About Chelan County, WA

With some great prices out there right now for vacation condos in Leavenworth and Chelan, a lot of people are entering the market. With prices coming down, some people ask me if they should wait for them to drop further; I tell them, " When you can buy a condo you like for less than it costs to build, there can never be an oversupply at this price, because if this is the price, no one will build any new ones. So if you didn't catch the absolute bottom of the market, you sure got close"

After you see the great prices, before you make an offer, you better check on financing. A lot of lenders have backed away from doing loans on vacation condos, especially those which can be rented out part of the time. Most condos loans I actually do are for people who started with a lender who said they could finance it as a conventional loan- only to have it get kicked out of underwriting. We do both Fannie Mae condo loans as well as 'non-warrantable' condo loans, and here is the big difference (I'm not smarter than anyone on this, we just checked with Fannie Mae to see what they would take): It is the presence of BOTH a rental pool, AND a nightly rental desk that kicks most of the loans out of FNMA eleigibility.

The other issue is the percentage of units that are investment properties Vs 1st/2nd homes. And then the other new FNMA rule that stops most new condos is that FNMA won't buy a loan for a condo unless 90% of the units have been sold.

So what does this all mean? For Leavenworth and Chelan, only a small number of projects can get Fannie Mae loans (I recently closed one at Kahler Glen). For all other condos, you will need to seek out a community bank that does Portfolio lending (lending their depositors money). These rates can be higher, however 1) If it is a new project, the bank that financed the project is probably offering special financing. and 2) If you save $100,000 or more off of what they used to go for, but you have to pay a higher interest rate SO WHAT; you are saving a bundle overall. Here is some quick math - you think you would like to pay 5% , but let's say the portfolio rate you find is 7%. If the loan amount with the new pricing is $200,000 you pay $1330 a month P/I. That unit used to sell for a $100K more. Even if you could have gotten the 5% you wanted, 5% on $300,000 is $1610 a month.

These deals won't last forever, as there is no more supply coming on the market for a great while. Seek out a competent Realtor in the specific market you are looking at to help you.

The $8000 first time home buyer tax credit ends soon and a lot of buyers worry they might get left in the cold. Even though this great program comes to an end November 30, 2009 I am here to tell you there are several other reasons to get out there and buy!

The tax credit is obviously a huge bonus but buyers are overlooking the current market condition which is just as exciting as the $8000 credit. Interest rates have reached an all time low and continue to dip under 5% for 30 year fixed loans. During the mid 1980's interest rates reached a high of 15.5%. It is only a matter of time before rates begin creeping back up and it is in any buyer's best interest to buy now if they are in a good financial position.

Another major factor a buyer over looks is that we are in a true buyers market. We have been in a seller's market for well over 10 years. Buyers are no longer being forced to compete in bidding wars and pay the highest dollar for a property. Buyers are able to get into a home for a very reasonable value and almost always get some closing cost assistance from the seller. This buyer's market is truly best for the first time home buyer because they have nothing to sell and sellers are more likely to give a non-contingent buyer a good deal over a contingent buyer with a home to sell.

One of the more important reasons to buy now is because the market is flooded with inventory and home builders are chomping at the bit to get homes under construction. When we were in a seller's market there were few choices and several buyers got stuck with a home that wasn't exactly what they we're looking for and even had to pay top dollar!

Now you can be picky. Take your time and find the home that really fits your wants and needs. The best part is you won't be paying the highest price for your dream home either! So even if you miss the date for the first time home buyer tax credit, don't feel like your missing out. There are so many good reasons to buy and now is the time!

Consider these words:

Help Americans understand that the first and best defense of their liberty is not free speech, a free press or free access to weapons, but, rather, the freedom to buy, sell, own, use, enjoy and profit from the land we live on. - Greg Swan

It is not that those other freedoms aren't important, but they pale in comparison to the power that individuals have when they have unfettered property rights.

I attend a slew of local meetings on comprehensive plans, zoning and property issues. I continue to be amazed at how citizens and officials in an area that claims to be freedom loving and predominately conservative are willing to toss out our individual property rights at every opportunity without even considering what they are losing.

We live in a challenging area with a state that has some of the most oppressive growth management laws in the country. Some local governments work to preserve flexibility for property owners while trying to appease the rotarian socialists who will peel away the rights of others and feed at their expense at every opportunity. Other plans do not. Compare Chelan to the proposed Manson plan.

Chelan works to do a reasonable and flexible adoption of state regulations that allows things to happen while the Manson Sub-Area Plan can't see a right or flexibility it doesn't want to take away. Yet, there are many claimed conservatives pushing the Manson plan. Are they really conservatives, or socialists?

I'm not a fan of having vacation rentals next to my home or the Twisted Pearl anchored in front of my house. But do we need to ban them in some sweeping rules that make illegal the vacation rental you would never notice or the commercial watercraft that are operated responsiblity? Neighborhoods can have or create covenants regarding vacation rentals. If there is not some existing regulations on safety, liability and sanitation that the Twisted Pearl is violating, I would rather they have the right to be there than allow any further erosion of my, or their, liberty.

I would be happy to argue that we don't need more laws, any more laws or regulations! If someone is upset about garbage being left out in their neighborhood it can be addressed in their neighborhood. Look at our elected officials and see which ones want to propose a new regulation for every issue while claiming to be conservative. Rotarian Socialism is not a conservative approach to governing.

On Saturday, there is a tea party planned in Chelan. While you're there claiming to value liberty, think about whether you value liberty even when it is inconvenient. Would you value an end to ag or other subsidies or tax breaks that benefit you but rob others of their liberty? How about if a more restrictive zoning might shield you from the possibility of something changing in the future, would you instead ask for you and your neighbors to have more freedom and less restriction? Would you encourage the government to have less social welfare responsiblity and instead have the liberty, and money, to fund the charities or your choice? Do you value others' right to free speech even when you don't agree with what they say? If you wouldn't take the side of liberty in those examples, you may not be as liberty loving as you think.

Most of our laws exist because of the few bad apples. We pass rules to the lowest common denominator, to regulate away the worst behavior. But the cost of regulating away that building that might not use a siding you like is that you also regulate away the clever designer who can use that siding in a creative, attractive way. We ban the best in order to limit the worst. The whole experience of life is lessened. With regards to zoning, look at the strict rules and design standards typical in Seattle and coming soon to our towns as compared to Houston. Houston is about to become the third largest city in the country and has no zoning!

Does Houston have some poor development, absolutely. It also has great development and a vibrancy that you won't find in Los Angeles, Seattle or San Francisco. The nanny state has a real cost.

As citizens, we have to demand our rights and liberty or we will lose even more. Houston is about to become the third largest city in the U.S.

As we pass the middle of August and we start to worry about getting kids ready for school, those who were hoping to sell their homes and properties in the Lake Chelan area know it won't be long before buying activity wanes to winter lows.

So, what do they do? It becomes "End of Summer Sale" time in Chelan! There are fewer and fewer new listings and more and more price reductions. There have been 148 price reductions in the last 30 days on the Chelan MLS and only 48 closed sales. Even the properties that don't reduce their list price often become much more open to offers or carrying a contract.

I have one client who would love a low ball offer on his acreage, but doesn't want to reduce the list price too much in case he needs to refinance later. He's even open to trades on almost anything that has value. Motivated sellers become even more so as the summer draws to a close at Lake Chelan! If you like I'll do my part. I'll even throw in a set of steak knives if you make an offer with me that gets accepted on a Lake Chelan home! See, I'm in the "End of Summer Sale" spirit too!

That's right, there is a type of home that is seeing much higher sales than last year. Those would be Lake Chelan waterfront homes! Through August, 10 have sold in 2009 as compared to 7 that sold last year.

Do you want to know why? While I don't know the thoughts of individual buyers, the bargain pricing this year probably has something to do with it. The average sale price of the Lake Chelan waterfront homes dropped from $1,728,071.00 in 2008 to $1,030,300.00 in 2009. That's right, waterfront homes this year, on average, are selling for 59.6% of last year's pricing! Wouldn't we like a tax revaluation now!

August 2009 saw fewer residential closings than 2008 with 15 in 09 compared to 18 in 08. By Dollar volume, August 2009 was 64% of 2008 and by transactions it was 83.3% of the 2008 number. With the strong July Lake Chelan home sales, July and August sales this year by transaction volume already match the entire third quarter of last year at 35. The average sale price through August is 91.9% of last years average sale price. To read all the details, have a look at the Lake Chelan Residential Real Estate Sales report!