About Clallam County, WA

Foreclosed homes are disappearing as investors and homebuyers avail themselves of low prices, historically good interest rates, the $8,000 first-time buyer tax credit and programs such as the USDA's 100% financing option. For example, of the eight homes in the $250,000 - $300,000 segment that went under contract last month, six were reposessed properties, many new construction.

If you are considering a new home, the inventory now is ten percent stronger than last year with 310 homes on the market.

There are 58 homes priced under $200,000, an increase of nine percent. Homes priced from $200,000 - $249,999 have a 90% increased inventory over last year's level of 39. There are 74 now.

There are 64 in the $250,000 - $299,999 range. Last year there were 56 at this time. The number of dwellings in the $300,000 - $350,000 price point have dropped to 26 from last year's level of 45; although some of the shift can be attributed to repossessed new construction.

The selection of $350,000 - $399,999 homes remains the same in number from last year with 22 now available. And homes priced in the $400's have grown by four to 23 on the market. There are three fewer homes in the $500,000 - $599,999 bracket with ten now for sale.

Homes in the uppermost segment of $600,000+ have seen a 43% increase in selection with 33 available versus the 26 seen last year.

Last year, at the beginning of April, there had been 73 homes sold in this market. This year we've had 43 so far, a decrease of 41 percent.

Home sales in the $400,000's have dropped from four to one so far this year. Homes listed in the $500's have seen two sales, versus three a year ago. And last year we had had two sales of homes in the $600,000+ and in the $300,000 - $349,999 segments. This year, none.

The number of homes sold in the $250,000 - $299,999 and $350,000 - $399,999 sectors have held even from last year's figures with ten and five sold respectively.

The two lowest price segments are under last year's levels with seventeen homes sold in the under $200,000 segment, versus 29 last year and seven having sold in the $200,000 - $249,000 segment against nineteen previously.

Serious investors from J. Paul Getty to Warren Buffet have attributed success to their philosophy of buying when others are fearful and it appears people are beginning to realize both the wisdom of that philosophy as well as the fact that no one can predict where the bottom of the market will be. Buying now may not get you the absolute best price on a home, but delaying could find you without the home you wanted and at a higher interest rate than previously available, cancelling out the advantage of the lower price. And with market levels where they are, it is a buyer's market. Sellers are aware of this fact as repossessions and slower market sales keep pressure on prices. But as the repo's leave the market that pressure will lessen.

Indicative of this market awakening is the number of homes sold within the last six months. A month ago there had been 24 sales in the market. As of the end of March there were 43 sold. While the market is down 41% compared to last year, over the last six months activity is only off by 27 precent with 118 sales since October.

So whether you are looking for an investment property or a new home, a repossession or a good property at a very do-able price, be aware. Opportunity knocks. It doesn't beat down your door.

Other markets are improving and ours is as well. To view the current inventory, visit: www.portangeles.com or call me at 457-0456 for information.

Sequim and Port Angeles home sales activity for the first three months of this year compared to last year is instructive. Here we have a graph of the number of single family homes listed for sale in the local MLS and expired or withdrawn in the first three months for 2008 and 2009 (only the Olympic Listing Service has all MLS listings for our area, the NWMLS only includes some of our local listings, so be sure you are searching with the OLS MLS).

That we have so many listings that have not sold, but have been removed from the market should be no surprise when we look at this graph showing how the actual sales of single family homes in the first three months of this year compares to the first three months of 2008.

Trying to understand how homes are assessed is, to many people, as difficult as understanding quantum physics. Throughout the upcomings months, we'll visit this topic and hopefully shed enough understanding to make this mental quandry, at the very least, palatable. Let's look first at Washington's unique 1% Property Tax Limit.

The one percent increase limit means that individual, and please note that word, taxing districts can only receive one percent more in revenue from property taxes than the year before.

An individual tax district is a singular entity such as a city, county or school district. There are also "junior" taxing districts such as a hospital or a fire district. Your tax bill is a culmination of each of these individual district's levy rates (so much per $1000 of value) added together.

Washington state operates on a budget system for figuring taxes. The total amount needed to meet a budget is divided by the number of taxpayers and proportional to their property's assessed value. Now before you leap off with the idea that increased property values mean increased taxes -- with this system, that ain't necessarily so.

But before we go there, let's follow this first part through. For simplicity's sake, we will not consider any other streams of revenue such as new construction fees. This is just about your property taxes and the role of the assesor in that figure.

If, for example, the individual tax district is the city in which you live and last year the city had a budget of one million dollars -- in the next year the budget can only increase by one percent. In this case, the new budget would be one million and ten thousand dollars. (Talk about tight! Imagine trying to run a business or household by only getting one percent more each year). Important Point: The one percent applies to the maximum increase in tax revenue that the individal tax district can acquire. It does not apply to individual homes.

Your property taxes could increase (or not) by more or less than one percent depending on how they change in value relative to other properties in a district. I can see the fog beginning behind your eyes, so let's try an example.

Imagine three houses in different parts of the city, each assessed last year for $200,000. The city collected taxes on a rate of $1 for each $1,000 of property assessed value. If all of the properties in the city were valued at one billion dollars total, the city would collect one million dollars of taxes. Each of our imagined home owners would pay $200 for the year.

Over the course of the year, Home A - in a neighborhood that's had a few problems - increases ten percent in value. Home B - in a neighborhood that has seen a dramatic upswing in popularity -and price - (who'd have thought a water view was so attractive) increases 20% in value. Home C is in a typical neighborhood in our fictitious town and increases fifteen percent in value, which is normal for this community. Home A = $220,000 Home B = $240,000 Home C = $230,000The city now has a budget of $1,010,000 (one million, ten thousand dollars), limited by the one percent increase allowed. The total value of the properties in the city is now up fifteen percent from the previous year -- normal appreciation for our imaginary municipality. The local assessor has informed you that your property has appreciated; a thought you both enjoy and view with trepidation. In order to keep from collecting more than the law will allow, the city must change the amount from $1 per $1,000 of property value to just below 88 cents per $1,000 (87.8261 cents, if you desire accuracy).

If you owned Home A, even though your home appreciated ten percent in a year, your taxes would drop to $193.22 ($220,000 x .878261). You probably wouldn't complain. But if you are paying less, someone else is going to be paying more to meet the budget.

In our scenario, Home C went up the average amount of fifteen percent in value. But what's going to happen with the taxes? Let's look. $230,000 x .878261 = $202 in taxes. That's a one percent increase in the taxes even though the home went up fifteen percent in value.

Home B went up the most in value, View-View Heights now being uber chic, and has a value of $240,000. (And just think, if homeowner B could've just convinced the neighbors to sell for less then this whole increase thing wouldn't have happened. But it has). $240,000 x .878261 = $210.78, an increase of 5.39 percent.

While each property increased in value, the value was based relative to the properties in the surrounding area; i.e., the neighborhood and the city.

Every year, the individual taxing districts and junior districts submit their budgets, (again, we are being simplistic here) and the total for all of them is figured out. It's like getting one check for your whole party at a restaurant. Now each person must pay their share and most will not pay the exact dollar amount of what the other is paying. The same applies with the homeowners and the taxing districts levies. The budget has been delivered, now how to divide the bill.

Rather than allow everyone to choose the amount they'd pay and hope it all comes out, each property owner pays a percentage based on the property value and that value is determined by the assessor's office.

Typically, a homeowner perceives their home's value by what a fee appraiser (one who is licensed by the state and charges a fee for their services) says it is worth after comparing it to similar homes in the same area. This is usually done by comparing a home with comparable others that have recently sold. The term used is "market value" and the appraisal is used to determine the worth of a home in today's real estate market.

The assessor's office appraisers also deal in "market value" but it's not the same animal. Same name, different critter. (A marsupial can either be a kangaroo or an opossum). When they determine market value, they are looking at the entire market and are doing what's known as "mass appraisal."

Complicating this process is how they are allowed to do it. If the assessor tried to keep every home valued at the market value of any particular day, they'd be busier than a long-tailed cat in a room full of rocking chairs. . . and values would vacillate dramatically. So, luckily (or not, depending on your view) the way an assessor looks at properties is dictated by the state. Whereas a fee appraiser must evaluate by the current market, an assessor is only allowed to look at historical market data.

Even though our mythical city increased in total value by fifteen percent, as we've seen, not all properties did the same. It would be so simple if all the neighborhoods were identical and all the homes were the same. But life isn't simple. View-View Heights homes are commanding higher prices than the ones on Downturn Acres, so different values have to be assigned to neighborhoods. Then there have to be general values assigned to Very Good, Good, Average, Fair and Poor homes within each neighborhood. The assessor has to look at the whole and then each piece of it to determine individual home values.

Anyone who has owned property has received a valuation notice, that little card that tells you what the assessor thinks your property is worth. Not only is that notice not your tax bill, it is based on information available before January of the assessment year. Also, the note you get in 2009 is the value of your home that will determine your property taxes in 2010. So what do you do when you disagree with the assessor's estimate of your home's value? Sorry for the cliffhanger, but we'll look into that in the next article.

Karen Cooper - Mortgage Consultant - www.Quality4Loans.com
Providing high Quality, Professional, Ethical service to Oregon and California home buyers and owners since 1983. Whether you are taking out your first home loan or your fiftieth, for your home, your second home or for investment, put my knowledge and expertise to work for you.

The residential market has both higher inventory and higher sales than last year at this time. By the ninth week of 2008, the Port Angeles market had 264 listings. This year we have 294, an increase of ten percent. Last year we had 19 homes sold. This year there have been 24 in the same period.

The lowest priced segment, those under $200,000, has a slightly smaller offering than last year with 55 now available. Last year there were 58.

Inventory for homes listed in the $200,000 - $249,999 segment have seen an increase of 70% over last year with 68 currently on the market, versus 40 last year.

There are 50% more homes in the $250,000 - $299,999 price range with 63 currently in stock, compared to 42 in 2008.

The next four price points are showing declines, with the number of $300,000 - $349,999 homes showing the strongest narrowing (57%) with just 25 available. A year ago, you would have had 44 to choose from. There are 20 homes priced from $350,000 - $399,999. Last year there were twenty-three.

Moving up to the $400,000 - $499,999 inventory, you'll find seven fewer with 20 now on the market. And if your eyes are cast upon the $500,000 - $599,999 section of homes, we're down two with ten now on the market.

The top segment, those priced at $600,000 and up, is showing an overall increase of 88%. Last year there were eighteen. This year, we have 34. Of those, seven are priced between $625,000 and $649,999; nine are priced from $650,000 to $697,500; seven range from $715,000 - $799,000; and four rank from $825,000 - $899,000.

There are two homes in the $900,000 price range and three priced from $1.1 million to $1.2 as their listing price. There is one currently offered at $1,495,000, one at $1.8MM and one at $4,000,000.

It is now taking about fifteen percent longer to sell a home with the average taking five months. By this time in 2008, it was taking four months and a week.

Homes under $200,000 have a six-point-four month inventory; sixteen-point-six month supply for homes listed between $200,000 - $249,999; and the same holds true for those priced between $300,000 and $349,999.

The homes is listed between $250,000 and $299,999, have an absorption rate of thirteen-point-seven months. There's a fifteen month supply of $350,000 - $399,999 homes; a 20 month supply for $500,000 - $599,999 residences and a two-year supply of homes that are listed between $400,000 and $499,999.

The top bracket has seen three sales in the last six months, but none so far this year. That supply has a five-and-two-thirds years absorption rate. An absorption rate above nine months indicates a buyer's market.

The amount sellers are garnering for their properties, when compared to their asking prices, has dropped slightly. Normally we see an average of 94% - 96% of the list price as the sold price.

Year-to-date, the average has been at 93%; although, homes in the lowest price point are selling for about 96% of list. Homes selling in the $250,000 - $299,999 segment are also faring well with a 95% average.

Homes in both the $200,000 - $249,999 and $300,000 - $349,999 ranges have sold for 92% of asking price, on average. The three homes in the $500's have averaged 91%. The three segments of $300,000 - $349,999, $400,000 - $499,999 and $600,000+ have had no sales so far this year.