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Rodney Johnston
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    Years of Experience: 15

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Keller-Williams Realty
505 106th Ave NE #210
Bellevue, WA 98004
(206) 979-2660

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Archive for June 2009

Choosing the Right Realtor in Kirkland Housing Market

Thursday, June 25th, 2009

You would be amazed at the number of people who pick realtors who do not know the ins and outs of the housing market where they are looking to buy a home. By doing so, you run the risk of not getting the best value for your dollar, buying a home with hidden baggage, or buying a home where a future municipal or private project may devalue the home.

In the Kirkland, Redmond and Bellevue housing market, there are a number of questions to ask your realtor candidates before choosing them. Here are a few key ones to ask:

- Does your realtor live in or near the housing market you are looking to buy?
- Does your realtor know where the quality neighborhoods are and where the neighborhoods that may be a little more run down are in Kirkland?
- How many deals did your realtor do in the past year in Kirkland?
- What are the pros and cons of living West of Market? East of Market? Totem Lake? Bridle Trails? Rose Hill?
- Is it worth buying a luxury home on the waterfont in Kirkland?
- What is the latest from the City Planning Department?
-When was the last City Planning Meeting the realtor attended?
- Do you (realtor) list the home for sellers or show the homes for buyers? Or, does your realtor have a team of underlings who do all the work and the lead realtor just gets the listings and new buyer clients and you never see them again?

By asking these questions, you can have a happy, fun buying or selling experience. Happy House hunting.

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Posted in Housing Market | No Comments »

Relocation in Today’s Housing Market

Sunday, June 21st, 2009

With the economy in flux, including the housing market and the job market, it may be difficult to decide to buy or rent if you have to relocate. The housing market has been on a downward trend and the mortgage rates are up and down like a yo-yo. There are a number of things to consider when making your relocation and considering your housing needs.

First, locate a good real estate agent in the market you are relocating to. If, for example, you just landed a job at Microsoft in Redmond, you’ll want to find a real estate agent who knows the Redmond/Kirkland market and surrounding areas. Knowing the micro-markets is important as the Redmond/Kirkland market is different than the market in Seatle. The local real estate agent should be able to tell you what is the market outlook, where are the good neighborhoods, what are the local schools like and how’s the rental market.

Second, you will want to sit down and do a little financial analysis. If you can find a cheap, nice rental house in Kirkland while the market and mortgage rates stabilize, would you be better off? Or, does the real estate agent think the market has hit its’ floor and could you possibly get an awesome deal on a house, or even a luxury house at a rambler price. Would your mortage and subsequent deductions put you better off with future equity than if you just decide to rent. (side note, if you need help with this let me know, with my background in finance and accounting, I can help you figure this out.)

Finally, what can you afford. If you are selling your home in your current location, will it sell quickly? If so, you may be able to do a contingent offer on a house in your new market. If not, you may need to rent in your new market while your house in your previous location is sold. Or, maybe you can sell quickly and upgrade to a luxury home in your new market.

With the housing market and mortgage rates going crazy, relocation brings on a whole new set of challenges. By following some of the safe steps above and doing your own due diligence, you can set yourself and your family up for the best possible scenario.

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Posted in Relocation | No Comments »

Mortgage Rates – A Moving Target

Saturday, June 20th, 2009

It was a crazy week for mortgage rates. Depending on when you closed or locked in on your rate, you could have gotten a 30-year fixed rate as low as 5%, or if you had bad luck, you ended up with a rate of 5.625%. That’s for a conforming loan in the Kirkland, Washington, or Seattle market. So, what makes the mortgage rates fluctuate so widely and how are they determined?

Many people hear the Federal Reserve cut their prime rate by a quarter or half a point and they expect that mortgage rates will drop in concert. I won’t say there is not any relationship, but I can say there is not a direct relationship. The true affect on mortgage rates comes from the capital markets. Capital markets is where various securities are traded. In simplistic terms, it’s Wall Street. In minute terms, it even trickles down to you and I as investors in mutual funds and other investment vehicles tied to mortgages.

Mortgage market makers are in place to figure out at what rate will investors buy mortgages and at the same time keep the rates low enough for the average Joe to want to buy a house. It’s a difficult balancing act. When rates go higher, it’s generally because investors feel the rates are too low and so they go off and invest in other securities. The mortgage market maker will then raise rates slightly to entice the investors to come back and invest in mortgage securities. When interest rates drop and are low, that means there is a higher demand for mortgage securities. This was the case around 2001 – 2005 when the housing market was hot. The investors were buying mortgages as quickly as they could. This is true whether you’re buying a house, or commercial property.

There are other factors that affect the mortgage rates, but supply and demand of mortgage securities is the one that really plays the biggest role.

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Posted in Mortgages | 2 Comments »

Commercial Real Estate Bubble

Friday, June 19th, 2009

The Commercial Real Estate market traditionally follows the housing market. Shortly after the hot residential real estate market began in 2001, the commercial real estate market began to get hot. It was in late 2002 when absorption rates improved in commercial properties. Logic comes into play when thinking about the lag.

As the economy heats up, incomes for both individuals and businesses rise. As incomes rise, individuals and businesses have more disposable income. More disposable income then equates to looking for a bigger place to live for individuals (larger apartments, second homes) and more space for businesses. Businesses that are especially affected during the boom time are those that are directly related to the housing industry. Mortgage companies, real estate firms, title companies, etc., start adding more employees. More employees require larger space. The companies then either add to their existing space by occupying offices next door, or they move to a larger space.

The same can be said about a downturn in the economy. There is a lag when the economy goes south. About 1 and 1/2 years ago, the housing market started correcting itself. Mortgage rates have gone down and now are creaping back up again. Layoffs have occurred on a regular basis with large employers like Boeing, Microsoft and others in the Kirkland area. Businesses have started closing their doors and some have filed for bankruptcy. Downsizing has affected not only businesses, but individuals. Foreclosures have caused people to lose their homes and move back to apartments or other leased space. Companies have moved back into smaller space or closed completely.

The loose lending practices that affected the residential housing market was also going on in the commercial property market. Recall that in the housing market, average wage earners were allowed to buy luxury homes as a result of loose lending practices and the low mortgage rates. Commercial lenders were guilty of the same problem. The lenders were allowing marginal investors to purchase buildings without the proper due diligence.

The problem we now face is the bubble is beginning to burst in the commercial property market. Loans are now coming to the point where they are either needing to be refinanced, or they are adjustable rate mortgages that are now adjusting up. One other issue is that the loan market is drying up. This can be attributed to the tougher credit standards now implemented in the commercial lending market and the declining yields in the bond market.

At the end of the day, the news is either good or bad depending on where you’ve positioned yourself. If you’re in the commercial property market and you own property with a nasty option ARM, you should start working on a refi as soon as possible. If you’re not in the commercial market, but want to get in, you should get yourself ready for some potential great deals that may be coming. Financing is still available for those with iron clad credit, a healthy downpayment and a good deal on the table. Careful planning, analysis and patience could net you another deal of the century. Remember, you make money on the buy, not on the sell.

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Posted in Commercial Real Estate | No Comments »

Kirkland Housing Market

Thursday, June 18th, 2009

There are a number of experts who are beginning to say that the real estate bubble has reached its’ bottom. In Kirkland, one can argue that the bursting bubble has not been nearly as big as in other parts of the country, or even within the State of Washington.

The average value of a house in Kirkland actually increased from April 2009 to May 2009 by .53%. The number of homes on the market was relatively flat from April to May 2009 at around 722 homes for sale. The average listing price is approximately $822,000. Houses typically stay on the market for 122 days. This is slightly skewed as higher priced homes generally stay on the market longer than lower priced homes. The reason for this is that there are more buyers in the lower end of the curve than on the higher end of the curve.

The housing market in Kirkland doesn’t typically follow the national, or even the state housing market trends. There are a number of factors that affect that assist in stabilizing the Kirkland housing market. One of the reasons that Kirkland has not experienced the big down turn in the housing market is the desirability of living or relocating to Kirkland. Kirkland’s attributes including proximity to Lake Washington, close to Microsoft, great restaurants, low crime rates, higher disposable income, etc., put a positive influence on the housing market. Even comparing Kirkland to neighborhoods in Seattle, such as Ballard, show that those external factors have a large influence on the housing market. In fact, the price of houses in Ballard was down year over year by about 4.6%. In Kirkland, the average price of a house decreased by approximately 1.5%.

On the lower end of the price scale, typically reserved for first time home buyers and investors, housing prices in Kirkland actually increased. Investors, seeing the values in the lower end of the market have bid up housing prices. I was recently showing a house that was introduced to the market at $325,000. It was an average rambler with 1,250 square feet with 3 bedrooms and 1.5 baths. The house was structurally perfect, but needed updates with paint and carpet. As a result of investors seeing a good deal on a house and first time home buyers using their $8,000 tax credit, the house ended up selling for $365,000. I’ve seen this type of activity on several homes priced on the lower end of the scale.

The conclusion is that if you have a home you are selling and the price is on the lower end of the market range, you can expect it to be on the market much less than the average time of 122 days a house is on the market before it sells. Also, if you are purchasing a house as an investor or first time home buyer looking to buy a house on the lower end of the market, you need to remember that there are more buyers in this range and be a little more conservative with your offers.

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Posted in Housing Market | No Comments »

Luxury Homes in Kirkland

Wednesday, June 17th, 2009

A Luxury Home in Kirkland is typically defined in a number of ways. Quality of craftsmanship is one of the primary qualifiers. Builders such as Buchan are generally associated with craftsmanship. Using granite or marble slab countertops, tiled floors, Viking appliances and other top quality materials is another sign of luxury. The size of the luxury home also comes into account. Typically, luxury homes are over 3,500 sq. feet. The price of luxury homes is a moving number. A few years ago, with the housing market in its’ peak, a luxury home was over $2,000,000. In the current housing market, the criteria may drop to just above $1,000,000. One of the top criteria that luxury home buyers look for when purchasing a home, or relocating, is location.

In Kirkland, there are a number of locations where luxury homes are located. West of Market Street is a great location for luxury homes. There are a number of reasons why this is a great location for luxury homes. First off, it’s right next to the east shore of Lake Washington. Secondly, it’s within walking distance, or a short drive to downtown Kirkland. Thirdly, it’s not too difficult to get to the freeway, or straight down 85th street and over to Microsoft.

Another location for luxury homes is on the hillside by Yarrow Bay. There are a wide variety of luxury homes near Yarrow Bay including some older craftsman style luxury homes and newer, contemporary style luxury homes. Yarrow Bay provides great views of Lake Washington.

Houghton, Moss Bay, and Carillon Point are other great areas in Kirkland that offer great locations for luxury homes. Of course, the piece de resistance is Hunts Point. Hunts Point is located along the shores of Lake Washington. It’s a somewhat exclusive community and home to a number of multi-millionaires. Hunts Point offers great location, waterfront property, exclusivity and prestige. It is also very quiet with very little traffic going to and from Hunts Point.

With the housing market in its’ current down state and mortgage rates staying low, maybe now’s the time to move up to a luxury home. Or, if you’re relocating, there are a number of great locations in Kirkland that would prove to be wonderful places to live in luxury.

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Posted in Luxury Homes | No Comments »

Market Recap

  • Avg. Sales Price: 379,000

  • Avg. Days on Market: 69

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