September 30, 2007 by Joe Kennedy.

Beverly Hills, Calif., and Killeen, Texas, Rank As Most Expensive and Most Affordable U.S. Markets, Respectively, in Annual  Study “Location. Location. Location.”  The age-old adage that defines home prices equates to a $2.1 million difference between the nation’s most expensive and affordable housing markets according to the 2007 Coldwell Banker Home Price Comparison Index (HPCI).  This annual “apples to apples” comparison of similar middle management homes in 317 U.S. markets finds that Beverly Hills repeats as the most expensive market in the nation.  An average 2,200 square foot, 4 bedroom, 2 ½ bath home in Beverly Hills would cost $2.21 million. Yet, more than 1,400 miles away from the glitz of Rodeo Drive, the Beverly Wilshire Hotel and Spago sits Killeen, Texas, the nation’s most affordable studied market where a home with similar characteristics would cost $136,725.   Killeen residents rejoice in their fishing, hunting, boating and Friday Night Lights-type high school football passions while embracing their role as a support system for the family and troops based at Fort Hood.

Killeen is not the only military community to score well on the HPCI’s most affordable list.  In fact, six of the nation’s 10 most affordable markets are also home to or located in close proximity to major U.S. military posts.

Serving as a “snapshot” study, the Coldwell Banker HPCI evaluates average home values for select 2,200 square foot single-family dwellings with four bedrooms, two and one-half baths, a family room (or equivalent) and a two-car garage1 in 394 markets across the United States, Puerto Rico, Canada and a sampling of countries/territories outside of North America where Coldwell Banker has a presence.

The cumulative average sales price of the homes surveyed in the 317 U.S. markets (including one in Puerto Rico) covered in the Coldwell Banker HPCI is $422,343.   By comparison, the National Association of Realtors reports the median price for all existing homes sold in the U.S., regardless of type, is $218,200.  

“The real estate market has certainly changed over the last year,” says Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate LLC. “I continue to point out that we can not make national blanket statements about appreciation and inventory. Real estate is a local business; with each market having its own story to tell.”

“People continue to move for lifestyle; they did before, they are today and they will tomorrow,” Gillespie adds.

Dublin is the most expensive studied market outside of North America where an HPCI subject home averages $2.1 million U.S. dollars.  Coldwell Banker charts a total of 13 markets outside of the United States which average more than $1 million, including Milan ($1.9 million), Rome ($1.7 million) and Paris ($1.7 million).  Bogotá, Colombia, ($140,100) is the most affordable foreign studied market.  Several markets including Egypt’s Sharm El Sheikh ($144,896), Charlottetown, Canada, ($157,630) and Granada, Nicaragua, ($158,375) also average below $200,000.  Warsaw ($417,760) in Poland is the foreign market closest to the $422,343 U.S. average.

“There is greater movement of people around the world and it is not only American baby boomers and relocated workers moving outside the U.S.,” says Gillespie.  “The National Association of Realtors recently reported that 32% of all Realtors in the U.S. had at least one international client during the last year.  Our HPCI serves as a guide for these world travelers and interested consumers to get a sense of how much a typical middle-management home may cost in various markets around the globe.” 

Through the comprehensive HPCI section on www.coldwellbanker.com, prospective homebuyers and sellers can calculate what their homes may be worth in other areas in the United States and gather preliminary intelligence about the affordability of housing from one market to another.

2007 Coldwell Banker HPCI – Highlights and Top Market Lists

• Beverly Hills, Calif., repeats as the most expensive U.S. market in the study ($2.2 million). Killeen, Texas, regains its 2005 crown as the nation’s most affordable market at $136,725.  Minot, N.D., the most affordable market in 2006, saw five percent appreciation for the subject home over the last year and drops to second on the most affordable list ($139,033). 

• Eight of the top 10 most expensive markets in the U.S. are in California, but Greenwich, Conn., jumped from the eighth most expensive market a year ago to second this year ($2 million).  Boston  ($1.38 million) is the only other market outside of California to make the top 10 most expensive market list.  In all, 16 U.S. markets exceed the $1 million average price for the surveyed home.  Joining Greenwich and Boston on that list outside of California are Wellesley, Mass. ($1.19 million) and Ridgewood, N.J. ($1.01 million).  Note:  Manhattan in New York City was not included in the study because of the lack of comparable single-family homes.  

• Six of the most affordable U.S. markets are home to or nearby major military bases:
Killeen, Texas:  Fort Hood (Killeen)
Minot, N.D.:  Minot Air Force Base (Minot)
Arlington and Fort Worth, Texas:  Naval Air Station Joint Reserve Base (Fort Worth)
Wichita, Kansas:  McConnell Air Force Base (Wichita)
Grayling, Mich.:  Camp Grayling (Grayling)

“My situation is similar to so many in Killeen,” said Tom DeAngio, vice president of sales for Coldwell Banker United-Killeen.  “My son will soon be deployed for his second tour of duty in Iraq, and I moved here to help my daughter-in-law and be with my two grandchildren.  I couldn’t see them going through another year without assistance.  This community does all it can to support the troops and their families.  We have a lot of community events like fairs and concerts, along with high school football, to stay together.”

• While the Northeast Corridor (from Maine to Washington, D.C.) and California combine for all but five of the most expensive 40 U.S. markets, only two locations from those regions (Augusta, Maine, and Binghamton, N.Y.) appear among the top 40 most affordable markets. Texas, led by Killeen, has eight of the study’s 40 most affordable markets.

• The cumulative average sales price of the homes surveyed in the 317 U.S. markets (including one in Puerto Rico) covered in the Coldwell Banker HPCI is $422,343, which is only four-tenths of one percent lower than the 2006 average of $423,950.  This change only reflects homes matching HPCI specifications in surveyed markets and is not necessarily reflective of overall market conditions.  Although the HPCI focuses on a “snapshot” look at subject homes meeting study criteria and is not intended to show overall market conditions, a comparison of the 2007 and 2006 surveys indicates 148 markets saw a rise in value of the HPCI subject homes, compared to 139 that dipped. 

• Markets that rank nearest to the HPCI national average sales price of $422,343 include Modesto, Calif., ($421,667), Minneapolis, Minn., ($415,767) and Frederick, Md., ($415,000)

• Canada mirrors the U.S. with its costliest market being on the West Coast.  Vancouver, British Columbia, tops the Canadian list where subject homes average $1,327,875.  The most affordable studied market in Canada is Charlottetown, Prince Edward Island ($157,630).  The price difference from Vancouver to Charlottetown is $1,170,245.

• The most expensive studied international markets included (prices converted to U.S. dollars as of Sept. 7, 2007): Dublin, Ireland ($2.13 million); Milan, Italy ($1.91 million); Rome, Italy ($1.79 million) and Paris, France ($1.67 million).  The most affordable international market tracked is Bogotá, Colombia, at $140,100.

TABLE 1
The top 10 most expensive and most affordable surveyed U.S. markets overall in 2007 are:

TABLE 2
The most expensive and most affordable surveyed U.S. markets within each state in 2007 are: 

The 2007 average price in the District of Columbia:
DISTRICT OF COLUMBIA $808,500 *

The 2007 average price in the Commonwealth of Puerto Rico:
PUERTO RICO  San Juan suburbs $357,500 *

TABLE 3
The most expensive and most affordable markets (in U.S. dollars) within selected provinces/territories in Canada³ are: 

* Only one market included in the study.

TABLE 4
All surveyed international markets³; conversions through September 7, 2007: 

* Conversions done on oanda.com as of September 7, 2007; All currencies listed are local to each country/territory

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September 27, 2007 by Joe Kennedy.

In story today at Inman News, Glenn Roberts writes about ActiveRain filing a lawsuit against Move, Inc. because Move did not purchase or invest in the platform.

Move operates the mighty Realtor.com and may have been looking at Active Rain as the forum for its recently launched free blogs for REALTORs.  ActiveRain is seeking $33 million in damages.

It makes me wonder what would have happened if AR was sold to Move?  Would it have been only open to REALTORS? Would all Active Rain have to abide by some rigid new rules?

Since this sale didn’t go through, I’m sure they’re back to shopping it.  I hope they make their money, but also consider their members.

Another great online real estate group is WannaNetwork.com which will be unveiling their new platform at the NAR convention in Las Vegas this November.  What I like about WannaNetwork is that they have forums where real estate professionals can actually exchange referrals.  Check it out!

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September 27, 2007 by Joe Kennedy.

Here is a recent press release about MLS consolidation here in Washington state.  There are a number of companies working on putting together a national platform.  Some how I think one of these companies will be able to pull it off a long time before there is national consolidation of the existing MLS.

Olympic Multiple Listing Service is dissolving effective Sept. 30, but no disruption in service is expected, according to officials from Northwest MLS which will enhance its presence in Thurston County with the opening of an office in Olympia. 

Jerry Wilkins, manager of Olympic MLS since January 1997, and all three staff members of that service will become employees of NWMLS and be based at the Olympia satellite office, located at 556 Lilly Road Southeast, Suite D. 

“We expect this will be a seamless transition,” Wilkins remarked, noting planning has been under way since the first of the year when the Olympic MLS board voted to dissolve, ending 50-plus years of service (under various names) to local brokers and agents. Northwest MLS started offering services to Thurston County brokers in 1999, but until now its closest satellite offices were in the adjacent counties.

Wilkins expects most members of Olympic MLS who are not already members of Northwest MLS will affiliate with the larger, regional group.  NWMLS, based in Kirkland, is the largest full-service MLS in the Northwest.  It is owned by its member brokers and currently encompasses more than 2,200 companies with nearly 27,000 sales associates. Together, they serve 19 counties, mostly in western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state. 

Olympic MLS chairperson Jeff Pust, general manager at Van Dorm Realty, Inc. in Olympia supported the decision to dissolve and consolidate services.  “It’s a win-win for brokers, agents and their clients,” he commented, citing NWMLS’ reputation as a leader in technology and customer support.  There will be no interruption and service to the public he emphasized, noting NWMLS members have access to the “latest and greatest” tools to assist home buyers and sellers.

The move by the Thurston association reflects a trend toward regionalization of MLS functions that is occurring nationally and locally, according to Jack Johnson, president and CEO of Northwest MLS.  Such consolidation enables more efficient exchange of information, broader exposure of inventory that benefits both buyers and sellers, streamlined operations and other economies of scale for accessing standardized forms and state-of-the-art technology, Johnson explained.

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September 26, 2007 by Joe Kennedy.

When a homeowners’ association board of directors misuses its authority, it can have costly consequences as some Redmond, Wash. residents are learning.

In a dispute about a fence color at a townhome community, an arbitrator ruled in favor of homeowners Marc and Kristina Weiss, resulting in an expense of more than $83,000 for residents of Sammamish Forest Manors (“SaFoMa”), a community of 167 homes.

After a three-day hearing and subsequent review of a series of briefs and documents supplied by both the plaintiffs and defendants, the arbitrator awarded the plaintiffs $39,560.87 for their attorney fees and costs. In his ruling he determined provisions of the Association’s Covenants, Conditions and Restrictions (CC&Rs) pertaining to such fees and costs are “unilateral award provisions and as such have been superseded” by state law (RCW 4.84.330).

The association incurred an additional expense of more than $42,000 for its own attorney fees and costs. When combined with the award to the plaintiffs, the total tab means a 12-foot section of a 46 foot T-shaped fence that cost around $400 in materials is theoretically valued at more than $83,000. The “objectionable” section that faces the street measures around 12 feet – now equaling around $6,800 per lineal foot.      

“This case presents an egregious example of a few members on a homeowners’ board abusing and misusing their authority,” said attorney Malcolm S. Harris, who represented the Weisses.   Harris, a partner at the Seattle firm of Harris, Mericle & Wakayama, PLLC, also believes the board acted in an “arbitrary and capricious nature” in its treatment of the couple.

In decisions issued on June 14 and Aug. 15, arbitrator Jerome O. Cohen of Seattle found the board had no authority to require the Weisses to recolor their fence (for a third time) and ordered the board to reimburse them for reasonable attorney fees and costs. 

In the same ruling the arbitrator ordered the removal or reversal of charges for “late fees” and “late fee interest” that had been applied to the Weiss’ “Occupant Ledger” and directed the property managers to prepare new ledger pages showing only authorized charges.

The dispute dates to 2003 when the Weiss couple and a neighbor built a T-shaped cedar lattice fence to enclose their entry courtyards after obtaining approval from the association’s Architectural Control Committee.  Such approval is required by the association’s CC&Rs.

The architectural committee granted permission for the fences to be built, but “for no apparent reasons,” denied the request to install gates. The Weisses appealed that decision to the full board, as allowed by association regulations.  At a December 2003 meeting, the board approved a motion to allow the gates.

Marc Weiss, who is an architect and a past president of the SaFoMa board, testified he applied a natural cedar colored stain to the fence after discussing the color with the chair of the architectural committee.  The question about color arouse in October 2003 when three homeowners complained to the chair of the architectural committee about the natural color. Questions about the color arose again at the December 2003 board meeting when a few members of the audience commented the “caramel” color that was used was too dark. During discussion, Mr. Weiss voluntarily agreed to attempt to lighten the color.

Although there was discussion about staining the fence a lighter color to match the color of the unit, the board secretary who took the minutes testified it was merely discussion, “not part of the motion.”  There was no requirement during the meeting or in the motion to use a color called “pina colada,” which the board subsequently demanded be used.

In the fall of 2005, the board consulted the association’s attorney on the matter and began incurring expenses for attorney fees. The board also concluded it had the right to charge those fees to the Weisses. The Weisses later discovered their account had been charged more than $17,000 in attorney fees and were considered “delinquent.”  Upon learning of the charges, they refused to pay. The board then threatened to foreclose the board’s “lien” on the Weisses home.

In an unrelated matter, the association received a substantial sum of money from the settlement of another lawsuit.  Proceeds were distributed to members of the association, but the Weisses’ share was withheld and applied to their “delinquent account,” which attorney Harris called a “blatant act of conversion.”  The Weisses were also told their votes for the election of officers at the annual homeowners meeting would not be counted because the board had declared them delinquent.

According to legal briefs filed in connection with the case, the Weisses on several occasions demanded to know how much had been charged to their “account” for the association’s attorney fees, but “the board and its management company steadfastly ignored those requests.”

In August 2006, Marc and Kristina Weiss commenced an arbitration request, under provisions of the association’s governing documents and state laws. In his arbitration brief, attorney Harris stated, “We want the arbitrator to understand that, although the Weisses initiated this arbitration, this whole controversy has been initiated by the actions of a few board members who seem determined to carry out a vicious campaign of harassing the Weisses.”

In his ruling, the arbitrator concluded the caramel color used by the Weisses was an appropriate color:  “It is the arbitrator’s conclusion that the color used by the Weiss’s in re-staining their fence was so close to the color of their unit that the difference was not distinguishable upon reasonable observation”

The arbitrator also concluded the association’s board “improperly converted the Weiss’s funds” from the proceeds of the unrelated lawsuit settlement, and ordered those funds plus interest be remitted to the Weiss family. (“Article 17 does not allow the Association to assess attorney fees against a Homeowner until an adjudication has been made that the Homeowner is in fact in violation of the CC&Rs or Rules and Regulations. No such adjudication had been made at the time the Association withheld the funds, therefore the Association improperly converted the Weiss’s funds.”)

Other rulings by the arbitrator included:

·    “The request for fence and gate made by Mr. & Mrs. Weiss was in conformance to the requirements of the CC&R’s and the policies established by the Board to maintain architectural uniformity.”