Bainbridge Island, WA Real Estate News

If you are looking for more good news in the real estate market, don't talk to local appraisers. They have a pretty dim view of the next few months.   Appraisers are seeing more distressed properties coming across their desk and its making them a bit pessimistic about values. Just ask anyone who is in the middle of a refinance what the thought of their appraisal.  That's bound to continue to spill over to appraisals on sales. Buyers are out there: I have 16 different couples and singles pre-approved for a home purchase and only three are actively making offers this week. The rest are dipping their toes in the water, but not jumping in just yet.   Sure would like to see an nice fall where they make the big leap, wouldn't you?
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Fannie Mae is making so many changes with their newest announcement that the link to the full document is listed below. Many of the changes will result in more paperwork for borrowers, but some guidelines are being radically altered, such as the one real estate columnist Ken Harney covered this weekend: no more trailing spouse income can be counted for those relocating. Here are some of the categories being impacted: - Age of Credit Documents (90 days max vs. 120)- Construction-to-Permanent Financing and Single-Closing Transaction (re-approval of the borrower)- Credit Card Financing (may allow up to 2% of loan amount outside closing)- IRS Form 4506-T (will require up front, urges lenders to pull tax returns during underwriting to verify income)- Home Equity Lines of Credit (expands use ...
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U.S. News & World Report placed the Bremerton-Silverdale area on its top ten list for the nation where home prices are expected to appreciate the most over the 10 years. The news magazine predicts home prices will increase an average of 5.2 percent annually in the next decade. Among the positive factors, the magazine noted a large military presence that adds greater employment stability to Kitsap County, as well as stronger employment prospects on the other side of the pond in the Seattle and Tacoma areas. PDF copy go to http://www.bainbridge-island.us/email/usnews.pdf  
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By Susan Peters, The Better it Looks the Better it Sells
(Dove Realty Inc.)
On Bainbridge Island, just a 35 minute ferry ride away. When it comes to interior design my philosophy is “fast and cheap,” with one exception: artwork! Take some of the money you’ve saved on furniture and spend it on something you’ll love for the rest of your life. Director’s Gallery on Bainbridge Island is my new favorite resource for beautiful, evocative, original paintings. Owner and director Jack Mclaughlin not only has an incredible eye (there was not one thing in the place I didn’t like), but he is so knowledgeable and so not pushy! While his taste is exquisite, his prices are very reasonable. When you buy artwork, buy something you absolutely love! Director’s Gallery 126 Madrone Lane Bainbridge Island, WA 98110 206.842.6000 www.TheDirectorsGallery.com
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Finally, it drives me nuts when I pick up the Seattle Times and they run a chart of "local lenders" and mortgage rates.  First, there is not one major lender on this monthly list, just companies you have never heard of before.  Second, the rates are a week old and mortgage rates can change daily and even several times in one day.  Third, how can you have the same loan amount and show the exact same fees, but the APR they list in the Times is wildly different between lenders offering the exact same thing??? Here's the truth about APR: it can be manipulated.  An APR or Annual Percentage Rate is supposed to be used as an apples-to-apples comparison between lenders quoting mortgage rates as it supposed to unveil the real cost of the loan and indicate if there are hidden fees. Unfortunately,...
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If you threw away a recent "disclosure" notice from your credit card company thinking it was junk mail, you better check your interest rate online or in your next statement. Dozens of my customers -- many with nearly perfect credit -- have told me their interest rates have recently been raised, some as high as more than 29 percent! Apparently there are new regulations coming next summer and credit card issuers are rushing to raise rates now as they will be more limited in the future.  If you pay your bill off each month, you still may be impacted as some companies will charge you interest from the moment the charge is made.  Recommendation: do read the fine print. NEW RULES COMING: http://www.creditcards.com/credit-card-news/help/what-the-new-credit-card-rules-mean-6000.php  
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 Beginning May 1 we'll have a new acronym for the industry to memorize:  the new HVCC or Home Valuation Code of Conduct. Loans purchase by Fannie Mae and Freddie Mac will require lenders to follow a new set of standards that is designed to eliminate anyone who works for a lender --  from processors to mortgage brokers -- being able to control the order of which specific appraiser is used and lender staff will be strictly prohibited from trying in any way to influence value.  HVCC:* eliminates broker-ordered appraisals* prohibits appraiser coercion* reduces the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages. Independent mortgage brokers are scrambling as most don't have the capacity to meet the requirements of the new rules...
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Two years ago, anyone with a 680 credit score or better was considered having  "excellent" credit.  A 680 or better middle credit score got you the best interest rates.  Even documentation requirements were less taxing if you had a score at this threshold.  A solid score of 680 also meant very little (if any) paper documentation for assets or income. Today, most people have discovered we once again live in a full income and asset documentation world. But borrowers are stunned when they learn that a 680 score can cost them dearly when they go to refinance a home loan.  That's because what was considered an "A" borrower yesterday, is at best a "C-plus" borrower today.  The Fannie Mae credit score bar now is at 740 or better for your "middle" credit score. A middle credit score is calculat...
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Two years ago, anyone with a 680 credit score or better was considered having  "excellent" credit.  A 680 or better middle credit score got you the best interest rates.  Even documentation requirements were less taxing if you had a score at this threshold.  A solid score of 680 also meant very little (if any) paper documentation for assets or income. Today, most people have discovered we once again live in a full income and asset documentation world. But borrowers are stunned when they learn that a 680 score can cost them dearly when they go to refinance a home loan.  That's because what was considered an "A" borrower yesterday, is at best a "C-plus" borrower today.  The Fannie Mae credit score bar now is at 740 or better for your "middle" credit score. A middle credit score is calculat...
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The rule of thumb for decades in the lending industry was that if you could lower your interest rate by 1 percent, you should refinance. Did I tell you I hate rules of thumbs? That's because there are always exceptions to rules. One such exception to this rule I call the "Lender's Little Secret."  It is a simple calculation that few loan officers will ever mention, much less offer as part of their analysis to run the numbers for a potential refinance customer. After all, the answer might convince the customer NOT to refinance, and that means the loan officer loses the deal. But this is a calculation I do for every single customer because refinancing is a math problem: if it makes financial sense, one should refi; if it doesn't, one should not. It is simple as that. The "secret" is to ca...
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Financing a rental property (called a non-owner occupied loan in lender lingo) is more expensive today. Fannie Mae and Freddie Mac continue to tweak the amount of "add ons" that are attached to a rental property. Across the board, if you are purchasing or refinancing an investment property, there is a minimum 1.75 in points that are added on up-front, regardless of credit score. If your Loan-to-Value (LTV) is more than 75%, you will pay THREE POINTS more.  That's right, purchasing a rental property with just 20% down today will cost you at least 3 points more than an owner-occupied loan (primary or secondary residence). In the past, to avoid the extra points associated with an investment property, a lender would simply increase the interest rate to significantly reduce -- or even elimin...
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GOOD NEWS STORY #1: Local Home SalesExperts remind us that one month does not make a trend, but we hadsome pretty good news in the March home sale numbers on Bainbridge. Of the 14 single-family home sales that recorded in March, four homesales were at one million dollars or higher and six sales were in the"dead zone" of $600,000 to $999,999. That means over 70 percent of all home sold on Bainbridge were pricedat $600,000 or higher. We had 33 sales so far this year compared with 34 last year.  Themedian home price (half sold for more, half sold for less) jumped fromjust under $700,000 last March vs. over $780,000 this March. Granted, median home prices are not very meaningful on amonth-to-month comparison basis, but it is still a very positivenumber. BOTTOME LINE: This is a very signific...
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By Brenda Prowse
(Prowse and Company)
Residential homes on Bainbridge Island were selling for a month end median price of about $825,000 at the end of March, 18% higher than a year ago. The three month moving average of closed sale prices ($609,667) is down 7% from a year ago. You can’t read too much into the apparent price rise - overall we think prices are still going down. However, the distribution of buyers has changed as properties in the higher price ranges are now selling. There are several factors - low interest rates, anxious sellers, and a slowly reviving market for jumbo loans all must be contributing to some extent. Kitsap County 3 month moving average median price has fallen 15% over the past year. The 3 month moving average number of Bainbridge closed sales is down 8% from a year ago, and the March number of p...
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By Brenda Prowse
(Prowse and Company)
Residential homes on Bainbridge Island were selling for a month end median price of about $455,000 at the end of February, a drop of 36% from a year ago. The three month moving average of closed sale prices ($477,167) has dropped 24% from a year ago. This substantial drop in median price is due not only to sellers lowering their price, but also because the distribution of likely buyers has changed. A primary contributor may be the higher interest rates and continued inability to sell jumbo loans (now exceeding $475,000 but previously exceeding $417,000 until last month). While the big banks are advertising a large interest rate premium for jumbo loans, local banks and credit unions are willing to make these loans for far less. Kitsap County 3 month moving average median price has fallen...
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By Paul Pival, A Realtor with the soul of a professor.
(Coldwell Banker Bain)
  Here's an example of a reasonably well-priced home. This one sold February 17.A Manitou Beach (Bainbridge Island, WA) three-bedroom 2-bath 1800 square foot home on only .2 acres with a partial view of Puget Sound was listed 4 months ago for $595,000.After 3 months the price was lowered to $575,000. It sold a month later for $535,000.The home sold for 93% of the reduced price (90% of the original listing price).Would the home have sold more quickly if the price had been $575,000 originally? It's hard to tell, but this is an example of buyer and seller coming to a relatively quick agreement. The tax assessment was $300,000.
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By Paul Pival, A Realtor with the soul of a professor.
(Coldwell Banker Bain)
Here's the second market chaser. A 1960 3 bedroom 1.75 bath large (3388 square feet) home on a half acre on rise Drive in Bainbridge Island. High bank waterfront with a view and a bulkhead. Time on market: 18 1/2 months, a long, long time, even in a slow market. Originally listed at $1,100,000. 2 months later, price drops to $999,000. 2 1/2 months later: $947,000. 4 months later: $899,000. 5 1/2 months later: $649,000. 4 months later: $550,000. 5 weeks later: sold at $425,000. Selling price 77% of last price drop. 38% of original listing price. The tax assessment: $757,040. Had the owner been carrying a large mortgage, the wait would have been very, very expensive. As it stood, the owner owed less than the selling price.
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By Paul Pival, A Realtor with the soul of a professor.
(Coldwell Banker Bain)
  When a home is overpriced (usually at the insistence of the seller) and nobody makes an offer, the seller has three choices: leave the price as is, lower the price quickly, or take the home off the market. If the seller waits too long to lower the price, he is "chasing the market," as if the home grew legs and began to lumber after the retreating buyers, calling "Pick me, pick me!"  The idea is to attract the market, not chase it. If the home is priced correctly, the buyers will come. Sometimes it's the price, sometimes it's a combination (including seller financing, for instance). The last two homes sold in Bainbridge Island (February 11) chased the market.  The first, a 3-bedroom 2-bath home, built in 1988, offered 1965 square feet of living space on a shy half-acre in Manitou Beach...
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By Brenda Prowse
(Prowse and Company)
Rather than a long descriptive paragraph we are posting some graphs of the Bainbridge real estate market. With the median closed sale price in the mid $500k range, many Bainbridge properties have a very limited number of buyers because jumbo loans are difficult to obtain. Only homes at the low end of the market are moving so the median price is falling. Local savings and loans and credit unions offer the best terms for buyers needing a jumbo loan.
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By Paul Pival, A Realtor with the soul of a professor.
(Coldwell Banker Bain)
  This week's pace, if it can be called a pace, is just slightly behind last year's activity during this time. Whatever else may be said, it is certain that the homes and condo that closed last week are no longer available to you.12 closings for single family homes, 1 condo closing Silverdale 2 homes, average market time 4.8 monthsPoulsbo 3 homes (1 presale)average market 9.3 monthsKingston 3 homes, average market time 10 monthsBainbridge Island 4 homes, average market time 5.6 months; 1 condo, market time 5.8 months The same period last year closed 13 homes and 1 condo Silverdale, 1 home on market for 3.3 monthsPoulsbo 6 homes (2 presale), average market time 6 weeks (hot!)Kingston 2 homes, average market time 6 monthsBainbridge 4 homes, average market time just over 8 weeks. 1 condo o...
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