Beyond Real Estate

In many areas of the country, the real estate market has slowed to all but a crawl. And although it is certainly getting slower here in the Seattle area, I think we’re still in better shape than many cities. Although, I just heard today that the home prices in suburban areas just outside Seattle and Bellevue are falling by as much as $100,000. That’s huge for a lot of people.

This is good news for buyers, actually. Even though the mortgage industry is in crisis, people might still be able to purchase homes - and even homes they couldn’t touch a year ago - because prices are now becoming more affordable. Additionally, the Fed lowering interest rates again might be helpful. I’m not sure that’s they right way to “stimulate” the economy, though, but that’s a topic for another post.

Frankly, I’ve always thought the housing prices in North King and Snohomish Counties were grossly over-inflated in the last 10 years. I’m glad to see pricing that more accurately reflects where prices likely should have been all along.

Of course, the bad news is that folks who’ve bought more house than they could afford or who have to move for job reasons and what-not, likely won’t recoup what they paid. Will those people end up in foreclosure? I think a good number of them will and many already have. They won’t really have much other choice. And that’s incredibly sad.

These are the people the Fed should be helping. I mean, the government can back the purchase of Bear Stearns by JPMorgan Chase but it’s unwilling or unable for whatever reason to help the average homeowner? Isn’t the government supposed to help it’s citizens? (Don’t answer that - it’s rhetorical.)

This isn’t a political blog so I won’t get into that any further . . . So back to the topic at hand.

I don’t think the Seattle area will see the problems that have plagued Las Vegas, Phoenix and Florida over the past few years but the picture certainly isn’t as rosy as some would like to pretend. There are real problems and I don’t think we’ve seen the lowest end of it yet. I heard that foreclosure rates rose 60% in February - I think that’s low compared to what’s coming over the next 6 months.

Do you live in an area that has been hit hard by this? What are your thoughts?

If you live in the Greater Seattle area, what are your thoughts?

Feel free to post in the comments, but do please keep in civil and clean.
Thanks,

Annie

UPDATE 3.17.08 - 9pm PDT: Very interesting article on Huffington Post about the Bear Stearns bailout and foreclosure crisis. Rather eye-opening. Check it out.

This blog is about to get a whole lot better! Until now, I’ve not really had much of a posting schedule - I just posted whenever and whatever I felt like posting at the moment. Well, beginning Monday, that is changing.

I’ve decided to get more serious about this blog and have created a schedule to that end:

Monday - Local Market. I’ll be posting on things happening in the Greater Seattle area in the Real Estate market.

Tuesday - National Trends. Things that are happening on a national scale which affect real estate in general. This might be mortgage related, bank related or could even be government related. It could be news or opinion.

Wednesday - Investing. Things affecting the investors market including thoughts, opinions, ideas, networking, marketing and the like.

Thursday - Living in the Pacific Northwest. My favorite places, things to do, social events, sports, music, theater - whatever!

Friday - Recap of the week/Marketing. Recap of top stories I’ve read or covered and etc. I’ll also post marketing tips for real estate professionals on occasion.

Saturday/Sunday - Future Trends & Thoughts. What I think might be happening over the long-haul in the RE arena. I’ll also share my thoughts on other topics, post fun pictures or cartoons and whatever else I think you might enjoy.

I hope you will find these things useful. Feel free to comment, make suggestions, etc as well as subscribe to the RSS feed. That way you’ll know as soon as something is posted.

Hope you’re having a great Sunday! See you tomorrow when I’ll be posting on what is happening in the Seattle area market.

~ Annie

Countrywide under investigation by the FBI for securities fraud.

In a report on CNNmoney.com this morning, a government official confirms that Countrywide Financial Corporation, acquired by Bank of America in January, is under investigation for fraud.

According to CNN,

“The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans, the paper said.

Subprime mortgages, or home loans given to borrowers with weak credit, have been at the root of a crisis that has rocked the U.S. economy.

Though the Federal Bureau of Investigation has acknowledged ongoing investigations related to the subprime debacle, neither the FBI nor the Justice Department would comment on the specific targets.

“The FBI has been investigating potential fraud in the mortgage/sub-prime lending industry, however, we can not confirm or deny which companies are under investigation,” said FBI spokesman Richard Kolko.

A law enforcement official told CNN that there are currently 16 companies being investigated.”

The New York Times reports that unnamed government officials with knowledge of the case, say that Countrywide is being investigated to determine whether or not the company misrepresented it’s financial position and the soundness of it’s loans in securities filings. The investigation is still in the early stages and it’s not clear yet if any charges will be filed.

The investigation of Countrywide comes after probes into the subprime mortgage fallout crisis. 14 other companies are a part of the broader investigation by the FBI.

“Countrywide already faces federal and state investigations of it’s lending practices, as well as several lawsuits by investors and mortgage holders.” - Reuters

CNN reported in February that Countrywide has broadened it’s mortgage workout scope where borrowers with fixed rate loans will be eligible for restructured loans. You can find more on that story at this link on CNN Money.

Will the changing face of suburban living cause slums?

Many people are moving closer to the city as gas prices and and costs for other necessities rise. Homes that typically have been a bargain may not be such a good deal in the future. The upside of suburban living - better schools and safer neighborhoods - has begun to erode.

Now, I don’t think we’ll see a mass exodus in people leaving the suburbs, rather a slower progression much like when people began moving IN to the suburbs. Already, we have seen more gang activity in suburbs than most inner cities.

According to an article by Christopher Leinberger in The Atlantic, much of these problems are attributed to the mortgage crisis but what’s really happening is that the social problems are being intensified by the waves of foreclosures.

Leinberger says

“For 60 years, Americans have pushed steadily into the suburbs, transforming the landscape and (until recently) leaving cities behind. But today the pendulum is swinging back toward urban living, and there are many reasons to believe this swing will continue. As it does, many low-density suburbs and McMansion subdivisions, including some that are lovely and affluent today, may become what inner cities became in the 1960s and ’70s—slums characterized by poverty, crime, and decay.”

It’s certainly an interesting phenomenon that will continue to change over the next two decades or so. You can read more about it The Atlantic: The Next Slum?

~ Annie

Add Dimitriou’s Jazz Alley to my list of Favorite Northwest Places.

My mom and I saw saxophonist Mindi Abair Sunday night at Jazz Alley and it was awesome! I had never been there before, although I’ve been to such venues as The Triple Door, and I must say it was very nice. Well designed, the sound is great and the view is equally spectacular from pretty much anywhere inside be it the balcony or the floor.

We sat in the balcony last night, right against the railing and had a great view of the entire stage and the band as well as Mindi. The staff is nice, helpful and quick. We both had coffee and never once had to ask for a refill - the waitress was right there with a fresh pot to refill our cups every time they got to the bottom. I’m sure between the two of us, we drank a whole pot, too!

After the show, we met Mindi and got her autograph. She’s a very sweet, energetic performer and I will definitely see her again the next time she is in Seattle.

Thanks Jazz Alley and KWJZ for putting on such a great show! And thanks Mindi for rockin’ the house!

~ Annie