March 17th, 2010
Posted by James Lupori
WHO WILL CONTROL LAKEPOINTE?
There has been a long-standing and important discussion about developing the waterfront area here in Kenmore known as Lakepointe. Since 1989 there has been a proposed development of the 45 acres on Lake Washington where the Sammamish River enters the lake. It is one of those wonderfully ambitious, visionary and seemingly impossible projects that has yet to materialise.
The fact is, Kenmore’s waterfront is a a real eyesore that looks more like an industrial wasteland than a part of our city. One of my readers recently commented:
“We have one Petunia in an onion PATCH. That would be LakePointe. If this is not developed and handled properly it will be all onions!!!!The City needs to get involved and not let greed and grandois ambition cloud their goal. The community needs to get involved and not assume someone else is watching out for their interests, no one is. We have health, environmental, clean water issues, ground water issues, storm water issues, hazardous waste issues, toxic issues, and more all on the one piece of property, LakePointe(45 acre Peninsula). We have the potential to pull Kenmore out of the designation labeled the armpit of Lake Washington,to Kenmore’s only opportunity for an economic, vibrant,environmentally friendly, community, the Last Pearl to be found, on Lake Washington, if we choose, this vision can only happen as a community effort.”
This is not an uncommon opinion expressed to me by my friends and neighbors here in “our fair city.” It’s one of those “if only” conversations about how incredible Kenmore could be if there was the vision and money to transform our truly spectacular position on Lake Washington from a gritty, off-limits wasteland to a vibrant waterfront community.
Waterfront Construction Gives Notice
Waterfront Construction is leaving in June 2010- What's going to happen now?
In a recent article in the Kenmore/Bothell Reporter by Tom Corrigan, it was reported that Kenmore’s Waterfront Construction (WC) will be leaving it’s location at the mouth of the Sammamish. WC has been the subject of a number of accusations regarding environmental violations. Several local watchdog groups have been accusing Waterfront of various questionable practices but Waterfront has indicated that this is not reason for their departure.
Is This the Beginning of Something New?
Since this news broke, a number of people have asked me what might happen with the property. Could this be the beginning of a transformation at Lakepointe? I’ve heard rumours that the City wants to purchase the property in order to create a park. I really have no idea what’s going to happen, but I think all of us here in Kenmore need to focus our attention on this development.
I would encourage you to contact the Mayor and City Council to see what they think about this situation. Don’t let this opportunity pass us by. Just click on this link for a directory:
http://www.cityofkenmore.com/Page.aspx?cid=1698
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March 15th, 2010
Posted by James Lupori
The Real Estate Gods Seem Calm This March 15th
Vicenzo Camuccini 1798
March is moving right along so I thought it would be fun to add a little history to my mid-month home sales post. Why not? Camuccini’s wonderfully stylised depiction of Julius Caesar’s murder (above) has nothing to do with real estate in Kenmore, WA but it sure is an artistic reminder that his assassination took place on March 15th, 44 BC. So what has happened with the market so far this month?
Active Listings
Pending Sales
March Sold Homes as of Today
So far this month there is nothing out of the ordinary with the housing market in Kenmore. Active listings have been hovering around 120 for months. The number of pending listings has dropped since last month (some of the pendings have sold) but if we don’t see this number rise by the end of March, April sales may be sluggish.
Just remember that you only need to beware the “ides of March” if you’re Caesar!!!!
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March 14th, 2010
Posted by James Lupori
An Inability of the Media to Ask the Tough Questions
It has been hard for me to sit down and write on KenmoreUndressed this week. The main reason is that almost all the news coming out of the Media has been especially negative and of incredibly poor quality. I don’t know about you, but it is becoming perfectly obvious that the loss of over 40,000 professional journalists this last two years has created a knowledge vacuum. Today, the news has taken on an “Entertainment Tonight” quality that truly sucks.
Worse yet is this nagging sense I have that NO ONE knows how to tell the truth these days. Doubly worse is the fact that there are no longer journalists to call the liars out. It’s almost as if reporters are too “afraid” to do the homework and then ask the tough questions. But alas, this evening good old 60 Minutes managed to redeem, at least a little, my faith that there are some journalists paying attention to important stories.
The Story of the Subprime Mortgage House of Cards
Click this picture to view "Inside The Collapse"
Tonight 60 Minutes broadcast an interview with one of the most knowledgeable writers about the corrupt gambling house we know as Wall Street: Michael Lewis.
After you watch this video your perspective of the “free market,” executive compensation and the flaws in human nature will never be the same. Frankly, Lewis eviscerates the all-too-common idea that Wall Street (with all it’s elitist propaganda) is governed by some “universal truths” about the sacred “free market.” On the contrary, you’re going to learn just how deeply the “fix is in.” I sincerely hope that you all come away from this story with a more grounded and realistic perspective of how the uber-wealthy Wall Street fat cats aggrandise themselves, ruin economies and walk away unscathed. It’s a tragedy that has affected everyone in some profoundly negative ways.
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March 7th, 2010
Posted by James Lupori
State Legislators Honor Bastyr University
Recognizing Bastyr University’s accomplishments in the areas of education, research and clinical service, Washington state legislators presented resolutions on February 24, 2010, honoring Bastyr in the chambers of the state Senate and House of Representatives in Olympia.
Sponsored by state Sen. Paull Shin (D), and Rep. Roger Goodman (D), the resolutions acknowledged Bastyr’s commitment to a sustainable health care model, the University’s role in minimizing its environmental impact through green building practices, and its instrumental role in increasing research activity in the natural health sciences. The resolutions were presented as part of the first annual “Bastyr University Day” at the state capitol.
Kenmore Mayor, Dave Baker and Bastyr President Daniel K. Church PhD
Joining Bastyr University President Daniel K. Church, PhD, at the event were University founders, members of the board of trustees, faculty, staff and student representatives. City of Kenmore Mayor David Baker also attended in support and recognition of the University and its achievements. The following legislators spoke on behalf of Bastyr University: Rep. Ruth Kagi (D), Rep. Bill Hinkle (D), Rep. Jan Angel (R), Sen. Karen Keiser (D), Sen. Cheryl Pflug (R), and Sen. Dan Sweker (R).
“We are honored that the Washington State Legislature recognizes Bastyr University’s dedication to enhancing the health and well-being of the human community, and we are grateful to Sen. Shin and Rep. Goodman for their leadership in sponsoring the important resolutions that were read at ‘Bastyr University Day.’ We are especially grateful to Mayor David Baker and other representatives from the City of Kenmore who attended in support and recognition of the University’s achievements,” said Daniel K. Church, PhD. “The day’s events further inspire our mission as we continue to educate future health care leaders. We look forward to making ‘Bastyr University Day,’ an annual tradition celebrating the University’s contributions locally and globally.”
Located in Kenmore, Wash., Bastyr University is a nonprofit, accredited institution internationally recognized as a pioneer in natural health arts and sciences education. Founded in 1978 as the John Bastyr College of Naturopathic Medicine, the University integrates the pursuit of scientific knowledge with the wisdom of ancient healing methods from around the world. Today, Bastyr University is the largest university of its kind in the United States, combining a multidisciplinary curriculum with leading-edge research and clinical training. The University offers 14 accredited degree and certificate programs in the fields of naturopathic medicine, acupuncture and Oriental medicine, herbal sciences, health psychology, exercise science, and whole food nutrition.
This article was submitted to me by Jordan Lindstrom of Bastyr University. I’d like to thank him and all the highly talented and dedicated people at Bastyr University as well as those Washington State Legislators who support our local institutions and communities.
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March 3rd, 2010
Posted by James Lupori
Home Sales in February Were Lethargic at Best
One year ago 10 single family homes sold in Kenmore. This year there were 14 home sales. I suppose if you’re a “glass-half-full” person this represents a 29% increase in sales. OK, I’ll grant you that. Great news for you optimists. To me, there’s something ominous about these sales figures: It doesn’t seem that the extended $8000 1st time buyer tax credit or the $6500 repeat buyer tax credit have stimulated as much activity as was hoped for.
For an interesting perspective regarding the repeat buyer credit, read “Not much impact from the repeat buyer credit,” in the February 28th Seattle Times. It seems that Americans are staying put for the time being. There’s simply too much uncertainty in the world for a lot of people: high unemployment, a grid-locked political system, natural disasters, the wars….I think it’s reasonable to conclude that Americans are hunkering down until things look and feel better.
So, let’s take a quick look at the sales from last month:
February 2010 Home Sales in Kenmore
Most of the home sales in Kenmore last month were under $400,000 (85%). Also, 50% of the home sales were new construction! As I mentioned last month, DR Horton built a community of smaller homes with some killer incentives which are selling quite well right now. Homes were selling at about 94% of the list price, which is better than last year.
For those of you interested in the current inventory, please turn your attention to the following:
Active Listings in Kenmore – Beginning of March
There are currently 111 single family homes listed in Kenmore. Last year there were closer to 140 active listings.
Pending Sales
Pending sales are always a good indication of the current market activity. Right now there are 60 pending sales. 30% of these homes are new construction. 22% are distressed properties (short sales or bank-owned homes). This is a healthy number of pending sales for the beginning of the month.
I had hoped to see more closed sales in the month of February, but the year is young and as Spring approaches we may see a reasonable up-tick in home sales.
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February 28th, 2010
Posted by James Lupori
Is Walking Away from Your Mortgage Just a “Business Decision?”
Over 11 Million Families are "underwater" in their mortgages!
A quick disclaimer: The discussion below regarding “strategic defaults”(walking away from your mortgage) is a serious matter. This post is not to be considered legal advice in any way. Nor am I encouraging anyone to walk away from a mortgage. It is intended to help readers understand a disturbing and, I fear, growing trend in the housing market. If you or anyone you know is considering walking away from a mortgage CONSULT BOTH A CPA AND ATTORNEY FOR FINANCIAL AND LEGAL ADVICE.
Last year over 1 million home owners walked away from their mortgages. This is 4 times the number who did so in 2008 and experts believe the number of “strategic defaults” will rise as more and more families find themselves “under water” in their mortgages. According to an article entitled Underwater Mortgages Continue to Rise in The Bulletin (a Philadelphia area paper):
First American CoreLogic reported today that more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.
Over the last several months I have been reading quite a bit about home owners walking away from their mortgages. It’s a subject that is both disturbing and compelling given the tough times many home owners are experiencing today. And truly, if you find yourself out-of-work, paying a mortgage on a home that is “upside down” (worth less than the mortgage) what should you do?
There are a lot of strong opinions regarding this. They stretch across a continuum of beliefs from the notion that it’s “unethical” to not pay one’s debts on the one hand to “hey, it’s just a “business decision” on the other hand. And believe me, if you read through the commentary in on-line discussions, you’ll encounter a huge amount of speculation, misinformation and many writers “practising law without a license.” One fact stands out: most people believe it’s just plain wrong to walk away from one’s debts, especially a mortgage.
Most People Agree Walking Away is Un-ethical!
But…….and it’s a big but
BUT, there’s also a growing number of economists who feel that attempting to do the right thing by paying back a mortgage (for decades) on a depreciating home is, simply put, a bad business decision not in one’s own self interest. One of the most controversial writers on this subject is Professor Brent White at the University of Arizona whose recent paper entitled ““Underwater and Not Walking Away: Fear Shame and the Social Management of the Housing Crisis,” has been creating quite a debate about the “business decision” angle of home ownership. If you click on this picture you can read it:
Click on this picture to read this paper
Dr. White is not giving advice in this academic paper but he is sending a clear message that individuals sometimes need to make hard-core decisions about paying for a home with little hope of ever making up for lost equity. Sometimes, it’s in the borrower’s best interest to put aside the morality of walking away from a mortgage and focus on one’s long-term financial interests. He suggests that taking the hit on your credit score and several years of higher interest rates may be a small price to pay compared to paying back hundreds of thousands of dollars on a depreciating home. If you want to hear an interesting interview with Dr. White go to: http://www.npr.org/templates/story/story.php?storyId=121911468 which was broadcast on NPR on December 25, 2009.
Some Consequences of “Walking Away”
I’ve had some heated “debates” with a number of writers who are quick to point out that “Wall Street” doesn’t play by the same rules that it expects of the public. Indeed, recently there were several huge corporate entities (Morgan Stanley and Tishman and Speyer Properties) that basically walked away from their multi-billion dollar mortgages. Sure, these corporations aren’t setting the best example; however, when it comes to your financial world I’d like to point out some things you must consider before walking away from a mortgage:
- First and foremost, seek the professional advice of your CPA and Attorney. There are a lot of legal and tax consequences involved in walking away
- Know that your credit score may drop close to 200 points by walking away from your mortgage. This is going to result in you paying higher interest rates for loans and may disqualify you from obtaining unsecured credit. Purchasing a car may become problematic
- If your home is in a “recourse” state, the lien holder can (and most likely will) sue you for the deficiency between what you home is worth and your mortgage. They can put a judgement on your credit report and possibly seek a garnishment of your wages and other punitive actions
- Many employers disqualify job seekers based on their credit history Worse yet, many employers terminate current employees if they file bankruptcy, experience a foreclosure or walk away from financial obligations
I hope this post has helped you understand some of the issues connected with “strategic default.” If you’re interested in learning more, here are other articles that are informative:
The Wall Street Journal – When It’s OK to Walk Away from Your Home
The Wall Street Journal – Debtor’s Dilemma: Pay the Mortgage or Walk Away
The Huffington Post – Don’t Look Back: Major Players Continue to Walk Away from Poor Mortgages
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February 26th, 2010
Posted by James Lupori
$1,000,000 + Absorption Rates in Puget Sound
One sector of the residential real estate market that has been pummelled by current economic times is the sale of homes that are listed for over $1 million dollars. I thought it would be interesting to show you a 5-year trend of the “absorption rates” of this special set of real estate.
The graph above shows the gap between the number of listed $Million dollar homes and those that went under contract each month since December 2005 to January of 2010. If you click on the graph you can see a larger view of these numbers. Needless to say, even in good years the inventory of expensive homes (over $1M) doesn’t turn over very quickly.
Click on this graph for a larger view
Basically, the absorption rate for this particular price-point has been hovering around 5%-6% of the inventory. So, if you are the owner of a $million dollar home and you’re thinking about selling, it behoves you to think carefully about your motivations and to select a real estate agent with experience in this calibre of home sales.
Data courtesy of Alan Pope and Assoicates.
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February 23rd, 2010
Posted by James Lupori
The Internet Has Transformed the Real Estate Business
How much is your house worth today?
In the last 5 years the Internet has literally transformed the very landscape of many industries. Some industries such as Print Media have been turned inside out due to the sheer mass of information in cyberspace.
The once powerful (and some would say evil) cartel of the real estate industry has seen its exclusive grip on property information evaporate. There was a time when the average consumer was forced to consult with a real estate professional or hire an appraiser in order to get a sense of one’s property value. Many home owners resented having to deal with agents and, frankly, it was a valid concern. For over 50 years the NAR and its members held an almost exclusive monopoly on property information.
Then, in February of 2006 a revolutionary company by the name of Zillow.com hit the Internet. Zillow allows anyone to find home value information to about 90% of the homes in the U.S.. Since that time, Zillow has expanded in it’s market penetration and has captured a huge following in the industry. I remember well the utter fear and anger many real estate expressed when they realized that the public had access to what was once “the sacred data.”
Zillow, Cyberhomes and Eppraisal
In this post I would like to introduce you to three of the top “Home Value” websites so you can take them for a spin. I encourage you to look up your own home. Today I checked-out the value of my home and the values of my neighbours which was rather interesting. Also, these three are not the only sites. For a larger list of other sites free and for-profit check out “10 Home Value Websites to Look Up the Value of Your Home.”
So here are three of the best sites. Just click on the pictures to visit the sites:
Zillow.com
Click on this picture to visit Zillow.com
Cyberhomes.com
Click on this picture to visit Cyberhomes.com
Eppraisal.com
Click on this picture to visit Eppraisal.com
As a Realtor® What Do I Think About These Sites?
I believe these home value sites have a legitimate place in the real estate industry. Some professionals feel that they are not “accurate” enough or that they compete directly against real estate agents. The fact is, many of these sites encourage agents to post their listings on the site. There’s a lot of paid advertising that hawks real estate services. Let’s face it, this is how they stay in business.
But are these sites accurate? Well, Zillow.com posts statistics regarding the accuracy of its “Zestimates” and, generally speaking in most markets the value provided by Zillow can be 10% to 23% in error. That’s not to say that these sites are bad. Frankly, I’ve found them to be relatively accurate in neighborhoods where there are similar homes (suburban neighborhoods tend to have consistent home values) or where there have been a lot of sales. On the other hand, it’s no surprise that more rural areas have higher error percentages. Just keep in mind that these sites provide “estimated market values.” They are not appraisals. I do think that consumers can learn a lot by doing some preliminary research on the Internet.
Now I get to do my pitch: I highly recommend that if you intend to sell your home you should contact a real estate professional or Realtor® to give you his/her professional opinion about your property value. In many cases I have found my comparative market analyses to be more accurate and realistic than those on Zillow.com. There’s something about being at ground zero and having years of experience in a particular area that gives agents a deeper perspective of home values. Nevertheless, I think that if you’re curious about the housing market, use these sites. They’re interesting and informative.
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February 20th, 2010
Posted by James Lupori
Mr. Freeze is In LOVE!!!♥♥♥
Sources report: "Mr. Freeze Loves Elizabeth Warren."
I, Mr. Freeze the Financial Curmudgeon am in LOVE. Yes, Cupid’s arrow hit me right in my glacially frozen heart and it (literally) melted!! Last night I was enjoying an ice cold vodka on-the-rocks (go figure) as I was watching “Real Time” with Bill Maher and THERE SHE WAS: Elizabeth Warren…..Oh baby, oh ya!
ELIZABETH WARREN IS HOT!!!!!!
Bill was actually doing a follow-up interview with “Liz” about the continuing strangle-hold the banks and credit card companies have on American families. I have to tell you, I, Mr. Freeze the Smitten Financial Curmudgeon, was enthralled by her eloquence in describing how the banks continue to invest in the same high risk “securitized instruments” that brought our economy to its knees in 2008. She also attacked Mr. Freeze’s sworn enemies THE CREDIT CARD COMPANIES, AKA SATAN. Even after the positive reforms just now going into affect to curb credit card company abuses, the companies are already finding ways to add fees, penalties and usury back into their bags of tricks.
In all seriousness, Mr. Freeze believes that there are very few people in government today who defends the interests of the American People more than Elizabeth Warren. As Chair of the Congressional Oversight Panel she has been responsible for oversight of the Department of Treasury’s administration of TARP. Over the last year she has been incredibly critical and blunt about how little has changed in the world of banking. Here’s a sample of her interview with Bill Maher last night:
Click on this picture to view the interview (Isn't she HOT!)
Mr. Freeze simply can’t get enough of “Liz.” Oh, I LOVE that gal!!!
Mr. Freeze courtesy of flicker.com and is the creation of ElDave.
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February 17th, 2010
Posted by James Lupori
AND THEN THERE WERE TWO!
Last October I wrote a post entitled “Kenmore Village – Squandering a Chance to Create a 21st Century City” in which I expressed my frustration about the way in which the Kenmore City Council and city leadership have essentially allowed Kenmore Village to become a ghost-town. Pardon me for being so blunt, but it’s a disgrace to see business after business vacate Kenmore Village whilst the City Council clings to the false hope that Urban Partners LLC will someday be developing this site. To add insult to injury the City of Kenmore is simultaneously building a new City Hall right across the street at great expense.
Kenmore Village is Down to Two Businesses!
On February 10th the owner of Grocery Outlet told me, officially, that she is moving her store to Kenmore Square at the beginning of April. This means that there will be two businesses left in the square: European Deli and Kenmore Fitness.
So What’s Next?
I’ve got to tell you, I drive past the new City Hall and the almost-empty twilight zone “formerly-known-as-the-Kenmore-Village” every day and I can’t help but wonder why it is that the citizens of Kenmore can’t see the uber-irony in all this.
I can tell you that there are a lot of business owners in Kenmore who feel that the City Council doesn’t care about business development. Some have pointed to their own dealings with the City and many have also pointed to the Kenmore Village as emblematic of a City Leadership that is unresponsive to the realities facing the business community. Everyone wants to know why the City is holding on to Urban Partners LLC WITHOUT A PLAN B!
The Kenmore City Council, Mayor and City Managers owe us an explanation regarding the current status of the Kenmore Village. I don’t think the City of Kenmore can afford to allow the structures in the village to sit empty. When will the City Council tell us what they’re going to do with this important asset? I highly recommend you all get on the phone, call the Mayor and council members and tell them that we want answers regarding the Kenmore Village.
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