Nicole Weidauer

According to a recent article by Amy Hoek of Market Watch- Wall Street Journal, industry experts are saying that 2009 is a great year to buy and invest in real estate. Jay Papasan, author of Your First Home offered 5 reasons why this is true;

1. Affordability is better than ever- Prices may still be above average in many areas but they have certainly gone down. In fact, in the King County area, home prices have "retreated to its lowest level since September 2005" (http://seattlepi.nwsource.com/local/398737_housing05.html).
2. You have a large inventory to choose from- Sellers want to sell and they want anyone interested in their home to make an offer- any offer.
3. Builders are offering big discounts- "Home builders are getting even more aggressive with their pricing." Even those who put in a "low" offer may be seriously considered because builders don't want to lose a potential sale!
4. Mortgage rates are historically low- Lower mortgage rates increase the affordability for home buyers- and the rates we've been seeing have been the lowest in decades. What goes up must come down and vice versa- these historically low rates won't last forever.
5. You can get a federal tax credit- Although Washington is working on further tax credits/breaks for those purchasing a home this year, the $7,500 interest free loan is still available for first time home buyers to take advantage of.

Of course not all of these may not be available to all buyers, it just depends on your situation, but I'd say that there are some great advantages offered to those who are ready to invest in real estate in 2009!

My good friend and real estate colleague, Patrick Flynn, recently talked about the stages of grief but put a real estate spin on things. Here's what he came up with. Enjoy!

____________________________________________________________________________________________________

We're all experiencing a level of grief in our current correcting market. We're all feeling those intense rolling waves of emotion. But, do we all experience the same feelings?

What Are The Stages of Grief?

Many people have tried to explain what grief is; some have even identified certain stages of grief. Probably the most well-known of these might be from Elizabeth Kubler-Ross' book, "On Death and Dying." In it, she identified five stages that a dying patient experiences when informed of their terminal prognosis.

The stages Kubler-Ross identified are:

• Denial (this isn't happening to me!)

• Anger (why is this happening to me?)

• Bargaining (I promise I'll be a better person if...)

• Depression (I don't care anymore)

• Acceptance (I'm ready for whatever comes)

Is the current market giving you grief? Let's take a look:

DENIAL (This correction won't happen to me!)

When the correction hit, it appeared the Seattle market and our wonderful economic infrastructure was going to shield us from what was happening in the rest of the country.

ANGER (Why is this happening to me?)

When Seattle began feeling the correction, many of us began seeing our business slow down and the normally simple deals become more difficult to close, if they closed at all.

BARGAINING (I promise I'll do it better or I promise to make my calls)

Now that we are in a corrective market, some have made a pledge to do whatever it takes, including getting back to the basics of the business (can you say, Lead Generation) and unfortunately, some have not and are scratching their head wondering why a for sale sign and an open house every Sunday aren't working anymore.

DEPRESSION (I don't care anymore)

A year into the Seattle correction, we are seeing a noticeable number of buyers not buying, sellers not selling or simply unable to sell, agents getting out of the business, a fair share of real estate transactions not closing and apathy amongst the ranks.

ACCEPTANCE (I'm ready for whatever comes)

Now is the time for all of us to get the mindset that this market 'is what it is' and there's only 1 thing we have to do...stop looking for reasons and start looking for results! Recognize we all have the skill to make it through this shift in the market as we have in the past...and will do so again in the future!

According to HomeSmartReports.com, among the least risky cities for home buyers to invest in, Seattle makes the list just under the most resilient areas of Bridgeport-Stamford, Hartford and New Haven, Connecticut. HomeSmartreport.com is a California based online service that measures "collateral risk," or the chance you will lose money on a property purchase.

"Neighborhood stability is almost always anchored by employment, above-average wealth and education. Highly compensated professionals, managers and business owners with college degrees and large incomes tend to stay in their homes.

The absence of speculators and buyers with adjustable-rate mortgages also makes a difference.

Michael Ela, the president of HomeSmartreports.com, says California, with seven of the 15 riskiest areas in his survey, 'was rampant with speculators who got caught in the worst possible vise; many bought at the top of the market with variable-rate loans.' " (http://seattletimes.nwsource.com/html/realestate/2008664749_hiddenvalues250.html)

Like buying a stock or company, you need to gauge a home's risks, which many buyers neglect to do. Before buying real estate, be sure to ask yourself AND your agent these questions:

• How many foreclosures are in the neighborhood you like?
• How many nearby homes have been repossessed by banks for cheap resale?
• Are average home prices steady or falling?

Make sure you know the current market conditions in the area you are investing in but also be sure to know the market trends so you can see where it may be heading. Make a smart investment and know the numbers!

Even in these slower than usual times, 2009 brings about a revival in our housing market. Just last week we talked with a few new prospects looking to get in on the great deals this market offers.

"Bill Riss, chief executive of Coldwell Banker Bain real estate and other area real estate professionals argue the time to buy is now, and say they are starting to hear from more buyers.

'It's not often you have a market where the rates are down and the prices are down at the same time,' said Deborah Arends, an agent with RE/Max Northwest Realtors." (http://seattlepi.nwsource.com/local/395666_buyers12.html)

Another place to look is the actual sales statistics in the area. 35.48% of King County/Snohomish communities had a year over year gain in median home price. While the overall median home price in both counties was down compared to December 2007, we had several areas with price appreciation.

Recap of the top 5:

1. Vashon Island 54.5%

2. West Bellevue 27.3%

3. Des Moines/Redondo 16.1%

4. Queen Anne/Magnolia 15.8%

5. North Seattle 15.3%

What these statistics tell me is that although the prices are down overall, in certain areas prices are being driven up by increased purchases and interest in those particular areas.

"January often brings a surge in new listings for homes, relisting of homes that were taken off the market and buyers making a home search part of their New Year's plan. Sure enough, a pile of new listings popped up last week, and many open houses had decent traffic Sunday.

Golan Kedan of Seattle recently got serious about buying after roughly two years of casual looking.

'We're getting fairly close to a time where it's going to be as good as it gets,' Kedan said. 'My feeling is that the market is starting to bottom out and so now is a good time to buy.' "

So 2009 is finally here and I think we are all ready to see some improvements in the economy and in the real estate market. Aubrey Cohen of the Seattle PI interviewed many local real estate experts and here is what they had to say about the Seattle market;

" 'The fact that this downturn is so multifaceted, with bad news coming from every angle, which in turn is leading us into one of the deepest recessions on record, is the most significant story,' Sean Hyatt, managing director of the Bellevue office of Trammell Crow Residential. 'The failure of WaMu, the disappearance of the condo market, the commercial markets grinding to a halt, how quickly Seattle proved it wasn't immune, again, and caught up with the national recession, and all the other negative events are just symptoms. Since Seattle peaked later than the rest of the country -- the second quarter of 2007 rather than the second quarter of 2006 for the national peak -- it probably still has a ways to fall," he said. "It's unlikely that 2009 will bring a bottom, but it will be a great time to be a buyer.' " (http://seattlepi.nwsource.com/local/393779_realestate27.html)

Bruce Williams, chief executive of HomeStreet Bank, also commented that, "Until people have confidence the economy is not in free fall, home sales will be down."

I hear similar sentiments when talking with clients as well as friends and family about current market conditions. No one wants to stick themselves out there when there is so much uncertainty. Will home values continue to drop? Will I even get approved at a bank? What if I get fired? How will I sell MY home in this market? There is a lot to think about, it's no wonder people are waiting on the fence.

I may not know when this market is going to shift back up but neither do you. What I do know is that homes prices are very affordable and interest rates are at all time lows. "Lower prices and greater selection make homes a relative bargain over years past, he said. "Couple this with interest rates that are now very nearly irresistible, and the incentive to home-shop grows much stronger." (http://seattlepi.nwsource.com/local/394929_housing07.html) Just the other day I was talking with a fellow agent about prices of homes in the Maple Leaf area in Seattle. We discussed how last year it would have been difficult to find nice rambler for very much less than $400,000 but now that is definitely do-able.

Like Sean Hyatt said, " [2009] will be great time to be a buyer." and boy is he right. With prices low and rates even lower, home buyers, especially first time home-buyers, can score some great deals!