As the World Turns. ...or Slows.

Wow, doom and gloom. ...or as one friend jokes: "misery, misery, death"

Not me!

I just spoke with an escrow closer today and she says "December is shaping up to be a killer month!" Scheduled closings are over 50% higher than closings in November.

Real estate is cyclical. This time of year is why Realtors take December and January off. At least interest rates aren't spiking up. My view: people are spooked by the media - and there is some justification to that with billions of dollars or write-downs and losses at the major banks.

However, the write downs are part of a convoluted issue that doesn't necessarily involve the rate of foreclosures itself or any risk associated with buying a home or investment property. The write downs are part of what appear to be a shell game played by the investment banks and brokerages in the secondary market. They were selling off "packages" of loans that had varying risks but selling them as "low risk". Once the foreclosures started and the analysts realized the true risk of the loans in the packages, the market decided that those packages weren't worth the value paid and they downgraded them to junk bond status (or something similar). Hence the write downs as they weren't saleable into the market they were sold at the prices paid.

Now, these packages of loans are probably still earning some rate of return, but not what the buyers paid for them, so it's not "all" bad...

d'oh! What a tangled mess!

...but let's look back at the bright side...

Closings in December are scheduled to be up. My own business is up from last year - and indeed has been better since the whole mess than before!!! I know several investors who are just tearing away, purchasing properties left and right.

Foreclosures in WA state are up, but only slightly compared to other parts of the country. Why? For some reason, there is a lot fewer high risk loans in WA than in those states. Hmmmm, a correlation?

Did you know that WA state expects over 1.8 million people to come in over the next few years (with an associated 1.1 million jobs) and only 15,000 new home starts next year?

We all go to sleep in November and December, starting with Turkey Day and continung through Christmas Day. We (the market) tend(s) to wake up after the carbohydrate-induced coma known as Superbowl.

...so when is a good time to buy? NOW, folks. NOW.

Sellers are nervous, there is lots of choice, home prices are continuing to rise (although slower than before) and you have lots of opportunity to negotiate.

Call me. Let's chat.