News - Local News

POSTED: Monday, Dec. 01, 2008

Falling house prices helping some Whatcom County residents buy homes

As a global economic storm dominates financial headlines, some Whatcom County residents are still finding affordable ways to borrow money and buy homes as prices moderate.

"People who were priced out of the market six months to a year ago are now coming back into the market," said Kristi Coy, senior sales associate at RE/Max Whatcom County Inc.

Others who have fallen into default on existing home loans are finding that lenders are more willing to work with them to avoid a foreclosure - often a lose-lose situation for both borrower and lender.

When Cari Williams and her husband Art first started thinking about home ownership about two years ago, mortgage money was still flowing freely. Cari had an $11-an-hour job, and her husband was just getting established in his own plumbing business, but lenders were eager for their business.

"We were pre-qualified for $350,000," Cari Williams said. "We were just amazed. ... It was way above what we could afford."

Lots of people saw the easy mortgage money as the keys to their dream home. Cari and Art Williams said no thanks.

"I could see how people could easily get caught up in that, but we're more 'staying within our means' kind of people," Cari said.

The couple bided their time until summer 2008, when home prices began to dip toward their comfort level.

Bellingham and environs were still too rich for their blood, but they found a $137,000 home in Peaceful Valley, near Maple Falls, that they liked.

Two years ago, borrowing that much might have been a snap. In 2008, even though Art's plumbing business was going strong on remodeling jobs, lenders were more skittish. But after the couple came up with a 5 percent down payment, they found a loan at a 30-year fixed rate, with a payment comparable to what they had been paying in rent.

Mortgage planner Susan Templeton of Loannetter put together that deal for the couple.

She said their experience illustrates the reality of today's mortgage market: Loans may be harder to come by, but there is no shortage of loan money for people who can afford to borrow it.

Templeton and others in the mortgage business say that's simply a return to normal, after several years of reckless lending and borrowing that helped drive housing prices to unrealistic levels.

She urged anyone thinking of a home purchase to work out a realistic household budget to figure out what kind of monthly payment is workable. Templeton said she still sees prospective customers who think they want a house and a mortgage but have yet to do that kind of basic household math.

"The happy story is, people can still get money if they're borrowing within their means," Templeton said.

Deborah Cook, broker and owner of Cityview Mortgage Professionals in Bellingham, agreed.

"We can still get somebody in with 5 percent down if they have good credit, good reserves and good employment," Cook said. "It's not all gloom and doom like people think."

But there is some gloom and doom: Cook said she works with more than 50 lenders, and every one of them has labeled Whatcom County an "adverse market," where real estate prices are expected to keep declining. That makes loans more expensive for mortgage borrowers here.

While some potential home-buyers may be holding back in expectation of further drops in prices, Cari Williams isn't concerned about the risk of a decline in the value of her new home.

"We're expecting to stay there for a while so it's not immediate," she said. "We're not terribly worried, because we'd like to keep this, long-term."

Cook said a declining market need not be a worry for a homebuyer who can afford the payment without expecting a fast payoff.

"Real estate is not supposed to be a flipping experience," Cook said. "Real estate used to be a long-term investment."