Did you feel the earthquake this afternoon? It happened around 1pm and was a 2.7 on the Richtor scale. The epicenter was aproximately 5 miles south of Bellingham, about 3 miles below the earths surface.

Happy Friday to all! Hopefully a nice sunny weekend at that, wouldn’t that be nice? Well…. this week the rates came up a bit, still great rates though, a customer this week told me he remembered when his home loan was at 17%! The “industry’ in general has had some hard times, recent headlines showing sub-prime losses and many lenders going out of business. The lenders going out of business have been primarily mortgage brokers, these brokers have relied heavily on A- borrowers, when the industry tightens up those loans the the A- minus borrowers go away, therefore no business for the brokers. In my opinion a Bank or Credit Union is the best place to borrow money from. The have a good solid foundation to keep going on. Enough gloom though here are the rates!

30 year fixed 5.875% 1.25pts 6.096% APR or 6.375% 0 pts  6.387% APR

5/1 ARM    5.750% 1.125pts 6.256% APR

30 year fixed jumbo (over $417,000) 6.125% 1.125pts 6.440% APR

APR

Annual Percentage Rate, is the cost of the loan in percentage terms taking into account the various loan charges of which interest is only one such charge. Other charges that are used in the calculation of the APR are Private mortage insurance (if applicable) and prepaid finance charges ( loan discount, origination fee, prepaid interest and other credit costs). The APR is calculated by spreading these charges over thelife of the loan which results in a rate generally higher than the interest rate shown on your mortgage note. if interest was the only finance charge then the APR and interest rate woudl be the same.

Here are this weeks real estate sales statistics for Whatcom County including Bellingham, Blaine, Birch Bay, Ferndale, Lynden and Sudden Valley. Sorry they are late - I was having some trouble posting yesterday.

The following are the pending ratios for each city. The pending ratio is the percentage of homes for sale that have a pending sales contract.

Bellingham: 28% (last week was 29%)
Blaine/Birch Bay: 16% (last week was 15%)
Ferndale: 24% (last week was 22%)
Lynden: 20% (last week was 19%)
Sudden Valley: 22% (last week was 20%)

As always, I have also posted graphs of these real estate sales statistics. We also have an array of othe statistical information available in the Market News section of our website.

The Johnson Team’s Moving Truck has moved many things in its two year tenure here - people’s household goods, tables and chairs for events, prizes for charity auctions, etc. But today, we had a first. Today, our truck hauled 1700 pounds of chicken!!

Draper Valley Farms was very generous and donated the 1700 pounds of chicken to the Bellingham Community Meal Program who provide meals for the homeless in Bellingham.

What made this whole experience all the more fun, was Tutu. Tutu is the spunky lady who moved all of the chicken (ok - so she had help from a few guys and some fork lifts). Tutu is one of those people who lights up a room when she walks in. She had all of us here at the office laughing, and the moment that she left, we all turned to each other and said “She’s hilarious!!” So thank you Tutu for the work that you do and thank you to Draper Valley Farms for your generous donation!

I hope that you all have been enjoying the sun that we got yesterday and today!!! It’s quite the relief after the incessant rain of last week. Spring is finally here!

The Bellingham Herald is reported yesterday that Global Insight Inc and National City Corp have rated Bellingham and Whatcom County as one of the most overvalued housing markets in the US. They have estimated that our area is 45% overvalued, which is the highest of any metro area in Washington. Furthermore, the authors of the study consider any market over 35% to be extremely overvalued and prime for a market correction.

Those numbers are enough to make anyone wonder what is going on! First of all, let’s clarify that just because the study says that an area is overvalued by a certain percentage, that does not mean that they think prices will drop by those percentages. So homeowners - you can all breathe your collective sigh of relief now.

So what is this study really looking at? They used a variety of data to compile thier numbers including house prices, household incomes, population densities and historical changes in the area over time. What this gives us is more of an affordabilty indicator than market value indicator.

Pricing levels eventually do collapse as fewer and fewer people can afford to buy, but it seems to me that the wild card is the income level (and equity transfer) of incoming population. We have definitely seen a stronger upper end market over the past year, even as overall prices have softened. This also pulls up our average and median prices and tends to skew the “affordability” perception. It almost seems as though a market should be broken up into segments to more accurately determine if it is overvalued or affordable.

So is Bellingham real estate overvalued in my perception?  No.  My standard of measurement is whether people continue to buy.  In the first two months of this year, both the number of properties sold and, more importantly, the number of net pending sales posted, was slightly higher than a year ago.  Average and median prices for the market as a whole are holding their own or up from last year.  So right now, I would say that we are doing just fine, but we need to keep watching the numbers.  Â

Mortage rates for Friday March 22

Today’s post comes from a week of very little change, rates remain low. I have not included much information on the adjustable mortgages this week. With the recent downfall of sub prime loans I think lenders are becoming more cautious. An adjustable is pricing just about the same as your trusty 30 year fixed. Rates are based on conforming convention single family loan amounts of up to $417,000.00, with a 30 day lock period. Remember to shop your rates at the same time of the day as rates change constantly and ask your lenders for a good faith estimate to give you an idea of the fee’s a lender will be charging to obtain your loan.

30 year fixed  5.875% 1.125pts 6.071% APR   or   6.25% 0 pts 6.367 APR

15 year fixed  5.625% 1.25pts   5.954% APR  

3/1 US Treasury ARM  5.50% 1.0pt

30 year fixed Jumbo (over $417,000)   6.0% 1.25pts  6.357% APR

FHA and V/A 30 year fixed  6.00%  .25pt  6.127%APR

I am pleased to offer first time home buyers Washington State Housing Loans as well. The current rates are:

30 year fixed  5.25% 2pts, 5.5% 1pt or 5.75% 0pts. 

For more details on any loan program. Please contact me at 360 650-5365 or email at sstonecypher@peoplesbank-wa.com 

I’ve heard about Roth IRA accounts and have wondered how they compare to a traditional IRA.  I sat down with my boss, Erik Dyrland, and in about 15 minutes had a pretty good understanding of the comparisons and differences.  I have had a traditional IRA account for many years but for my 2006 IRA contribution, I will be opening a Roth IRA account to take advantage of its many benefits.  There is still time to inquire about a Roth IRA and make a 2006 contribution.  To talk to MY qualified financial advisor, contact Erik Dyrland’s office, Farmers Insurance & Financial Services at (360) 734-5072 or visit our website at www.dyrlandinsurance.com   I do encourage you to find out about a Roth IRA account - it’s a good investment in your future!

There will be a “Lost Treasures Sale” this weekend. 2nd hand items will be available to purchase at Bridgid Collins House at 1231 N Garden Street in the basement (across from Kinko’s) from 10am to 3pm on Saturday March 24th. All proceeds will go to Evergreen AIDS Foundation and Sean Humphrey House. Call 360-671-0703 for more details.

We have all been hearing a lot about the fall of subprime lenders lately, but what does it all mean? What is a subprime lender? How do they work and why are the getting shut down?

I normally never do a “copy and paste” blog post, but this time I am making an exception. Jillayne Schlicke from Rain City Guide did a BRILLIANT post on subprime lenders and what is going on. I highly recommend that you read her post because it very clearly explains subprime and answers a lot of questions that I’m sure many of you have had.