Median home prices in Pierce County dropped again in November, according to figures released Tuesday by the Northwest Multiple Listing Service.

The median price for a single-family home or condo in November was $230,000. That price is about $32,950 below the median for the same time last year - an almost 13 percent drop.

Month-to-month, however, it's a 4.5 percent decline from $241,000 in October.

The median price is the midpoint of all sales. Half of homes went for more and half for less.

Other county data for November from the Northwest MLS:

• Homes listed for sale dropped from 1,505 a year ago to 1,368.

• Closed sales were cut almost in half compared to a year ago, from 784 to 463.

Look for more details on the data in tomorrow's News Tribune.

The upside of all this housing gloom is that homes that previously seemed unreachably expensive are now more reasonably priced - at least for those with cash and good credit.

We're planning a story or stories about the relative bargains that are now available on the market.

Real estate folks, e-mail me, John Gillie, at john.gillie@thenewstribune.com, with your nominations for the best bargain houses or condos available now.

Include your reasons for nominating the home. For example, it's priced substantially below what the neighbors paid for their homes, it's 60 percent of last year's asking price, it comes with a free cruise on the Amazon or the owner is willing to finance with zero down.

We're looking for a variety of properties at several price points and in several areas of the South Sound.

Our selections will be made somewhat arbitrarily with an eye toward providing our readers a broad idea of what's available on the market. If your nomination isn't picked, it's nothing personal. It may be that we just had too many nominations for 4-bedroom homes in Proctor.

A new study by Coldwell Banker Real Estate rates Tacoma's residential real estate prices 129th in the country among 316 cities.

The study is unique in that it ranks cities not by the median prices of homes, but by the price of a typical 2,200-square-foot, 4-bedroom, 2.5-bath home.

The study shows that geographic location places a huge role in what homes cost.

In Tacoma, according to the Coldwell Banker study, such a home would cost $338,750, but in the nation's most expensive market, the San Diego suburb of La Jolla, Calif., the same home would cost $1.84 million.

The same-sized dwelling in the country's least expensive market, Sioux City, Iowa, the cost would be just $133,459.

Most of the cities at the bottom end of the list are in the Midwest or Texas. That typical home in Houston, for instance, would cost $158,625, and maybe less now that Hurricane Ike has raked over the Texas Gulf coast city.

Not all the inexpensive cities are in the corn fields of the Midwest. The Coldwell Banker "average" home in Colorado Springs on the edge of the Rockies would cost $198,500.

If you're looking to move to the sunnier climate of California, beware. Even with recent steep drops in home prices, eight of the most expensive cities in the country are in the Golden State.

Not only does broad geographic location play a big role in home prices, but so does the city's reputation. The Coldwell Banker house that costs $338,750 in Tacoma would cost $814,483 in Bellevue, just 40 miles distant.

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.

The numbers available so far for 2008 give a read on the first quarter and since so many on the national scene are making predictions about the bottom of this market and where it might be, I thought you might want to make some predictions, too.

As a starting point, Yale University economist Robert Shiller, admittedly bearish and known for the S&P Case-Shiller home price index, said this week that U.S. housing prices could fall farther than they did during the Great Depression. At that time, prices decreased by 30 percent.

Here’s where price changes stand, year-over-year, in Pierce County for the first three months of 2008, according to the Northwest Multiple Listing Service.

March: -6.02 percent
February: -7.8 percent
January: -2.5 percent

For additional context, prices in Pierce County have decreased compared to the same month the previous year in the last six of seven months. So where do you think prices are headed? Did we find the bottom of this market correction in March? Or will we be waiting through the rest of 2008, and perhaps 2009, or even farther down the road?

It seems the biggest factor in the near-future could be financing -- how readily it's attained, how strict lenders continue to be and how expensive loans are to get, considering the fees being tacked on in today's lending climate.

Short sales continue to be a hot topic in a difficult housing market. I wrote about the option, which allows a homeowner to sell a home for less than what’s owed on the mortgage, in February.

A recent Wall Street Journal story details the many difficulties related to what can be a lengthy and frustrating process. On an anecdotal note, I have friends who are now on their second attempt to buy a short-sale home. The first one fell through after months of unresponsiveness from the seller’s bank. Anyone else finding success or frustration with a short sale?

Here's the WSJ story:

As more people fall behind on their mortgages, lenders have been slow to take advantage of a longstanding alternative to foreclosure — a so-called short sale.

At first glance, a short sale might seem like a win-win for everyone involved. In such an arrangement, the borrower sells the home for less than the amount owed, with the lender forgiving the difference.

The sale releases borrowers from their obligations. For mortgage holders, it can be less costly than foreclosing — and could provide protection against future price drops. For buyers, it can be a chance to buy a home at an attractive price.

Short sales — which were rare when the housing market was booming — can also be a good way for lenders and investors to minimize losses.

They typically result in losses of 19 percent of the loan amount, compared with an average loss of 40 percent for homes that are sold after foreclosure, according to a recent analysis by Clayton Holdings Inc., which tracks more than $500 billion in mortgage loans monthly for investors. The costs of foreclosure can include not only legal fees, but also taxes, insurance and the expense of maintaining the home until the property is sold and repairing any property damage.

As the housing market continues to weaken, the number of short sales is edging upward. Short sales currently account for about 18 percent of home sales, according to the National Association of Realtors. But it can be extremely difficult to get these deals completed. Unlike a traditional real-estate sale, a short sale requires the approval of not only the buyer and the seller, but also the mortgage-servicing company. In many cases, loans have been packaged into securities — which means that the mortgage servicer must consider the interests of the investors who own the loans.

=> Read more!

Pierce County’s rate of homes sales in the third quarter fell far below the state’s and farther than its Puget Sound neighbors, according to the newest numbers from WSU's Washington Center for Real Estate Research. The figures exclude new construction and condo sales.

Sales dropped 32 percent compared to the same quarter in 2006. Statewide sales declined by 11 percent.

The median home price was up year-over-year 3.3 percent in the county but also not keeping pace with the state or other nearby counties.

Pierce County prices, said Glenn Crellin, director of the center, could easily slip into negative territory in the fourth quarter given the number of homes for sale.

“That means buyers have a lot more market power. If they’re going to buy, they are going to negotiate aggressively,” he said.

Affordability remains an issue, with the typical first-time home buyer in Pierce County having just 52.8 percent of the income needed to purchase a typical home. That’s one number that upstages the state’s, which had a third-quarter first-time affordability index of 48.2.

Here’s a look at the percentage change in third-quarter numbers for Pierce and other Puget Sound counties compared to the third quarter of 2006.

Sales
Pierce: -32.2%
King: -18.0%
Snohomish: -26.9%
Kitsap: -21.4%
Thurston: -17.3%
State: -11.4%

Median price
Pierce: 3.3%
King: 9.1%
Snohomish: 3.6%
Kitsap: 5.8%
Thurston: 5.0%
State: 4.4%

I'll have more stats later today and on Monday, but here's an early look at Pierce County's September housing market, according to the Northwest Multiple Listing Service. (Area by area numbers don't get released until late in the day.)

• Sale prices were down 2.4 percent year over year, from $276,670 to $269,925.

• Closed sales were also down, by 40.1 percent.

• Listings continued to increase but at a slower pace than recent months, up 37 percent.

For months, mortgage loan officers and brokers have been predicting the comeback of the FHA loan as lending guidelines have tightened. And, they say, the FHA loans could essentially be zero-down, with the help of other programs that supplement down payments.

But news today from Bloomberg could make such FHA purchases more difficult.

Here's an excerpt from the story:

The U.S. Department of Housing and Urban Development today ended a down payment assistance program it said leads to higher prices and more foreclosures for home buyers, over objections from the House of Representatives.

The program let nonprofit organizations including AmeriDream Inc. and Nehemiah Corp. of America fund down payments for low- and middle-income home buyers, and be reimbursed by the sellers of the homes. It was used by more than 100,000 consumers last year and accounted for a third of all Federal Housing Administration loans.

Sellers sometimes try to recover the cost of the fee they pay nonprofits by raising the price of the house an average of 3 percent, a 2005 study by Congress’s nonpartisan Government Accountability Office found. The higher prices contributed to double the rate of foreclosures on homes paid for with FHA-backed assistance, agency audits found.

According to Bloomberg, the ban goes into effect Nov. 1. The story also said that Nehemiah and AmeriDream, the two largest providers of down payment assistance under this program, filed separate lawsuits in federal courts seeking to block HUD from implementing the new rule.

Looking for an affordable place to live? If you want to stick in Washington state, head to the Tri-Cities. At least according to a nationwide survey profiled by BusinessWeek.

The Coldwell Banker survey says the Tri-Cities is Washington's most affordable market. The most expensive? Bellevue. (More than 300 markets were evaluated for the average selling price of a house with about 2,200 square feet, four bedrooms, 2.5 baths, a family room and a two-car garage, according to BusinessWeek.)

The most affordable market in Oregon is Salem. In Idaho, it's Coeur d'Alene, though not by much. The most expensive is Boise, with just a $30 difference between the two.

There's a slide show listing every state's top and bottom markets. (Washington is slide No. 48.) The list seems more accessible than most, with affordable places a bit more likable than the ones that seem to usually fall on similar roundups. One of my favorite stops on an East Coast trip last year -- Portsmouth -- was New Hampshire's most affordable market.

The Pierce County Assessor-Treasurer's Office says it will be working on the west side of the Narrows Bridge starting in mid September. State law requires the office to physically inspect all properties once every six years.

So know when you see a county vehicle with county logos and an exempt plate, it could be an appraiser. Any questions? Assessor Ken Madsen says feel free to ask the appraisers for ID.

You can get more info on the assessor's office here.

This from a blog post at CNBC:

Chad Dreier, chairman and CEO for builder Ryland Group Inc., said at a J.P. Morgan conference last week, "We do think if you're dumb enough to buy a home builder (share), you ought to buy us," Diana Olick reported.

OK, maybe not fun. But funny. Yes?

Olick does a lot of reporting on builders at her Realty Check blog. You can catch her whole post on the conference, which she says included some refreshing straight shooting from Ara Hovnanian, the CEO of K Hovnanian Homes. The company doesn't build in Washington but does have projects in 19 other states.

You can find Olick's full blog here.