Online brokerage Redfin is trying out a new approach in buyer home tours, in part to mollify criticism from real estate agents unhappy about showing their own listings. (In the traditional real estate world, buyer’s agents typically show a house while seller’s agents list and market it.) Redfin will offer two free home-showing sessions to prospective buyers with a third and fourth tour costing $250 each at closing, according to a release from the Seattle company.

If buyers don’t buy, spokeswoman Cynthia Pang said they don’t end up paying for the tours.

The showings now last two hours, down from the previous three hours. Buyers must bring along a pre-approval letter from a lender demonstrating the ability to purchase.

“Redfin exhaustively surveys every client who attempts to use our service, and the most common request has been more home tours,” Scott Nagel, the company’s vice president of real estate operations, said in the release. “We've also found that three hours was too long for most clients, so by offering shorter tours more frequently we hope to be able to fit our customers' needs better without notably increasing our costs.”

The tour test is expected to run 75 days.

Today's washers and dryers, it seems, are located in any number of spots in a house. They're upstairs, downstairs, near the kitchen, near the bedrooms, in garages and in basements.

The Washington Post story below dissects the trends associated with where to locate such appliances and finds that there is no overwhelming preference, which can be good for resale value. Something I've seen in new-construction homes that I didn't see mentioned in the story: Multiple sets of washers and dryers in a home, one for upstairs and one for downstairs.

Any preferences for the best and not-so-great places to locate a washer and dryer?

Here's the story:

Your preference about the location of your washer and dryer may reveal as much about your age as do the clothes you put in them.

Younger buyers of new homes prefer a laundry room near the bedrooms, said Gopal Ahluwalia, staff vice president of research at the National Association of Home Builders. Older buyers, more wary of leaks and noise, prefer their machines on the main level of the home, often near the kitchen.

Overall, statistics reflect the tastes of younger buyers. According to NAHB surveys, 37 percent of new-home buyers prefer a location near the bedrooms; 20 percent prefer a spot near the kitchen; 17 percent still like the old-fashioned choice, the basement; and 12 percent prefer the garage.

Trends in new homes eventually translate into existing neighborhoods as homeowners remodel. The good news for anyone planning a renovation is that no one spot is emerging as an absolute trend. A distinct laundry room, even if it’s just a converted closet, will be an asset when it’s time to sell.

=> Read more!

With a cut in federal funds rates by the Federal Reserve, comes the inevitable crush of hopeful homeowners looking to refinance. Problem is the two don’t necessarily go hand in hand. (A decrease in the federal funds rate, like last week’s cut, discounts the cost to banks of borrowing money. Mortgage rates, instead, tend to depend on inflation concerns.) Still, mortgage loan officers and brokers around the South Sound have been fielding a flurry of calls and e-mails from clients looking to cash in.

Bankrate reported an average 5.57 interest rate on a 30-year-fixed mortgage in its weekly survey released Jan. 23 – down from 6.32 percent a year ago.

The Fed is meeting again today and Wednesday, and so I chatted with mortgage folks this week to get their perspective on whether homeowners should or should not be refinancing. (Expect a decision from the Fed Wednesday on another expected cut in the federal funds rate.)

Diane Inman, who owns Serenity Mortgage in North Tacoma, said she expects the Federal Reserve will again cut the federal funds rate.

“Is that going to radically drop home interest rates? I doubt it,” she said.

The best refinance candidate is someone looking to get out of an adjustable-rate loan and into a fixed-rate mortgage, she said. One inquiry in the last week, Inman said, came from a homeowner with a fixed rate of 6.0 percent. Inman recommended against a refinance, because rates aren’t low enough to make up for new “adverse market” fees now being tacked on by Fannie Mae and Freddie Mac and other refinance costs.

Racardo McLaughlin, who owns McLaughlin Capital Group in South Tacoma, predicted that rates will continue to fall through the end of the year. Mortgages a half-percentage point or more above current rates tend to be the best candidates for a refinance, he said.

“People need to understand money is available if you have good, reasonable credit regardless of what’s being talked about in the subprime market,” he said.

The problems McLaughlin said he more often runs into are declining home values or equity tapped out in previous refinances. And, he said, loans are taking longer, because of recent lay offs at big mortgage companies. So, if you’re looking to lock a good rate, forget about a 15- or 30-day lock. Many lenders, he said, won't do anything under 45 days.

The Seattle-Tacoma area remained one of the few housing markets in the country to show year-over-year home price increases in November, according to the latest figures released today by the S&P Case-Shiller index. Of the 20 metro areas tracked, just three showed annual appreciation. The other two were Charlotte, N.C., and Portland.

Seattle-Tacoma’s increase of 1.8 percent from the previous November, however, paled compared to recent months. In fact, a look back at year-over-year appreciation shows a steady decline:

October: 3.3 percent
September: 4.7 percent
August: 5.7 percent
July: 6.9 percent

The index measures the gain or decline in prices of a typical house, not including condos, with the base set at prices in January 2000. When combined, the 20 areas around the country tracked by the index had price declines of 7.7 percent.

The rate of foreclosure-related filings in 2007 ranked Washington state No. 21 in the nation, according to the latest figures to be released today by real estate research firm RealtyTrac. The company measures default and auction notices and bank repossessions. Compared to 2006, Washington had 28 percent more such filings last year, RealtyTrac said.

The report says that last year .57 percent of Washington households entered some stage of foreclosure. Where's the highest percentage? Nevada, with 3.4 percent of households starting some part of the foreclosure process, according to RealtyTrac.

How much does smell factor into impressing home buyers?

We’ve all heard the selling wisdom that says fresh-baked cookies should be on your to-do staging list. Sure, it’s a nice idea, but how much is a nice scent going to factor into a buyer’s take on a prospective property?

A candle burning can be a homey, pleasant touch. But I wonder if scents that seem nice – vanilla, cinnamon, lavender – could backfire if they don’t appeal to certain types. On the other hand, I was walking out of Trader Joe’s the other day when a couple walked in and the man said, with a clearly-pleased smile, “It smells nice in here.” Had it been a house for sale, he looked ready to buy.

For those who don’t want to go the candle route, there are electric plug ins. Reed diffusers use oil and require no burning or electricity.

But is scenting more than one room in a house ever too much? Unlikely, says Rick Ruffolo, senior vice president of brand, marketing, and innovation for Yankee Candle Company, who I saw quoted on the topic at Realty Times. (Remember, he does sell candles for a living.)

"It's not like the person who put on too much perfume. A home is a very large place and it absorbs a lot of the fragrance so it would be pretty hard to overpower a house with too much fragrance," he said.

So, sellers, how scented are the rooms in your home? Buyers: Does a nice scent make a difference one way or another? Any thoughts, agents?

If banks can walk away from debt, can you?

Foreclosures are not the problem in the Northwest that they’ve become in areas like Southern California or Florida, but they are happening here. And lenders who’ve already taken a hit from unpaid mortgages are bracing for a shift in thinking on the part of homeowners that could magnify their problems, according to the Calculated Risk blog, that could go something like this: If I owe more on my mortgage than my home is worth, it makes more financial sense to walk away from the home and save some money.

Calculated Risk posted this quote from a conference call at Wachovia, the nation’s fourth largest bank, explaining losses in California: “People that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties, and so in a way, we may have -- it's hard to know right now, but we may have seen somewhat of an acceleration (in) problem loans as people have reached that conclusion and we're just going to have to see how the patterns unfold here.”

I found this on the LA Times real estate blog, which also posted a comment from a homeowner who said he bought a condo in 2006 for $520,000 that’s now worth $350,000. He’s purchased a second home and when that sale closes he plans to stop making payments on the first mortgage and take the hit to his credit while making what he feels is an otherwise smart financial move.

Here’s an excerpt of what he had to say:

"I realize I agreed to the deal when I signed the mortgage papers, but I am within my rights to walk away from a bad deal and suffer the consequences, just as many corporations write down billions of dollars of debt, lose money for their shareholders, and lay off people as a result of their bad decisions.

"I don't really understand why people view a business decision by a homeowner as a terrible moral lapse. However, when large lending institutions, with access to more sophisticated information than any consumer could imagine, make mistakes affecting thousands of people worldwide, they are not excoriated and vilified with the same righteous zeal."

This illuminates a problem far more acute in other areas, but such attitudes and loan abandonment could easily spread north and nationwide, particularly if the housing market does not go as well in 2008 as agents and brokers say it will.

Any thoughts?

Buyer bonuses seem to be as popular as ever, given continued hesitancy on the part of home buyers. I wrote a story in October about such incentives, which can take the form of home warranties or cash to put toward closings or even cars.

But in recent days I have run across a few buyer bonuses that struck me as over the top or unusual to the point that I wondered if perhaps they had the opposite of the intended effect.

Here’s a sampling:

For a $275,000 Tacoma home: "12 percent owner financing on full-price offer. Up to 6 percent closing costs. Two flat panel TVs! (One installed.)"

For a $199,500 Tacoma duplex: "$10,000 buyer bonus! Seller will use bonus to remodel the front unit prior to closing or buyer may use bonus for closing costs or?"

For a $299,000 Tacoma home: "This owner is an investor who has decided that this home is too big to be a rental. She will consider creative proposals like trades, owner help with financing, etc."

Do such forthcoming remarks give the buyer too much of an upper hand in a potential sale? Or is such openness the best marketing policy in today’s market?

One stat that didn’t make it in today’s housing story recapping 2007: the number of homes listed for sale. The average number of Pierce County listings for 2007 was 43.3 percent higher than the year before, according to the Northwest Multiple Listing Service. That amounts to 2,316 more homes for sale county wide last year.

Pierce had some good company when it came to inventory growth – King County had an average of 46 percent more homes for sale last year; Snohomish saw an average of 51.8 percent more homes for sale. Kitsap's supply of for-sale homes was up 34.4 percent; Thurston's increased 27.5 percent.

Any guesses on where supply will head this year? Will buyers pick up the pace or remain on the sidelines? Will slowing construction have the desired impact of helping to keep inventory numbers on the low end for 2008?

Real estate agents have been sued by their clients over the years. But, according to The New York Times, a Southern California woman is wading into new and potentially volatile territory: the value of a home and the agent’s role in providing the best information to determine that value.

Here’s an excerpt of the story:

CARLSBAD, Calif. — Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.

What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.

Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.

And the crux of what this could mean for the residential real estate industry:

Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.

That persistence has put the Ummels at the forefront of a developing legal question. When buyers have sued their agents in the past, the cases focused on problems with the property itself, often alleging failure by the broker to disclose a known hazard or maintenance issue. After reviewing litigation records for the last five years, the National Association of Realtors could find no cases that revolved solely around the question of valuation.

The agent, Mike Little with ReMax Associates, calls Ummel a "nutjob."

“When people see their home values and assets declining, they always feel there’s someone to blame,” he said. “This is a dangerous time for all of us in the industry.”

Any thoughts?

Subprime loans catching the heat for housing market problems was so 2007. This year’s financing poster child for excess and irresponsible lending, according to BusinessWeek: the home-equity loan.

In fact, the magazine has dubbed what’s to come “the home equity crisis.” Overblown?

Here’s what the magazine has to say:

Buoyed by rising prices, borrowers increasingly tapped into the equity on their properties to finance a new car, renovations, or even a down payment, making equity a key source of consumers' strength. But with the housing market in disarray and prices plunging, the business of home-equity lending is souring. At least $14.7 billion in loans and lines of credit were already delinquent through the end of September—the highest level in a decade. "After subprime, home-equity lending is the biggest problem the industry has right now," says analyst Frederick Cannon of Keefe, Bruyette & Woods.

What's more, there's little that can be done to prevent the pain from the deterioration of this $850 billion market. A lender on a mortgage has the first claim on the underlying property. In the case of foreclosure, it can sell the property and recoup some money. The bank with the home-equity piece has no such collateral and is usually out the money. "The home-equity lender is going to get hosed," says Amy Crews Cutts, deputy chief economist at mortgage giant Freddie Mac (FRE).

The full story goes on to label some home-equity loans “toxic” but ones that were made with confidence during the boom because prices were rising so rapidly.

Like many of the other factors, such as diving prices and swelling inventory, that are far worse in markets elsewhere, I’m guessing difficulties associated with home-equity financing won't be nearly as severe here as elsewhere. But just like other national problems, issues with home-equity loans today could impact your ability to get one down the road. Any thoughts?

I won’t have the full roundup from the Northwest Multiple Service on home prices and sales for 2007 until next week. But I do have some numbers broken down comparing last year to 2006 for the 17 areas in Pierce County tracked by the MLS.

So let’s take a look at how condominium sales fared.

Year-over-year, the median price of a Pierce County condo increased by 2.9 percent to $218,560 and sales were up 4.7 percent. Notable standouts on sales activity included Puyallup (+33.6 percent to 286 units), Parkland (+115 percent to 86 units), Central Tacoma (+44.3 percent to 101 units) and North Tacoma (-32.2 percent to 166 units).

Here’s how prices shook out. (I excluded areas that did not record more than 10 sales for the year.)

According to The Wall Street Journal, Tacoma is bucking a nationwide trend of swelling apartment inventory. The number of rentals is particularly high in areas, such as Las Vegas and Miami, where the condo market was overbuilt by thousands of units. And where foreclosures are hitting hardest, forcing potential renters into living with family or friends.

In Tacoma, however, vacant units fell by 0.9 percentage point to 5.3 percent -- the biggest drop in the country, according to the WSJ.

A recent report examining Pierce County's rental market by Apartment Insights backs such a drop, saying that the vacancy rate for the fourth quarter was 4.6 percent, down from 5.3 percent in the third quarter. (UP/Fircrest has the lowest vacancy rate in the county at 3.6 percent, according to Apartment Insights.)

The report also says that "the apartment rental market should weather a leveling off period, especially because there is very little new construction to compete with existing properties. Additionally, prospective home buyers will most likely remain in the rental market rather than purchase due to dim prospects for appreciation."

Here's the WSJ story. Look for the Tacoma reference near the bottom:

There's one bright side to the housing crisis: some lower rents.
The regions hardest hit by the housing downturn have seen ailing builders, rising foreclosure rates and a glut of unsold homes, amid other signs of distress. But there are also stories like Laura Evans's.

The 38-year-old elementary-school teacher moved to Stuart, Fla., from Orlando with her husband and baby last fall. Looking for a rental apartment, they were pleasantly surprised: There were plenty of choices at lower-than-expected prices, thanks to the multitude of owners trying to rent units they couldn't sell.

"When we got down here, we shopped and shopped around," says Ms. Evans, who rented a new 2,200-square-foot, three-bedroom townhouse with a pool and a playground for $1,150 per month. The owners allowed the couple to move in with their dog, despite a prohibition against pets.

To be sure, rents have continued to rise steadily in many markets. And the housing downturn means that more people are looking for rentals as well, increasing demand. Many would-be buyers have become renters because they can't get a mortgage in today's tight credit environment, or because they're sitting tight in hopes that prices drop further.

But in the regions hit hardest by the subprime crisis, finding a rental apartment is easier and, in some cases, cheaper than it was before the crunch. Some homeowners forced out by foreclosure are finding rental deals that are at "discounts of 50 percent to 70 percent off what they were paying on their mortgages," says Brenda F. Gerdes, who owns Management Specialists Inc. in Port St. Lucie, Fla.

=> Read more!

This time next week, if Windermere broker-owner Dick Beeson gets his way, all of the price-reduced signs in the yards of Pierce County homes will be gone.

Beeson estimates that of the more than 7,000 homes for sale countywide, 1,000 have price-reduced signs. (Sometimes, “new price” stands in for “price reduced.”) Beeson, who believes the Pierce County housing market is on the rebound, said a price-reduced sign gives buyers the misimpression that they can continue to sit on the sidelines.

Also a director for the Northwest Multiple Listing Service, Beeson said he’s encouraged several other brokers in the county to have their agents remove the signs. He'd like them all gone by Tuesday.

“It doesn’t help anybody’s cause to put up the price-reduced sign at this time. It doesn’t mean anything. There’s too many of them. It just shows mistakes in marketing from the beginning,” he said.

Agents: Will you be removing price-reduced signs? Buyers/sellers: Do you think such signs help or hurt?

Seattle’s Zillow.com, the online company known for publishing the estimated values of millions of homes, launched a reworked version of its Web site today. Information that updates a home’s stats, such as number of bedrooms, and that are provided by homeowners or real estate agents now will count toward the calculation of what the company calls Zestimates. And, in turn, applying such feedback should improve the accuracy of the Zestimates, according to Spencer Rascoff, Zillow’s vice president of marketing.

Homeowners could add such information starting about a year ago. But Rascoff said it took awhile to gather enough data to make sure such additions would help, not hurt, the Zestimates.

Also, models used to calculate a home’s estimated value now will evaluate a home on a neighborhood level rather than comparing it to homes countywide, Rascoff said. Zillow, for example, has broken Tacoma into eight neighborhoods.

All of which is expected to bring Zestimates closer to the price a home is eventually sold for – the measure used by the company to determine accuracy. The accuracy of Zestimates in the Seattle-Tacoma area is expected to improve by 7 percent, Rascoff said. (That compares to 12 percent nationwide. The improvement here is smaller, Rascoff said, because local Zestimates were already more accurate than elsewhere.) Using Zillow's new modeling, 86 percent of Zestimates in the Seattle-Tacoma area should be within 20 percent of an eventual sale price.

At least one Central Tacoma property saw a new and improved Zestimate this morning. A co-worker whose spouse closely follows their home at Zillow said their house’s Zestimate increased by about 50 percent, presumably because the site previously hadn’t accounted for the home’s full square footage.

One indication of the real estate market’s health is how long a home, once listed, remains for sale. In December, homes in Pierce County spent an average 102 days on the market, up from 69 days the same month in 2006, according to Northwest Multiple Listing Service numbers provided by Coldwell Banker Bain agent Bruce Larson.

Which areas saw the longest time on market in December?

Gig Harbor: 101 days
Lake Tapps-Bonney Lake: 103 days
Central Tacoma: 120 days
University Place: 101 days
South Tacoma: 124 days
Southeast Tacoma: 107 days
Fife: 113 days
Puyallup: 116 days
Spanaway: 127 days

All increased year-over-year from the previous December, a couple by more than 100 percent (Central Tacoma and South Tacoma). When all of 2007 is taken into account, however, homes were on the market an average 81 days (a 40 percent increase from 2006) and none of the 17 areas around the county surpassed 100, though a few came close.

Some real estate agents say homes taking three or more months to sell indicates a return to a more normal market. But any concerns that several areas in Pierce County are pushing past 100 days?

Here's a look at December home prices in the 16 of 17 areas around Pierce County as broken down each month by the Northwest Multiple Listing Service. (No homes sold last month in Anderson Island.)

Countywide, prices were flat and so too were prices in several areas within the county, including Gig Harbor, Parkland and Puyallup. But there were also some big fluctuations. Check out North Tacoma, Graham, the Bonney Lake area and Browns Point.

One thing to keep in mind: This is a year-over-year snapshot of one month. So while 103 homes sold in the Bonney Lake area in December, just 24 sold in the Graham area.

I'm back from vacation and just in time for December's housing numbers from the Northwest Multiple Listing Service. Prices for Pierce County evened out with a $25 gain (+.01 percent) to $269,950 from December 2006. This after three months of price decreases September through November.

But sales remained slow, down 39.3 percent to 681 houses and condos. Interestingly, Snohomish County looked much the same with 682 sales in December.

Any thoughts on prices remaining virtually unchanged year-over-year? Does it indicate a move back to increasing prices for 2008? Or will we continue to see prices move up and down in the foreseeable future?

Look tomorrow for stats on the 17 Pierce County areas covered by the monthly MLS breakdown.