Garland Street Fair

Held today, August 16th, 2008. The Garland Street Fair is an all-day family event featuring arts and crafts, games for kids, live music on 3 stages, classic cars, face paiting and food vendors.

The Garland Street Fair is a tribute to Judy Garland and The Wizard of Oz.

The bright yellow brick road bobs and weaves through the center of Garland street, leading visitors from one end of the Garland street fair to the other.

Today was HOT HOT HOT but thankfully a few booths offered shade, and a place to plop down for a few minutes and catch some time under a fan.

There weren’t too many food vendors today, so Kim’s Teryaki (always a Garland District treat) was packed with hungy and thirsty patrons who could catch a break from the sun.

Take a look at some pics:

Thanks!

Aaron

Today at WalMart on North Division from 10am - 2pm.

       

     

After filling out a brief survey and taking an optional safety quiz, a Safety Technician came over and got me started.  At first she checked the belts and buckles with Olivia in the car seat, then had Olivia pop out.  She and her assistant removed the car seat, recorded the model and year made and did a search for any possible past recall notices.  Then, she showed me how to (properly) install the car seat back in our car.

The best part of the car seat check was the safety education.  The questions they address are:

• Is the car seat installed correctly?
• Is the car sear the right size for your child?
• Has your car seat been recalled.

     

The Spokane County Traffic Safety Commissions puts these car seat safety check workshops on about once per month.

• Their last free check station was on Saturday, June 21, 2008 at AAA located at 1717 W. Fourth Avenue Spokane, WA.
• Their next free check station is on Saturday, September 27th, 2008 at Dishman Dodge
• If you don’t want to wait until the next Spokane County Traffic Safety Commission workshop, you can have your car seat checked at 7 child-seat fitting locations around Spokane county.  You can also call (509) 232-2985 for more information.

Thanks,

Aaron

Aaron Mallo video blogs that in a balanced or buyers’ market, Spokane real estate buyers require a discounted price to purchase a home with defects. If you want to share your opinion please email your feedback to AaronMallo@AaronMallo.com and visit Spokane Real Estate Video Blog list for all the Aaron Mallo Spokane Real Estate Video Blogs.

Since we’re in a balanced Spokane real estate market, which we’re seeing for the first time in 5 and 1/2 years, things have changed.

The one thing that is very noticeable is that buyer’s are not willing to pay anywhere near top price for incurable defects such as being on a busy street, being near commercial buildings or having a bad floor plan.

Even some curable defects such as badly sagging floors or rooflines that are hard to assess the cost to cure, buyer’s aren’t willing to touch.

In a hot seller’s market people can overlook these things because they just want to get a home in a neighborhood they want at a monthly payment they can afford but now that it is a balanced market and buyers have more choices, people are not willing to pay for these defects.

So what we’re finding is that homes on quiet streets in good condition with good floor plans, people are still willing to pay the top dollar for these properties.

However for the property on a busy street with bedrooms in the basement instead of above ground, or with choppy placement of rooms, prices will have to adjust.

In a balanced market, homes with incurable defects will sit on the market unless sellers price VERY aggressively to generate interest and get the home sold.

Aaron Mallo video blogs about whether we in a sellers’ market, a buyers’ market, or a balanced market. The “Month’s supply” of homes guides us. If you want to share your opinion please email your feedback to AaronMallo@AaronMallo.com and visit Spokane Real Estate Video Blog List for all the Aaron Mallo Spokane Real Estate Video Blogs.

When looking at whether it’s a buyer’s market, a seller’s market or a balanced market, one of the best indicators of who has the upper hand in negotiations and who dictates the tone of the market is the “Month’s supply of homes” or absorption rate of homes.

Think of the “month’s supply” like this, suppose a grocery store puts 100 cans of soup on their shelf and they sell 20 cans of soup per month, there is a 5 month supply of soup before the grocery store runs out. If we can assume no new homes come on the market, measuring real estate month’s supply is the exact same, we can see the pace the homes are selling at.

In general, a 5 months supply or less is a seller’s market.

Sellers have the upper hand and they tend to stand firm on their prices and buyers don’t get a lot of concessions from sellers such as help with their loan closing costs.

What we had 2 years ago was a 2 or 3 months supply of homes which was a VERY hot seller’s market and there was a lot competition from buyers to get their hands on anything they could.

A 5 – 7 months supply is a balanced market where supply and demand keep pace with each other.

Buyers are buying for the proper reasons, buyer’s are taking a long-term view of their home purchase and aren’t buying simply to try and make a quick buck. Sellers are more flexible on contract terms, and homes in good condition that represent a good value sell quickly, and those that don’t sit on the market.

With a 7 or more months supply, there is an ample choice of properties and the advantage shifts to the buyer.

Buyer’s are more able to negotiate on price and for the extras such as the having all of their loan closing costs covered, and to pick up that nice top-of-the-line washer/dryer set that the seller wanted to keep.

What the Spokane Association of Realtors says about Spokane Real Estate:

Closed residential sales reported in June are up 21% over May. There were 592 closed sales reported in June compared to 489 reported for May. The average sales price for June was $216,454 compared to $206,284 for last month. The median price for June was $193,000 compared to $183,000 for May.

Again, here is what the MLS data tells us….

When we look at the Spokane MLS Real Estate statistics, what are we really looking at?

Everything. Every property type. Every city within the MLS. Which is why I don’t like using the MLS stats. Nothing wrong with outside communities or property types, but I want to know about, analyze and discuss Spokane houses.

Spokane Real Estate Video Blog #04

Aaron Mallo video blogs about his opinion of the Spokane real estate market for July 2008.

Read also: Spokane Real Estate statistics explanation

So, let’s look at Spokane houses (a subset of the Spokane Real Estate MLS data), as of July 9th, 2008:

(The footnote states: Includes sales data from Spokane, Spokane Valley, Millwood, Veradale, Liberty Lake, Medical Lake & Airway Heights on Single Family Houses on <= 1 acre.)

Trends

Homes in Spokane still sell at a healthy clip, 510 homes sales last month. Compared to a year ago, June 2007, we are down 167 homes sold for the month (677 homes sold in June 2007). Spokane homes for sale inventory is up just a hair, to 2633 available Spokane homes for sale from last month’s 2,575 Spokane homes for sale.

See Also: Is now a good time to buy a Spokane home?

Our number of pending properties is only off by 7 homes pending, 640 now compared to 647 homes pending 30 days ago. Given the increased inventory but similar pending numbers, our total market absoprtion rate ticked 2/10ths of a month higher to 5.1 months. Given the number of pendings, I would expect homes sold in July to be similar to June.

As you can see from the “month’s supply” number, whether we are in a “buyer’s market”, a “seller’s market” or a “balanced market” really depends on the price range we’re discussing.

Lets look in the middle

61.0% of house sales in Spokane occur between $125k and $250k. Active lisitngs (those not yet sold) range from $60,000 - $2.6 million, but the bulk of what buyers purchase sells in the range of $125k - $250k. With 4.9 months supply of homes it is still a seller’s market, and the good homes priced well sell.

Regards,

Aaron

Aaron Mallo video blogs about what various Spokane real market conditions mean for both buyers and sellers, and why buyers should really be asking a different question - Is now a good time FOR ME to buy a home in Spokane. If you want to share your opinion please email your feedback to AaronMallo@AaronMallo.com and visit Spokane Real Estate Video Blog List for all the Aaron Mallo Spokane Real Estate Video Blogs.

I met with a client last night, Jen, who is a first-time homebuyer, Jen graduated from Eastern Washington University about a year ago and has been working in her career for the last 12 months. We met last night to discuss her financing options, and to have a more in-depth conversation about housing needs and her housing wants.

The question came up, is now a good time to buy?

And the answer to that question really lies within. Whether or not it is a good time to buy REALLY depends on your own life situation. In this case, she is established in her career and looking to plant roots in Spokane Valley. The questions to ask yourself when considering a purchase is, over the next several years, is your household size growing, is your family size shrinking, is there a birth in the family, are you secure in your employment and your employability for the future, and are you prepared for the responsibility and rewards that come with homeownership?

When clients ask the question, is now a good time to buy, they are really asking about the market

But what the market is doing is background noise and is really unimportant compared to your own life situation. Real estate is a long-term investment, and your own circumstances should determine when you buy.

In Jen’s case, the answer is no, now isn’t a good time to buy.

She needs to focus on her finances and on saving up a downpayment. We put a plan in place for her to get her savings beefed up and we are touching base periodically over the next few months to check on her savings progress and to reassess where she is at, and we have a plan to look for a home for her in November.

Spokane Hoopfest held in Spokane Washington is always a great time for the players, families, spectators and Spokane residents.  This Spokane Hoopfest video shows hightlights from various basketball games, basketball contests, and Riverfront Park scenes.  Spokane Hoopfest photos and videos spliced together with music.  Enjoy!

Here is a Spokane real estate video tour project I’ve been working on for several months now (OK, several years actually).   I’m creating video tours of Spokane’s neighborhoods, as a way quick way to hightlight what each neighborhood has to offer potenial buyer’s who are considering investing in one of Spokane’s homes for sale.

I’ve been accumulating photos and videos over the past 24 - 36 months and am just starting to put them all together in video format.  What a blast, I hope I’m able to adequately capture the beauty of Spokane’s neighborhoods and landmarks.

A really big thanks to Ryan Rose from Deparment Of Search who is helping me with search engine optimization and content ideas.

Also a thanks to the folks at Vimeo who run an awesome video sharing operation.

You’ll might recognize some of the notable and charming South Perry District landmarks including:

• The Spokane Farmer’s Market
• The Shop
• The Pop Shoppe
• Perry Street Cafe
• Grant Park
• Liberty Park Florist and Greenhouse
• Grant Elementary School
• Stunning Spokane homes for sale

Thanks,

Aaron

However, for those that choose to purchase a condo as their Spokane real estate investment, this is an important topic.

A client of mine, who purchased a condo about a year ago, wrote to me today asking about limiting the percentage of condo units that can be used as rentals to 10%:

A neighbor of came by and had a petition to sign - that would limit the percentage of condos that could be rented — to ten percent of the total number of condos.

At first thought, it sounded good to me because it prevents the neighborhood from deteriorating with ever-increasing numbers of rental units. However, on second thought, I wondered: If that’s such a good idea, why permit even ten percent? Why not vote to prohibit rentals altogether?

The rub, as I see it, is that after the first ten percent of owners eventually rent their condos out - then effectively virtually nobody else can do it regardless of unexpected circumstances or need. But, what would I do if I were transferred to another job location and forced to move - and found I could not sell at a reasonable price because of some downturn in the resale value of the condo?

I’m conflicted over the pros and cons of this issue - so I’m really curious about your take on it. I fully appreciate how dreadful it would be to have 1/2 the condos eventually turned into rentals. All the riff-raff would make the condo little different from living in an apartment - and that would obviously torpedo the resale value of the units.

On the other hand, I dislike the idea that the first 10% of condo owners to rent their units out, are free to do so if it suits them - but then the gangplank is pulled up and for all practical purposes nobody else can do it - even if there was an unexpected and important need….

What’s your take on this interesting conundrum?

My Response: It’s a good policy…

As far as a 10% cap on rentals, I tend to agree with it. My experience is that a 0% cap leads to lower property values and no cap leads to lower property values.

See also: Top 5 Spokane real estate investments

The reason 0% leads to lower property values is because you’ve decreased demand for the units by effectively cutting out any potential buyer who has either long-term or short-term plans of turning their new home into a rental. I actually had this happen. A client of mine wanted to purchase a condo and turn it into a rental in about 2 years when he purchased another home. We found a wonderful condo, quite a good value (cheap), and he really wanted to purchase it. I found out the association didn’t allow ANY units to be rentals, so he ended up not putting an offer on the condo.

The reason no cap leads to lower property values is two-fold:

• One, more renters = less upkeep, more of an apartment-type atmosphere, less desirable, etc., as you’ve already mentioned.
• The second reason is that, if a certain percentage of condos are rentals, you can’t get Fannie Mae or Freddie Mac (conforming) financing. New borrowers, OR those trying to get a refinance, would have to look to portfolio lenders (which are REALLY scarce right now and tend to have higher rates) instead of conforming financing. I don’t recall what that cutoff number is for percentage of units allowed to be rentals is.

The way it works is, when a borrower is trying to get financing, the condo association has to fill out a form called and “condo questionnaire”. Some of the questions include things such as

• “what percentage of the units are rentals”
• “does 1 owner own more than 10% of the units in the complex”

If a condo association has a certain percentage of units that are rentals that are above the lender’s threshold, the lender won’t lend on the condo.

In practice, the way these caps work is that setting your unit up as a rental is on a first-come first-served basis. After 10% of the units are rentals, the association keeps a waiting list of those who would like to convert their unit to a rental. When anyone in the 10% sells, or moves back in to the unit, the next person on the list is granted permission to convert.

Generally, you can let a “family member” live with you and your unit isn’t considered a rental.

Enforcement, well, that’s another thing. If push really comes to shove, the 10% cap is already met and a homeowner absolutely can’t sell and needs to convert their unit into a rental, what would happen? Frankly, if the tenant is decent and doesn’t cause any problems with the neighbors, I’m not really sure how the association would find out.

Thanks,

Aaron

What the Spokane Association of Realtors says about Spokane Real Estate:

There were 489 sales reported in May compared to 441 reported in April. The average sales price was up 1.3% from April. May’s average sales price was $206,284 while the median sales price was $183,000.”

Again, here is what the MLS data tells us….

When we look at the Spokane MLS Real Estate statistics, what are we really looking at?

Everything. Every property type. Every city within the MLS. Which is why I don’t like using the MLS stats. Generally, when we discuss the Spokane real estate market, I want to know about single-family homes in and around Spokane, not in Colville, Spangle, etc. Not condos. Not 120 acre parcels. Nothing wrong with these communities or property types, but I want to know about, analyze and discuss Spokane houses.

Read also: Spokane Real Estate statistics explanation

So, let’s look at Spokane houses (a subset of the Spokane Real Estate MLS data), as of June 9th, 2008:

(The footnote states: Includes sales data from Spokane, Spokane Valley, Millwood, Veradale, Liberty Lake, Medical Lake & Airway Heights on Single Family Houses on <= 1 acre.)

Trends

No real suprises here. Our number of homes sold increased very slightly compared to last month, and given the market’s number of pendings, I wouldn’t expect a large increase or large drop in sales figures for next month.

Comparing May to April, there are 106 more homes for sale in the Spokane area (2,575 vs. 2,469). A closer look reveals the bulk of this additional inventory is priced on the high side of market average, between $225k - $400k. Looking at inventory in the more competitive $125k - $225k price range, we virtually mirror where we were a month ago.

Our number of pending properties is virtually identical to 30 days ago, 654 pendings now vs. 647 pendings last month. Given the increased inventory but similar pending numbers, our total market absoprtion rate ticked 1/10 of a month higher to 4.9 months.

Lets look in the middle

61.9% of house sales in Spokane occur between $125k and $250k. Active lisitngs (those not yet sold) range from $49,900 - $2.6 million, but the bulk of what buyers purchase sells in the range of $125k - $250k. With 4.6 months supply of homes it is still a seller’s market, and the good homes priced well sell.

Regards,

Aaron