2011 Wenatchee Real Estate Outlook (5 of 5)

Guest writer, Rebecca Darley

As the manager of a Wenatchee home inspection company I attend many local real estate events to stay informed of the latest real estate news and developments.  On May 19, 2011, the Wenatchee Valley Chamber of Commerce hosted a discussion panel called “2011 Real Estate Outlook.” This blog entry along with the other 4 entries will summarize the panel discussions of each speaker including a loan officer, appraiser, commercial real estate agent, builder and residential real estate broker.

 Previous Entries:

• Speaker from Touchstone Appraisals, Cheri Farivar
• Speaker from Peoples Bank, Darel Ansley
• Speaker from Windermere NCW, Fritz Nichols
• Speaker from Gold Construction, Randy Gold

Alan Biedler, Commercial Real Estate Broker at Sage Real Estate Services

Alan Biedler is a Commercial Real Estate Broker, Certified Property Manager and Certified Commercial Investment Member.  He has specialized in commercial sales and leasing for the last 26  years and has been active in the Wenatchee Valley housing and commercial real estate market for more than 41 years. 

Due to the lack of sales in 2008-2010 Alan feels that appraisers are having a hard time finding comps and are either using non-local or old comps.  This isn’t helping to identify true values.  The commercial leasing market is the most interesting he’s seen 26 years.  Businesses are downsizing and landlords are offering better concessions.  Tenants are asking for free rent and fixed leases for several years.  For example, a recent transaction occurred where the potential tenant started negotiations by asking for 10 months of free rent, a moving allowance and space planning allowance on a 5 year lease agreement.

Alan predicts that there will be a huge problem in refinancing commercial loans.  Businesses that have not performed well over the last couple of years or who have experienced decreased sales will have a tougher time qualifying.  The low commercial rates of 4.5% and the affordable value of raw land make it the perfect time to invest.

Wenatchee Real Estate Outlook 2011 (4 of 5)

Guest writer, Rebecca Darley

As the manager of a Wenatchee home inspection company I attend many local real estate events to stay informed of the latest industry news and developments.  On May 19, 2011, the Wenatchee Valley Chamber of Commerce hosted a discussion panel called “2011 Real Estate Outlook.” This blog entry along with the other 4 entries will summarize the panel discussions of each speaker including a loan officer, appraiser, commercial real estate broker, builder and residential real estate broker.

Previous Entries:

• Speaker from Touchstone Appraisals, Cheri Farivar
• Speaker from Peoples Bank, Darel Ansley
• Speaker from Windermere NCW, Fritz Nichols

Randy Gold is the owner of Gold Construction and has 26 years of experience in the building industry.  Gold Construction won two awards in 2002: the Building Industry Association of Washington (BIAW) Washington State Builder of the Year and Wenatchee Business Journal Reader’s Choice Award for Best Builder. He was the founding President of the local Home Builders Association (NCHBA) and the 2003 President of the BIAW, the largest trade association in Washington State.  He moved to Wenatchee from San Diego in the early 1980’s.

Randy started his discussion with a look back to the building industry cycles of the preceding decades.  In the 1970’s the interest rates averaged 10%.  In the early 1980’s the interest rates escalated to an astonishing 19%.  Randy commented that he was trying to build anything that he could “from fences to dog houses” to make ends meet.  In the 1990’s he started building spec homes and was doing really well.  As that decade ended the demand fell and he was stuck with 2 -3 spec homes on the market for two years.  In 2000 he decided to focus on high-end custom homes and was feeling like he had figured out the industry when the bottom fell out in 2008.  He says “this is longest downturn I’ve ever seen.”  Everyone on the panel agreed that they’ve experienced slow and hard times in our real estate market but the fallout of 2008 is taking a long time to sort out.

Randy believes that bargain hunting, longer processing periods, low offers and desperate sellers accepting lowball offers are all factors contributing to the decrease in home values.  He has already sold one spec home for less than it cost to build. 

He predicts a huge epidemic will surface once the new construction demand returns.  Many mills and plants closed and skilled workers found other jobs due to lack of demand in construction.  Randy believes that building material costs will skyrocket and construction lag time will increase while a shortage in building materials and skilled workers will have to be figured out.  He agreed with the other panelists that this is the best time to buy.  New regulations and requirements from building codes will increase the cost of building as well.  He believes that interest in remodeling will increase due to everyone’s equity being tied up in their home.

Wenatchee Valley Real Estate Outlook 2011 (2 of 5)

As the manager of a Wenatchee home inspection company it’s very important learn about the latest real estate news and information.  On May 19, 2011, the Wenatchee Valley Chamber of Commerce led a discussion panel with local real estate experts to discuss the current state of the real estate market and to say their predictions for the rest of 2011.  This blog entry along with the next 3 entries will summarize the panel discussions of each speaker.

 Previous Entry: Speaker from Touchstone Appraisals, Cheri Farivar

Darel Ansley, Real Estate Loan Officer at Peoples Bank

Darel is a Real Estate Loan Officer at the Wenatchee Peoples Bank.  He specializes in construction loans and mortgages for Wenatchee, Chelan, Leavenworth, and Okanogan Counties.  He has lived in Wenatchee for 8 years after moving from Issaquah.

Darel concentrated on the topics of availability of funds and the access to low mortgage rates.  Mortgage fees increased a quarter point in March while rates are staying at an extremely low 4-4.5%.  Darel assured everyone that there are plenty of funds.  While more affordable options are available in the Wenatchee home market, buyers have to consider increased mortgage fees that are adding about $100 on average to the monthly payment.  With “cheap money” lended to home buyers they can currently buy more home for less money.  Darel agreed with Cheri Farivar (Touchstone Appraisals) that now is the time to buy!  He sees our current economic cycle in the bottom of a “U” shape.  While our market is going to improve slowly in the next couple of years the new regulations imposed on lenders and appraisers will only make the home buying process more time consuming and will double the amount of time to close a transaction.  He also predicts that rates will increase up 5.5% by the end of 2011.