Basin bucks national housing trends

Resident industry members advise buying now

COLUMBIA BASIN - Several local housing industry members are nearly unanimous in the sentiment that now is the perfect time to buy a house in the Columbia Basin.

The Basin is in direct opposition to reports indicating a national housing price slump, they say.

Larry Shannon, branch manager for Evergreen Home Loans, explained the national trend shows housing prices are down.

"Locally, we're not - our sales are off a little bit, but our housing prices are up and we're still bucking the national trend as far as availability and affordability of houses," he said.

It's a positive position for the area to be in, Shannon noted.

"The everyday working person can afford a house in the Columbia Basin area, where in other places of the country, they're virtually priced out of houses," he said. "People in our area, the working people, can still afford to buy a house."

In southern California, for example, a house in the Basin which sells for $200,000 would sell for anywhere between $400,000 to $500,000, Shannon said.

Shannon attributes the upward trends locally to the area's employment boom, with employers unable to find enough skilled labor, and more people coming into the area to meet their needs, creating more need for housing, which in turn creates more jobs, he said.

"The employment boom is part of it," Shannon said. "The other part of it is a tremendous amount of people have decided to relocate and live in this area, either for retirement or as a second home, because of the 300-plus days of sunshine and the recreation and other things Grant County has to offer."

In light of the current local trends, Shannon advises residents buy a house today.

"Every year they can buy less and less house for their dollar," he said. "They need to enter the housing market while interest rates are still down. In most cases, a lot of people can buy a house for approximately what their rent payment is."

For example, Shannon said someone paying $1,000 per month in rent could approximately buy a house ranging from approximately $120,000 to $125,000.

Shannon expects the local trend to continue for about another two years.

"If interest rates go up and all of a sudden the availability of jobs changes," he said when asked about signs the trend is shifting.

Most residents are not aware of the local trends, Shannon said.

"What they're seeing on the national news is doom and gloom, and that's not our situation in this area," he said. "What's happening is, the best thing they can do is get into the housing market today while it's still affordable to them."

Susan Alsted-Fanning, owner of Alsted Real Estate, agreed that the area is definitely defying national market trends.

"There's no doubt about it," she said.

In looking over statistics from the Grant County Assessor's Office and the Northwest Multiple Listing Service, Alsted said Grant County was one of seven counties in Washington to register double-digit gains over 12 months ago.

"That's exciting in itself," she said. "It was interesting, because the new residential and condominium closed sales are up 30 percent from this time last year. Our median price home is up from $132,000 to $152,000 this time last year."

In addition, closed residential sales are up 23 percent with a closed median price up 15.1 percent, and condominium closed sales are also up 23 percent, Alsted-Fanning said.

"Which is exciting to me, because there's more and more condos being built and sold," she said. "In 2006, the average price of a condo was $206,000, and this year it was $286,000. Condos have not been good over the years. They just took off."

If a person was a buyer last year, and purchased a condo for $206,000, that person just made money, Alsted-Fanning explained.

"If you were a buyer, you're still going to end up being a seller in most cases, and I don't see any of these prices dropping," she said. "Interest rates are low, there's choices, there's new homes in all different directions and that always helps. We have plenty of supply, and we're not overbuilt."

It appears most buyers of condominiums, which are raising the market, are coming from out of the area and using their properties as second homes in most cases. In Moses Lake, Alsted-Fanning's office has seen two buyers from Alaska, but the majority of buyers are from within Grant County or within the state.

The average time on the market for homes at present seems to be 66 days on average, Alsted-Fanning added.

Alsted-Fanning recalled hearing recent news reports on the radio about the market slump continuing.

"If you drive around Moses Lake, you see new construction everywhere," she said. "North, south, east, west - there's more coming in. There's hundreds and hundreds of new construction (projects) being planned right now, and I don't see a lot of empty homes out there."

Many real estate agents used to sell primarily in Moses Lake, Alsted-Fanning noted, but with everything going on in Moses Lake, Ephrata and Quincy, "it's almost like we're one area, that's our market."

Alsted-Fanning attributes the growth in the area to the Grant County Public Utilities District's low-cost power and low-cost property.

She advises people who are presently renting to purchase now.

"Take this opportunity and buy now, because it will favor you," she said. "The buyers, if they're on the sideline just watching right now and waiting for the right time, I don't think there's a better time than right now. It looks like they're going to cut interest rates a little bit, they have choices out there."

Alsted-Fanning urges sellers to consider the fact that buyers are savvy.

"They will not put up with previewing overpriced homes," she said. "For the sellers, I say state your home, make your repairs, clean your clutter out and don't overprice, because we do have a lot of competition with these new homes."

Sellers must be careful, or they could price themselves out of selling their homes, she added.

Alsted-Fanning can see the current situation lasting at least 10 more years, if not longer.

"When I look at REC Silicon, with expansions, you know they're going to bring in a lot of people," she said. "Yahoo! Inc., Microsoft, Intuit, Guardian - they might not be hiring too many people right now, but they're coming, otherwise they would never be building the large buildings they are. I think we're just at the tip of the iceberg."

Jeff Foster is owner of Advantage GMAC Real Estate in Moses Lake. He doesn't believe the national trend compares at all to the current situations in the area and in the Northwest.

"There are pockets of markets all across the country much stronger than what the national media is portraying," he said. "There's lots of data available supporting the numbers and how we're different than the rest of the national markets."

Foster agrees the situation is positive for the Columbia Basin area.

"There's opportunities out there for sellers to sell, there's good homes out there for buyers to buy and the lenders in the area are looking to make loans," he said.

Foster also pointed to the job growth and construction projects.

"It's still very affordable housing when you compare it to the rest of the nation and even the Northwest region," he said. "I don't think it's real smart to project how long things might last, but in my personal opinion, there's nothing on the horizon in the next 18 to 24 months to believe we're going to see any backward movement in the housing market in our area."

Area job growth is great, Foster added.

"Any economics student will remember some early classes where they talked about, for every new job created, there has to be somewhere between five to seven new jobs to support that position," he said.

Foster said it's hard to convey to consumers the fact the seasonality of the Moses Lake housing market is not like it once was, even 10 to 15 years ago.

"The types of jobs which have been created in the area, the demands, are not just come and go with the seasons," he said.

John L. Scott Real Estate Owner Alan Heroux said the national housing trend is "basically tanking right now."

That's because the national real estate market was treated as any large investment concept, Heroux explained, appreciating at a high level for several years until, like any investment, the actual value was much lower than the perceived value.

"People went, 'Wait a second, we're paying more for this than what it's really worth,' and it kind of started to unravel from the top down," Heroux said. "Nationally, that has a lot to do with the subprime market for mortgages. They were giving credit to people who should never have had gotten credit. There were too many loans going out with too high a loan to value ratio. And so that was one of those things where, at some point, we've got to pay the piper and get back to a more normal real estate market."

Locally, the market has returned to more of a normal market, Heroux noted. In the last few years, sellers were essentially able to demand what they wanted for their homes, and buyers had no choice but to pay it, he said.

"We've reached a point where Moses Lake has got nothing but good economic news going on, great employment coming into the area, a ton of new jobs - there's no reason why our market should suffer the way the national market has, or is," Heroux said.

The local market has returned to normal, where buyers are out looking for houses and sellers can ask a price, but negotiations are going on, he said.

"We are a little bit above what we probably should be value-wise on homes, but we're not like the national market where it's 50 percent overvalued," he said. "Our prices are a little bit on the high side, but sellers are starting to negotiate now. It's actually a normal real estate market, which we've needed to do."

The Moses Lake area is usually a little behind the national trend for real estate, Heroux noted.

"If the rest of the country goes up, we're a little slow going up, and that actually benefited us greatly because we didn't get to that really overpriced concept," he said. "It's helping us right now because we're not having huge drops in values, there's just negotiations going on."

Heroux echoed his fellow real estate industry members in opining the time is ripe.

"Right now, I think it's a great time to buy a house," he said. "There are deals to be made for buyers; sellers, if they bought their homes in the last couple years, are probably still going to be able to make a reasonable profit on it. It's a good market, there's really no problems with it."

Sellers do need to understand the difference between perceived value and actual value, Heroux advised.

"The reality is if they bought their house for $100,000 and thought it was worth $200,000, but it turns out it's only worth $175,000, people think they lost $25,000 in value," he said. "They didn't; that value was never there, it was a paper value. They're still making $75,000 on their house. The only time they lose money in the real estate market is when you have to bring money to the closing table to sell that property. Otherwise, it's still a profit."

As more than 1,200 new jobs start to really hit the area in about a year or so, Heroux believes the market will go back to a more seller-controlled market with a lot of buyer demand.

"Everything is supply and demand, so as the inventory dwindles because of all those new people moving into the area, our real estate market is probably going to go back to more of a seller's market in a year to 18 months," he said. "I think the time for a buyer is right now. If they're thinking about it, between now and probably next fall is probably the best time they're going to see in a couple years to buy."