Friday, June 30, 2017

Congress is Taking Another Look at Dodd-Frank

Back in 2010 the US Congress passed a finance reform bill and President Obama signed it into law. It is commonly referred to as the Dodd-Frank bill after the two primary sponsors. Although the bill had some solid repairs to help shore up the financial system after the big crash, it also had some provisions that have led to a whole different line of problems for the public.

One of the biggest annoyances is the radical change to the appraisal system. For better or worse on cleaning up crooked loan officers and appraiser on the take, it has led to skyrocketing prices and greedy appraisers that gouge relentlessly at consumers. Hopefully they will fix that.

The system also created a three day waiting period after the final closing disclosures are issued. This had already been the case with refinances, but now they added purchases to the waiting period. This just adds yet another delay to the already burdensome length of time it takes to close a real estate transaction with a loan.

Maybe the gang on the hill can smooth out some of these ugly wrinkles int he Dodd Frank law.

With all these crazy regulations governing the lending industry it is wise for buyers to consult their trusted loan pro to go over the dos and don'ts of borrowing and to understand the timeline of a loan closing. So many buyers get frustrated as the process seems to linger endlessly. Sometimes they haven't done what the loan officer has requested and sometimes it is just one of many individuals involved int he process taking a bit longer on their part. Patience is the key.

Buyers should be very cautious before giving up their apartment, ordering a moving truck, or other costly moving related expenses until the loan officer has given the all clear. Some buyers find themselves homeless when they are buying a home, because they gave up their apartment trying to time perfectly the closing of their new house and the end of the rental period. Buyers are well advised to not let greed put them in a bad spot. Dodd-Frank and other heavy industry regulations will continue to create opportunities for delays in closing a real estate transaction. Patience padawan, patience.

Tuesday, June 20, 2017

Mount Vista Area Revisited

I took some photos of a new listing yesterday on the north side of Mount Vista. This was down near the bottom of the hill. I wasn't expecting any kind of view as the home was nearly at the bottom of the north side of Mount Vista.

This house however was well positioned for a view, the question was simply whether the local trees and other houses were to allow it. To my surprise and delight the home has a very respectable view of the mighty Mount Saint Helens.

From the front yard there is no indication of any view. From the back yard you have a peek-a-boo view of the mountain. Once you make you way upstairs however, that peek-a-boo becomes a 90% unobstructed view! Both the Master Bedroom and a large bonus room over the garage offer this excellent view.

Now I'll be clear, this is not a sweeping vista like the properties I have listed in Colorado Ridge. But this is a nice 2200 SF home in a very tidy neighborhood priced well under $400k. So any clean view of one of our big volcanoes is huge bonus in this price range.

All over Clark County we have homes with what I call "sleeper views". You walk in, not expecting any kind of vista and then BAM! there it is. I love it when that happens :)

Friday, June 16, 2017

Some New Home Builders are using Streamlined Sales

Many new home builders are now entering into a business model that is more streamlined but less flexible for the buyer. The first time I saw this approach was when Lennar came into the local market several years ago.

Now this is not a bad thing, but buyers looking for a lot of flexible customization in their new home should be aware that Builders like Lennar and Express by D.R. Horton are seeking to minimize the changes to the basic plan including very limited options on color and trim. This allows them to order in mass a small selection of trim outs, and keep costs low. Often this business model will have an A and B selection on color/tone and that is about it.

The upside to this type of approach is that the buyer will typically find a sharp price on a comparable home to a 'full service' type builder such as the tradition D.R. Horton or locals like New Traditions. It isn't a question of one being better than the other it is a concern that new home buyers realize that they have limited choices on these streamline building models.

Personally I like to have some choice in the decor and trim of a new house. It has always been one of the advantages to buying new over resale. Of course for many the idea of a new house is more about having everything brand new and not having to deal with a copious number of problems early in the experience.

It is truly a matter of preference. If you want a brand new house at price that could be 3-5% lower than a comparable property in a tradition development, then one of these newer business models could be ideal for you. If you want to have near 'Carte Blanche' on things like kitchen counter tops, carpet and flooring choices and other trim out features then sticking with a development running the classic business model may be best for you.

Whichever style suits you, make sure you understand the terms and choices before entering into a contract with a builder. Most problems that people experience could be avoided with by simply taking extra time to fully understand the offer from the builder.

As a local Realtor® I enjoy the multitude of opportunities to help my clients with a variety of different business models in various developments in and around Clark County.

Friday, June 9, 2017

Condos ride the waves

The condo market has ridden the wild roller coaster over the last several years. This is not atypical in a market that follows an extreme adjustment like the one we had back in 2009.

Condos took a serious beat down in the 2009-2011 free fall. Locally there were two major factors. The first was the obvious market crash that the whole nation felt. But more localized was the over abundance of condos that had flooded the area, particularly in Downtown Vancouver.

There were luxury units in Vancouver Center and 500 Broadway that were fetching close to a million dollars in 2007-08 that got wiped out in the foul mood of real estate in 2010-11. Those units saw reductions in sales prices in the 60% range!

Condos were much slower to rebound and those ultra luxury high-rise units have not yet returned to the lofty price typically associated with lofty heights high above the city. But lower priced condos are seeing a surge. As single family detached and attached housing has soared, suddenly the traditional condo with the expensive HOA dues still makes financial sense for people in the entry level price ranges.

The charts provided represent the last 6 months of activity wherein we see the days on market coming way down. Note: you have to ignore average with this as the unit totals are too small and the average is heavily skewed by a couple of short sale or bank owned problem units that sat for years.

Negotiated prices on condos as recently as six months back were well under asking, then they popped up to meet the rest of the market averaging over asking, and now seem to be settling in at or near asking. I think the bump in available inventory cooled the jets a little on condos.

Anyone sitting in a mid-level to upscale condo may have a solid opportunity to sell now at top dollar. Starting next year the new waterfront will begin coming online with new buildings and an urban buzz. Part of that will be a phased in 3300 housing units which will be a mix of condos, apartments, and senior housing. This may tug on the values a bit in the middle to upper end of the condo market elsewhere in the area.

I have my eye closely on the condo market as I am most excited about the waterfront development. They are working on the cable suspended Grant Street Pier right now and several of the mid-rise and high-rise buildings are starting to go up.

All things considered, condos are back and they should start filling in as relief for the entry level buyers and practical for those seeking to down size as they approach retirement.  

Friday, June 2, 2017

The Well Test Dilemma

Many people are buying rural homes to enjoy the privacy of a rural setting and a bit more land to sprawl out on. This is all fine and well, a little pun for fun, but rural properties are often located in areas where public water and sewer services are not available. Septic and wells are ultimately the responsibility of the homeowner to maintain. Buyers need to be certain for their own safety and health and to keep the banker lending the money happy, the well and sewer are working properly.

In the case of a septic, there are licensed service providers that come and check the system to ensure both compliance with local laws and regulation, as well as overall condition of the equipment. Wells however are a different animal. A well has a pump and often a pressure tank and other equipment that should be checked by a pro. One thing for certain is that the buyer and their lender need to know that the water quality is not compromised.

Generally in Washington State, we check for three types of contamination; bacteria chloroform, arsenic, and nitrates. Should the home buyer wish to conduct the test themselves, that is fine. If they are using a lender, they will need to hire a neutral third party to handle the sampling and delivery to local lab. No one connected to the transaction can be a part of the process. The lender wants to make certain it is an above board, arms length arrangement and no foul play is involved.

Buyers should note that well equipment is generally very reliable like most plumbing. The main concern is the flow rate of the well and the quality of the water. Having a flow test and water quality test are not that expensive and should be done by any home buyer considering a property serviced by a well. The flow rate should be in excess of 5 gallons per minute to enjoy good pressure with multiple sources running. Anything over 10 is pretty solid for a single family residence and would likely never cause any loss of pressure for typical family home usage.

I often hear questions about the well running dry. Although our abundance of precipitation may seem like a guarantee of forever flush aquifers, we can and occasionally do have wells that go dry. Many factors can play into this problem. Sometimes a local aquifer gets to heavily used and the natural replenishment can't keep up with the draw on the system. Generally local governments try to regulate the usage through zoning that keeps the possibility of dense development in check with geological facts affecting water supply. I don't hear of too many wells going dry around here, but any homeowner must know that it could happen and if it does, the expense could be very high to rectify the situation.

Locally in Clark County we have a pretty heavy population living on a relatively small piece of land. nearly half a million residents occupy just 620 square miles of land making Clark County one of the most densely populated counties in the Northwest. According the state estimates from both Oregon and Washington, Clark County has the third most dense population behind number one Multnomah County (Portland) and number two King County (Seattle). FYI: Multnomah County has a much smaller population than King County but it is also much much smaller is physical size making it more 'dense'.

The population density can play a role in the status of the aquifers in the region. Geological activity unseen beneath the surface can as well.

Buyers should consult professional well contractors for information about flow rates and how they might effect their personal usage on any given property. I am providing basic overview material here.