Rich & Lylene Johnson

Despite what you might think from last night's snow storm, the icy roads & your frozen car locks this morning, Spring is really just around the corner. The reason I can say that without reservation is this:

Every year about this time, Lylene starts to drop comments to me about how nice it would be if the windows were washed. It's just a subtle nudge at first but after 41 years of married the nudges become not subtle . It's when I find the squeegee, bucket & extension handle on my chair at the breakfast table that I know she really is serious about it & that if I don't want her putting the milk on my dry cereal the night before I actually eat it, I'd better get with it. Anyway, she has not put the window washing paraphernalia on my breakfast chair yet, but all signs point to that shortly.

Joe's Garden's Spring Opening
The next indication of Spring is the sign at Joe's Gardens ( I actually took the photo a few days ago & at that time they were scheduling a March 1st opening. It has now changed to March 2nd). All winter it stands there in silent witness to one of the Pillars of Free Enterprise in Bellingham. Anyway. I drove by the sign just a few days ago & saw that on the sign they had included their opening information. I just talked to Jason Weston, one of the owners, to find out what they would have available on Opening Day, the 2nd. Jason told me to expect a full complement of flower & vegetable starts. Joe's Garden holds a special spot in my heart for a variety of reasons beginning with the Weston family themselves. This is truly a family business, with Carl & Carol Weston purchasing the Garden from Joe Bertero in 1983 & in recent years being joined in the business by their 2 sons, Jason & Nathan. They have a work & family ethic that is a joy to see. I'm honored to call them my friends. Another reason Joe's Gardens is important to me is that it is this farm where my Mom's family lived before they moved to their home at 16th & Donovan. Just one more piece of historical trivia & then I'll move on. Jason told me that in 1922 Joe Bertero bought a farm from his uncle located on Iowa St & then purchased the farm at 31st & Taylor in 1933. Joe operated them both for awhile but because the Iowa St property continually flooded, he ultimately sold it. It would have been hard for him to imagine them that his Iowa St location would later become Auto Row.

Another tell tale Spring indicator for me are the robins. It seems as though there are always a few around but in the last couple of days I have noticed them in droves. In fact, our neighbor's cat practically had a seizure the other morning when a group of robins flew in their back yard. I thought for sure Felix was going to throw his jaw out he was chattering so hard.

If you don't put any stock in any of the above, this is the clincher. The newspaper coverage lately of the Seattle Mariners is the talk of many breakfast tables. Of course the addition of Ken Griffey Jr to their roster certainly added fuel to the fire. I understand that when the news broke, Seattle fans reached down in their pockets & in one day bought 17,000 season tickets. Hard to imagine that in the middle of the worst economy this country has known since the Great Depression of my parents generation that a single news story could have that much impact. Anyway, hope springs eternal but there are apparently a bunch of Seattle fans who are betting on their Team.

So with that said, I don't exactly recommend you rush out to sell snow shovels on Craig's List anytime soon, but you might want to start getting in the spirit of Spring because it's just around the corner. If you don't have confidence in my forecast methods, you can always check out the local weather forecast but I'll bet that my method is just as accurate.

By the way, if you or your friends and family have any questions about Whatcom County Real Estate, we'd be delighted to talk to you. You might be interested in our monthly "Whatcom County State of the Neighborhood Report".

After the arctic weather Whatcom County experienced in December, it was not surprising that January 2009 residential sales were down from January 2008 real estate sales numbers. The number of homes sold in Bellingham dropped 38%, while Whatcom County residential sales were down just 33%, since Sudden Valley and Lynden actually posted small increases. Average sales prices of Bellingham homes dropped 38% from January of 2008, although the median sales price was nearly identical to a year ago. Whatcom County as a whole was a bit more consistent with last year, as the average sales price dropped 13% and the median fell 7%.
The smaller the sample (number of homes sold), the less meaningful a % change is. What can be meaningful, however, is the trend shown by the monthly numbers. This chart shows the number of residential real estate sales in Bellingham by month over the past two years, together with the average and median sales prices (shown in $1000's of dollars) in each of those months

Charts are wonderful because they provide a clear picture of what has happened in a market, which can give us some clues as to what may happen in the future. Let's look at what is important in this one.

• Note the shape of the Residential Units Sold line from January of 2007 through to January of 2008. There was a distinct rise beginning in March 2008 that topped out in August and dropped off sharply in September, ending the year at approximately the same level where it started. This is a fairly typical seasonal sales curve. In 2008, however, the upward curve was relatively shallow, actually peaked in June, and ended the year lower than it began. The trend appears to be flat, with nothing to suggest that we are going to see a spike anytime soon.
• When looking at the Average & Median Sold Price lines, it immediately becomes obvious that average prices have remained relatively level throughout the past 2 years - until October of 2008. In October, average prices didn't pop back up as they had been doing, and it looks as though the Average Price Line has found a new level.
• On the other hand, look at what happened to the Median Price Line in October of 2008 and January of 2009. It was almost the same as the average. What caused the two lines to converge? It is actually a continuation of a gradual trend that began in December of 2007. More of the homes that sold were in the lower price ranges. As the number of sales decline, the presence or absence of just a few upper end sales has a pronounced impact on the average sale price, but a minimal impact on the median. Foreclosures and short sales may continue to pull the median and average prices down as the year progresses. The primary impact of these types of sales will be in the price ranges where they are most prevalent, which at this point still seems to be in the lower end.

What does this mean for buyers and sellers? For a seller, this is a good time to get your house on the market. Even with the shallow sales curve we had in 2008, sales began to increase in February. For a buyer, this is also the time of year when inventory starts to increase, which means you should have more choices over the next few months than you have had.

Regardless of whether you are buying or selling, it is critical that you get to know your segment of the market very well. Sellers need to price in the market or expect to still be showing their home in the fall, when sales begin to decline. Buyers need to be able to recognize good value when they see it or risk losing the house they want to someone else. For each of us, this can be the best of times or the worst of times - it all depends on what we make of it.

For ongoing real estate numbers, go to http://johnsonteamrealestate.com/. We update the site weekly with everything from interest rates to market conditions to information from Fannie Mae, the FED and the FDIC. Also, feel free to call us at (360) 527-8766 or e-mail The Johnson Team if you want to know more about a specific portion of the market - we track a lot more than we have space to report.
www.JohnsonTeamRealEstate.com also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales, as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.

In its attempt to stabilize the housing market by increasing investor confidence, Fannie Mae has tightened up a bit on its requirements for loans that it will buy. Since most lenders sell the loans they generate, and since Fannie Mae buys the majority of housing loans, they set the "gold standard". If a loan can be found with less stringent requirements, it will typically cost more in terms of loan fees and interest rate. So, changes made by Fannie Mae are extremely important to the markets and have a huge impact on an individual's ability to get a loan on a specific home

Condos have been hit very hard in the current downturn, so it makes sense for Fannie Mae to review its requirements in an attempt to make new condo loans safer investments. Why does a buyer need to know anything about the requirements? It's simple. It is very disappointing to find a home you love and then find out that you can't get a loan on it. Standards are different for "established" and "new" projects, but the guidelines that follow are the basics, and apply to both condo classes unless noted otherwise.

• New projects require 70% to be presold - established projects require 70% owner occupancy.
• All projects require fidelity insurance - this covers the value of the association's reserve and active funds.
• No more than 10% of the project can be owned by a single entity.
• No more than 20% of the project can consist of non-residential space.
• Dues delinquency rates can be no more than 15%.
• Borrowers must have individual insurance on their specific portion of the project.
• The condo association must have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible.
• Payment abatements (HOA dues paid by seller or other concessions) are not allowed
• The minimum down payment required for a primary residence in an established condo project is 10%. Credit score, purchase as an investment or second home or other factors could increase this requirement.
• Some of these can be modified on a case by case basis

Ultimately, these requirements are to the benefit of a buyer. They lower the odds of problems in a complex, whether of the association or multiple foreclosures, that could negatively impact the value of an owner's investment. Many of them are disclosed in the resale certificate or public offering statement which a seller is required to provide to a buyer. As a preview of what may be in store, your lender can go to the Fannie Mae website to see if a particular complex is approved. From there it is just up to you.

You can meet the Johnson Team Real Estate on the web. Bellingham Real Estate Blog at Johnson Team Real Estate Bellingham Blog

A client who has wandered the world once told us, after a particularly good travel story, "The most uncomfortable experiences always make the most interesting stories." As we look back on the current economic times, I'm sure that will be the case. What makes it uncomfortable today is that we don't know the story's ending. In the case of the real estate market, we want to know, "Will prices drop? Will sales fall? When should I buy or sell?"

None of the experts have those answers. Most of them admit that they didn't see the current situation coming and that we have no good historical examples to show us what to expect. But as humans, we want answers for the future, so the experts give us their best guesses, which range from a pickup in the 1st quarter 2009 due to excellent interest rates to softness through 2010 due to job losses and lack of consumer confidence.

The reality is that nothing in life is guaranteed and that each of us needs to make our own financial decisions based on our individual circumstances. Some people have to move regardless of the market, but more move by choice, and in today's market it still makes sense for some people to move up or downsize. The current actual value of your property really doesn't matter - what matters is whether that value will allow you to make the change you want to make in your lifestyle.

Statistics can show us what has happened in the past, don't help a lot in predicting the future, but give us some indication as to where we are currently, so let's look at some of the numbers:

• Single family home sales in Whatcom County peaked in 2003 at 3052 units sold
• Single family home average sale price in Whatcom County peaked in 2007 at $334,698
• Condo sales in Whatcom County peaked in 2007 at 685 units sold
• Condo average sale price in Whatcom County peaked in 2007 at $225,146

2007 to 2008 comparisons of single family homes in Whatcom County show the following:

• 26.4% fewer sold (2693 to 1981)
• 4.4% drop in average sale price ($334,698 to $317,740)
• 4.5% drop in median sale price ($290,000 to $276,900)

2007 to 2008 comparisons of single family homes in Bellingham show the following:

• 28% fewer sold (1219 to 881)
• 4% drop in average sale price ($375,161 to $359,151)
• 5% drop in median sale price ($315,000 to $299,000)

To summarize the numbers, the odds of a house selling at this time are lower than they were a year ago and the price may be a bit lower than it was, but there has been no dramatic drop. List prices are being negotiated down about ½ % further than they were a year ago.

To summarize the reality behind the numbers, the basics of buying and selling have not changed. There are people looking for property. When something comes up that fits their needs and is good value, they buy quickly and pay the listed price. Some areas and price ranges are more desirable and in shorter supply than others so pricing is stronger and sell times are shorter. With less new construction available, newer homes and nicely renovated homes have an advantage. To view this post in it's entirety access the Bellingham Real Estate Blog

For ongoing real estate numbers, go to www.JohnsonTeamRealEstate.com. We update the site weekly with everything from interest rates to market conditions to information from Fannie Mae, the FED and the FDIC. Also, feel free to call us at (360) 527-8766 or e-mail Info@JohnsonTeamRealEstate.com if you want to know more about a specific portion of the market - we track a lot more than we have space to report.

The Johnson Team also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales, as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.

In all the discussion and dissension over the $700 billion government bailout intended to stop the downward slide of the economy, it is encouraging to finally hear of some plans to help the "Main Street" we keep hearing about. Since this is where the problems started, it seems reasonable that it may have a place in the recovery.

On November 11, Fannie Mae and Freddie Mac announced a program to help homeowners in default on a loan held by the two entities modify the terms of their loan to possibly forestall a foreclosure. Today, November 20, Fannie Mae went one step further and announced a halt to foreclosures scheduled for November 26, 2008 through January 9, 2009. There are some limitations. It applies to

· All portfolio and MBS pool mortgages owned or guaranteed by Fannie Mae that are currently scheduled for foreclosure

· Foreclosures scheduled for sale from November 26, 2008 through January 9, 2009

· Single family properties only

• Occupied properties only

The purpose of this temporary halt is to allow time to institute the loan modification program announced November 11, which will begin on December 15. That program provides for the following potential options for those mortgages currently in default:

· Repayment Plan: paying off the delinquent amount over time to bring the loan current

· Fannie Mae's HomeSaver Advance: paying off the delinquent amount with an unsecured loan

· Modifying the Existing Loan: changing the terms of the loan to pay off the delinquent amount and/or lower the monthly payments

· Pre-foreclosure sale: agreeing to sell the property for less than the loan amount (typically a short sale)

• Deed in Lieu of Foreclosure: lender accepting a deed to the property from the borrower and cancelling the debt

Borrowers covered under this procedure should be receiving a letter from the foreclosure attorney or trustee handling their file. That letter will tell the borrower to contact their loan servicer (the company to whom they make their payments), to discuss alternatives to foreclosure.

While Fannie Mae & Freddie Mac hold or guarantee the majority of the home loans in the US, that leaves a lot that are held by individual lenders. This program does not apply to them, but you may find that they are actually more flexible. To qualify for the Fannie Mae/Freddie Mac program, the borrower must be in default. Chase and Washington Mutual (www.wamu.com/wamucares) are working with borrowers who are still current on their payments but can provide evidence of hardship, and there may well be other lender/servicers who are doing so.

The bottom line is that anyone who is behind on their mortgage payments or thinks they are going to get behind on their mortgage payments should get on the phone to their servicer (the place they make their payment) sooner rather than later. While Congress and the federal Administration are trying to figure out where to spend that $700 billion, some lenders are trying to solve the problem where it started.

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