About Edmonds' Esperance

The Seattles Times is reporting today that the number of homes sold in King County was down 18% from a year ago. I decided to do some quick number crunching and found that here in Snohomish County, sales volume has dropped even further: 25% (from 635 homes sold in 2009 to 476 this year). That number is three percentage points higher if you account for condominium sales as well.

Our fair city of Edmonds did far better, closing just 13% less homes August '10 (39 sold) than in August '09 (45).

Here's a quick breakdown of how each neighborhood in Edmonds did last month (compared to year-ago figures):

• Edmonds Bowl: no change (4 sales in August '09 & '10)
  
• 5 Corners: +300% (3 sales last month vs. zero in August '09)
  
• Downtown: +200% (2 sales last month vs. zero in August '09)
  
• Edmonds Comm College:no change (zero sales in August '09 & '10)
  
• Esperance: +100 (1 sale last month vs. zero in August '09)
  
• Lake Ballinger: no change (2 sales each in August '09 & '10)
  
• Meadowdale: -33% (6 sales last month vs. 9 in August '09)
  
• Perrinville: no change (zero sales August '09 & '10)
  
• Seaview: -71% (2 sales last month vs. 7 in August '09)
  
• Westgate:+100% (2 sales last month vs. 1 in August '09)
  
• Woodway: +100% (1 sale last month vs. zero in August '09)
  
• Yost Park: +100% (1 sale last month vs. zero in August '09)
  

These numbers will vary slightly as sales depend on agent designation of neighborhoods.

December 7, 2009 -- On Monday, the Federal Housing Administration started limiting the number of buyers in condo buildings that can get loans insured by the agency. The rules also put restrictions on buildings with poor finances, too many delinquent owners and a high number of rentals.

First, a little background for you...
The Federal Housing Administration (FHA) determines which condo complexes throughout the country are eligible for FHA financing. If you are looking to get an FHA-insured loan, you can only purchase a condo within a complex that is FHA-approved. It used to be that you just found an FHA-approved complex (with the use of a resourceful Realtor) and were good to go. But on Monday, FHA adds newer restrictions -- even beyond just finding approved complexes.

Why not just get "conventional" financing? Well, with a minimal requirement of just 3.5% down, FHA loans are a very attractive option for many home buyers. And with default rates on FHA-insured loans at about 18%, the FHA is looking for more security. I wrote more about lending restrictions on FHA loans in an earlier blog. For those complexes that are approved, there are new restrictions.

Here's a summary:

• Only half of all units wiithin a complex are allowed to be FHA financed (the others being conventional loans or other financing).
• In 2011, this number goes down to 30%.
• There has been talk that the minimum down payment threshold of 3.5% may go up. No word yet on how much but if they are as arbitrary as I think, it might be 5%.
• It's not all bad. The FHA has relaxed the numbere of pre-sold units that must have already closed before the lend money to anyone. It used to be that 50% of new buildings had to be sold; that number is now 30%.

So, if you're considering purchasing (or even selling) a condo in Edmonds, keep in mind that there are new guildelines that your lender should be aware of. Ask first; you'll save some time and heartache.

Now I'm off to educate my own condo clients....