RSS Feed ReaderTri-Cities, Washington (Kennewick, Pasco, Richland) Real Estate Center
Real Estate National News Media Headlines can be misleading
In the Tri-Cities, we are on pace to see a 5%
rise in prices and sales numbers very similar to 2008 and 2009
- which were considered very strong Real Estate Markets
(Rivaling Historical Best Numbers).
Another example of playing with numbers to
create a story:
It's been widely
reported that as many as one in four homes is underwater.
Moody's Economy.com pegs the problem at 30 percent. Both
numbers make headlines but it appears that neither represents
reality.
According to the U.S. Census Bureau, as of
2009, one-third of all owner-occupied homes have no mortgage.
So last month when CoreLogic reported that 22.5 percent of
mortgaged homes had negative equity the reality was that only
15 percent of all homes were underwater.
Past the headlines
the Journal article went on to explain how the statistical
methodology inflates the number making it appear worse than
actual reality. What?!?
"Everyone likes to get headlines, so they tend
to overstate problems like this, without doing ground-level
research," says Kenneth Rosen, chairman of the University of
California, Berkeley, Fisher Center for Real Estate and Urban
Economics.What do you know, the exception to the rule: an
economist with half a brain.
Sadly, that's how the media works. Be
sensational or get lost in the noise. The truth be darn. And
economic data is not immune.
So what is the
reality?
According to the author of this article,
professor, entrepreneur, radio and TV commentator, Tony
Paradiso - for mortgaged homes, 49 out of 100 homeowners owe
less than 75 percent of the value of their homes. Twenty-four
out of 100 owe between 75 and 95 percent. Excellent: 73 percent
of mortgaged homeowners are in good shape. An additional 4 out
of 100 owe 100 to 105 percent.
Statistically and practically, this group
poses no problem. Basically, there are three problem groups.
These include those who owe between 105 and 110 percent, 110 to
125 percent, and more than 125 percent of their home's value.
In total, these groups account for only 19 percent of all
homeowners. This is already lower than the advertised negative
equity number. However, now we must adjust for the margin of
error. Conservatively, we can assume that approximately half of
those who owe less than 125 percent of their home's value
actually belong in the "no problem" group.
Applying this final adjustment yields a number
that more closely represents the actual magnitude of the
problem. And that number is in the neighborhood of 10 percent
of all homeowners in the Nation and far less in our own Market
in Tri-Cities, Washington.
Not great, but certainly more encouraging than
what the experts would have us believe. Again, proving that
Real Estate is local and you need to get your advice from a
Trusted Realtor - Not the Media.
No more planned layoffs at Hanford - Should help Tri-Cities Real Estate Market
Today Tri-City Herald Prints Good News
Hanford avoids
most budget cut
According to the Department of Energy, no
additional contractor employee layoffs at the Hanford nuclear
reservation beyond those already announced.
With no federal budget passed for the fiscal
year that ends Sept. 30, Congress approved a continuing
resolution this spring that cut DOE cleanup spending by $380
million from the amount the Obama administration had proposed for
the year.
The DOE Hanford Richland Operations Office,
which is responsible for the rest of environmental cleanup at the
nuclear reservation, will receive $1.039 billion, which is down
about $3 million from the 2011 administration request.
Hanford will be able to
continue its momentum on environmental cleanup along the Columbia
River, at the Plutonium Finishing Plant in central Hanford and on
projects to clean up contaminated ground water, said Matt
McCormick, manager of the DOE Richland Operations Office.
If Hanford had also seen a larger share of the
budget cutbacks in the continuing resolution, additional layoffs
would have been needed by September's end, but that is no longer
the case.
Tri-Cities, Wa Real Estate Housing Maket #5 in the Nation.
http://www.housingpredictor.com/2011/best-investors-markets.html
March 2011 --(PR.com)-- The
best housing markets forecast in 2011 have been named by Housing
Predictor, which forecasts local markets in all 50 U.S. states.
Markets are annually selected by the real estate research firm,
and updated as regional market conditions demand over the entire
year.
One of the projected top five
strongest markets is our very own Tri-Cities, Washington. The Tri
Cities - Kennewick, Pasco, and Richland - has been predicted to
see a 3.4% increase in home prices. According to Eric Fox, Vero's
vice president of statistical and economic modeling, smaller
metro areas, such as the Tri Cities with a population less than
250,000, will make up a good portion of the better appreciating
markets.
However, there's no shortage of
housing markets that will experience deflation during the year as
the U.S. struggles to recover from the worst downturn in real
estate in decades. The foreclosure crisis has topped 5-million
homes and is gaining momentum as more and more homeowners, who
have lost equity in their homes walk away from
properties.
Consumers, bankers, mortgage
companies, retail outlets and real estate firms consult Housing
Predictor forecasts. Housing Predictor forecasts more than 230
housing markets in all 50 states and offers real estate news,
mortgage rates and analysis on the housing market.
Ti-Cities, Washington on another Top Ten List - Not David Letterman's
Tri-Cities always coming out on top
By John Trumbo, Herald staff
writer
Welcome to the Tri-Cities: Home of the fastest car, best
cabernet, the most Ph.D.'s per capita, and the oldest complete
human skeleton in the Northwest, if not the Western Hemisphere.
Hyperbole and superlatives aside, it all depends on who you ask
for a ranking of the Tri-Cities. But asking will reveal that the
community is highly rated on a wide variety of yardsticks.
For instance, While financial turmoil battered the nation, the
Tri-Cities remained an oasis of relative economic stability --
the top story of 2009.
Business Week ranked the Tri-Cities the third-best place in the
U.S. to make a fresh start for people thrashed by the ongoing
recession.
Kennewick recently made the cut for American Cowboy magazine's
top 20 list of best in West communities for boots-on livability.
That's good, but how many people know that the March-April 2009
issue of Flying Adventures magazine tagged the Tri-Cities as a
top 10 romantic getaway spot?
And while we're talking airplanes, it was April 6, 1926, that a
biplane carrying two satchels of mail hopped into the sky at
Pasco's airport, bound for Elko, Nev. That weather-whipped flight
marked the first official air-mail delivery done from anywhere
this side of the Cascades in Washington to anywhere outside the
state.
The Tri-Cities also made headlines last year with Sunset
magazine's declaration that Bookwalter Winery & Bistro in
Richland was its Winery Tasting Room of the Year.
That distinction came on the heels of Wine Spectator magazine
pronouncing Columbia Crest's cabernet sauvignon the No. 1 wine in
the world for 2009.
But it was perhaps the discovery of an ancient human skull and
bones in 1996 in the shallows of the Columbia River in Kennewick
that really thrust the Tri-Cities into the national spotlight.
Those remains of the 9,300-year-old "Kennewick Man" skeleton
pitted scientists against Native Americans, who insisted the
human remains should be respectfully returned to the Earth
instead of poked by curious scientists. Since then, Kennewick Man
has become a reclusive, yet renowned, representative of the
Tri-Cities.
Then came the super-fast Ultimate Aero, the creation of West
Richland supercar builder Jerod Shelby.
His high-end automobile screamed into headlines in 2007 by
hitting 256 mph on a lonely section of a rural road in Benton
County. That run set a Guinness Record as the world's fastest
production car, eclipsing the previous record held by a
Italian-built Bugatti Veyron.
Be it a fast car, ancient bones or world class wine, Jordan
Youngs, director of marketing and public relations at the
Tri-Cities Visitor & Convention Bureau, said it all helps
promote the Tri-City area as having plenty of the right stuff.
"The more lists we are on the better. We love it," Youngs said.
And the list of those "best of" lists that the Tri-Cities has
made is itself impressive. They include:
-- The Tri-Cities leads the nation in per capita Ph.D.'s, with
1,600 doctoral degrees among 7,000 scientists and engineers in
the community, most of whom work for the Pacific Northwest
National Laboratory in Richland.
-- Kennewick's 7-Eleven store was acclaimed the Slurpee capital
of world, besting Winnipeg's Slurpee outlet in 2009 by amassing
more sales and number of cups sold. The upset ended a nine-year
reign by the Canadians.
-- The Tri-Cities made the top 10 best places to raise a family
in 2010, by Kiplinger publications.
-- We also made the 10 best community list for gains in housing
value, 2010, by CNNMoney.com.
-- The three cities were rated No. 1 in nation for housing in
2010, by SmartMoney.com.
-- In 2009, the Tri-Cities was ranked the No. 2 best city for
employment opportunity in the U.S. by Manpower magazine.
-- For 2010, the online publication Garner Economics rated us No.
1 community for job growth.
-- The Tri-Cities was ranked No. 5 in the nation among "Best
Performing Cities in 2010 where Jobs are Created and Sustained"
by the Milken Institute think tank. That followed a No. 6 ranking
the year before.
-- The ACCRA Cost of Living Index reported that the Tri-Cities
had the lowest cost of living in the state for the second quarter
2010.
w Pinkmagazine.com rated the Tri-Cities the fastest rising
residential market in the U.S., at 4.5 percent for the second
quarter of 2009.
-- In 2006, CNNmoney.com rated Kennewick the best place to live.
-- We ranked No. 2 in the U.S. for over-the-year nonfarm
employment increases in 2009 by the U.S. Department of Labor.
-- And the Census Bureau in 2010 rated the Tri-Cities the fastest
growing metropolitan statistical area in Washington since 2000.
Boasting about economic prowess is one thing, but there's also
notoriety.
-- Miss Tri-Cities, a 24-cylinder, one-of-a-kind hydroplane built
in 1955 at the request of steel magnate Henry Kaiser, didn't
perform well on the water. It was nicknamed the submarine because
it sank at least five times. After retirement from the circuit,
the historic hydro was displayed for years on a pedestal in
Columbia Park as a reminder of the piston-powered days at Water
Follies.
w Actress Sharon Tate, who was Miss Richland 1959, is better
known by many as one of Charles Manson's victims in the grisly
1969 Tate-LaBianca murders in Los Angeles.
-- And the B Reactor at Hanford, the world's first large-scale
nuclear reactor, was built during World War II and produced
plutonium for the Fat Man atomic bomb that was dropped Aug. 9,
1945, on Nagasaki, Japan. The reactor now is a National Historic
Landmark.
John Trumbo: 582-1529; jtrumbo@tricityherald.com
Read more:
http://www.tri-cityherald.com/2011/03/14/1407090/tri-cities-always-coming-out-on.html#ixzz1GcIF15dm
Hanford Layoffs
We all you have heard the news regarding the
Hanford layoffs and people are starting to speculate that this is
somehow going to negatively impact the Tri-Cities Housing Market
and Economy.
Please do not buy into this mind set. The
Tri-Cities is already in the mist of a housing and rental
shortage in the most active price points. Sensational headlines
and media sound bytes which do not offer deep analysis of the
current market conditions is the last thing we need in our
community and it is up to Realtors to explain the reality of the
Real Estate Market and the strength of the local economy.
Although, no one has a crystal ball, a deeper
analysis suggests that more jobs and a growing economy are in the
Tri-Cities future. This in turn means the need for more
residences and businesses in the community.
Businesses, investors, lenders, developers, and
builders who truly comprehend the facts surrounding our economy
and housing market will take advantage of the opportunities that
are here now and will continue to come to the Tri-Cities during
the next decade. Those that don't will sit on the sidelines and
look back with regret because they used these layoffs as a reason
not to invest in this growing community which currently has low
housing and rental availability.
Hanford is a federally funded
governmental program whose work force is always evolving and
always changing. As Hanford's missions change they require
different employees with different skill sets. During the last 20
years, Hanford has a long history laying off and hiring new
workers with little or no negative impact on the housing market
or economy. It reminds me of 1993 when the headlines read "6000
Hanford Employees to be laid off". The article and many others
predicted that the housing market would crash and the economy
would decline.
But, many of those workers or new workers were
hired while others went on to other industries or like myself
started their own businesses. Those 6,000 lay-offs were just part
of another major reorganization in a change of mission. In 1995,
the Tri-Cities experienced a record number of home sales and the
economy, population and the housing market have grown ever
since.
Another example was in 2007, when the state
tallied job totals at the end of 2006, the Tri-Cities economy,
employment numbers and housing market had grown. This after
having lost 700 Hanford jobs during 2006 - and on top of the
2,200 lost in 2005. Today is no different, as approximately 4,000
new non-Hanford jobs were added in 2010 with nearly 4,000 new
jobs predicated in 2011 to according to work source
statistics.
One example of many industries contributing to
the strength of our economy is the local health care industry.
This industry added roughly 4,000 jobs since the year 2000. The
strength of the health care industry has been so pronounced that
it appears to have appreciatively raised the average, non-Hanford
wage in Benton County. This industry is expected to continue to
grow as the Tri-Cities continues to become a regional health care
provider.
During peak weapons production in the 1950's,
Hanford employed 50,000 people. Hanford currently employs
approximately 11,500 people in the clean-up workforce. The fact
of the matter is that since the headlines of 1993 announcing 6000
lay-offs, over 50,000 jobs have been added to the Tri-Cities
Economy while Hanford's overall workforce has declined by over
5,000 people. The leadership of the community and real estate
industry believe that history is merely repeating itself when it
comes to Hanford lay-offs and recent history suggests these
lay-offs will have no impact to the overall economy or housing
market.
Instead of focusing on negative headlines, we
should look into the future of the Department of Energy mission
at Hanford. When you do, you'll see a new mission on the horizon
for the Tri-Cities which is built on developing renewable energy
sources for our countries pending energy crisis.
Right now, DOE officials in Washington, D.C.,
are developing policies for possible energy parks at Hanford and
other DOE sites. The 2010 National Defense Authorization Act
signed by President Obama last week requires DOE to submit a
report within four months on creating energy parks.
The report will include how the energy parks
will be implemented and recommend any additional legislation that
is needed. Objectives for the energy parks include carrying out
projects related to the development and deployment of energy
technologies and related advanced manufacturing technologies,
including pilot projects, the bill said. Hanford is expected to
be a major player in this initiative.
The energy parks also are intended to set a
national example for the development of energy technologies in a
way that promotes employment and U.S. energy independence, the
bill said. The energy parks should create a business environment
that encourages collaboration and interaction between the public
and private sectors, the bill said.
Instead of focusing on the layoffs, we should
understand that Federal interests are working with the Washington
governor's office to recruit an international energy company
interested in using Hanford land, according to a letter to the
Department of Energy.
The unnamed company is considering locating a
renewable energy manufacturing plant offering what should be
family-wage jobs just north of Richland.
The company is interested in 1,000 acres of
property for a project that would create more than 2,000 jobs,
according to the letter from the Port of Benton, the city of
Richland and the Tri-City Development Council. Technical
operators, chemical engineers and managers could be needed for
the plant.
The company would invest at least $2 billion to
develop the plant and wants to own, not lease, property for it,
the letter states.
TRIDEC and other agencies have been working with
local energy companies and public utility districts since 2009
when DOE began talking about the possibility of establishing
energy parks at Hanford and other DOE sites where some land soon
might have enough environmental cleanup completed for portions to
be considered for other use.
Energy Northwest has proposed a lease of 300
acres near the Columbia Generating Station to be used for energy
research or production by Energy Northwest or other companies or
agencies. The transfer supports the diversification of the
Tri-Cities economy away from reliance on Hanford as a primary
employer.
The company being recruited could have a plant
operating by next year, which are political leaders are touting
as way help stabilize the Tri-City economy as the last of $1.96
billion in federal economic stimulus money for Hanford is spent
late this year.
"We'd love nothing more than to see our
community land a big new company that brings with it a
construction investment and long-term family wage jobs," said
Colleen French, DOE Hanford government affairs program
manager.
It is my belief as it should be yours that the
Tri-Cities will continue to grow, will continue to thrive, and in
time will be the leader of solving the growing need of our
country for renewable energy.
If I won the lottery and had millions of dollars
to invest anywhere in the United States it would be in a growing
economy, with growing population, quality of life, and the most
affordable living in the Western United States for metro area
communities. That area would be Tri-Cities Washington, one of the
few communities in the country that THRIVED during what has been
called the worse recession of all time. Just think what it will
do when the rest of the country recovers?
The future is bright in Tri-Cities. Believe
it!
National Real Estate Market...What to expect in 2011
Residential Market Outlook: Virtuous or Vicious?
It's slow. It's uneven. But it's there: the home sales recovery.
"There will be two steps forward, one step back, with sizable
local market differences," says NATIONAL ASSOCIATION OF
REALTORS® Chief Economist Lawrence Yun, " but the trend
nevertheless will be a rise in home sale activity in the upcoming
years."
Yun is forecasting 5.2 million existing-home sales in 2011, up
from 4.8 million last year. He also expects modest improvement in
prices-a rise of about 1 percent this year on a national basis.
That would be the first in what Yun says will be a series of
small but steady gains in the years ahead that will eventually
bring home sales back to a period of normalcy.
At the root of these gains is continuing improvement in the
overall economy. Yun is estimating modest 2.5 percent growth in
the country's gross domestic product in each of the next two
years, job gains of about 1.5 million in the same time frame, and
a slowly improving jobless rate, which he projects will dip from
a stubbornly high 9.6 percent in the latter part of 2010 to a
better but still-high 8 percent in 2012.
This is what Yun calls the "virtuous cycle" that residential real
estate started entering a few months after the home buyer tax
credit ended in the middle of 2010. At that time, home sales took
a big hit, dropping 27 percent in July. But in August, sales
picked up again, under their own steam, and have been gaining
ever since without the aid of subsidy.
Will Businesses Pony Up?
Whether this virtuous cycle continues into 2011 or spins into a
vicious cycle of stagnant sales and falling prices depends first
and foremost on business spending. "This is the big difference
between this economic recovery and those in the past," Yun says.
In the past, as the economy emerged from recession, businesses
poured money into growing their capacity-hiring workers, renting
office space, replacing old equipment-to position themselves for
growth. But that hasn't happened this time.
The reluctance among business leaders to spend, despite sitting
on money from strong profit growth during the recovery, stems
from low consumer confidence.
With unemployment high and lingering concerns about whether home
prices have really stabilized, consumers remain far from certain
that the worst is behind them. The key confidence index that
tracks their sentiment, the Conference Board's Consumer
Confidence Index, remains far below what business leaders want to
see before they start investing again. "Consumers think things
are rotten in the country," Yun says.
Weak business spending also stems from uncertainty over how much
it will cost to comply with last year's Wall Street and health
care reform laws. Within the thousands of pages of new
legislation are rules that have yet to be written, says Yun.
"Businesses don't know fully what the rules of the game are going
to be down the line."
But this reluctance isn't expected to last much longer. Yun and
other analysts say business cash reserves have grown to the point
where corporate leaders have to start deploying their money to
get the kinds of returns their investors want to see. As Hugh
Kelly of the New York University Schack Institute of Real Estate
told REALTORS® in early November when he spoke at the 2010
Conference & Expo in New Orleans, "Investors want to get back
into riskier investments."
Low Prices Will Spur Recovery
Once businesses do pick up spending, job gains will quicken and
home sales-fueled by strong affordability and plenty of pent-up
demand-will rise.
Yun says all of the price excesses from the housing bubble have
been squeezed out of the market and interest rates remain at
historically low levels, making buying attractive now. In San
Diego, for example, buyers at the end of 2010 would be paying
$1,564 a month in mortgage payments for a median-priced house
that at the height of the boom would have cost them $2,833 a
month.
At the national level, the median home price at the end of 2010
was about $172,000, down roughly 30 percent from its $239,000
peak in early 2006 and, for the first time in a decade, less than
its replacement cost.
"Home prices have overcorrected a bit," Yun says. "The cost of
duplicating an existing home, when you factor in the expense of
buying bricks and mortar and putting it all together, is going to
be more expensive."
One reason that replacement costs are up is the large number of
foreclosures that have to be worked through the market before
existing-home prices can start to rise in any significant way.
Yun expects foreclosed homes to account for a third of sales well
into 2011, about the same as in 2010. "My best guess is that this
year, people will be buying a lot of the foreclosed properties,
but it will still take an additional one-and-a-half years to
bring the inventory down to a more normal level."
Another sign that excesses have been removed from the housing
market: an attractive ratio of home prices to income levels. The
cost of homes peaked at almost 3.5 times their annual income
during the boom. That ratio now stands at 2.4 times income, just
below the more historically normal level of about 2.5.
In addition, the number of home sales compared with the size of
the workforce peaked in 2005 (one home sale for every 20 employed
persons). Now the ratio stands at just below 4:1 (one home sale
for every 25 employed persons), in line with historical norms.
The Threat of Inflation
One of the big remaining questions is whether inflation, long
dormant, is poised to return in 2011 or 2012 as the recovery
solidifies and businesses start to raise prices.
At the end of 2010, inflation remained a nonissue, with the
Consumer Price Index up a low 1.1 percent from 2009. Indeed, some
analysts have even been talking about the risks of entering a
period of Japanese-style deflation in which the expectation for
continuing price drops keeps people from spending.
But there are signs that prices could start heading up soon, a
possibility that the Federal Reserve fueled in late 2010 when it
announced it would flood the economy with money by buying $600
billion worth of Treasury bonds in the first three quarters of
2011 to stimulate growth.
Thomas Hoenig, president of the Federal Reserve Bank of Kansas
City, said at the recent REALTORS® Conference in New Orleans,
that keeping rates low might help the recovery in the short term,
but the long-term consequences could be higher inflation that's
difficult to manage. "We risk repeating past errors," he said.
Yun says inflation was quiescent in late 2010 mainly because of
low housing rent growth. When you look at producer prices,
though, which in late 2010 were up 4 percent for finished
products and more than 20 percent for early-stage products and
commodities, the picture looks very different. These increases
are likely to show up in consumer prices soon, and they will be
hard to reverse. "High inflation is like toothpaste," says Yun.
"Once it's out of the tube, it's hard to put back in."
The impact will fall hardest on first-time buyers; as interest
rates rise along with inflation, home ownership will become
increasingly out of reach.
"Some inflation isn't a bad thing, but high inflation isn't
optimal," Yun says. "So as long as inflation can be kept in
check-and business and consumer confidence restored-look for a
slow return to normalcy in the months ahead."
What's Going on in Your Market?
Real estate practitioners from around the country chime in on
what they're seeing in their geographic area and business niche.
Tri-Cities, Wa. "This is one of the most
prosperous cities in the nation as evident by Forbes Magazine
naming it second in their list of "Best Cities for New Jobs" in
2010. There are opportunities here for all ranging from engineers
and scientists to farm hands and local growers. Prices have
increased, inventory for Single Family homes and Rental units are
low, and foreclosures have remained normal. With the news of a
national real estate and econmic recovery we predict continued
growth in 2011. Paul Roy, Managing Broker, Coldwell Banker
Tomlinson, and Tri-City Association of Realtors 2011
President.
Jacksonville, N.C. "Our market is going to stay
fairly stable in 2011 and could even enter a little growth mode.
Camp Lejeune, the big Marine base, has provided us with a very
stable economy. The new-home market and the first-time market
have been strong. The upper-end market has been a little slower
because people coming from other parts of the country probably
haven't been able to sell their houses. There's also been a lot
of commercial development going on to support the military
base."
Sheila Pierce, CCIM, Commercial Brokers Unlimited
Marietta, Ga. "Our market is slightly better
this year at this time [November 2010] than it was a year ago. We
have an overhang of distressed properties that's been a real
damper on the market. If we get this overhang handled, we're
going to see more improvement. There has to be some pent-up
demand that's built up during this lull period."
Paul Brower, ABR, GRI, Harry Norman, REALTORS®
South Lake Tahoe, Calif. "Sales are actually
increasing now and have been for the past nine months. We're
about 25 percent up from last year, and we're about six to nine
months into stable pricing. A lot of the fence-sitters who were
waiting to see what the market was going to do are now coming
into the market. Their caution is paying off, because houses are
so much more affordable and interest rates are great."
Debra Howard, CRS, RSPS, D. Howard & Co.
What's Going on in Related Industries?
Professionals who work in affiliated industries tell us where
they see the market heading.
The Home Builder:
"Financing will loosen, but small builders will still have a
tough time."
New-home sales will pick up and financing to home builders for
developing new projects will loosen, although for smaller
builders without a strong track record of obtaining financing, it
will continue to be hard, says Dave Erickson, president of Gray
Hawk Homes Inc., in Columbus, Ga. "For the average, day-to-day
builder, it'll probably get better in the sense that banks will
start talking to them, not that they'll start lending to them."
Construction costs, particularly labor, have dropped over the
last two years and will remain down for the first half of the
year, but prices will head up in the second half. The costs of
commodities such as concrete, copper, and Sheetrock are expected
to rise, eventually leading to upward pressure on home prices or
downward pressure on home sizes.
The Stager:
"Sellers want their house staged because they saw it on
TV."
Activity in the staging industry has been growing "bit by bit"
during the downturn as listing agents look for an edge in the bad
economy and as banks show an increasing interest in staging to
boost the selling price of REOs, says Barb Schwarz, CEO of
Stagedhomes.com in Seattle. Also playing a role: Sellers'
exposure to staging in the popular media. "Sellers are coming to
agents and saying, 'We want this house staged because we saw on
TV that homes sell faster and for more money when they're
staged.'" The number of training classes hosted by her company
remains the same as it was in the boom: between 80 and 120 a
year. But attendance is down. "Instead of 90 students, we might
see 50." Staging fees are also down, from a national average of
about $2,800 to about $1,800, as sellers take more moderate
approaches to staging their home, especially since they're often
strapped for money.
The Home Inspector:
"Presale inspections are on the rise."
The improved housing market in 2011 will increase
"transaction-based" inspections, which are the standard
inspections ordered by buyers before finalizing their purchase,
says Bill Redfern, CEO of A Buyer's Choice Home Inspections in
Milwaukee. Those took a big hit during the downturn. But the
industry could see business coming back even stronger than before
the downturn because of the way inspectors have branched out into
other types of activities when business was slow. Sellers, and
particularly banks, have become far more interested than in the
past in having presale inspections conducted to help attract
buyers. This business, which helped sustain inspectors during the
downturn, is expected to grow in 2011 even as regular inspections
come back. "I might be optimistic, but I think in five to 10
years every listing coming to market will have a presale
inspection done." Banks, entering into volume agreements with
inspectors to get a handle on the extent of neglect or vandalism
to a property before they put it on the market, are driving this
new business. "Banks are seeing it as wise money spent to have a
better idea in forecasting what they're ultimately going to get
out of the property at sale or even if it's truly salable."
Tri-Cities No. 5 for jobs in the nation for 2010
Continued growth in jobs and wages in the Tri-Cities is being
noticed nationally.
The Milken Institute has ranked Kennewick-Pasco-Richland among
the top 10 metro areas that managed to create and sustain jobs
in the face of a national recession.
The Tri-Cities retained the fifth spot it earned last year,
said Armen Bedroussian, a Milken research economist who helped
put together the latest report.
In the Tri-Cities, jobs grew 4.5 percent in the last 12 months,
he said, noting that's the highest percentage growth in the
nation. The bulk of the growth was the result of the federal
stimulus money for Hanford, he said.
And he noted the role of the high-tech sector in pushing the
job and wage growth for the long and short terms.
The Milken report is used for economic benchmarking, he said.
Corporations use the data to scout locations that have economic
momentum, and civic officials and economic development agencies
use the information to compare their communities to other areas
and take steps to stimulate growth, Bedroussian said.
Carl Adrian, president and CEO of the Tri-City Development
Council, said it's good to be on the radar of the
California-based think-tank that helps business and public
policy leaders identify and implement ideas for creating
broad-based prosperity. That can generate interest by new
businesses to explore the Tri-Cities and appreciate the area's
knowledge-based economy and the presence of a skilled work
force.
"We have become more resilient to the ups and downs at
Hanford," Adrian said. Also, the community is committed to
developing a diversified post-Hanford economy that can create
new types of jobs for the growing population in the area, he
said.
The Mid-Columbia Energy Initiative is a good example, he said.
The group wants to transform the Hanford site and the local
community into a "carbon-friendly" power-producing, energy
demonstration and manufacturing site.
The research initiatives of Pacific Northwest National
Laboratory and Washington State University Tri-Cities will help
pave the way to develop cutting-edge technologies that could be
commercialized, Adrian said. The presence of companies like
Infinia and InnovaTek in the community may encourage other
clean-tech companies to set up shop in the Tri-Cities, he said.
"Clean tech is a natural transition for the area," said Diahann
Howard of the Port of Benton. PNNL's experts already are
working on various projects to enhance smart grid applications
and developing other clean energy products, said the port's
director of economic development and government affairs.
The Port of Benton, in partnership with other public agencies,
has continued to improve infrastructure to help recruit and
retain businesses in the area, she said.
The growth of medical equipment manufacturing, food processing,
health care service industry and wine industry is helping
economic diversification despite the continued dominance of
Hanford, said Dean Schau, former regional labor economist for
the Tri-Cities. About 1,350 workers are employed in the local
wineries, he said.
Agriculture, manufacturing and energy production could help
sustain future growth, he said.
The Tri-City economy also gets a big push from the retirees who
have moved to the area for its quality of life and weather.
They spend their money locally and help the retail sector,
Schau said. The presence of an aging population also has led to
the development of a regional health care industry that is
poised for growth.
The Tri-Cities abounds in human and social capital that can
help transform the economy in years ahead, he said.
For more on the Milken report, go to www.milkeninstitute.org.
Read more:
http://www.tri-cityherald.com/2010/10/16/1211833/tri-cities-no-5-for-jobs.html#ixzz12XWjo9Vk
Report: Tri-Cities a great place to raise a family
Report: Tri-Cities a great place to raise a
familyBy Pratik Joshi, Herald
staff writer
Paula Fluit loves the Tri-Cities for its parks,
schools and safe environment so much she said wouldn't dream of
living anywhere else.
The Tri-Cities is perfect for raising a family,
said Fluit, a stay-at-home mom.
That's why the Kennewick and the Tri-City region
are among the top 10 places nationwide to raise a family,
according to Kiplinger.com, part of Washington, D.C.-based
publisher of business forecasts and personal finance
advice.
Kiplinger.com singled out the area for its low
cost of living, affordable housing, a strong
science-and-tech-based economy, plenty of outdoor attractions and
a falling crime rate.
It's no surprise to Fluit, an Othello native,
who came to like the Tri-Cities ever since moving to the
community about 10 years ago to be with her then-fianc, who now
is her husband.
"We like to bike ride, go to parks and boating
on the river," said Fluit on Wednesday while enjoying a day out
with her three young children at the Playground of Dreams in
Columbia Park in Kennewick. "There's always something going
on."
The inclusion on the national list means more
visibility and awareness for the Tri-Cities, said Carl Adrian,
president and CEO of the Tri-City Development Council. It also
recognizes the area's knowledge-based economy, which has
diversified and created new types of jobs for the growing
population, he said.
Adrian said he hopes the
mention on Kiplinger.com will help attract new businesses and
more investment to the community.
The high quality of life and area's
affordability continue to serve as a magnet to lure people to the
Tri-Cities, he said.
"Things are pretty cheap here," said Mark Tyler,
who moved to the Tri-Cities from St. George, Utah, about three
months ago with his wife, Melanie, and 2-year-old son
Titus.
He wants to study accounting at Washington State
University Tri-Cities next year when he becomes eligible for the
in-state tuition rate.
St. George, a community of about 60,000 people,
offers nothing like the Playground of Dreams, Tyler said. He and
his family visit the parks at least three times a week. "It's
free entertainment and my son gets to meet other kids," he
said.
The Tri-Cities also seems like a nice community
where people care, Tyler said.
That's true, agreed Mike Schwenk, chairman of
Three Rivers Community Round Table, which was created in 2001 to
develop a common vision for the future of the community. Over the
years, the community has worked together to promote education
with high-caliber schools and innovative teaching approaches, he
said.
WSU Tri-Cities, which offers four-year degrees,
and Delta High School, the new school focused on science,
technology, engineering and math, are great examples of success
the community has had that will help sustain the area's
technological edge and promote innovation in the Tri-Cities, said
Schwenk, who has lived in the area for 30 years.
United Way's Community Solutions initiative -- a
regional health and human services plan intended to address the
Tri-Cities' most pressing needs -- is another example of
collaboration to achieve the desired goals in the community,
Schwenk said. The communitywide effort began in 2006 with four
program priorities: education, health, safety and
self-sufficiency.
Three Rivers Community Round Table also is
committed to promoting water-nurtured quality of life and
improving connectivity through a transportation network, he said.
It's all part of promoting economic development, he said.
The perception of the Tri-Cities as a
Hanford-based economy is changing, especially in the Northwest,
said Kris Watkins, president and CEO of the Tri-Cities Visitor
& Convention Bureau.
The growth of wine industry in the area, outdoor
attractions, particularly the local trail systems, and nice
weather continue to draw visitors, she said. The Tri-Cities also
is a hub for shopping for people in Southeastern
Washington.
People like to come here because it's safe and
clean and about three hours away from major metro areas, she
said.
Some of those visitors end up settling down
here, she said. The local arts scene has expanded and become
diverse, and a variety of restaurants have opened in the past few
years. That has meant more options for resi-dents and continuing
economic growth for the community, Watkins said.
Walla Walla's Traci Jao
came to study at WSU about 10 years ago and ended up making the
Tri-Cities her home. It has good schools, family-friendly
businesses, a lot of parks, safe environment and friendly people,
said Jao, who is co-chairwoman of Young Professionals of
Tri-Cities, which started in 2007.
-- On the net: To view the Kiplinger.com report,
go to http://bit.ly/ai7ENM. Then click on the "next" button under
the picture to see the Kennewick/Tri-Cities listing.
-- Pratik Joshi: 582-1541;
pjoshi@tricityherald.com
Mortgage Rates at Historic Lows
Mortgage rates fell this week to the lowest level on record,
giving consumers' added incentive to lock in low payments for
home purchases and refinanced loans. But, as stated in previous
posts, this trend will not be here for ever...what goes down must
go up.
The average rate for 30-year fixed loans sank to 4.69 percent,
from 4.75 percent last week, mortgage company Freddie Mac said
Thursday.
That's the lowest point since Freddie Mac began tracking rates in
1971. The previous record of 4.71 percent was set in December.
Rates for 15-year and five-year mortgages also hit lows.
Mortgage rates have fallen over the past two months as nervous
investors have shifted money into the safety of Treasury bonds.
The demand for Treasuries has caused Treasury yields to fall. And
mortgage rates tend to track the yields on long-term Treasuries.
Yet the falling rates have yet to spark a home-buying boom - or
energize the economy nationally, while many Real Estate Markets
such as Tri-Cities, Washington continue to be strong. New-home
sales contracted, as we predicted, in May after home buying tax
credits expired. The economy also remains under pressure from
fears of high unemployment. And many people don't qualify under
tightened lending rules.
"Many homebuyers are still concerned about their jobs and
financial well-being, many will be reluctant to take the plunge,
even though affordability has never been better," said Paul Roy,
Managing Broker, Coldwell Banker Tomlinson in Kennewick,
Washington. "Consumer confidence is crucial to a growing
sustained housing market," said Roy.
Lending activity remains sluggish. Mortgage application volume
dipped 6 percent last week from a week earlier, according to the
Mortgage Bankers Association. Refinancing activity fell 7
percent. And mortgage applications to buy homes slipped 1.2
percent.
People considering refinancing should factor in such fees. They
should also calculate how many months it would take to recover
them. For those who expect to stay in their home for two years or
less, the fees might outweigh the savings from a lower rate.
Despite some lenders' ads, refinancing is never free. A fee
normally goes to the mortgage broker or lender. There are also
fees for title insurance, a new appraisal, document processing
and other charges. Often, mortgage brokers or lenders create the
appearance of a "no fee" mortgage by adding the costs to a total
loan amount or by charging a higher interest rate. Talk to your
Real Estate Professional to see if refinancing makes sense for
you.
Freddie Mac collects mortgage rates on Monday through Wednesday
of each week from lenders around the country. Rates often
fluctuate, even within a given day.
Rates on 15-year fixed-rate mortgages fell to an average of 4.13
percent. That was the lowest on records dating to September 1991.
It was down from 4.2 percent a week earlier.
Rates on five-year adjustable-rate mortgages averaged 3.84
percent, down from 3.89 percent a week earlier. That was also the
lowest on Freddie Mac's records, which date back to January 2005
for such loans.
Average rates on one-year adjustable-rate mortgages fell to 3.77
percent from 3.82 percent. That was the lowest average since May
2004.
The rates do not include add-on fees known as points. One point
is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac's survey averaged 0.7
a point for 30-year, 5-year and 1-year loans. The average fee for
15-year loans was 0.6 of a point.
Is Tri-Cities headed to a Housing Shortage?
While many homeowners across
the country have watched the values of their homes plummet, the
Tri-Cities real estate market has fared much better. Economic
forecasters are now saying a housing shortage may cause
Tri-Cities' home values to increase drastically within the next
two years as the recovery across the nation continues.
Especially, if lending practices do not
provide builders, investors and developers loans to build housing
units to keep pace with the demand.
With the relatively healthy
local economy encouraging continued migration to Tri-Cities and
homebuilders slowing or halting many new projects, Real Estate
forecaster Paul Roy, Manager, Coldwell Banker Tomlinson Real
Estate said demand will soon exceed supply.
"My fear is that national
developers and banks may have overreacted and Tri-Cities may be
penalized in the form of lower home starts, which can eventually
create an artificial shortage," Roy said.
Roy estimates newcomers move to
Tri-Cities area at a rate of approximately 10,000 a year during
the last 10 years. Those newcomers, coupled with the decrease in
home starts, new homes under construction, and no new rental units- may lead to a shortage over the
next few years, he said.
"Four years ago we were
building new homes at a rate of about 2,000 a year, and last year
we only built 1,210 housing units. Additionally, there are no new
apartment buildings currently under construction. Based on our
population growth that's not enough," Roy said. "With this type
of growth the ideal number of home starts for Tri-Cities is 500
to 700 more a year than last year and
most apartments buildings are near capacity, we need new units to
keep up with demand.."
The largest decline in home
starts in Tri-Cities has been in the $200,000 and under price
range since fourth quarter 2007, according to data from housing
data from the Tri-Cities Association of Realtors.
"Capital constraints faced by
builders and the tightening in credit for buyers played large
roles in this decline," said Roy. "It's a little different
here," Roy said. "I think a lot of people get confused with the
national news. A big challenge that we face is that the buyers
come in and think they can buy a house in this area for pennies
on the dollar."
"The guidelines have tightened
so much now that even A+ credit buyers are challenged to get
loans," he said. "I don't think it can get any tighter than it
already is."
The psychology of a recession
despite the Hanford reputation, Roy said it works to the areas
advantage that not all of the local economy is tied into
Hanford.
Pointing to 2010 as a year
likely to continue with a growing economy and housing market in
the Tri-Cities, Roy said 2009 was a lot better year than 2008.
"The psychology of the market is very important. If you expect
that the economy is going to get better, it instantly gets
better.
Roy said the good news is
Tri-Cities home values have never appreciated to the degree
national values have.
"As conditions do improve
nationally, Tri-Cities will be well-positioned for a rebound
because the overall inventory levels are low," Roy said. "At this
point, the most significant variable impacting local demand for
housing is depressed consumer confidence. When consumer
confidence returns, in 2010, home production will gain
momentum."
In anticipation of the
economy's recovery, Roy said many who have lost their jobs in
other smaller markets will move to Tri-Cities and other areas
like it for the opportunities of employment. But, they won't if
they can not find suitable housing which will be a negative
impact to the areas local economy
|
Copyright � 2008
Coldwell Banker Tomlinson Associates