Homes more affordable in buyers’ market

  • Tue Sep 28th, 2010 9:16pm

By Katie Murdoch Enterprise editor

Real estate activity in Snohomish County shows it’s a buyer’s market, but one industry official warns potential homeowners that an impending change in mortgage insurance premiums could limit their bargaining power.

Members of Kirkland-based Northwest Multiple Listing Service tallied more than 6,000 pending sales in August.

However in Snohomish County, pending sales decreased to 906 last month from 1,189 in August 2009, a 24 percent drop.

The number of closed sales of single-family homes and condos combined in Snohomish County dropped from last year. In August, there were 642 closed sales compared to 791 in August 2009. Average home prices dropped from $285,000 to $260,000.

NWMLS director OB Jacobi, general manager of Windermere Real Estate Company, said the market is favorable for sellers who price their homes correctly.

Jacobi described the current demographic of buyers as “value hunters,” characterized by stable income and good credit.

“Value hunters are purchasing homes they couldn’t afford a few years ago and are most likely first-time buyers and move-up buyers with strong equity in their current home,” he said.

Along with lower prices and record low mortgage interest rates, buyers have an abundant inventory to consider, further bolstering their bargaining position, according to the NWMLS.

In Snohomish County there were more than 5,900 listings last month compared to more than 5,500 in August 2009, a 7.7 percent spike in activity.

NWMLS director Darin Stenvers, managing broker at John L. Scott, Inc., in Bellingham said the relatively flat prices, combined with the large number of foreclosed and short sales transactions, are reflective of a buyers’ market.

However, one real estate official warned buyers shouldn’t expect the market to stay in their favor forever.

Prospective purchasers may not be aware of a forthcoming change in annual mortgage insurance premiums, a change that can reduce purchasing power, said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

Scott said buyers might not be aware of plans by the Federal Housing Association to raise its annual mortgage insurance premiums by 3 percent beginning Oct. 4.

“With FHA loans accounting for about half of all home loans, the change will affect a significant number of borrowers,” he said.