Market Statistics Update

Yesterday I conducted a more detailed review of the 37 new purchase contracts written two weeks ago and 18 of them were for either short-sales or foreclosed (bank-owned) properties.


I then did a more comprehensive review and of 116 recently written purchase contracts, 55 were for either short-sales of foreclosed properties.

Recently then, over 40% of the new purchase contracts being written are in these two categories. This is similar to circumstances in the San Diego, California market. I mention this because whatever is happening there eventually spreads throughout the rest of the country (usually with at least a six month delay).

I also conducted a search of the 1,800+ plus active listings and somewhere around 200 have been coded as either a short-sale or foreclosure. I say somewhere because it's difficult to determine the status of these properties because of the wording used in the listing. But I believe the percentage of short-sales and foreclosures is about 15% of our current active inventory.

The unanswered question is how many more properties of this type will be "coming on the market" for the next six months or so.

I also believe this is a preview of what's coming up and it's positive because we need to absorb all these short-sales and foreclosures before our markets have a chance to improve.

New Credit Scoring System in Effect

The January 29, 2009 issue of The Wall Street Journal has an article on the improved credit scoring system devised by Fair Issac Corp. and recently released.

Click here to read this article.

Remember, we are all entitled to a free credit report (but not a credit score) annually from each of the three credit bureaus. You can click here here and be taken to the website for that information.

Economic Recovery? Unfortunately...Politics As Usual

Several months ago I wrote it was vitally important that professional politicians stay out of the way of our economic recovery. Well...I guess that's not going to happen!

I don't like posting politics but you really need to click here and read The Wall Street Journal's January 22nd front page article on bank recoveries. You may come to the same conclusion I did.

President Obama's no dummy. He's surrounded himself with an intelligent and capable team of economic and financial advisors to correct the situation. But some members of Congress have a short memory and a sorry case of conflict of interest. If President Obama doesn't put a stop to this right now, he won't get a second chance!

Oh, did anyone else happen to see last week's comment from Senate Majority Leader Reid that "I don't work for President Obama?"

Recycling Your Old Television

In light of the upcoming change of television signal reception (February 14, 2009 (which may be delayed until July)), there are several locations in Silverdale which will recycle televisions for free.

If you own a Sony, Zenith, LG or Goldstar television, you can take it to a Waste Management location (transfer station on Dickey Road).

If you own a Panasonic, Sharp or Toshiba television, you can take it to Office Depot at 9931 Mickleberry Road.

Although not in Silverdale, Wal-mart will recycle Samsung televisions taken to their drop-off spots.

Regardless of the manufacturer, Best Buy will take your old television provided you purchase a new one and have it delivered to your home.

Short Sale Report

One of my CRS "buddies" told me about this blog site that has information on how national banks respond to requests for short sales from homeowners in trouble.

Click here to check out this information (as Artie Johnson used to say on Laugh In..."veddy intarestink)."

Update: Short-Sale "Catch-22s" For Sellers (and Buyers)

Good News!

The Washington State Department of Revenue reversed its position this morning to collect real estate excise tax on the difference between the sale price and outstanding mortgage amount on a short-sale. Chalk this victory up to the Washington REALTORS and Escrow and Title Industry among others.

The Department of Revenue will only collect real estate excise tax based on the sale price.

This removes the third "Catch-22" I addressed on my previous blog post.

Short-Sale "Catch-22s" For Sellers (and Buyers)

I've recently posted information on short-sales but yet to address possible tax consequences that occur at the local (city/county), state and federal levels.

Here goes!

In Kitsap County the sale of real property "triggers" a real estate tax of 1.78% on the sale price of the property. If the sale price were $100,000.00, the excise tax due the county would be $1,780.00. This tax amount is deducted from the seller's proceeds at closing.

We have no state income tax in Washington State. But if you live in a state that has an income tax, your state may consider the difference between the outstanding mortgage amount and the sale price as income to be taxed at your marginal tax rate. This is one of the "Catch-22s."

At the federal level, the IRS may consider the amount "foregiven" by the mortgage holder as income and thus taxable at the seller's marginal tax rate. This in another "Catch-22."

By the way buyers, just this week the Washington State Department of Revenue issued direction to escrow companies that it considers the foregiven amount of a short-sale to be subject to the 1.78% excise tax. So...who pays this if the seller has no money? This is the third "Catch-22."

If you're selling under short-sale conditions you need to consult with your accountant to determine the tax consequences.

Silverdale Real Estate Market Statistics

Here are two charts showing some additional market statistics for Silverdale. The sales chart covers the past 2 years of sales showing the average and median prices trends for those sales.

The other chart shows the trend of original list price to sale price ratio for this period.

Facing Foreclosure...Here's Help in Washington State

If you live in Washington State and are having problems making your mortgage payment, here's a link that may help you.

Kitsap County Weekly Market Statistics for January 5, 2009

This is the first report for 2009 and let's all hope the information I present throughout the year becomes more positive by year's end.

That being said, the absorption rate for Silverdale declined to 78 weeks of active inventory for sale. This rate has been decreasing since the beginning of December 2008 but not because the market has improved...unfortunately because there are fewer active listings for sale.

The absorption rate for Kitsap County also decreased, from 200.4 weeks of active inventory the previous report to 134.5 weeks this past week. This number has remained relatively stable for the past five months.

There were 26 new purchase contracts written the past week which is five more than the average for the month of December 2008 but one-half the number prior to the stock market's major decline this past October.

There were 1,738 active listings for sale county-wide this past week.

I expect the number of active listings to gradually increase over the next several months, possibly to 2,400 or more. For sellers...more competition. For buyers...more choices. If I'm correct, the absorption rates will also increase unless the number of contracts written also increases. More to come!

Your Credit Report

Your credit score is one of your most precious resources...especially in today's economy! A good score (above 720) can open doors and save you money. But what if your score is "bruised" amid the credit crunch?

Don't fret. Here are some tips to repair damage and increase your credit rating:

• Order a credit report from the top three bureaus (Equifax, Trans-Union and Experian). Don't be surprised if the results are slightly different. Creditors aren't required to report to all three credit bureaus, so they typically report only to the bureau to which they also subscribe.
• Examine your reports carefully. Nearly every consumer has an error on at least one credit report from one of the major bureaus. Errors can include typing, outdated and incomplete information to innacurate account history. Make a list of items to dispute and why.
• Dispute. Either by completing the dispute form provided with your report or write a letter. Identify each mistake and state why it's wrong. Send a photocopy of your report with the mistakes circled to the reporting bureau. Include copies of supporting documents.
• Document. Keep copies and records of all forms, letters and documentation you send to the bureaus plus the dates sent. The bureau must investigate any relevant dispute within 30 days of receiving your letter.

Click here to order a copy of your credit report (you are entitled to one FREE report from each bureau each year). However, this program does not entitle you to your credit score.