Wednesday, August 27, 2008 Newsletter ~ 08.2008

Summertime at the Beach!
Ocean Shores hosts some of the best birding locations on the West Coast with more species per location than possibly anywhere else in Washington. Currently, large flocks of brown pelicans are putting on spectacular displays, diving into the bay and surf along the coast. Hundreds and hundreds of pelicans migrate through our area between June and November and it's not unusual to see flocks of 30 to 40 at a time. If you're not really into watching birds, I'm with you. But these guys, they're cool to watch.Ocean Shores Real Estate Update
Here are some stats I recently pulled from the NWMLS website. All year-to-date (YTD) stats are based from January 1st through August 26th. These numbers do not include pending or contingent status properties. These are sold/closed properties only.

2008 - 135 sold at an average sales price of $204,357 or $148 per square foot.
2007 - 155 sold at an average sales price of $210,322 or $154 per square foot.
2006 - 174 sold at an average sales price of $204,119 or $152 per square foot.
My summary: average prices seem to be holding okay while the number of transactions is down. No surprises. It's also taking longer to sell: In 2006, it took on average of 125 days to sell your house. In 2007, you needed 173 days and in 2008, it's taking 190 days to sell a house. Another item worthy of mentioning is that out of the 135 homes sold so far this year, 59 of them were built between 2005 and 2008. That's means that almost half of all home sales this year in Ocean Shores were brand new or homes built in the last four years.

2008 - 143 sold at an average price of $50,966.
2007 - 214 sold at an average price of $56,380.
2006 - 271 sold at an average price of $53,880.
My summary: again, average prices seem to be holding. Land sales are way down and are almost being passed up by home sales for the first time in a long time.

2008 - 14 sold at an average sales price of $262,714 or $249 per square foot.
2007 - 30 sold at an average sales price of $170,163 or $194 per square foot.
2006 - 60 sold at an average sales price of $165,729 or $200 per square foot.
My summary: Wow, condo sales are still not good. The average time on the market for 2008 is 413 days to sell. It was 186 days in 2007 and only 93 days back in 2006. Prices are up in 2008 due to a few sales in the high end, ocean front condo market. Other than that, the condo market in Ocean Shores is in trouble.

The Boardwalk Shops of Ocean Shores
The Boardwalk Shops of Ocean Shores is a new retail condominium complex that is now pre-selling phase 1 and they've already got commitments for 5 of the 7 units available. Now that's some good news in local real estate and it's not even my listing! This project is an exciting opportunity for Business Owners & Investors to own an affordable high visibility retail unit centrally located in downtown Ocean Shores on Point Brown. This Complex features 7 individual units connected by an extensive boardwalk. All units have metal roofs, bead-board walls & wood floors to create an authentic beach town feel. Want one? Email me. Groundbreaking is happening any day now.

Upcoming Events

Associated Arts of Ocean Shores Arts and Crafts Festival
Friday, September 5 - Sunday, September 7, 2008An end of summer annual event. Visit one of Western Washington's largest indoor & outdoor handmade arts and crafts fair. 1,000's of unique items are showcased by gifted artists and talented craftspeople. Admission is free

Paddle the Shores
Friday, September 26 - Sunday, September 28, 2008North Bay Park, lakes & canals. Attention kayak, canoe, and rowing enthusiasts. All Skill levels are welcome! Human-powered boat activities on the lakes and canals of Ocean Shores. Race, Poker Paddle, picnic, seminars and the latest in paddling gear at end-of-season prices.

Whale of a Quilt Show
Friday, October 3 - Sunday, October 5, 2008The Sea-Pal Quilters of Ocean Shores, "Whale of a Quilt Show" offers boutique vendors, handmade quilts, demonstrations, and quilted items. The show is judged and prizes are awarded. Free admission, donations welcome.

Cat Fanciers' Association Cat Show
Saturday, October 25 - Sunday, October 26, 2008
A cat show is composed of a number of separate, concurrently running, individual shows held in the various judging rings throughout a show hall. 120 W. Chance A La Mer Ave. Ocean Shores, WA 98569


New Fire Station Going Up
The Ocean Shores City Council recently approved a storm water system which means the city can develop a construction schedule for a new 20,000 square foot fire station, located south of the current station on Point Brown Avenue. According to fire chief, Jim Hodges, he hopes to start putting in foundation for the fire hall by mid-September and have the project completed sometime in February, if weather permits. The old fire station is garbage because the foundation sits on rotting logs beneath a pit of sand which is causing the ground to sink. The garage floor is mounded, with the center several inches higher than the floor near the wall. The rear wall of the garage has separated away from the building, creating the potential for collapse.A Roundabout at the Angry Intersection?The City Council also recently approved a design recommendation from the Public Works department on a roundabout that will be constructed next year at the intersection of Chance a la Mer Boulevard and Point Brown Avenue. The design will include a 34-foot wide median, a five-foot wide bicycle lane, and 10-foot wide sidewalks. (note the little green donut thing at the top right part of the picture - that's it.)
New Water Coming Soon?
Grays Harbor County Commissioners recently approved taking a $3 million loan to construct a new water system at Hogans Corner, between Hoquiam and Ocean Shores (just outside of Ocean Shores). The project is specifically geared to providing drinking water to existing development in the area as well as spurring on more building, specifically a proposed 542-acre resort and golf course that until recently had been stalled by a state-mandatory building moratorium. "The first line will bring in water to the state park, which will benefit the casino and all of those in Illahee and Oyehut and we're working with the City of Ocean Shores on an agreement for them to purchase water," Commissioner Al Carter said.
Permit Issued to Study Wind & Wave Power of the Coast
The Federal Energy Regulatory Commission has issued a preliminary permit to grant the Grays Harbor Ocean Energy Co. the exclusive right to conduct a feasibility study for generating power from wind and wave energy on a 28-mile stretch of the Pacific Coast from Ocean Shores to Grayland over the next three years. The permit, issued Friday, does not authorize any construction.
The project foresees as many as 90 260-foot tall steel wind turbines, as well as wave energy converters to convert ocean waves and wind into a renewable source of energy. The project could supply enough energy to power the entire Olympic Peninsula and make Grays Harbor one of the largest producers of renewable energy in the world, according to Burton Hamner, president of Hydrovolts, Inc.-the creator of the Grays Harbor Energy Co. Hamner also said the project has the potential to create numerous jobs within the county because the renewable energy equipment would be manufactured locally.
The feasibility study will seek to find out if the turbines would affect gray whale migration patterns and flight patterns of birds, according to Hamner. Hamner said the study will also examine whether or not the locations of the turbines could limit the areas in which fisherman can fish. Even after the feasibility study is completed, it would take about four years to begin construction, Hamner said. - source - The Daily World

Jeff Daniel
Associate Broker
Coldwell Banker Ocean Beach Properties1.360.581.9020 (cell) - 1.888.469.3100 (toll free) - 1.360.289.3111 (fax)

Thursday, August 07, 2008

Zillow measures homeowners' perception gap

Zillow measures homeowners' perception gap

Just like with most of life's unpleasant realities, the majority of Americans think the nation's housing crisis is something that happens to the other guy.
That's according to a survey of more than 1,300 homeowners conducted by Zillow. Two-thirds of homeowners believe their house has increased in value or remained the same in the last year. Yet, these same folks acknowledge the existence of foreclosures in their neighborhoods and believe that more are on the way.
The results even gave the Zillow people pause.
"We attribute this gap to a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them," says Stan Humphries, Zillow's chief of data and analytics.
Zillow, of course, is the website founded by the brains behind Expedia that came on strong more than two years ago with its clever algorithms that assign a "value" to nearly every house in America. Initially, the site was a bit disappointing because, at least in many parts of Southern California, its estimates seemed wildly off the mark.
Since then, reality has caught up with Zillow, if not its homeowner-users. The company's data now appear to be in line with most other research that shows the vast majority of U.S. houses lost value in the last 12 months.
One of the more interesting findings of Zillow's latest survey shows that homeowners in the West seem to have a slightly better grip on the housing reality. More than half -- 56% -- of Western homeowners believe their home value had indeed declined in the last year, versus 38% of homeowners overall. (See the graphic above right.)
Maybe that's because homeowners here are facing a harsher reality. After years of tremendous price appreciation, the stinging face-slap of rapidly depreciating values has brought homeowners to their senses.
-- Annette Haddad
Graphic: courtesy of Zillow
Questions? Comments? Email

California's Discount Foreclosure Sales Point to Housing Bottom

California's Discount Foreclosure Sales Point to Housing Bottom
By Dan Levy and Daniel Taub

July 31 (Bloomberg) -- California led the U.S. into the worst housing recession since the 1930s. Now the most populous state may be the first to find the bottom.
In Stockton, the U.S. metro area with the highest
foreclosure rate, home sales more than doubled in the second quarter after prices fell by an average 37 percent, said PMZ Real Estate Corp., the area's largest broker. Across the state, sales rose for three consecutive months starting in April after 30 straight months of declines, the California Association of Realtors said. About 40 percent of those transactions were foreclosure sales, DataQuick Information Systems reported.
``California is having a wrenching decline in wealth, but this is a cathartic event that will lay the foundation for a recovery,'' said
Mark Zandi, chief economist at Moody's in West Chester, Pennsylvania, in an interview. ``This signals the beginning of the end.''
Almost $1.3 trillion of homeowner equity was lost in California since home prices peaked in December 2005, Zandi said. Discounts of as much as 50 percent will extend into 2010, helping clear a glut of
foreclosures and leading to a more balanced housing market, said Ryan Ratcliff, an economist at the Anderson Forecast at the University of California in Los Angeles, and Christopher Thornberg, principal of Beacon Economics LLC in Los Angeles.
``Half off in a decent neighborhood is close to the bottom,'' said
Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., manager of the world's biggest bond fund. Property markdowns of 30 percent to 40 percent give the market ``price illumination if not sunshine,'' he said.
`Beginning to Happen'
California led the U.S. in default notices and bank seizures for the 18th straight month in June and had seven of the 10 metro areas with the highest foreclosure rates, according to Irvine, California-based
RealtyTrac Inc., which sells default data. That drove down prices and led to ``discounted distressed sales,'' with two-thirds of transactions under $500,000, compared with 40 percent a year earlier, the California Association of Realtors said.
The amount of time it would take to deplete the supply of homes decreased to 7.7 months from 10.2 months a year earlier, and the median price fell 38 percent to $368,250 last month, according to the Realtors.
``Things are beginning to happen,'' said
Karl Case, professor of economics at Wellesley College in Wellesley, Massachusetts, and co-creator of the S&P/Case-Shiller home-price index. ``We're not going to get reestablished in a stable market unless that inventory gets cleared out.''
Birth of Subprime
California led the boom in the U.S. housing market, as
prices in the state more than doubled from 2000 to 2005, fueled by historically low interest rates, according to the Chicago-based National Association of Realtors.
As values soared, California gave birth to the subprime mortgage industry that specialized in lending to borrowers with poor or limited credit, who often used them to buy homes they couldn't afford, said
Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto.
Subprime products included ``zero-percent'' loans that needed no down payment, adjustable-rate mortgages, known as ``exploding ARMs'' because low interest rates rose after two or three years, and ``Alt-A'' or ``no-doc'' loans requiring no proof of income.
Almost half of the 25 biggest U.S. subprime lenders were based in the state, including New Century Financial Corp. in Irvine and ACC Capital Holdings in Orange, and a quarter of the country's subprime loans were issued there, more than in any other state, according to
Inside Mortgage Finance and data from San Francisco-based research firm LoanPerformance.
County Breakdowns
Defaults on those loans began to accelerate in 2006, helping to push California into the lead in foreclosures.
Foreclosure sales accounted for 75 percent of June's total in Merced County, home to the Merced metro area with the country's second-highest foreclosure rate; 72 percent in Stanislaus County, home to the Modesto metro area with the third-highest foreclosure rate; and 66 percent in San Joaquin County, home to Stockton, data from
DataQuick in La Jolla, California, and RealtyTrac show.
Sales of foreclosed properties equaled 63 percent of the total in Sacramento County, 62 percent in Riverside County, 58 percent in Solano County, 57 percent in San Bernardino County and 49 percent in Contra Costa County. Prices dropped as much 37 percent in those counties, DataQuick reported.
`Seen the Light'
About 1 million U.S. homes will be in some stage of foreclosure by the end of the year, and properties seized by banks will eventually sell at an average discount of 30 percent to 33 percent, said
Rick Sharga, executive vice president for marketing at RealtyTrac.
Discounts will be higher in areas such as Stockton, about 80 miles east of San Francisco in California's agricultural Central Valley, and Riverside, 50 miles east of Los Angeles, that experienced above-average levels of new construction at the peak of the housing boom and where lenders made a disproportionate number of subprime loans, Sharga said.
PMZ, the Stockton-based brokerage, closed 1,707 home transactions in the second quarter, about 80 percent of them foreclosure sales, said Michael Zagaris, the company's president. Foreclosed homes are now getting multiple bids and the supply of homes for sale in San Joaquin and Stanislaus counties shrank to 4.9 months in June from 18.2 months a year earlier, he said.
``We've found the bottom,'' Zagaris said. ``The financial institutions have seen the light and are allowing the market to find its own level.''
Loan Values
Bank-owned properties attract investors who can rent out the homes for 10 percent of the purchase price annually, said
Sean O'Toole, founder of real estate auction Web site ForeclosureRadar in Discovery Bay, California. ``Those deals are starting to pop up and putting a floor on the market,'' he said.
Bruce Norris, president of the Norris Group investment firm in Riverside, said he purchased foreclosed properties for one- third of the outstanding loan value during the past two months.
Norris bought a three-bedroom home in the Moreno Valley section of Riverside for $106,000, a 65 percent discount on the $300,000 loan held by
Bear Stearns Cos., now part of JPMorgan Chase & Co. He got a 61 percent discount on a home with $258,750 in loans held by Deutsche Bank AG, and a 63 percent discount for a home with $324,000 in loans held by Morgan Stanley, he said.
``The banks are stuck wholesaling to people like me,'' Norris said. ``They are starting to move product faster than the market would normally allow.''
Housing Bill
Banks will
foreclose on about 700,000 properties with subprime mortgages this year, more than double the number a year ago, Sharga estimated. The increase is prompting overwhelmed banks to hire more workers to process purchase offers.
Executives from Charlotte, North Carolina-based
Bank of America Corp. and Wells Fargo & Co. in San Francisco told Congress last week that they've accelerated the pace of loan modifications and added personnel to help homeowners avoid foreclosure. Wells Fargo, which services one in eight U.S. mortgages, expanded its staff to more than 1,000 from 200 in 2005.
The housing bill signed by President
George W. Bush yesterday is intended to stem foreclosures and includes a program backed by the Federal Housing Administration to insure as much as $300 billion in refinanced mortgages, including many subprime loans.
Housing in Stockton and Riverside sprang up during the boom as builders purchased cheap land and potential buyers sought affordable homes away from expensive coastal cities, said Levy at the Center for the Continuing Study of the California Economy.
Stockton Couple
Inland home values mirrored coastal gains until a wave of ``insane'' subprime and Alt-A mortgages started in 2005 and resulted in record defaults, Levy said.
``All of those markets suffering from higher foreclosures are where prices went too high and leverage was applied too excessively,'' Pimco's Gross said. The housing bill will ``put a floor on certain mortgages'' and help stop price declines, he said.
Homeowners like computer consultant
David Imig and his wife, Deborah, who live in the Stockton area and owe more than their house is worth, aren't helped by the bill. They paid $462,000 for a three-bedroom at the market peak in 2005. Now, their neighbor's foreclosed home is on sale for half its original price.
``We're a good $100,000 down,'' Imig said. ``If we could move without taking a huge bath, we would.''
Past Busts
Previous California housing busts had roots in local economic woes and U.S. monetary policy. The state
lost 350,000 jobs in the early 1990s, about two-thirds in the aerospace industry, according to the Cato Institute and Los Angeles County Economic Development Corp. Home prices tumbled 12 percent. In the early 1980s, existing-home sales dropped 61 percent amid interest rates of more than 14 percent and a national recession, the state Realtors said.
California may rebound more quickly from this decline than regions with fewer delinquencies and vacant homes, according to Zandi of Moody's The foreclosure process is ``more efficient'' than in states such as Florida where courts are involved, and Californians are typically ``more optimistic'' about housing after experiencing busts that were followed by property booms, Zandi said.
``They know it's going to be a good investment five or 10 years down the road,'' Zandi said. ``The fundamentals are good: supply constrained markets with lots of population growth, a solid and diversified economy and important global links'' in Los Angeles and San Francisco, he said.
`Bidding War'
It may take until 2010 for foreclosure sales to work their way out of the system in areas where defaults have soared, said Thornberg of
Beacon Economics.
``Those sales are going to have a very large impact on prices for the next year or so until those homes get absorbed by the market,'' he said. ``Housing markets don't bounce, they splat. They hit bottom and they stay there.''
That's good news for buyers like Peggy Thorpe. She outbid seven offers for a foreclosed house in Vallejo, east of San Francisco, and still got a 34 percent discount. It was the sixth time since May she made an offer for a home in foreclosure.
``This time I jumped higher,'' said Thorpe, 43, who works at a vineyard in Napa and paid $190,500 for the three-bedroom home with a loan balance of $289,000. ``There's an extreme bidding war right now.''
To contact the reporters on this story: Dan Levy in San Francisco at; Daniel Taub in Los Angeles at