Thursday, August 21, 2008

Q: I was going to buy land and build a little place, but land prices are just too high here!

I can’t believe how much people are asking. I’m also shocked at how much it costs to dig a well, do the septic, clear the land for a house, and all of that stuff. Where is land cheaper? I commute to Seattle so I can’t get too far away.

A:
Alas, your problem is that you want to be in commuting distance to Seattle. That's one of the major reasons that land seems to be priced high here and around the Puget Sound region. Many people who work in and around the Seattle area want to live in the country and have some privacy. They also want horses, large gardens, and fresh air. Demand pushes prices.

I checked on prices for 2 to 5 acres of undeveloped land in the eastern, more rural, section of King County. That would include Issaquah, Snoqualmie, North Bend, Tiger Mountain, and even some parts of Kent. The prices averaged from $280,000 for 2.6 acres to over $500,000 for five acres, which is higher than our prices. The lowest I found was $179,000 for two acres in Kent.

Looking at Kitsap County to our west, among those communities that are most commutable, I found land a little cheaper. Two to 2.5 acres in Silverdale goes for $154,000 and in Port Orchard for just over $200,000. Olalla seemed to have the lowest prices. You could find 2.5 acres there for as low as $140,000. Southworth had one five acre parcel for $189,000.

Our prices are very competitive with these other areas. As an example we currently have a 2.2 acre parcel listed for $175,000 and a few 4.5 to 5 acre parcels for $244,000 to $265,000. Some properties even have some improvements already done.

If you want cheap land, you have to move to a less popular and more distant place. Otherwise it may be best to buy an existing home. There are eight homes on the market here that are on acreage and are under $400,000. I don't believe you could buy land and build a home for that price.

Monday, August 11, 2008

Q: You've shown us houses off and on for a couple of years.

At this point, we think that maybe we just won't ever be able to buy on Vashon. We're thinking of moving to Tacoma where we can afford a house. It's very sad to leave the Island, but the media has us really scared about the high interest rates and the foreclosures and everything. We can get a condo in Tacoma pretty cheap.

A:
I would encourage you not to give up on Vashon. As I recall, you were qualified for up to $350,000 the last time you were looking. We have about 25 homes under $350,000 at this time, the highest inventory in that price range for many years. Many of these homes are in good locations and in excellent condition.

Regardless of what the media is saying, there are excellent conventional loans available at very low interest rates. In addition, the FHA has just come out with some excellent packages to help folks with low down payment still get into a home.

There is a lot of hype about real estate these days, but Washington State remains a strong market and Vashon Island even stronger. Our inventory of homes is up, which is a bonus for buyers. Properly priced homes are still selling and buyers are getting good loans.

I find it frustrating that after waiting for years to have a decent inventory of nice homes to sell, we are having trouble getting buyers to come out and take a look. That is especially true in the lower price ranges. Now is the time we've been waiting for! Investors are certainly taking advantage of the situation to buy up these properties for rentals, but lower income buyers are scared off by the news media.

Don't be fooled by all the hype. This is a good time to buy and become homeowners instead of permanent renters. I don't want to disparage Tacoma, which is a great city with lots to offer, but let's face it: it isn't Vashon Island.

Friday, August 08, 2008

Q: We’ve had our place on the market for almost two years!

We just got rid of the third agent that we’ve listed with. Is there anyone you recommend that can get this place sold? Is it just a slow market or what? We can’t believe there are so many dumb agents on the Island.

A:
Since you are not in a current contract with any agent, which would mean I can’t interfere with your listing or give you my opinion of price, I can say that the problem is not with your agent. You home has been very over priced for those two years. If you had been more reasonable, you would have sold long ago and could have moved on with your life.

Often sellers simply set a price that looks good to them without ever checking on the comparable sales or the current competition. They don’t like what the agents tell them so they set their own price. Your house is in very poor condition and that means most buyers will have to consider the costs to make repairs and to up grade the place on top of the price.

It isn’t about the current market, which isn’t bad on Vashon. It isn’t about “dumb” real estate agents. It’s really about your unrealistic expectations. I suggest you take a look at other homes listed for about the same price as yours. I think you’ll be surprised.

There are several very nice homes in that price range that don’t need any fix up or work. They are in good repair, tidy, clean and show well. Several are beautifully staged to show off their best features. Those houses will sell. Yours may not ever sell.

I’m not trying to be insulting here. It always boils down to what a buyer is willing to pay. The price is ultimately set by the buyer and the market--not by the seller! Go back to your agent and list the property with a deeply discounted price and I think you’ll see results.