Realtors®. Also released today were periodic benchmark revisions with downward adjustments to sales and inventory data since 2007, led by a decline in for-sale-by-owners.
Although rebenchmarking resulted in lower adjustments to several years of home sales data, the month-to-month characterization of market conditions did not change. There are no changes to home prices or month’s supply.
The latest monthly data shows total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million-unit pace in November 2010.
Lawrence Yun, NAR chief economist, said more people are taking advantage of the buyer’s market. “Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing,” he said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.99 percent in November from 4.07 percent in October; the rate was 4.30 percent in November 2010; records date back to 1971.
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said housing affordability conditions have set a new record high. “With record low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” he said.
“With consumer price inflation rising by more than 3 percent this year, consumers are looking to lock-in steady payments by taking out long-term fixed-rate mortgages. However, the problem remains that some financially qualified families who are willing to stay well within their means are being denied the opportunity to buy in today’s market by the overly restrictive mortgage underwriting situation,” Veissi said.
An elevated level of contract failures continues to hold back a broader sales recovery. Contract failures2 were reported by 33 percent of NAR members in November, unchanged from October but notably above a year ago when it was 9 percent.
Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including lower conforming mortgage loan limits, home inspections and employment losses.
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For the past year, I have been the happy recipient of the weekly Grange Food News email from Chris Williams, who is an officer of the Deer Lagoon Grange. Chris’ official title is Pomona, and like her Roman Goddess namesake, she dispenses tantalizing tidbits of information about the gardens, fruits, vegetables and local foods of Whidbey Island. I marvel and admire how much effort she must put into staying informed about the farmers and foods of our island home. Thank you Chris for the wonderful job you do producing this email.
For me, Chris’ weekly email is a delightful reminder of how special our lives are here on Whidbey, and I am constantly amazed at the diversity, commitment and passion of our island farmers and food producers as well as others throughout the Pacific NW. Here are just a few examples of the food “adventures” I have learned about from Chris’ email newsletter:
1) Sea Breeze Seafood – Many of you know that during the summer there is a seafood vendor in front of the Bayview shopping center (Sebo’s / The Goose). Chris’ newsletter provides advanced notice from the vendor on specials, pricing, etc. You can also sign up directly for their newsletter, email seabreezeseafoods@hotmail.com.
2) Tuna Run – speaking of seafood, this is special. Each year, the Grange arranges a delivery of fresh albacore tuna from Westport’s annual tuna run. You have to pre-order, and the fish is available both whole and filleted. We ordered a whole fish, and now have the most incredible tasting canned tuna in our pantry.
3) Making Whid-Bee Friendly – David Neel of Island Apiaries is developing a program starting in January 2012 to take people through the hands on process of getting started with honey bees. At the end of the series, all participants will own a functioning bee hive with an established queen, drones and workers. He also is working on flower seed distribution so that everybody can grow bee-friendly flowers. Choosing the right plants to get a long continuous flowering season will help both native bees and honey bees, which are important pollinators of our food producing plants.
4) Foraging for Seaweed – Slow Food of Whidbey Island is planning a major seaweed foraging event at Fort Ebey. You can only forage seaweed there from April 15 to May 15th only. You will need a shellfish and seaweed license, which you can get from any hardware store. The hands-on foraging event will cost $35 to be followed by a cooking class and seafood meal at a kitchen venue to be arranged, for another $35.
This is very small sampling of the wonderful events and information available from the Grange. Email Chris at cwilliam@whidbey.com to receive the newsletter, and of course, please consider becoming a member of the Deer Lagoon Grange.
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If you are allergic to data, don’t read this, because it has a lot..:-)
Here’s a snapshot of the past 15 months of real estate activity for the Whidbey Island real estate market from Coupeville to Clinton. It excludes Oak Harbor and Camano Island which are very different markets compared the southern half of Whidbey Island.
The graph below shows the total number of single family homes for sale and sold in the past 15 months. Notice the seasonal nature of sales, with the peak month being August, and the lowest in Feb. As winter turns to spring, the activity will rise again, and hopefully bring a positive year.
What you cannot tell from these charts is the activity by different price segments or “layers”. The most active market is the homes priced under $300K. Two thirds of the total sales in the past 15 months have been under $300K even though they represented only 44% of the total homes listed.
This next chart shows you the total Cumulative Days On Market (CDOM) for the homes that sold, plus the final selling price compared to the original listing price. Notice that the final sales price is in the range of 84-90% of the original listing price. One comment on this. People often take their homes off the market for a while, especially in the winter months. If their home is removed from the market for 90+ days, the statistical data system does not use the previous listing data. This means the data shown below is actually better than reality.
The chart below compares the average list price of homes still for sale, and the average selling price for the homes that sold. This really is another way of depicting how the lower price range (less than $300,000) is the most active segment at this time. Whidbey’s real estate market is tracking the national market in this respect as this is where there is a significant number of distressed (foreclosed and/or short sales) properties. So while the market may seem to be marginally better than in the past 2-3 years (and it is), the activity is primarily in the lower priced homes.
Please contact me or leave a comment if you have any questions, or would like a more refined analysis for your specific property. This data set is revised each month, and I should have another Market Update for you summarizing 2011 sometime between the 10-15th of January 2012.
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Attached is the latest Gardner Report covering the third quarter of 2011. According to Matthew’s analysis, the economy continues at a tortoise-like pace with slow, plodding improvements. Compared to the first six months of the year, Island County’s unemployment rate fell to (8.8%) from last quarter, but still a slight increase over this time period last year. In YTD Closed Sales, Island County is down 1% in units. Claiming it is still unfair to look at year-over-year prices due to last year’s tax rebate his stats show that prices are down 13% for the past year – and down a total of 34.7% over the past 5 years.
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Recently Whidbey Island Realtors received an email from the Whidbey Island Board of Realtors alerting us to a new ordinance regarding Ebey’s Reserve. Here’s an excerpt from a letter from Island County, the Town of Coupeville and the Manager of Ebey’s Reserve that was addressed to all “Whidbey Island Real Estate Professionals.”
On 10/3/2011 the Board of Island County Commissioners adopted the new Unified Code and Design Guidelines for all development within Ebey’s Reserve. The Code and Guidelines become effective 1/1/2012.
The code requirements include a new Disclosure Statement that applies to the sale, lease or offer to sell or lease any property within Ebey’s Reserve.
My first thought was “No problem, we will just add that to the list of seller disclosures we normally insure are available for our listings.” So I decided to write down how many seller disclosures a homeowner might be required to prepare for a buyer of their property. I stopped at 9, but am sure if I thought a bit longer I could come up with 1 or 2 more.
So you may be asking yourself, “What does this have to do with using a local realtor?” Well of the 9 legally required disclosures, 7 of them are based on local knowledge and information.
Using the example above about Ebey’s Reserve, many off island agents would not even know a property is in Ebey’s Reserve, and even if they did, what is the likelihood they know of the upcoming requirement to disclosure that fact? It is not that they are unskilled. They are simply unaware. Why? Because this is knowledge that local realtors learn from experience, from each other and from their managers and owners. Real estate agents from out of the area do not have the benefit of those opportunities, nor will they.
Unfortunately what your broker/realtor does NOT know can impact you negatively.
So do yourself a favor. If you are going to buy or sell real estate, use a competent, experienced local realtor. It is the best insurance you can obtain to be sure you are well served and well protected.
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I don’t usually post another blog or document in it’s entirety, but in this case, I thought it was important enough to do so. Many leading economists and regular citizens, me included, believe solving the nation’s housing crisis is the singular most important near term economic issue facing our nation, not withstanding the current focus on the federal deficit. Below is the National Association of Realtors (NAR) position paper on how to stabilize and resolve the housing crisis in our country.
NAR’s 2011 Five-Point Housing Solutions Plan
NAR worked with two well-respected policy think tanks – the Progressive Policy Institute (PPI) and the Economic Policies for the 21st Century (e21) – that organized and conducted a policy meeting on October 4. New Solutions for America’s Housing Crisis brought together policy leaders, industry representatives, Members of Congress, thought leaders and the media to present ideas and make actionable recommendations intended to stimulate the growth necessary for a sustained recovery in housing and extend an ensuing positive effect on job creation and the broader economy.
It’s no secret our nation’s housing markets remain depressed and continue to suffer. While no one thought the crisis would carry on so long, markets are slowly recovering and are in need of immediate policy solutions to address the myriad challenges in order to stabilize housing and support an economic recovery.
We have long maintained that the key to the nation’s economic strength is a robust housing industry. And, we remain steadfast in our belief that swift action is needed now from Congress and the Administration that could directly stimulate a housing recovery.
NAR unequivocally endorses many of the bipartisan ideas and recommendations that came out of the meeting and we wholeheartedly urge Congress and the Administration to undertake their consideration promptly.
In letters sent Oct. 24, 2011 to the Chairman of the Federal Reserve Bank, President Obama, and Congress, NAR provided recommendations and solutions to stabilize and revitalize the housing industry and economy:
Recommendation 1: Do Not Risk Weakening Our Nation’s Housing Markets Any Further
Recraft the Qualified Residential Mortgage rule mandated by the Dodd-Frank Act to include a wide variety of traditionally safe, well documented and properly underwritten products. Requiring a 20% down payment coupled with stringent debt-to-income ratios and rigid credit standards – as defined under the proposed rule by six federal regulators – would be detrimental to prospective home buyers, especially first-time and middle-income buyers.
Restore higher loan limits supported by FHA and the GSEs to provide liquidity in housing markets and to assure mortgage financing options while stabilizing local housing markets. On September 30, the loan limits in 669 counties and 42 states declined. Already, this has had a harmful impact on our fragile housing recovery. Sellers have had to lower their price in markets where mortgages backed by FHA and the GSEs are no longer available. Buyers are confronting higher mortgage rates and larger downpayments because only private mortgages are available in these high-cost markets. In some instances buyers have given up their home search entirely.
Resist proposals that call for changing the tax rules that apply to homeownership now or in the future. Without a doubt, now is not the time to change the mortgage interest deduction or any other housing incentives. Making gradual or targeted changes would send the wrong signal further undermining confidence and further depressing home values.
Recommendation 2: Restore Vitality to Our Communities and Neighborhoods by Reducing the Foreclosure Inventory
Support S.170, The Helping Responsible Homeowners Act, sponsored by Senators Barbara Boxer (D-CA) and Johnny Isakson (R-GA). Their bill would remove refinancing limits on underwater properties for borrowers that have been paying on time, and would eliminate risk-based refinancing fees charged by Fannie Mae and Freddie Mac.
Support bipartisan Senate efforts calling for improvements to the Home Affordable Refinance Program (HARP). Led by Senators Barbara Boxer (D-CA), Johnny Isakson (R-GA) and Robert Menendez (D-NJ), the time is appropriate to enhance HARP and provide refinancing opportunities to at-risk borrowers as an alternative to defaulting on their mortgage loans.
Direct Fannie Mae, Freddie Mac and servicers to prioritize short sales above foreclosures.
Support all necessary foreclosure/loss mitigation efforts to keep American families in their homes. Reology Corporation’s President and CEO, Richard Smith, has proposed a debt for equity approach to help underwater borrowers in trouble keep their homes and lower their monthly payments while lenders take a smaller hit than they would have with a default and foreclosure. We call on Congress to introduce legislation adopting this innovative proposal.
Recommendation 3: Open Opportunities for Private Capital to Return to the Mortgage Marketplace to Foster New Demand among Responsible Homebuyers
Open up the FHA Section 203(k) rehabilitation loan program to investors to encourage purchasing of foreclosed property. This will facilitate the rehabilitation of the existing housing stock and help reduce the inventory of foreclosed homes.
Require the GSEs to temporarily suspend investor financing limitations, especially the limit on the number of mortgage loans allowed for any one investor/borrower (currently 4 for Freddie Mac and 10 for Fannie Mae). This will give small, private investors the opportunity to absorb some of the excess inventory, resulting in the stabilization of prices for existing real estate-owned (REO) properties.
Recommendation 4: Support a Secondary Mortgage Market Model that Includes Some Level of Government Participation
Reject proposals that call for full privatization of Fannie Mae and Freddie Mac. This is not an effective option because private firm’s business strategies will focus on optimizing their revenue/profit generation. This model would foster mortgage products that are more aligned with the businesses goals than in the best interest of the nation’s housing policy or the consumer.
Recommendation 5: We Call on the White House to Hold a National Housing Summit to Articulate a New National Housing Policy and Move the Provision of Housing to the Front of the Nation’s Domestic Agenda
Homeownership matters! It represents the single largest expenditure for most American families and the single largest source of wealth for most homeowners. The development of homeownership has a major impact on the national economy and the economic growth and health of regions and communities. Homeownership is inextricably linked to job access and healthy communities and the social behavior of the families who occupy it. We recognize the serious public debate as to which tax and spending policies will best support the sound fiscal management that our nation requires.
However, we urge caution against dismantling or eliminating vital resources for housing that provide important economic, social, and societal benefits. We call on the White House to empanel a body comprised of public and private industry participants to fashion a national housing policy that is flexible enough to address the varying needs across the nation, whether it’s homeownership or rental housing, production or preservation.
In conclusion, we emphasize again the recovery of the broader economy depends on housing. The last two and a half years have shown that, with housing prices bumping along the bottom, a robust economic recovery will remain exceedingly difficult. The National Association of REALTORS stands ready to work with Congress and the Administration to move this 5-point plan to help restore housing and grow our economy.
To learn more about NAR’s position on the Housing Crisis and potential solutions, please visit the National Association of Realtors website.
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The above chart shows the last 15 months of real estate activity for South and Central Whidbey. See discussion below:
The summer finished with a total of 103 homes being sold in July-Sep 2011 compared to 83 for the same period last year which is an increase of 24% more homes sold. This high sales rate in the summer meant that the overall sales for 2011 YTD is now slightly higher than 2010 with a total YTD homes sold of 225 vs 220 in 2010.
Interestingly, the average sales price of homes for the 2011 YTD in South and Central Whidbey increased slightly from $353K to $357K; however, the median sales price (midpoint) dropped from $309K to $280K. Also of note, and related to the median price drop, is the fact that in 2011, 34% of all sales in South and Central Whidbey were bank owned properties or “short” sales (selling for less than owed to the lender). That compares to 22% at this same time in 2010.
The overall trends for South & Central Whidbey real estate we are seeing are as follows:
1) Total home sales are about the same as 2010. In 2010 there was a surge in the spring associated with the tax credit incentive, while the 2011 has been more of an organic demand. This is encouraging.
2) A large number of those sales are in the lower price range, which resulted in the median sales price dropping. That has been offset by an increase in higher priced home sales, most of which were waterfront homes.
3) The percentage of distressed home sales has unfortunately increased significantly, and they now represents 1/3 of the total home sales.
4) Both average and median list prices are declining, as home sellers continue to recognize the downward price pressure present in the market.
Showing activity and sales slowed in the first half of October as expected. As of 10/15/11, 10 homes had sold and an additional 19 were pending sale. This is the time of year that some sellers, knowing that the pace of sales slacks off, remove their homes from the marketplace. In real estate parlance, these homes are “parked”. Experienced agents understand this dynamic, and they can often provide you with access to these properties by getting the seller to agree to what is known as a “one party show”.
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