Before I get to the news, I want to sincerely thank everyone who was involved with me be named a "2009 Best In Client Satisfaction Real Estate Agent", as recently reported by Seattle Magazine. This is a cool award, and I appreciate the support of everyone I've worked with this year. On to the good stuff...
Local Update: Pending sales are up 25% from one year ago. This is the 5th consecutive monthly increase in our region, an excellent sign for our area.
Inventory is down 18% from 2008, interest rates continue to hover near the 5% mark, (compared to 6.48% 12 months ago), and affordability is at an all-time high. There has been no appreciable drop in home values since January, and in some areas there's been small appreciation. For those who are comfortable with their personal finances, this is an excellent time to buy a home, condo, or townhome in the Northwest.
Proposed Changes Coming to the Condo Market, effective November 2nd:
1) The number of units in a given complex that already have FHA financing may not exceed 30%. If a complex has 30% or more FHA financed units, it will not be open for any new FHA purchases. (There has never been a limit prior to this change).
2) FHA Spot Approvals will be eliminated. Condos must be on the FHA's approved list to be eligible for FHA financing. (Prior to this, Spot Approvals were allowed by most lenders).
3) Many projects which are currently on the FHA Approved list will be removed. FHA plans to remove all projects approved prior to 11/2 from their approved list. These projects will require re-approval by FHA, (under all of the new guidelines), and the estimated turn around time for project review by HUD is 8+ weeks.
Summary: For years FHA approved buyers have had an excellent chance of finding a unit in an FHA approved complex, therefore allowing them to proceed with a purchase. On November 2, all of this will change and we anticipate it will be extremely difficult for FHA condo buyers to pursue purchases. Since nearly all purchasers are using FHA financing, these next 3-6 months are going to be very interesting.
National News: Nationwide sales are up 14% from January, with inventory currently at 3.6 million homes, the lowest level in 2+ years. This equates to a 8.5 month suppply of homes, which continues to inch closer to the 7.5 month level which historically coincides with the stabilization of home prices.
1 in 3 deals include a Distressed Property, therefore values are still down from 2008 levels. (Distressed properties sell on average for 15-20% less than traditional homes). Stay tuned to see how the 4th quarter plays out...Wall Street is up, consumer confidence is up, job losses continue to shrink, and pent up demand for home buyers and sellers is very real. Banks will begin to release more inventory over the next several months, so how our nation's housing market responds will be a significant indicator of how close we are to true price stabilization.
