Mike Conner, City Realty Inc. Olympia, WA

I've had the unfortunate experience lately of having to explain to many of my clients that they would have to pay the full asking price in order to buy the home they were looking at. We find ourselves in strange territory at the moment. Numbers and statistics indicate that we are in the heart of a buyer's market, but reality tells a far different tale.

THE LAST 8 OFFERS I HAVE WRITTEN WITH MY BUYER CLIENTS HAVE FOUND THEMSELVES COMPETING WITH MULTIPLE OFFERS!

What is this all about? Basically it boils down to quality. We have a false sense of over-supply right now in the market due to bank owned properties, short sales and, for lack of a better term, DOGS! It seems that an overwhelming majority of the homes currently available are just plain UGLY or at least in need of some kind of visibly obvious repair. You know the type of home I'm talking about, they sit on the market for countless days and undergo multiple price reductions only to get a still lower offer.

The flip side of this is much different and I think a better indicator of the true health of the real estate market (at least locally). Homes that are well kept, presented in a way that is inviting to buyers, and priced within reason are typically selling VERY quickly and for TOP DOLLAR!

As an agent you can usually pick these listings out fairly easily. You walk in these homes and just know that they will not be available by the time the weekend is over. But HOW do you convice your clients, who are so influenced by the negative picture being painted by the media, that it is still OK to pay full asking price for a nice home?

DUCK DASH IS HERE!

JUNE 6 at Tumwater Falls Park

11:00 a.m. - 5:00 p.m.

Feeling Lucky? If you are, or if you just want to contribute to a number of worthy local causes, come out to Tumwater Falls Park and participate in the festivities of this year's 20th anniversary of Lacey Rotary Duck Dash!

What do you do at a Duck Dash, you might ask... Its really pretty simple. You purchase a ticket for 5$ (or multiple tickets if you want), the number on the ticket corresponds to a number on one of the rubber ducks that get dumped from a giant crane into the Deschutes River. The ducks race down the river toward the finish line where the first 11 ducks are rewarded with great prizes.

All the money raised from duck sales goes back into the Rotary Club for community service projects. See where you can purchase tickets as well as what projects Rotary has planned at: http://www.laceyrotary.org/

In addition to the duck race there will be a food and fun fair with live music and entertainment as well as a Kid's World with face painting, waddle races, quack contests, costume contests, arts & crafts, drawings for free bicycles, and more fun!

This year's event is sponsored by a host of local businesses and the prize list is pretty amazing!

Grand Prize: An entry to win a 2010 Ford Mustang! - Lacey Rotary

First Prize: $2,500 CASH! - Venture Bank

Second Prize: 57" Mitsubishi 1080p High Def DLP TV - Desco Audio/Video

Third Prize: $1,000 CASH! from Lucky Eagle Casino AND 1 Night Family of Four Pack to Great Wolf Lodge

Fourth Prize: Tag Heuer Aquaracer Sportswatch - Ben Bridge Jewelers

Fifth Prize: $500 of Fishing Gear from Cabela's AND a Steelhead Fishing Trip from Riverman Guide Service

Sixth Prize: $1,000 Savings Bond - South Sound Bank

Seventh Prize: $500 Gift Card - Interiors by Carpet One Floor and Home

Eighth Prize: A Golf Pack to 4 Local Golf Courses - Capital City Golf, Home Course, Olympia Country Club, Tumwater Valley Golf

Ninth Prize: Two Season Passes - Harlequin Productions

Tenth Prize: $300 Gift Certificate - The Guardsman Menswear

Eleventh Prize: $250 Gift Certificate - Sportsman's Warehouse

Hope to see you there!!!

We are in the midst of a paradigm shift in the housing industry.

THE REALLY OLD: Homes used as shelter

THE OLD: Homes used as ATM's

THE NEW: Home sitting vacant

Since we are headed down this path, thanks to recent economic woes, lets examine a history of homes and what they have meant to us as human beings. Perhaps that will help us put things in perspective and remember why we came to value the ability to own our own homes. Homes weren't always personal ATM's and we didn't always buy homes for the sole purpose of getting rich. We are, in a way, going back to our roots in terms of housing.

In years past, our ancestors created shelters out of whatever raw materials were available to them. Their sole purpose: protection from the elements. They obviously didn't have the amount of material possessions we do now so security was not a necessary function of their dwellings. The oldest known human dwelling was discovered in 1965 near Kiev, Ukraine. It is believed to be 12,000 years old and made of mammoth bones likely covered by mammoth hides. History is full of stories like this. We all have heard of the cave dwelling people of ancient times, we've seen igloos and adobes, and we've seen the ruins of civilizations of yesteryear. Even in our on nation, our early inhabitants used whatever was available to them to create shelter.

Early settlers used anything they could find to construct shanties with dirt floors. There were no rooms, just one open structure and it was probably about the size of a modest bedroom by today's standards. Eventually word began to spread of the efficiency and ease of construction of log cabins. Systems began to take hold and people began to specialize in home construction. As construction took off we began taking pride in the appearance of our homes and property. In the late 1800's we began to experiment with the majestic weed-free grass lawns like the ones typical of the wealthy English. The American home was slowly becoming a status symbol.

Soon cities began to blossom and urban life flourished. It wasn't until after the second World War that suburban America really got its legs. Through federal subsidies being offered for suburban development, homebuilders began constructing relatively large structures that served as a status symbol to people who were desperate to separate themselves from less wealthy city dwellers. Large developments began springing up and the size of homes continued to grow.

In 1950, the average home size was just under 1,000 square feet while the average household consisted of 3.7 people. Over the next 55 years the size of homes continued to grow but the number of people per household dwindled. By 2005, the average home had grown to nearly 2,500 square feet while the average household had dropped to only 2.6 people. Also worth noting...in 1950, only 1% of homes built had 4+ bedrooms, but in 2003 that number had grown to 39%! So to summarize, we increased our homes by 1,000 square feet, built more bedrooms, but reduced our family size. Wait....WHAT?

Where has all of this left us? Maybe you've heard the stories about large developments of brand new homes being demolished after being turned back over to the bank. You've probably witnessed street corners with a roll-call of real estate companies' directional signs. You've certainly read at least one news story about falling home prices.

By now, we are all too familiar with terms like 'housing bubble', 'foreclosure crisis', 'downturn', 'bailout', and a whole host of other emotionally charged words. Basically, we became much too dependent on our homes as status symbols, as measures of our value to society. We went away from the model of wealth leading to home ownership and turned instead to a model of home ownership leading to wealth. It is the classic rags to riches story that is just inspiring enough to make people do silly things in the pursuit of wealth.

Everyone should have a roof over their head but it isn't necessary that we all own our own roof! Homeownership should take place when you find a community that you believe in, where you see yourself leading a positive, prosperous life for an extended period of time. When we buy homes just to turn a profit, we end up robbing our communities of any positive contribution.

So, once this ugly, greedy chapter of the history is behind us, what will we find in the future of the house?

Ok, so I have to admit that most days for me are 'Take Your Daughter to Work Day". I've been lucky enough to not have to put my daughter in day care or with babysitters at all (other than Grandma). It has been a real blessing to be able to develop such a close bond with her during this time in her life where everything is new and exciting. So, with this blog series I'll attempt to share some of the laughs, tender moments, and sheer joy that go along with fatherhood.

To backtrack just a bit, my daughter Addy is not quite 2. She has been a Realtor in training with me from about the time she was 9 months old and my wife went back to working. It used to be pretty easy as she was not very mobile. I could set her down in her little carseat and give her something to play with and she was content. Pretty soon though she discovered that arms and legs could work together to get her where she wanted to go. She was still easy to contain, I could just close my door and let her do her thing while I was on the computer or on the phone. When we weren't at the office she was a good sport about previewing new listings with me. A few months later she learned that her legs alone were far more efficient as a mode of transportation. My days of productivity were numbered.

Since then, our time at the office mainly consists of a continuous game of chase, where she is leading and I am following. Another favorite game is coloring on Dad's for sale signs. I'm lucky to have a family friendly office where she can roam around and say hi to people, but saying hi to each person 10-12 times in a matter of 5 minutes can distract even the most focused agent. I've also found that not eveyone thinks poopy diapers are cute and/or funny. So, for the sake of my colleagues' productivity (and sanity) I have made myself a little more scarce around the office lately and try to mainly work from home when I have Addy.

I always hear about Tiger Woods' love for golf as a young boy, and about Bill Gates obsession with computers from an age when he should have been more concerned with coodies. It seems that if a child can focus their energy on something they enjoy and parents encourage that activity, there is a good chance they will turn out to be brilliant at it. I was hoping that activity for my daughter would be golf (just so I have a legitimate excuse to go play) but I'm realizing that she is soaking up my every move like a sponge. At 18 months she started carrying around this little play phone with her, not the fancy new fake cell phones for kids, but a true old-school land line handpiece complete with cord. She would walk around with it and randomly put it to her ear and say 'hewwo?' then she would hand it to me like she was my receptionist or something. Next she started to experiment with computers. She has changed some settings on my computer that, to this day, I can't figure out how to reset. Just recently she typed an entire page of jibberish on an open email window that I hadn't yet sent out. Luckily she hasn't figured out how to control the mouse and click send.

I'm beginning to think I should take on the European lifestyle and take a mid-day siesta since my work schedule mainly revolves around nap time. And my car has gone from a clean comfortable place for chauffeuring clients to a storage bin for toys, crackers, and diapers. My work shirts now feature faint fingerprints, dried slobber, and plenty of crumbs. But through it all I have learned a whole lot about patience, humility, and forgiveness. I've learned that the only way to succeed is to keep trying no many how many times you've failed. I've learned that if you can't laugh at yourself life will get the best of you. I've learned that it is possible to be someone's hero without doing anything heroic. I've learned that a genuine smile can cure almost anything. And most of all I've learned that unconditional love is a true and essential part of a fulfilled life. My time with my daughter is truly priceless.

Stay tuned for more from The Fatherhood Chronicles!

You've likely overheard conversations (or maybe participated in them) recently about the state of the real estate market, particularly what caused the crisis and when we will "hit bottom". Everyone seems to have an opinion of who is to blame and how to get things back on track. But rarely do you hear real numbers that apply to your own community. Even the numbers used in local publications generally look at county-wide sales data to formulate their statistics. If you are a Thurston County resident then you are aware that areas like Yelm, Tenino, and Rochester follow much different trends than the Olympia market. So, for all my fellow Olympians, here are some statistics that actually look at YOUR neighborhood.

While my statistics cover only my local market of Olympia, Lacey, and Tumwater, WA I have a feeling these same trends may apply to many markets across the country. For the sake of comparing apples to apples I have limited my sales data to single-family, stick-built, detached homes. All data was provided by Northwest Multiple Listing Service.

Peaks and Valleys

This first chart provides a picture of the number of homes sold per year, dating back to 1999. I've broken it down into total number sold (green), resale homes sold (red), and new construction (blue). Interesting to note that Resale sales volume peaked a year earlier than new construction, perhaps because all those buyers in 2006 were lured away by the shiny appeal of brand new homes. I just hope they didn't all get in on adjustable rate mortgages with no down payment....

The Intimate Relationship of Supply and Demand

Next, we'll take a look at how median sales prices have reacted to the sales trends seen above. The same colors apply in this chart. (Just so everyone is on the same page here, MEDIAN represents the middle number in a list. So for example, if you had 5 sales with prices of $150, $185, $205, $210, and $260, your median sales price would be $205 because half of the prices are smaller and half are larger. Median prices are used as a measure of the real estate market because there tends to be a large number of sales in the middle of the range of prices. Averages are sometimes used but if you have a few sales that are way above the rest the results will be skewed.) What stands out most to me is that prices have not really reacted to the huge decrease in sales volume. The resale market began to dip last year, I'm sure due to the "inventory reduction sales" and "buyer bonuses" being offered at the struggling new construction sites. However, I found it very interesting that the new construction median price has continued to rise through '08. I would call myself an optimist, but at times you have to be real and look at the facts...when demand drops, prices are sure to follow. The degree to which they fall will be determined by the confidence of the consumer, the availibility/affordability of loans, and the rate of foreclosure in the area.

Back to Reality

Many of us were fooled into thinking that 20+% appreciation in home values was sustainable. Banks lent money to borrowers based on this philosophy. People assumed that real estate was an avenue to get rich quick. But, when the honeymoon ended and reality started to set in we saw the finger pointing begin. Lets face it, greed is the only guilty party. When your neighbor buys his house then sells it a year later for a $50,000 profit without making a single improvement you are going to want in on the game. And so the bubble inflated.... In this chart I have set 1999 as the bench mark for value, therefore it shows as 0% appreciation. There was in fact appreciation in '99 but I had to start somewhere!

The moral of the story is that I, like everyone else, wish I had the crystal ball to be able to answer that question of "when will we hit bottom". Unfortunately, we will only be able to see the bottom in hindsight.

If you'd like to discuss the impact recent changes in the housing market have had on YOUR home, please contact me. I have detailed charts and data for most neighborhoods in the Olympia area.

Mike Conner 360.970.4408 / mike@cityrealtyolympia.com