hdnelson's Blog: All Categories

Since we maintain several websites,  it's always hard to know what to post on this site. I'm hoping some members will find the information at this link useful, not only for our local market, but for their own market as well.

http://www.bprowse.com/index/weblog/kitsap-real-estate-market-report-april-2008/

The National Association of Realtors has a current ad campaign promoting two topics, the value of real estate in building wealth and the long term value of housing as an investment. The campaign is a well intended reminder that purchasing a home is, over the long run, a good investment. Historically homes have appreciated in value at an annual rate of about 6%, a little more than than the rate of inflation. Recently, however, many buyers purchased with the expectation of automatic and never ending appreciation, which, when fortune changed, has led to foreclosures and economic loss on a large scale. The ads do not so well represent the notion that home ownership brings a sense of pride and responsibility, which results in better communities and schools and…

In the Kitsap County real estate market, we have been monitoring how affordability has improved for conforming conventional borrowers as a result of the reduction in median sales price and rates. Affordability for that class of buyer (admittedly limited) has improved to mid 2004 levels with the reduction in median sales price and rates. See more here.

While many pundits have argued that the relationship of median home prices to median incomes must be restored (for instance one study cites that the median home price should be about 2.8 times the median income) the NAR has argued that we should be paying more attention to the monthly mortgage payment in relation to median income. With home prices steady or falling, mortgage interest rates down…

 There is a recurring scene in the movie, "Shakespeare in Love", where in the midst of what appear to be dire circumstances with performing the play, Hugh Fennyman (Tom Wilkinson) asks Philip Henslow (Geoffrey Rush) "What do we do?" Henslow replies, "Nothing. Strangely enough, it all turns out well." "How?", Fennyman asks, and Henslow replies, "I don't know. It's a mystery."

So it goes now with the national real estate market and our own fate here in Kitsap County. The circumstances appear dire enough - National unemployment just rose to 5%. Inflation is up as commodity prices are going through the roof, so the Fed would really rather not cut interest rates much further to fend off the huge losses that may be coming because of mortgage defaults and…