Pierce County’s median home price was $255,000 in July, according to the Northwest Multiple Listing Service.
That’s where the median stands after year-over-year declines in 10 of the past 11 months.
So what does $255,000 get you?
Here are some samples currently on the market:

Price: $255,000
3 bedrooms, 21/2 bathrooms
17601 108th St Ct E
Bonney Lake

Price: $255,000
3 bedrooms, 1 bath
4415 N 25th St
Tacoma

Price: $255,000
3 Bedrooms, 1.75 baths
417 Buena Vista Ave
Fircrest, WA 98466

Molly Smith spends much of her time making other people's houses look good. Smith owns Molly Smith Designs in Tacoma, which helps people stage their houses.

We asked her what some of the top mistakes she sees when people stage their homes to be put on the real estate market:

Not addressing bad smells

Not making sure the house is clean and clutter free

Not addressing bad paint color

Not removing draperies or window coverings that are dated and,

Just not having the home completely ready before it’s put on the market

Smith said she sees home owners who have too many personal items on display. She suggests putting family photos away when listing a home.

She said she’s noticed more homeowners realizing the benefits of properly staging their homes.

“I would say that more and more people are doing consultations and more and more people are understanding the importance of staging,” Smith said.

Depending on the needs of the home, Smith said a consultation with her would start off at $75 for an hour. If the home is not yet vacant and depending on its condition, the price could jump to as much as $1 per square foot for a “full blown staging.”

Smith said that because of limited funds, some homeowners benefit more from having a consultation then having someone do the staging for them. “People are still pretty tight with their dollars and want to spend as little as possible,” Smith said.

“Usually they get the most bang with a consultation and just being told what to do versus having somebody do it for you.”

By LaShonna McBride, for The News Tribune

If you've spent any time on Zillow or Trulia you've probably wondered: how accurate is the information you find on those sites?

Not very, according to a new report featured on Techcrunch today. But there's a big grain of salt: the report was commissioned and paid for by Roost, a new competitor in this space.

Still, the comparisons and the data are interesting. And so is the discussion toward the end of the post on whether quantity trumps quality when it comes to listings.

My own personal experience is that Zillow has become an industry standard for the valuation of a home that's not currently for sale. But I don't know anyone that turns to it if they are in the market for a new home.

The News Tribune still will provide you with news about the South Sound real estate market. The business team, a group of experienced reporters who know the business and economic climate in this region, will update this blog several times a week while we search for a replacement for Devona Wells.

Please send any tips or thoughts or suggestions my way.

Today is my last day writing for Open House as I move on to a new adventure. Thank you to everyone who read and contributed to the blog in the past many months.

Please be kind to the business staffers who will do their best to continue to bring you South Sound real estate news and musings.

I often hear and read about folks trying to find the ever-elusive bottom of today’s real estate market, particularly when it comes to sinking median home prices. Pierce County’s median home price has declined year-over-year 10 of the last 11 months to $255,000 in July, according to the Northwest Multiple Listing Service.

Some see a bottom in a price that’s stayed essentially flat for most of 2008, though dipping a bit recently, from $260,000 in January to last month’s $255,000. My response: Aren’t prices supposed to be rising during the spring and summer, the hottest sales months of the year?

A Keller Williams agent told me last week we’re halfway through an 18-month down market. A Parkside Realty agent told me this week recovery won’t come until 2011. Which seems awfully far off.

Then I saw a Prashant Gopal BusinessWeek blog post about others seeking the bottom. Here's an excerpt:

It’s easy to call a bottom to the housing slump. The tough part is getting the timing right.

Treasury Secretary Henry Paulson has made many such predictions. “All the signs I look at” show “the housing market is at or near the bottom,” Paulson said in April 2007, a few months before the credit crunch hit.

Just last month Barron’s declared that “Real-Estate Rout May Be Short-Lived.” The evidence: home prices were moving closer to incomes in high-priced markets, existing homes sales had improved somewhat and inventories of unsold homes had dipped slightly. The critics responded swiftly: “During the Bull Market of the ’90s, I used to read Barron’s for their hard edged, skeptical look at many of the excesses on Wall Street, wrote Barry Ritholtz, of The Big Picture blog. “During the past 5 years or so, that skepticism seems to be fading… The latest evidence of this is the wrong headed cover story on Housing.”

Now, a Bloomberg article is suggesting that California might be the first state to hit bottom. The article points out that sales are rising across the state for three consecutive months starting in April. And four in 10 sales were sales of foreclosed homes.

What are your thoughts, predictions?

Yesterday, I had foreclosure numbers for the second quarter. Today, RealtyTrac released July stats, which continued to put Washington near the middle of the pack.

The state was No. 26 in the nation last month for such filings, which include auction and default notices, with one filing for every 977 households. The U.S. rate is one filing for every 464 households. Washington's filings increased by 56 percent over July 2007 while U.S. filings increased by 55.1 percent, according to RealtyTrac.

The No. 1 state? Nevada, with one filing for every 106 households.

I talked with a few people recently who spend their days working with foreclosures from different sides of the issue, plus I have some numbers showing foreclosure filings in different areas around Pierce County.

Pam VanderLinda, an agent with Parkside Realty who specializes in foreclosure sales, said business took off in the second quarter this year. Banks hire VanderLinda to list foreclosed properties.

“It’s been crazy busy,” said VanderLinda, who’s getting about 10 new homes a week to put up for sale. This time last year she said about three to four a month came in.

Most of the foreclosures she's seeing are for homes financed in 2005 and 2006, she said.

“I just think the prices were too high, everything was selling and everyone was jumping in on it and all of a sudden it crashes. I do a lot of work for Fannie Mae, and they are taking huge hits on a lot of the houses,” she said.

VanderLinda, who said she’s working 12 hours a day six days a week, expects to stay busy for awhile.

“I don’t think it’s going to get any better until about 2011,” she said.

Windermere agent Erik Tinglum works at Foreclosure Solutions, which helps investors find foreclosure properties. He specializes in Pierce County.

He said the increase in foreclosures locally and nationally falls across every price range.

“It’s pretty clear the increase is due to some poor decisions on the part of borrowers, some of them were doing nothing more than accessing their equity,” he said. “Now we see there’s been a devaluation and so people aren’t able to refinance.”

That said, foreclosures here aren’t nearly as bad as they are in some other places, he said. For the second quarter of the year, Tacoma had one foreclosure filing for every 179 households compared to one for every 171 households in the U.S., according to RealtyTrac. But look at somewhere like Miami and you'll see one foreclosure filing for every 62 households.

Today’s foreclosures come from a mentality shift that occurred two to three years ago, he said.

“That mentality was pandemic. All the way across the board. People started looking at homes as a checkbook. They didn’t look at it as a place to raise a family, it became an opportunity to make money. And certainly a home is the largest investment a family will ever have. But to consider it a checkbook was very short sighted,” he said.

People interested in buying foreclosure properties need to watch out for numerous red flags, he said: location, liens, multiple failing mortgages.

“You’ve got to have some serious ice in your veins to do this and be successful at it,” he said.

When I asked Tinglum if he had any reservations about making money off other people’s misfortunes, he said, “I wrestled with that, thought of that from a moral standpoint. The reality is that home is going to be foreclosed on and I cannot prevent that from happening. There’s increasing opportunity with banks trying to put together forbearance agreements of all kinds. The reality is those that come into foreclosure need to be put back into the marketplace.”

Teresa Seeley, the housing coordinator at Consumer Counseling Northwest in University Place, works with homeowners in danger of defaulting on their mortgage. Most she sees are loans with rates that adjust; some adjust so many times that the borrower can handle one upward adjustment but not the subsequent ones.

Often, she calls the lender to bargain for more favorable loan terms.

“The other day I spent an hour on the phone with Countrywide and they would have rewritten the loan except for a $2,700 collection. She should have never been put into the home in the first place,” Seeley said.

That loan’s interest rate, now at 9.45 percent, shot up after two years and is now scheduled to reset every six months, Seeley said.

Some loans do get redone. But when banks won’t work with a borrower, Seeley said filing for bankruptcy protection is an option. The best thing homeowners facing mortgage troubles can do is talk to someone before they miss a mortgage payment.

“If I can get them when they first think they’re late, that would be wonderful. But usually we get them two or three months late,” she said.

If you’re facing mortgage problems, you can reach Consumer Counseling Northwest at (253) 588-1858. Or try the state homeownership hotline at 877-894-4663.

Here are second quarter foreclosure numbers, according to RealtyTrac, which compiles foreclosure filings, including auction notices and defaults. Typically, I would include the percentage change from the previous year, but RealtyTrac only provided the change from the previous quarter.

By request, here are the months of supply numbers for several areas around Pierce County. Countywide, the average months of supply – the time it would take to sell everything on the market based on sales activity in the last six month – is 10.8 months, according to Northwest Multiple Listing Service statistics provided by Windermere broker Dick Beeson, who is also an MLS director. A balanced market, according to industry standard, is about six months.

A couple areas get close: Lakewood at 6.9 months and Spanaway, with 7.7 months of supply. And then there’s Gig Harbor, which has more than 18 months of supply. I asked Beeson for his take on Lakewood and Gig Harbor.

Lakewood: “It was well above 12 months supply last year because everyone and their brother was putting their house on the market. That whole market place has adjusted.” Also, Beeson says many homes previously listed for sale have been rented by military families stationed at Fort Lewis.

Gig Harbor: “It’s the wrong price range for today’s market.” The median sale price of a Gig Harbor-area home in the last six months was $360,000 (the county’s was $255,000 in July), with a median asking price of $499,000. “If you’re going to sell a house in the Harbor, you’re going to have to be priced under $400,000.” And while it remains a great place to live, Beeson said gas prices and the bridge toll hamper home sales in an area where most people cross the Narrows for work.

Here’s a look at the months of supply as of today:

A new study by Zillow shows that many homeowners have a higher opinion of their home’s value than what the home is truly worth. The Seattle company says that nearly two out of three homeowners think their home value has increased or stayed the same in the past year. The reality: 77 percent of homes in the U.S. lost value in the last year, 19 percent increased and 5 percent remained the same.

I find this level of optimism particularly interesting at a time when I hear often from real estate professionals that gloomy economic numbers and reports have dampened consumers' enthusiasm and outlook on the market.

Zillow’s vice president of data and analytics Stan Humphries highlighted the gap between homeowner perception and market realities.

"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," he said. "This sentiment is also carried through in homeowner confidence for the short-term as more people expect their home to perform better in the next six months than the market and recent past. Although many homeowners may believe the worst is over, we think this level of optimism is out of sync with actual market performance."

Thoughts?

Pierce County home sales in July, typically one of the busier months of the year, were down year-over-year in most of the 17 areas tracked by the Northwest Multiple Listing Service. Two were up: DuPont and Browns Point.

Check out the number of houses and condos sold in each of the areas below and by what percentage each increased or decreased compared to the same month in 2007, according to MLS figures released this week. For some context, sales dropped countywide year-over-year from 1,141 sales in July 2007 to 796 sales last month, a decline of 30.2 percent.

While home prices countywide continued their year-over-year decline last month, three of the 17 areas tracked by the Northwest Multiple Listing Service stayed even or saw prices increase. Can you guess which ones?

Of note in the two that grew: They had more than or nearly as many homes sold as in the same month in 2007, so activity mirrors buyer willingness to pay for the homes. Where might these be, you ask?

Lakewood, with a year-over-year price jump of 10 percent, and Dupont, where the median home price increased 2.6 percent. (July’s Pierce County home price of $255,000 declined by 9.4 percent compared to July 2007.)

Areas with fewer than 10 homes sold are excluded from the price list, which means Roy and Anderson Island didn’t make the cut. (If your area's not part of the list, check out this earlier post explaining why you won't see the Key Peninsula, Orting and others on either stat roundup.) Tomorrow I’ll have the number of closed sales for each area and how those numbers compare to last year’s. Sales grew in only one area besides DuPont. Any guesses?

The latest Northwest Multiple Listing Service numbers were just released and the median home price in Pierce County continues to decline compared to the same month last year. July saw a 9.4 percent drop to $255,000.

And, despite it being the middle of summer when transactions (and prices) are supposed to be at their busiest and best, July's price also fell compared to June's. Not by much, just 1.6 percent, but a month-to-month dip doesn't help those trying to find the bottom of this slowdown.

Here's a look at Pierce County's year-over-year price changes since the start of 2007. Later this week I'll post breakdowns by areas in the county of July price and sales activity.

2008
July: -9.4 percent
June: -6.6 percent
May: -7.8 percent
April: -4.3 percent
March: - 6.02 percent
February: -7.8 percent
January: -2.5 percent

2007
December: +.01 percent
November: -4.4 percent
October: -1.4 percent
September: -2.4 percent
August: + 4.4 percent
July: +3.3 percent
June: +0.82 percent
May: +6.9 percent
April: +3.2 percent
March: +5.8 percent
February: +12.5 percent
January: +5.3 percent

From the coffee wars to the commission wars, Consumer Reports has now taken on the issue of agent commissions paid by home sellers, according to a story this week from The Associated Press. The magazine's recommendation: Negotiate for less than 6 percent.

It also details the companies where agents were most willing to negotiate (Re/Max) and how lots of consumers who didn't try to whittle the commission they paid later regretted it.

Here's the AP story:

Don’t be shy about haggling over what you pay your real estate agent.

A study released Monday by Consumer Reports found 71 percent of sellers who negotiated for lower commissions with their brokers were successful. But only 46 percent of sellers surveyed tried.

Those who paid commissions of 3 percent were just as satisfied with their broker’s performance as those who paid 6 percent, the study found.

The lesson? Haggling won’t hurt.

In fact, those who paid higher commissions were more likely to have regrets about the selling experience. Nearly one-third of them said they should have been more aggressive in negotiating a fee.

Sellers were most likely to get lower fees from independent and RE/MAX brokers, said Mark Kotkin, director of survey research at Consumer Reports.

“But they will all negotiate. Just ask for it,” he said. “It’s like buying a car. A lot of people think (the price) is set, but it’s not.”

Independent brokers may be more likely to negotiate fees since they keep their entire commission, while those who work for other brokers typically split commissions with the broker in exchange for marketing and office support.

About half the home sellers surveyed paid less than 6 percent in commission. The study is being published in Consumer Reports’ September issue. The issue also includes tips on which home improvements provide the biggest pay off (Hint: What’s on the outside really does matter).

=> Read more!

One particular aspect of the national mortgage bill signed by President Bush last week is being touted as helpful for first-time home buyers (or those who haven’t owned for the last three years): a tax credit that’s really a zero-interest loan. Such buyers could receive as much as $7,500, an advance that’s intended to provide an extra incentive to those contemplating a leap into the housing market. It’s available to those who bought as of April and before July 1, 2009.

The National Association of Realtors put together a Q&A to explain how it all works. One caveat: The information is accurate as of July 30 and any questions should be taken to a tax adviser.

Here’s an excerpt of the association’s Q&A:

How does a tax credit work?
Tax credits are special provisions that reduce income tax lability on a dollar for dollar basis. Credits are claimed on an individual’s income tax return. In this case, Congress has created a tax credit for first-time home buyers.

Is there an income restriction?
Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals whose Form 1040 filing status is single (or head of household) are eligible for the credit if their income is no more than $75,000. Individuals who file a joint return may have income of no more than $150,000.

Is the amount of the credit tied to the price of the home?
Yes. The credit is for 10 percent of the cost of the home, up to a maximum credit of $7,500. If a home costs $65,000, the allowable credit would be $6,500. If a home cost $120,000, the allowable credit would be $7,500. The amount of the credit is the same for all taxpayers, married or single.

Why do some news reports call this an interest-free loan?
Unlike most other tax credits, this tax incentive must be paid back. All eligible purchasers who claim the credit will be required to repay it over 15 years. The statute specifies that the repayment amount will be 6.67 percent of the credit amount each year. Thus, a buyer who qualifies for the full $7,500 credit will repay $502.50 each year. There will be no interest charge on outstanding balances.

How do I apply for the credit?
There is no pre-purcahse authorization, application or similar approval process. Eligible purcahses will simply claim the credit on the appropriate IRS Form 1040 tax return and/or on any special forms the IRS might devise. In many, if not most cases, the IRS will be on notice that the purchase has occurred because the settlement officer at the time of purchase is required to report the transaction.

So I can’t use the credit amount as part of my downpayment?
Presently, there is no mechanism available for claiming the credit any earlier than the 2008 tax return that will be filed in 2009. Congress tried to devise a mechanism that would allow pre-funding for the credit, but found that prefunding would require combursome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

When do I make the payment?
The mechanics are not specified. Repayments for credits claimed on 2008 tax returns will go into effect for the 2010 tax year. As a practical matter, then, repayments of credits taken in 2008 will not actually start until 2010 returns are filed in 2011. Repayments for credits claimed on 2009 returns will go into effect for the 2011 tax year and be reflected on 2011 returns filed in 2012.

What if I sell my house before the 15-year repayment period is complete?
When the person who used the credit sells the home, any amount of tax credit that has not been repaid will be due in the year of sale. For example, if an individual still owed $4,000 in repayments and realized $25,000 of proceeds from the sale, the $25,000 of seller proceeds would be reduced to $21,000 and $4,000 will be remitted to the IRS. Again, the mechanics are unknown.

What if there’s very little gain (or even a loss) on the sale and the proceeds won’t cover the repayment amount?
If the gain on the sale is less than the amount that must be repaid, part of the liability is forgiven. For example, if the individual still owed $4,000 but the gain on the sale was only $3,500, then the seller would not be required to repay the IRS the $500 shortfall. If there was no gain or even a loss, then the remaining $4,000 would not be repaid.

The National Association of Realtors also has a chart you can find here that breaks down the basic elements of the tax credit.

A popular lending option for low- and moderate-income home buyers soon will go away.

Private down payment assistance, which allowed the seller to contribute up to 6 percent toward the buyer’s purchase, was banned as of Oct. 1 under the national mortgage bill signed this week by President Bush. Such down payments were used for loans insured by the Federal Housing Administration.

But it turns out the FHA, along with the Internal Revenue Service, had long criticized the down payment programs because of their relative high failure rate and for supposedly inflating the price of the home to cover the seller’s contribution to the down payment.

Doing away with the programs eliminates one of the few remaining ways borrowers still could get into a home with little or no money down, said David Erickson, president of the Washington Association of Mortgage Brokers.

“There are instances where it works and where it’s done wrong and that shouldn’t be tolerated,” he said.

No-money-down options still available, he said, include loans made through the Department of Veterans Affairs and a USDA program for rural properties. The zero-down mortgage might make a limited comeback once the market settles down, he said.

“If it comes back, it will be extraordinarily restrictive,” he said.

Mortgages in recent years that required little money from the borrower shoulder much of the blame for today’s housing and credit market slowdown.

But Nicole Rosen, a mortgage broker in Roy, said this week that the soon-to-be-banned down payment assistance helped prospective buyers as housing prices outpaced their ability to save. Rather than taking options away from borrowers, she said resources should be used to better educate them.

“I think it’s going to be absolutely devastating to the industry as a whole. FHA’s own estimate is that down payment assistance comprises about 40 percent of their transactions,” she said. “If the seller is willing to give you equity in the house, I don’t see why we’re closing the door on that.”

Sellers who participated in the down payment programs made a donation to an organization, such as The Nehemiah Corporation of America, that would then give it to the buyer.

A statement from Scott Syphax, CEO of The Nehemiah Corp., on Wednesday said the organization would fight to get the down payment assistance program reinstated.

“We hope that Congress and President Bush wake up with a clear conscious tomorrow, knowing that millions of Americans will awake to a law that leaves them with zero alternatives for attaining homeownership,” the statement said.

From a lender’s point of view, Rich Bennion, executive vice president of Seattle-based HomeStreet Bank, said money contributed by a borrower tends to make a better loan than one without.

“On another hand, I’m an advocate for home ownership and I’m an advocate for tools to aid the buying and selling of homes, so part of me feels like I hate to see this go away. But I think there are other avenues to address situations where people need a down payment,” he said.

He pointed to mortgage assistance through the Washington State Housing Finance Commission and gifts, such as money from a parent, that the FHA allows a borrower to use as part of a downpayment.