Here are some interesting tips from this short clip:

1. Staging your home is like preparing for a blind date; you only have one chance to make a great first impressions on buyers.

2. Staging doesn’t have to be expensive (deep cleaning, exterior maintenance and de-cluttering do not take much $, but are very important).

3. Remove anything with eyes (photos, stuffed animals, etc.) to help de-clutter.

Click the video above to see more helpful tips.

Two other indicators of activity fell – inventory and sales prices. There were 3,915 fewer active listings of single family homes and condominiums in the entire MLS system compared to a year ago, a drop of about 10 percent. Sales prices area-wide for January closed sales declined about 4.8 percent from figures a year-ago ( the NWMLS service area covers 21 counties).

For Whatcom County, in January, pending sales of residential homes were down 7 percent while closings were up 5.5 percent. Our listing inventory of residential homes was up 26 percent compared to January, 2009. Prices were down about 3 percent for the entire county.

Currently, there is about 13.5 months of inventory ( ratio of houses for sale to houses sold). January, 2009 was 14.6 months of supply. Economists consider a supply of six months to be a balanced market. One month can be deceiving but due to the increase in listings and reduced closing the supply number is somewhat skewed. A first quarter analysis will be telling. The absorption rate was 7.4 percent as compared to 6.8 percent from January, 2009. The absorption rate analyzes how many homes have sold of the existing inventory in a month.

Nearly 80 percent of the residential sales were under $350,000 which is about the same compared to the same time last year.

 2009 sales ( units) continued their downward trend. All sales throughout Whatcom County were down about 10%.

 The residential resale market was the only category up by 1%. New construction sales decreased by 33%, condominiums were down 26% and land sales down 18%. These are unit sales.

 The median price declined about 6.5%( $258,000) for a residential resale home in Whatcom County. New construction prices were down about 12% ($263,000) and the median price of a condominium was unchanged at $191,000.

 Among other highlights in the annual CBMA summary:

 1.     Residential and Condominium listings decreased 8%.

2.     The highest residential sale was $2,500,000 in Point Roberts.

3.     The highest condominium sale was $740,000 in Bellingham.

4.     There were a total of 17 residential sales above $1,000,000.

5.     Nearly 75% of all residential sales were below $350,000.

 Residential sales:  Units compared to 2008

 Bellingham down 9%, median price $289,000

Ferndale down 10%, median price $260,000.

Blaine/Birch Bay up 1%, $224,000.

Sudden Valley down 3%, $231,500.

Lynden down 1%, $269,000.

Mt Baker/Deming down 14%, $135,000.

Everson/Nooksack up 17%, $215,000

One of the most important influences on housing prices is the employment rate. When employment is high, people are more likely to purchase. In such an environment, there is optimism that if you lose your job, you will be able to find a new one.

Today, we’re facing some of the highest unemployment rates since the Great Depression. Is it possible that the housing market can make a recovery in light of these conditions?

Here are several key factors to determine what is most likely to happen in your market.

1. Markets aren’t just local, they’re “hyperlocal.”

Prices may be down in your state, county or city, but up in your local area. For example, it’s common for the first-time-buyer market to have shortages of inventory while the remainder of the market is glutted with inventory.

To determine what will happen in your local market, you must consider the “hyperlocal,” or “micro” market, conditions. In most cases, this means what is happening within a one-mile radius of where the property is located. It also means considering only those properties that have square footage and lot sizes within approximately 10 percent of your property square footage and lot size.

2. Months of inventory on the market are the best predictor of price changes.

Even though the National Association of Realtors is forecasting that existing-home sales will jump 10.8% in 2010, after a 4.8% increase in 2009, the real issue is how much inventory is on the market in your local area.

During the 35-plus years I have been in business, I have found the amount of inventory in a given location and price range to be the best predictor of what prices will do several months from now. As a rule of thumb, price changes lag behind inventory changes by about six to 10 months. If there are only two or three months of inventory in your market, chances are good that prices will be increasing in 2010. On the other hand, if there are eight or more months of inventory, your area may experience price declines well into 2010.

3. Extension of the first-time-buyer tax credit

While many people feel the first-time-buyer tax credit was responsible for the upswing in sales activity this fall, NAR reports that only six percent of the buyers attributed their decision to purchase this fall to the tax credit.

There are two key issues for 2010. First, will the extension of the tax credit produce enough buyers to create a price increase?  Second, what will happen to the market when the credit runs out?  Will sales drop as substantially as they did when the Cash for Clunkers car-buying program ended?  Will NAR try for another extension even though the Obama administration has signaled that  “this is the last time we’re going to be caving to the demands of NAR.”?

4. Demographics bode well for increased sales activity

Gen Y (born 1977-94) are now at their peak time for buying their first home. There are now more Gen Y’ers than there are baby boomers ( 1946-64). This huge cohort of young adults is marrying and having children.

In fact, the typical married Gen Y mom has 2.3 kids. Owning a home is part of their American dream. Although the unemployment rate is even higher among this group, most still have jobs. Coupled with the first-time-buyer tax credit, this could be a strong force to drive prices upward.

5. The Real Issue: Cost of ownership, not sales price

The real driver of price in 2010 will continue to be the cost of homeownership. This is a huge wild card for a variety of reasons.  If interest rates increase from 5% to 7%, or even from 5% to 6%, the impact on monthly payments would take a would-be-buyer off the market.

And changes of this magnitude could take place as early as 2010. The reason?  Interest in the sale of US Treasurys that are used to finance our debt is weak. This means that the government could raise interest rates to attract more buyers. The other issue is the decline in value of the US dollar, which, in turn, can result in inflation. The Federal Reserve typically responds by raising interest rates to cool inflationary pressures.

The third factor that could drive up the cost of home ownership is the decline in tax revenues at the local and state levels. This could result in increased property taxes in some areas. Increased costs shrink the pool of potential buyers, resulting in fewer sales and potentially a decline in prices.

Bottom line:  Watch the sales levels and the inventory in your local area. If sales are increasing and inventory is decreasing, look for stabilization of prices first and then, eventually, an increase.  On the other hand, if the inventory is static or increasing, 2010 will probably be similar to 2009.

Pending & Closed Sales Up Over 2008, Median Price Drops

Pending sales for November tapered off from the October surge, but Whatcom County experienced a 25 percent increase from the same period in 2008.

Closed residential sales increased dramatically from November, 2008. Closed sales were up 88 percent, due in part by lower interest rates and first time homebuyer tax credit. The other reason for such a dramatic increase is the tremendous slowdown that occurred last year at this time.

The median sales price is down about 7.6% in November (over November 2008), and down 7.1% year to date.

Inventory Almost at Balanced Market Levels

Overall residential inventory has decreased by 9% year-to-date. November, 2009 vs. November, 2008 numbers are even. For the month of November, months of inventory was at 7.5 months, as compared to November, 2008 when it was 16.5 months. Six months of inventory is considered a balanced market.

Average cumulative days on the market for November, 2009 is 157 days, which compares to only 126 days on the market in November, 2008. The list to sale ratio is at 89% for November, 2009, compared to 91% in November, 2008.

Finally, the absorption rate for residential sales for November was 13.3%. It was 6.1% for the same period in 2008. The absorption rate indicates how many homes are being sold as compared to the number of listings currently on the market. Since November of 2008, that rate has steadily increased.

Holidays can be a favorable time to sell

Buyers tend to encounter less competition for the most desirable homes during these winter months. Also, qualified buyers can expect above-normal attention from service providers who are experiencing a slowdown in their business, including lenders, inspectors, appraisers and title companies.

Agents are able to devote more time to clients and the smaller selection of homes on the market. Sellers can also benefit from showcasing their homes with tasteful holiday decorations, although home stagers caution them to show restraint and not overdo the décor.

To view the complete article, please click here.

As of this writing, the homebuyer tax credit has been extended to April 30, 2010. You can read more about this here, in a previous article on our blog.

Pending Sales Up

In Whatcom County, pending sales increased nearly 75% in October compared to the same month a year ago. In Bellingham, pending sales increased 63% for October. Lynden was up 63%, Ferndale increased 105%, and Blaine/Birch Bay increased 67%, while Sudden Valley was up 39%.

The new figures show continued signs of some stability in the market and improving consumer confidence. Inventory levels are down about 10% and Whatcom County added about 313 residential new listings in October: about the same as one year ago.

Median Prices Down

The median price for October was $260,000. And, if you add condominium sales, the median price is $251,000. Overall value decreased 7.1% and 5% respectively.

Majority of Activity Under $350K

For the month of October, 80% of residential sales were under $350,000, versus only 71% a year ago. The upper-end market accounted for about 9% of the sales over $500,000 in October, as opposed to 7.7%  in October, 2008.

Interest Rates Remain Low

The weekly average interest rate borrowers were quoted for 30 – year fixed mortgages at 4.87 percent. Rates for a 15-year fixed mortgage were 4.31 percent.

Delinquencies on single-family homes continued to rise at the two big government-sponsored  mortgage lenders, Fannie Mae and Freddie Mac, indicating that problems have yet to level off.

Last night, the Senate voted 98-0 to pass the legislation. Next, the bill will head to President Obama to be signed into law.

Not Just for First-Time Homebuyers

While the bill extends the $8,000 tax credit for first-time homebuyers, it also makes available a tax credit to homeowners who have lived in their current residence for at least five years.  The credit for these buyers will be capped at $6,500.

Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples to $125,000 and $225,000, respectively.  Above those limits there are diminishing credits available.

Housing interests, especially the National Association of Home Builders and the National Association of Realtors, have pushed strongly for the extension, and the Obama administration has also lobbied heavily for its passage. However, not everyone was in favor of it.

Critics of the Housing Tax Credit

Some critics have charged that the tax credit has merely moved sales that would have occurred sooner or later to an earlier date and that, when the credit finally does go away, the market will experience another severe downturn. A diametrically opposed opinion would have it that, while 1.4 million claims have been made, few sales were actually inspired by the credit (i.e. these sales would have occurred with or without the tax credit). Others have argued that the current interest rates and low housing prices are enough of an incentive without spending tax money. The extension is expected to cost an estimated $11 billion on top of the $10 billion that has been spent to date.

There have also been charges of fraud in the operation of the program. To combat this, the new law has some expanded safeguards, including a minimum age of 18 for obtaining the credit, a requirement that a settlement statement accompany the tax return claiming the credit and a prohibition on non-arms length transactions.

Another criticism of the extension has been that it ends just as the “spring market” is getting underway.  Diane Olick, writing for CNBC’s RealtyCheck, said it “is sort of like offering cheap snow boots in July.”

Robert E. Story, Jr., CMB, Chairman of the Mortgage Bankers Association (MBA), today issued the following statement in response to the passage in the U.S. Congress of legislation to extend and expand the homebuyer tax credit:

“At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the homebuyer tax credit is a critical step to keeping the momentum. This has been one of MBA’s top single-family legislative priorities, and we are very glad to see that policymakers on both sides of the aisle see the importance of this measure.

“The existing credit for first-time homebuyers has helped move a segment of potential homebuyers off the sidelines and into their first homes.  By expanding it to qualified existing homeowners, we can help stimulate even more home purchases for qualified buyers.  I also want to applaud measures in the bill that will help eliminate fraudulent use of the tax credit.”

The Homebuyer Tax Credit is Net Positive, But Not the Universal Solution

Following a 98-0 vote in the Senate, the House of Representatives has overwhelmingly agreed to pass legislation extending the home buyer tax credit until April 30, 2009. Next the bill will head to the desk of President Obama to be signed into law.

No one argues the extension of the tax credit has value to the marketplace. But what other immediate steps must be taken — either by government or industry — to create a sustained housing recovery?

It is universally expected that interest rates will rise next year when the Fed is expected to stop purchasing MBS next year. How high, how quickly is a matter for debate.

What is not debatable is the negative impact of higher rates and an ever shrinking credit box. The extension of the Homebuyer Tax Credit will serve to soften these blows. However, a sustained recovery in the housing market must have two key components

1) Stable Employment
2) Access to Credit

In the absence of either of these components, the single shot tax credit will have limited impact. The tax credit is positive, but it’s not a universal solution.