Local real estate market is still hot

Wednesday, 23 August 2006

‘Stabilization’ hits local real estate BY MAGGIE ULMER S-E Staff Reporter The local real estate market is still steady and stable, according to local real estate gurus. “Our local real estate market is still good,” Tricia Lyman, President of the Northeast Washington Association of REALTORS and co-owner of Town and Country GMAC Real Estate said. “There hasn’t been any slowdown at all in the last few weeks in our office. “I would caution sellers not to overprice properties beyond what the market indicates,” she added. Lyman explained that even in a strong market, sellers pricing too high can bring even healthy markets to a halt. “If sellers price too high for the market because they see higher prices in other areas, that can damage the market,” Lyman said. “Buyers are very smart; they do a lot of research and they know if a property is priced too high. I’ve had buyers turn down properties locally because the prices were too high for our area.” Ken Barcus, broker and owner of the new RE/MAX Select Associates, Inc., explained that the area has experienced a sellers’ market since the fall of 2003. “It’s all about supply and demand,” Barcus said. “We had more buyers than listings, and with that shortage, there was a tremendous increase in values. Now, we’re in a transition market. We’re getting out of a sellers’ market and stabilizing because we’re starting to see a decrease in available buyers.” Barcus said the stabilization means sellers will have to be more competitive because there will be more of them. “This stabilization is healthy, not bad,” Barcus pointed out. “The market’s certainly not falling on its face. The market will remain strong and healthy with modest appreciation. There are still lots of Baby Boomers retiring, and the Pacific Northwest, and eastern Washington in particular are becoming sought-after spots.” More for the money Jeff Hinton, a real estate agent with Coldwell-Banker Am-Pac Realty, agreed that the transition into a balanced market brings stability. “With that stabilization, we’ll possibly see more competitive pricing and possibly an increase in inventory as the buyer pool slows down,” Hinton said. “We naturally see a bit of a slowdown in the market right before school starts, and then it picks up when people get settled in with school,” Hinton pointed out. “We typically have a strong fall season. Prices adjusting back to a stable market after an intensive, buyer-driven market is not a decline in the market; it’s a healthy adjustment.” Barcus speculated that the area is more attractive because it’s much less expensive than other pristine areas. “Spokane is moving north, and having the metropolitan area so close but getting to live in this area is another big pull,” Barcus said. “In addition, we have unbeatable natural beauty, four distinct seasons, a reasonable cost of living, a desirable way of life, good resources, and a friendly community with a lot to offer.” Lyman added that most buyers are coming from larger metropolitan areas where prices are much higher. “We’re still a very good value,” Lyman said. “We’re not a job destination location as much as we are sought after by early retirees, people looking for second homes, and telecommuters who aren’t bound by the normal job-related necessities. They’re looking for the lifestyle they can’t find in the big city.” Raw land sales increase Lyman pointed out that one reason the area hasn’t grown at a greater rate is because people don’t want it to. “We want to stay a small town,” she said. Hinton pointed out that in response to the limited residential units for sale, raw land sales have increased. “Oftentimes, when there’s a shortage of homes available to buy, we see spurts in land sales, and that’s what’s happened here recently,” Hinton explained. “People want to move to the area, and in some cases, can build a new home for a reasonably comparable close price as a resale. With the increased demand for raw land, the price of the land increases, too.” Hinton said that according to the local MLS database, which covers the tri-county area, the number of land units sold is about the same as last year. The dollar-volume of land, however, has increased 21 percent from last year, and the median price has increased 30 percent. As far as existing residential units, Hinton pointed out that according to the same MLS database, the number of units sold is down about 22 percent from last year, and the dollar-volume has decreased about 11 percent. The median price, however, has increased 11 percent. Barcus said that historically, most out of area buyers came from the Puget Sound region or other parts of western Washington. “Now, the pool of buyers has grown from mostly Washington’s west coast to the entire nation,” Barcus said. “I believe there would be more buyers if our local governments would develop infrastructure for more housing. We have both local people and people from out of the area who want to buy property here, but the supply is limited because of the lack of infrastructure.” Spike in out of area buyers Barcus speculated that prior to the last three years, only about 30 percent of buyers were from out of the area. Now he estimates that 40 to 50 percent of buyers are coming from elsewhere. Lyman pointed out that she doesn’t foresee a slowdown in the local market. “We still have too much to offer,” she said. “The attraction of this area for people is the natural beauty, the quality of life, the laid back atmosphere, and the fact that we’re not densely populated like a lot of other areas.” All three real estate agents contributing to this article agreed that the local market is doing better than the national one. “Markets whose prices increased rapidly have slowed down,” Lyman said. “As a whole, our market is doing better than the national one because ours never had price increases to the extent that larger ones did.” “Across the nation, real estate has slowed tremendously, but Washington is still a hot spot,” Barcus said. “I’ve been talking with clients from across the country who want to get up here and buy a home, but they can’t sell their current house.” Barcus speculated that national real estate trends are affected by interest rates, the economy, the price of fuel and general price inflation, and the instability in the Middle East. “It takes time before we see the effects locally of the national real estate trends,” Barcus said. “We’re still seeing lots of cash buyers, but I think the market time for local sellers will become longer, and sellers will have to become more competitive. As the market stabilizes, it’s possible we’ll get back to a very hot market, like what we have experienced.” Barcus added that real estate shouldn’t depreciate. “We’ll just see the frenzy in the market leave, but we’ll still have a healthy demand, and enough supply,” he said. “It will all level out.” ‘We’ve always been counter-culture to national market’ Lyman pointed out that national market trends can have a negative affect on the local market. “When people hear the national numbers about real estate, they’ll assume it’s the same locally, and it’s not,” Lyman said. “The pricing adjustments may be downward elsewhere and markets might be slower in other places, but it hasn’t been true here. “We have usually been pretty counter-culture to the national market,” Lyman said. “Our market didn’t really improve until the last real estate cycle, and our greatest improvements have really been in the last three years.” Lyman pointed out that she has never believed in a real estate “bubble.” “I’ve been in the business a long time, and it works based on simple supply and demand,” Lyman said. “The ‘bubble’ is one of those things the media sort of created and kept going back to until everyone thought it was a big deal. Yes, property values rose, but it was because demand rose, bot because of a bubble. There were a lot of contributing factors to the increase in buyers, such as the retiring baby boomers, low interest rates, and a good national economy. Now we’re just experiencing a normal readjustment that will get us back to normal.” Lyman also pointed out that even though values may not be going up in this area as high as they are in others, properties are still appreciating. “People may not see as marked an increase in their property value as they would in a faster paced market, but they’re still making money on their homes, even with this slight adjustment,” Lyman assured. “If things are priced right here, they do sell, and very timely. It’s easy to make the delineation between the properties that are overpriced and those that aren’t.” No shortage of business for serious agents When asked about the trends’ effect on the business of real estate, Hinton, Lyman and Barcus answered that serious real estate agents will always be in business. “The statistics show that about the top 20 percent of agents do most of the work in the industry,” Lyman said. “Those who follow the procedure, which is a good formula, will have enough business in any market. Those who don’t rely on the basics will have a more difficult time. “There is a big misconception about real estate agents, but we all do work very hard. If it were easy, more people would be doing it and be successful at it.” Barcus added an adage that a former boss imparted to him: the cream always rises to the top. “There’s always room for better service, and there’s always business out there for those who are willing to go get it,” Barcus said. Barcus, Lyman and Hinton also agreed that the internet has had a large impact on the real estate business. “Almost all of our marketing is done online, and the majority of our buyers come to us via the internet,” Barcus said. He added that most people look for their next home from the comfort of their current home. “When people come into the office, they’ve usually already done their homework and have their search narrowed down to just a few properties they want to look at,” Barcus said. “They’ve looked at everything online and done the virtual tours, and they have a pretty good idea of what they want by the time they come through the office door.” Lyman estimated that about 75 percent of her business is generated through online advertising. “The buyers have already decided what they don’t want and what they’re interested in looking at, and then we take them around to the places on their list,” she said. “It has happened rarely, but it’s almost unheard of for a client to buy a home after only seeing it online. Most buyers will go out to the site and see it and touch it before they know for sure whether or not they want it.” Despite changes in the way buyers find their new homes and the complicated webs that determine local markets, northeast Washington is still the place to buy. “The median price of a home is currently at $139,250,” Hinton said. “Last year, the median was $125,000. “I agree that people will continue to buy here because they want to be here,” Hinton pointed out. “The area has a lot to offer, and it’s still reasonably priced. When the market transitions like this, it’s still a good market, and it’s still good for sellers – it’s just a little more attainable for buyers as well.”

Last Updated ( Wednesday, 30 August 2006 )