David Edwards King County Real Estate

Housing starts unexpectedly surged in February. Work began on an annual rate of 583,000 homes, a 22% increase from January, posting the biggest jump since 1990. The rebound suggests builders cut production too deeply as the credit crunch intensified at the end of 2008, and they may have to make up for some lost time.

Of course, any sustained recovery in the homebuilding market will be contingent on a recovery in the financial markets. The good news here is that a recovery in the financial markets appears to be under way. Stocks continued to rally last week, though not as much as credit markets. Indeed, 30-year fixed-rate home loans slid by as much as 3/8 of a percentage point to around 5%, nearing record lows. Until recently, 30-year fixed-rate mortgages hadn't been below 5% since the 1950s.

The latest rally in mortgage rates was spurred by the Federal Reserve's ongoing efforts to stimulate borrowing. In its latest go-around, the Fed said it would add $750 billion to the till to raise its total purchases of Fannie Mae, Freddie Mac, and Ginnie Mae mortgage bonds to $1.25 trillion by year's end. The Fed also said it will double its potential note purchases from Fannie, Freddie, and the Federal Home Loan Bank System to $200 billion and absorb as much as $300 billion in Treasury securities, which will add at least as much liquidity to the economy.

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF

View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

Reasons to Do So:
-Interest rates on mortgage loans have recently declined to levels not seen since the "refi-boom" of 2002-03.
-All the really bad loan programs are gone.
-What remains are loans that use common-sense guidelines and require that the borrower can afford to make the payments.

Key Points for the Fannie Mae Refinance Plus Streamline Loan:
-Owner occupied, second homes and investor properties are eligible
-Liquid assets must cover the funds needed to close
-No limit on multiple mortgage to one borrower for all occupancy types
-Existing mortgage must be current
-LTV 80%+580 minimum credit score - New credit report required
-Income documentation is required
-Salary/Bonus/Overtime: one current paystub and a verbal Verification of Employment
-If Commissioned or Self Employed: one year tax returns
-Maximum LTV is 105%. Subordinate financing may not be paid off but must be resubordinated. No new subordinate financing is allowed.
-If the underlying loan does not have mortgage insurance, no mortgage insurance is required on the new loan, regardless of the LTV!
-If the underlying loan has mortgage insurance, the existing MI Company must modify the MI certificate transferring the coverage from the existing loan to the new loan. The coverage on the new loan must be at the same level as the existing loan, regardless of the new LTV.

Below are two links you can use to see if your mortgage is owned by Fannie Mae or Freddie Mac. Remember, you maybe eligible for a Home Affordable Refinance that will go up to 105% Loan to value. Only loans owned or guaranteed by Fannie Mae or Freddie Mac are eligible. Your mortgage company can tell you who owns your loan also.

Fannie Mae
1-800-7FANNIE (8am to 8pm EST)
http://loanlookup.fanniemae.com/loanlookup

Freddie Mac
1-800-FREDDIE (8am - 8PM EST)
https://www.freddiemac.com/corporate

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

The Federal Reserve announced that it will buy $750 Billion more mortgage bonds last Wednesday. This purchase will bring the total investment to $1.25 Trillion. They are also going to buy $300 Billion in long term treasuries. This will keep the yields of the different types of bonds on an equal playing field. Most are predicting that rates will basically stay in the upper 4's to low to mid 5's for the remainder of the year as a result of these actions.

However, the Congressional Budget Office increased the projected deficit from $1.75 trillion to $2.75 trillion. This creates huge inflationary pressures on our economy. Once things get turned around, inflation will be the headliner, and our good rate environment will vanish. The mortgage market has been up for a week and a half, housing starts were up for the first time in years and consumers have been spending a little more money lately, so the rate of economic decline already seems to be slowing.

The Wall Street Journal reported on a study concerning the relative cost of owning versus renting. The swing is back to historical norms in favor of homeownership in many of our US markets. Over the past 18 years, after-tax mortgage payments have averaged 26% more than rent payments. In 2006 at the height of the housing bubble, mortgage payments reached as high as 66% more than rent payments. By the end of 2008, mortgage payments averaged just 24% more than rent, the narrowest gap since 2001. Qualified renters need to understand that they must buy this year. They'll receive an $8,000 credit from the IRS and they will only need 3.5% down with an FHA loan.

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

News headlines have given investors some confidence in the equity markets this week. For example, Citigroup announced that it has a strong capital base and is looking at profits instead of losses over the first few months of the year.

Also giving Stocks a boost were remarks from Treasury Secretary Geithner and Federal Reserve Chairman Bernanke. Geithner stated that the US has done more in the last few weeks than other countries have done in years. Bernanke, on the other hand, indicated that the recession would be over by year-end if the banking situation is stabilized. He also reiterated that major financial institutions would not be allowed to fail.

Have a great day!

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

KIRKLAND, WA. (Feb. 4, 2009) - Pending sales during January jumped from the same month a year ago in eight of the 19 counties in the Northwest Multiple Listing Service area. Last month's pending sales outgained December's weather-hampered activity by nearly 1,100 transactions, prompting one MLS director to report "We're starting to feel the train building up steam." The latest report from Northwest MLS shows inventory is shrinking and prices in most areas are below year-ago levels.

NWMLS members tallied 4,353 pending sales of single family homes and condominiums area-wide during January, up from December's total of 3,255, but down about 3.3 percent from a year ago when sellers accepted 4,499 offers. Sales surged more than 26 percent in both Pacific and Pierce counties, according to the new figures from Northwest MLS. Cowlitz, Grays Harbor, Kitsap, and Okanogan counties also experienced double-digit gains in pending sales compared with a year ago.

Pending sales of single family homes, which accounted for about 86 percent of last month's residential volume, increased about 1.2 percent from a year ago. Condo activity remained sluggish: area-wide sales dropped more than 24 percent from twelve months ago.

"The market seems to be gaining momentum, and buyers seem to be feeling more confident," reports Northwest MLS director Meribeth Hutchings. Agents are more optimistic and banks are getting more realistic on pricing bank-owned homes and bank-controlled homes (short sales), which is helping move that inventory, she stated. "The sooner we can eliminate that inventory, the sooner we will get back to a healthy market," says Hutchings, the broker/owner of Windermere Real Estate/Lake Stevens, Inc.

NWMLS brokers reported year-over-year drops in both the number of new listings added to inventory during January, and in the total inventory at month end. Members added 10,713 new listings, nearly 2,500 fewer than a year ago, for a decline of nearly 19 percent. At month end, there were 38,171 active listings in the MLS system, about 8 percent fewer than the year-ago total of 41,498. Thirteen counties reported shrinkage in inventory.

"Home buyers in Pierce and Kitsap are starting to recognize the opportunities that exist for first-time buyers and those looking to buy a home in the more affordable price ranges," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "These areas were the first to feel the housing market adjustment, so it's natural that they would lead the road to recovery," he added.

MLS director Dick Beeson, broker/owner of Windermere/Commencement Associates in Tacoma, agreed. He estimates one in four pending sales in Pierce County last month were short sales (a sale in which the proceeds are less than the balance owed on a loan; such sales are typical to prevent foreclosure). Beeson attributes the uptick in pending sales to short sales along with low interest rates and a buyer pool that's "finally waking up to the excellent values in the marketplace.

"There's no question that buyers are being educated and coached by agents in how to craft offers within lender approved guidelines that garner good price values along with seller concessions for closing costs and needed repairs to the property," according to Beeson. Given the pent-up demand, he believes passage of a stimulus package with key elements for housing would spur a housing rebound.
Members reported fewer closed sales in January compared to a year ago, reflecting the slower pace of sales during the last few months of 2008. Prices area-wide slipped about 13.7 percent from a year ago.

Viewed separately, condo prices were unchanged from a year ago. Condos that sold last month had median selling price of $250,000, which compares to a price of $249,950 for sales that closed during the same month a year ago. In King County, which accounts for about two-thirds of the MLS condo sales, prices increased 3.4 percent, rising from $270,500 to $279,750.

"It's pretty clear that the real estate train came to a complete stop over the past few months," acknowledges NWMLS Pat Grimm, owner/broker of Windermere Real Estate/Capitol Hill, Inc. "The good news is that the train was moving pretty fast before and now people have an opportunity to get aboard." Affordability is the key, according to Grimm. "With interest rates and prices down, dream properties are within reach again and we're starting to feel the train building up steam."

Working in buyers' favor are historically low interest rates and a large percentage of homes that fall beneath the conforming loan limit of $506,000 and therefore qualify for low interest loans backed by the Federal Housing Administration. "This makes homes in this market very appealing to first-time buyers," noted Lennox Scott.

Officials from the National Association of Realtors® say "significant uncertainty" still clouds the housing market despite improved affordability conditions. "For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers," stated Lawrence Yun, NAR chief economist.

"The market is fragile given the economic backdrop," declared NAR president Charles McMillan. The Dallas-Fort Worth broker emphasized additional steps are needed to meaningfully drawn down inventory and stabilize home prices.

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes approximately 28,000 brokers and agents. The organization, based in Kirkland, currently serves 19 counties in western and central Washington.

Best Regards!

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.