Dear Windermere colleagues and friends,

To hear the pundits and self-styled experts tell it, home ownership as a goal for most Americans is over.

The message comes from national publications like Time magazine (“The Case Against Home Ownership”) and the Wall Street Journal (“the over-celebration of home-ownership), that the financial and social benefits were oversold; encouraging home ownership may have even contributed to the current difficulties in residential real estate.

To which I say: What bunk.
We’re not giving up on home ownership, and neither should you, nor should the people and communities we serve. Home ownership is too important to everyone to dismiss as some passing and outdated fad.

To tell people that home ownership isn’t a goal worth pursuing and attaining is to do them a huge disservice, not to mention being pure nonsense.

We’ve been through this before. In the 1990s some geniuses suggested housing had entered a period of permanent price deflation. To put it mildly, they were wrong.

So when the so-called experts revive their attacks on home ownership, and what we do, it’s worth reminding ourselves of the true story of the real estate market.

In September alone, about 379,000 homes and condo sales closed nationally (resale only; does not include new construction). That’s a lot of individuals and families for whom home ownership makes sense, even in uncertain economic times.

The self-appointed pundits may deride the notion of home ownership as an integral part of the American dream. But home ownership has a powerful allure to people just because it is how so many dreams are transformed into reality. Owning a home is how many Americans put down roots in a community. It’s the point of their lives at which many of them start and build families.

Our communities benefit when those people buy homes. Home owners have a stake in the condition and appearance of their neighborhoods, in the safety of their communities, in the performance of their schools, in the vitality of local businesses, in the array of cultural and recreational offerings available. For them, a home is not just an address – achieving home ownership is something to be proud of. They are making an investment – psychologically and financially, figuratively and literally – in the communities in which they live, work, shop, play and raise families.

Here’s a bit of statistical insight to keep in mind: Median home prices increased every decade from 1940 to 2000, according to U.S. Census data. In some areas, they doubled in each ten year period.

Warren Buffett, who knows a thing or two about investing, has said he can’t predict where stock prices will be in 10 months, but he does feel comfortable predicting where they’ll be in 10 years – up.

It’s the same with home prices. We can’t predict where they’ll be 10 months from now. They may be up in some markets, down in others. But I am comfortable predicting that in 10 years home prices will be above where they are now. Furthermore, home buyers get advantages not available with other investments. If you buy a gold bar, you pay the full amount, and it delivers no benefits while you own it. But homebuyers enjoy the benefits of leverage and the increase in their equity as the price appreciates (put 10 percent down on a $100,000 home, and if the price increases an average 2 percent a year, you’ve doubled your down payment in five years). They also get tax benefits from the mortgage-interest and property-tax deductions. Plus, they can live in and enjoy their home. They can’t do that with a gold bar.

So while Geoff Wood gave his perspective of the last 10 years, I can give my perspective as well, having been in this business for almost 50 years. I have been through a few ugly periods and recessions in the housing market – like the early 1980s, when interest rates soared above 18 percent.

And yet people still wanted to buy homes even in that economy, and we sold homes and survived. We will survive this too. Eventually the financial markets will right themselves, the economy will recover, and we’ll return to more “normal” conditions in housing – and home ownership will again, return to favor.

We’re not waiting around for that to happen. We’ll continue to help people find homes that are right for their lives, their lifestyle, their families, their aspirations and their budgets, helping them build their futures, their financial security and their communities’ well-being.

And we’ll be proud to have done so.

John Jacobi,

Founder and chairman, Windermere Real Estate

I spend part of every Monday checking out my on-line stats for listings, looking at economic and housing news, updating myself on the mortgage interest rates and for today’s update on interest rates, please check the following link:

Interest Rates for Mortgages

For an update on local interest rates any day, please check in with my website:

http://www.debbiebargersmith.com > help for Buyers > Search for homes and in the lower right hand corner you will see interest rates, updated daily.

Hope your fall is starting off well!

Another New York Times article:

Home Maintenance Tools

Maintaining your home now means less time and money required later for repairs if you need to sell your home!

If you are a Seller and I have talked to you about preparing your home to go on the market, you’ve already heard me say: Buyers won’t buy what Buyers can smell! Your home must look and smell great! Here is an article that supports that view…

New York Times Article

Just in case any of you thought I knew that our prices would decline as they have, I want you to know that no-one I know had this knowledge. If they had, or if I had, I would have told you. We bought at the peak of the market and our housing value is in the same boat as many of my reader’s home values. Consider this:

• Historically, American home values are the best long term investment.

• Historically, Americans stay in their homes an average of 7 years.
• In some ways, our houses are like stocks market values. They are what they are. You cannot sell your stocks for less than what they’re worth, period.
  
• We’re in America, the number one nation on earth. If you bought at the peak, consider relaxing, enjoying your home, and wait that 7 years. Our area has been identified as the number one area expected to rebound in terms of housing prices.

I hope you’re having a fabulous summer and that you’re enjoying the fruits of your labor!

Today a Conventional Fixed Rate 30 year Residential Real Estate loan can be had for 4%. Unheard of. If the interest rates goes up .05%, your buying power could decrease by $10,000. Keep your eyes on the news. Prices on homes are down as well.
Call me if you are at all interested in information about properties out there!

Historically, my Windermere office in Marysville, wins the Food Drive contest. I hear through the grapevine that the other Snohomish County Real Estate offices are going to try to beat us. This means war! (In a good way, of course). If you want to bring canned goods or money into my office at 801 State Avenue, Marysville, Wa., please do so during the month of September. We will mount a sneak attack and pull out a come from behind win yet again!

Go Food Bank!

Interest Rates are at historical lows. Just 2 years ago interest rates were high 5’s and low 6’s. If you are interested in refinancing, now is the time. If you are interested in Purchasing, now is the time. The fact that interest rates are THIS LOW means your new investment property or dream home is just that much more affordable! I wouldn’t wait….

Here is what I think….there are such great prices out in the market right now for both commercial and residential properties, that I believe the market will continue towards normality. Interest rates still threaten to rise, but as of today, my on-line mortgage information says that rates are still hovering around 5%. How much further down will prices go…no one knows. The talking heads are suggesting that the downward trend is about over. When will market values start moving up?….no one knows. Talking heads are saying they will….but probably not much for the foreseeable future year by year. At least not like it was for 3-5 years. While this might be frustrating for some of us who bought at the peak, here’s the good news…it offers stability!

The most important thing for you to know is that it’s a great time to buy and Sellers, price your homes correctly. It is a strong buyers market still….in most of our Puget Sound areas, although there are some exceptions in either area/neighborhood or price ranges.

Mixed Use Zoning With Over an Acre on Grove Street