Area not hit hard by housing crisis, experts tell chamber
Aug 27 2008
TULALIP While problems with sub-prime mortgages, or even predatory lending practices, have garnered plenty of publicity, the local housing market has remained largely unscathed.
That was the message delivered to the latest Business Before Hours gathering of the Marysville Tulalip Chamber of Commerce held at the Tulalip Resort Casino on Aug. 22.
Communications director for the Master Builders Association of King and Snohomish Counties, Dan Klusman said the rate of home mortgages going into default have reached epidemic levels in some parts of the country.
Klusman said Las Vegas, Detroit and some cities in southern California have been particularly hard hit. But of major urban areas, Seattle ranks 80th in the country in terms of defaults. Klusman added the rate of sub-prime loans, which eventually led to high default rates in some spots, never comprised much of the local mortgage market.
According to Klusman, at one point, sub-prime loans made up as much as 20 percent of the home loans being generated nationally. Locally, that same percentage never moved above about 3 percent.
Gary Wright of Marysville's Wright Realty/Coldwell Banker later added the state default rate is less than one-half of
1 percent.
Even though both King and Snohomish counties largely have escaped the mortgage "mess," as Klusman termed it, he did say housing sales have slowed throughout northwestern Washington. In search of answers as to why, Klusman said the builder's association held several focus groups. He said public uncertainty about the mortgage crisis, with that uncertainty fueled by the media, was definitely one reason.
Klusman also talked about home buying and building trends as being historically cyclical. According to Klusman, the market began to slow locally in 2006. Currently, the drawing of new building permits is down about 60 percent compared to previous levels.
Both Klusman and Wright argued now might be the time to act for anyone thinking about buying a home. Klusman said interest rates are on a par with what they were in the early 1960s, but added they won't stay that way. Both he and Wright said there is a large selection of homes on the market in both King and Snohomish counties, meaning buyers have plenty of choices.
Wright also talked about changes to maximum loan amounts, changes that allow homebuyers to borrow up to $522,000. That number is up from $417,000. He also talked about a federal $7,500 tax credit available to homebuyers between now and June 2009.
While it's referred to as a tax credit, the dollars actually reach homebuyers in the form an interest-free loan from the federal government. The money must be paid back over 15 years and is available only to first-time homebuyers, defined as anyone who has not owned a home in the last three years.
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