Smart Homebuyers are focusing on taking advantage of favorable rates along with the Tax Credit

January 11, 2010

Smart home buyers are focusing on taking advantage of the present, very favorable rate situation along with the still available tax credit.

Rates are likely to go up:

Please note that the main reason interest rates are so low is because the government is buying mortgage backed securities, or you may have heard the term “toxic assets”, which are basically sub-prime loans or loans that required no proof of income, allowed low credit scores and were generally 0% down.

After you get a loan through your bank or mortgage broker, the loans are sold to Fannie Mae and Freddie Mac and then those 2 entities package them up to sell them to investors. After the sub-prime meltdown no investors wanted them and so to keep Freddie Mac and Fannie Mae afloat, we, as taxpayers, bought them for essentially the “list price” even though they were not worth anything.

Even now, because interest rates are so low, private investors are not interested in mortgage backed securities (even though most of the loans now have a stringent qualification process) and so we, as taxpayers, are still buying them (and probably over-paying the banks).

In December (on the 24th, while most of the country was spending time at home with their family for the holidays) the Treasury announced there was to be no limit on what the government spent to bail out Freddie Mac and Fannie Mae. The prior limit was 400 Billion. This is a good article to explain what that means (besides we are all getting ripped off and our children, children’s children and so on will suffer). .

So, when the government decides to start stepping out of the big business welfare role, interest rates will go up and I presume that will happen in 2010 sometime. So, what happens when interest rates increase? Buyer’s qualify for less money and it impacts the housing market because buyers can afford less.

Tax Credit for First-time Buyers and Move-up Buyers scheduled to expire April 30, 2010.

In order to qualify for the credit, all home purchase contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

More about these tax credits can be learned in one of our prior posts from November 8, 2009 entitled “First Time Homebuyer Tax Credit Extended” and “A New Tax Credit for Certain Existing Home Owners”.

A great way to learn more about the above topics or decide if becoming a homeowner is right for you, please contact us or attend one of our home buyer workshops:


Date: Thursday, January 28, 2010
Time: 6:30pm – 7:30pm
Location: Northgate (Seattle) – 9709 3rd Ave NE #450, Seattle, WA 98115

Topics covered:
Loan Application Process, First-time Homebuyer Tax Credit, Market Conditions, Own vs. Rent Illustration, Home Buying Process, For Sale by Owner (FSBO), bank-owned, short-sale properties, Q & A. RSVP to Kerstin at 206.276.5827 or

Krisanne Heinze & Kerstin G. Brooks

Brooks & Heinze Team

Housing Recovery? Not so fast?

October 4, 2009

I received some feedback and questions about one of our July blog entries regarding signs of a recovery in the housing market. The entry was entitled: Housing Market is Showing Signs of Recovery. Some of my clients wanted to know if this meant they will stop “losing money” and that their property prices would go back to what they were.

There has been a lot of talk about a housing recovery. We, the Brooks and Heinze Team, have also reported on promising developments such as more sales in recent months, and multiple offers in some neighborhoods and other promising news.

After a long time of little or no movement in the market, this development certainly was worthwhile reporting and very encouraging. Some of the ‘flurry’ can be attributed to lower interest rates, greater affordability and the first time homebuyer tax credit.

However, for a sound recovery to take place which will stabilize prices and offer some growth in the future, the economy has to improve and good jobs need to be available. Real estate agents and economists know that the housing market cannot truly improve or recover unless the economy and with it the job market improve.

According to the Bureau of Labor Statistics, unemployment rates were higher in August than a year earlier in all 372 metropolitan areas, the U.S. Bureau of Labor Statistics reported today. Sixteen areas recorded jobless rates of at least 15.0 percent, while 9 areas registered rates below 5.0 percent. The national unemployment rate in August was 9.6 percent, not seasonally adjusted, up from 6.1 percent a year earlier. Among the 369 metropolitan areas for which nonfarm payroll employment data were available, 356 areas reported over-the-year decreases in payroll employment, 11 reported increases, and 2 had no change.

The economic downtown was created to a great extent by an insane housing bubble made possible by the availability of easy and cheap money or “bad loans”. People who should not have qualified for a loan were able to buy homes and other people who should have been able to buy a home were put into higher loans than they should have qualified for or were made loans that were structured in a way that made them unaffordable.

To make matters worse now, the number of good loans that are now going into default are surging as a result of the economy, not just poor loan underwriting. So, although the housing crisis may have help in the economic downturn, at this point the economic downturn is putting additional pressure back on the housing market due to job losses, and losses in property values; so even the once “good” loans are now going “bad”.

This brings me back to why I wrote this article. I want to make sure that our clients understand that there is some good news about the housing market but I also want them to understand that only as the economy at large improves and more good jobs are created, will the market and prices stabilize; and then I will be able to report that there has been a true recovery of the housing market.

Kerstin G. Brooks
Brooks & Heinze Real Estate Team

Phone: 206.276.5827

Housing Market is Showing Signs of Recovery

July 23, 2009

After months and months of discouraging news in the real estate market, for the last couple of months the news has been better.

According to the National Association of Realtors, sales of previously occupied homes rose for the third month in a row in June. Home sales rose 3.6 percent to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May. Sales were up in all four regions of the country. For a detailed breakdown of existing home sales statistics by region, please click on the following link: Existing Home Sales by Region .

Unfortunately, there is still a backlog of foreclosures that have yet to come on the market. It will be interesting to see what their sale will do to home prices. Usually, foreclosure sales drive down market values but if the inventory of homes on the market is shrinking, a downward effect of prices may be avoided by an increased demand. Only time will tell. The good news, at least at the moment, the share of foreclosures on the market is shrinking!

The Brooks and Heinze Team of Seattle, WA expects a slow but continued upward trend in sales to first time homebuyers, at least until the end of November due to the first time home buyer tax credit incentives, great affordability and favorable interest rates. Certain neighborhoods like Ballard, Phinney, Wallingford, Fremont, and Queen Anne have seen very low inventory and some of the better homes have sold in multiple offers.

Kerstin G. Brooks
Brooks & Heinze Team
Phone: 206.276.5827

Have we seen the bottom yet in Seattle?

June 16, 2009

Have we seen the bottom yet in Seattle? Maybe, maybe not. It depends what neighborhoods and price ranges you are talking about.

The suburbs are still struggling and many properties that have sat on the market for a long time in these areas continue to sit. Condos are tough to sell, as well, largely because financing is tricky for some of those. And homes in higher price ranges (above $600k) are also not moving as quickly (some neighborhoods excluded).

So, where are things turning around? Downtown and north of downtown to about 85th St. has seen a change in momentum in the last couple of months. Particularly in Fremont, Wallingford, Roosevelt, Ravenna, Ballard, Queen Anne, Wedgwood, Greenlake and Bryant where single family homes in good condition are selling quickly and occasionally two or three buyers are competing for the same home. There is an increased demand in the under $600k range.

If you are looking to buy in these more popular neighborhoods, wait no more, I think we have seen the bottom (dare I say it).

Properties south of downtown and north of 85th are more affordable than ever and some great deals are to be had. Take advantage of a strong buyer’s market, low interest rates and if you are a first-time homebuyer you most likely qualify for the $8000 tax credit (contact us for more information on who qualifies).

Pending sales are up even in these areas compared to a few months ago, some of which can be attributed to the time of the year (sales always go up in late spring/early summer) , some of it can be attributed to favorable terms for buyers such as low interest rates and the first-time homebuyer credit and I am hopeful it is actually a sign of a recovery.

The Seattle Metro area is one of the “10 Cities Most Likely to Bounce Back” according to Forbes Magazine. Forbes magazine has identified the top 10 cities that it believes are poised for recovery by examining unemployment figures, projected gross domestic product from Moody’s, and housing affordability data from the National Association of Home Builders.

Here is Forbes’ top 10:

Austin-Roundrock, Texas
Fayetteville-Springdale-Rogers, Ark.
Boulder, Colo.
Huntsville, Ala.
San Antonio, Texas
Mobile, Ala.
Dallas-Fort Worth-Arlington, Texas
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
McAllen-Edinburg-Mission, Texas
Seattle-Tacoma-Bellevue, Wash.

Have a wonderful day,


Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.

Your buying opportunities are endless !

October 31, 2008

Buy now – don’t wait.

A lot of buyers are saying they want to buy but they are waiting until prices hit rock bottom. First, it is really hard to tell when the market has hit bottom. It does not matter if we are talking about gold, stocks or homes here. Trying to time the bottom is almost impossible.

Is it likely that prices will go down further? Yes, it is is. In fact, I do not believe that we have seen the bottom yet. However, I do not forsee any more drastic drops.

You should buy now because prices are low and financing rates are low. It is important to keep in mind that purchase price alone does not determine the cost of investment but the combination of purchase price and mortgage interest rate determine the true cost. For a more detailed explanation and some compelling examples take a look at my blog entry from Oct. 22, 2008.

If you are a cash buyer, feel free to wait what you perceive to be the bottom of the market. However, if you are like most buyers who need to get a loan to finance a home purchase, don’t wait to buy. Interest rates are great at the moment but everyone in the lending industry I have talked to says they will soon go up. Higher rates will affect your buying power or may even make it impossible for you to qualify alltogether. Just talk to some of your relatives or friends who bought in the eighties – the rate was 17.48% in January of 1982 (source Freddie Mac homepage). Now rates are going to jump that high overnight or perhaps ever again but I just wanted to make the point that you need to look at the cost of financing, as well as the purchase price.

Just for fun, take a look at the mortgage rate changes between 1971 – 2008.

So, don’t delay. Buy today. We would be happy to help you take advantage of this great buyer’s market. The opportunities are amazing.

Kerstin G. Brooks, ABR, Realtor

Brooks & Heinze Team at Skyline Properties, Inc.

Cell: 206.276.5827


Web: www.

What’s going on in the Seattle housing market?

July 7, 2008

So, what’s going on in the Seattle market? If you live in Seattle but listen to the national news, all you hear is about how the housing market is in the toilet. Yes, the housing market has slowed in Seattle over the last year but not as much as the national average (not by a long shot).

Well, there are a couple of things going on in Seattle that make this still a healthy real estate market. Of course, our market has slowed down and the changes in the mortgage industry, high fuel and food prices, credit crisis, sub-prime delinquencies, etc. are to blame for that. But our employment market is great and it is keeping our real estate market in good shape.

The good news is that Microsoft and Boeing are doing well and are adding jobs in the information services and manufacturing sector. The unemployment rate in the Seattle-Bellevue-Everett area has remained low at 4.1% in May (lower than the national 5.5% rate). Source: Bureau of Labor Statistics:

The U.S. Census Bureau estimates that there will be a 8.7% change in population in the U.S. between the years 2010 – 2020 and a change of 13.6% change in Washington State during the same period. The projected change in the U.S. between 2000 – 2030 is 29.2% and 46.3% change in Washington State during the same period. Source: U.S. Census Bureau:

Where are all these people going to live? In apartments, houses and condos, of course. If these projections are correct, there will be an increased need for housing in Washington, which should bode well for real estate values. Some areas are showing a projected decline in population, such as D. C., North Dakota and West Virginia.

In short, Seattle is affected by the national economy and prices have dropped which is great for buyers who can take advantage of some great deals. How long will it be a buyer’s market? Who knows … for a while longer; but the great employment opportunities, good income, population growth and limited availability of buildable land (due to geography and environmental protection laws) make for a strong housing market that is good now and will be fantastic in the future.

So, buy a house in Seattle!

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Phone: 206.276.5827

Is the Seattle Real Estate Market Tanking?

January 1, 2008

What’s happening to the Seattle Real Estate Market? The market has cooled off but compared to much of the rest of the country, the market in Seattle is healthy and not tanking.

Seattle has strict growth-managment policies and therefore has not seen the same building boom as some parts of Arizona, for example. So overbuilding isn’t as much a problem here as it is in some other areas that have seen tremendous urban sprawl. We do not have an overabundance of vacant inventory.

A strong job market is key to a healthy housing market. The number of new jobs has outpaced or at least kept up with building permits for single-family homes and condos in this area. The Seattle Area has seen a tremendous amount of local job and population growth. In fact, “growth in this sector is running twice the national average, plus high wages. Local per-capita income, expected to be $46,356 this year, is 19.7 percent above the national average” (Elizabeth Rhodes, Seattle Times, December 2007).

Location. Location. Location. Yes, real estate is local and even though some areas can be doing really poorly, some areas can do really well. And yes, Seattle is doing well, although, national factors do and will affect all local markets. National factors have affected the Seattle market.

In the summer of 2007, the mortgage industry saw a meltdown which resulted in a shortage of funds available to lenders for home loans. Money was and still is difficult to come by for credit-challenged borrows. With fewer qualified buyers there is less competition – less demand – lower prices.

So, although Seattle has a lot going for it, particularly a strong and good employment, it can’t be completely incubated from the national crisis.

We get a lot of clients asking us to predict the housing market. Obviously, we can’t do that. We think that the market has slowed down and that appreciation will be relatively flat for a while.
However, we would not expect home prices to drop in the Seattle area.

Some of our buyer clients we have been working with have decided to wait and see what the market will do. And some of our sellers have decided to sell “before the bottom drops out” or have decided to wait “until prices go up again”. Clients ask us what the best time is to buy and sell.

If you are looking to speculate in the market short term, I would say – stay out. It is simply impossible to predict with any certainty exactly what the market will do.

If you are a renter, thinking of buying, I would say – do it. If you can qualify for a mortgage now and you think you will occupy your new property for at least 5 years, buy now. It is a buyer’s market (for the first time in a long time in Seattle !!!). Now is the time to negotiate on a good price, get some closing costs paid for and get some critical repairs paid for by the seller). We do not predict prices to drop much if at all and mortgate rates are great right now.

If you are a seller, thinking of selling, I would say – maybe. If you plan on staying in the area for only a short while longer, because you are retiring, relocating, etc. Do not switch to being a renter. Do not list your home for sale in the winter months. Come on the market in the spring. (November through January – are usually slow months for real estate in Seattle). If you plan on staying in Seattle long-term and like your home, keep it. Remember, there are other benefits to owning a home besides appreciation such as tax benefits, pride of homeownership, etc. If you have outgrown your home and plan on moving into a bigger home, now is a good time to do that. Yes, you may not get top dollar for your current home but you will get a great deal on the new home (which presumably is more expensive and your savings in percentage will be greater on the new house than the “loss” on the old house).

If you have any questions regarding this particular blog entry or any other questions regarding real estate, please feel free to contact us at your convenience.

Happy New Year!!!

Kerstin G. Brooks

Brooks & Heinze Team
Remax Northwest Realtors (Seattle)
Cell: 206.276.5827

This article was written by Kerstin G. Brooks, Realtor, ABR

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