Leavenworth Mortgage Crises?

People have been asking me how the recent mortgage meltdown will affect lending in Leavenworth. The truth is, the 'crises' is actually helping people in Leavenworth. As you might imagine, few people purchase a vacation home with a subprime mortgage, and the typical Leavenworth buyer is at the far end of the spectrum from the person who needs one. So the collapse of this financing doesn't hurt the Leavenworth market at all.

Where the benefit comes from is this: Within the secondary mortgage financing world there is a 'flight to quality'; investors are hungry for Mortgage Backed Securities (MBS) composed of low risk -high quality mortgages. As a result, they are paying more for these good MBSs, which like a bond, drives down the interest rate. The bottom line is, conventional rates for good mortgages are dropping!

Jumbo loans are a little different. A jumbo is a loan amount above $417,000. Secondary financing for Jumbos has also dropped off, as a result, jumbo rates with the large lenders have gone above 8%. Fortunately for smaller banks like ours, the rates have not gone up as much. In fact our rates for jumbo construction loans are not even that high.

The best thing is to talk with a lending professional to guide you through the daily-changing maze of lending programs.

I met with some clients today building a home on East Leavenworth Road, they needed to borrow an amount well above $417,000 for their project. There project had been delayed since Spring, and they were wondering what impact the delay would cost them in financing costs.

In our discussion I learned that they intended to sell a rental house in Seattle during the construction period. I showed them that instead of doing a one step (construction plus final mortgage) jumbo construction loan which would give them a rate of 7.625% as their final mortgage, I could do a simple construction-only loan now and refinance into a conventional loan at lower rates when their project is complete (using the sale proceeds to bring the loan amount down to $417,000). The closing costs for the two-step process are roughly the same as they would be for the all in one loan. The clients feel confident that with current conventional rates around 6.375%, there is not much risk of the conventional rate getting near the 7.625% range. So they came away happy that their home financing would not be as expensive as they feared.

Construction lending can be confusing, if you want to learn more about it you can read my recent article.

One other thought, with conventional rates dropping, and all the appreciation in recent years in Leavenworth propeties, we may be headed into one of the only refinance booms in the industry. You never know.

Leavenworth construction continues to boom, I am currently working on six construction loans within the Leavenworth market. So where the mortgage meltdown may lead to some bargain properties in Detroit, the bargains in Leavenworth are today's prices compared to where they will be in the future. Geordie can explain the supply/demand dynamics which make that a reality.

Lake Wenatchee Real Estate

Real Estate at Lake Wenatchee and Fish Lake has really taken off in the last decade. Lake Wenatchee's popularity comes from the wealth of recreational opportunities (boating, fishing, wind surfing, hiking, snowmobiling, skiing, golfing) and it's proximity to the Seattle area.

I wrote about Fish Lake real estate in a previous post, so this article will be mostly about Lake Wenatchee.

There are two roads that skirt Lake Wenatchee and serve as separate neighborhoods. Cedar Brae (aka South Shore road) runs along the South Shore. It starts at the South entrance of Lake Wenatchee State Park and passes Kahler Glen Golf Club. At the other end of the road is Camp Zanika Lache, a Campfire Camp, a number of cabins on leased Forest Service land, and a trail to Hidden Lake. On the north side of the lake, North Shore Drive runs from the Lake Wenatchee Highway near the YMCA camp to near the White River road near the former site of the Cougar Inn. The north shore of Lake Wenatchee is often preferred because it faces South and gets more sunshine in the short days of winter. The West end of the lake is mostly U.S. Forest Service and the East end is the mouth of the Wenatchee River and Lake Wenatchee State Park.

Lake Wenatchee Real Estate 2007

In 2006, there were 7 sales on Lake Wenatchee listed on the North Central Washington MLS. These are lakefront properties, not properties with access to the lake or across the street from the lake, but actual lakefront. 1 was a cabin on leased land, 2 were tear down houses, and 3 were lakefront homes and one was a building lot.

The tear downs averaged $490,000 while the lot sold for $822,000. The tear downs were on similar size small lots on the North Shore (.17 and .12 acres) with 52 and 40 feet of lakefront. The lot was also on North Shore, but was .55 acres and had 100 frontage feet on the lake.

The three houses averaged 2400 square feet in size and sold for an average of $1.1 million. All three houses were on the North Shore and on lots smaller than a 1/4 acre. Two of the homes had 100 feet of lakefront, while the largest house had only 50 feet.

In 2007, 2 lakefront homes on Lake Wenatchee have sold so far. These homes are smaller (average of 1500 square feet) and had an average selling price of $910,000. One home was on Cedar Brae and though larger, much newer and on a lot 3 times bigger, sold for less money. This is the only South Shore listing that has sold in two years and it appears that the market does favor the North Shore by a large margin.

Currently one home is pending at $750,000 for a rustic cabin 1392 square feet in size. A much smaller house of 800 square feet is available for $770,000. Both are on 1/2 acre lots on the South Shore.

There are still a number of cabins on Lake Wenatchee that sit on leased land owned by the U.S. Forest Service. These cabins sell for under $200,000. It seems like a great deal except that you don't own the land. The USFS does and they make you pay them a lease. Those leases are currently for 10 or 20 years and may go up drastically, they are supposed to be set at 5% of the value of the land, though current leases seem to be a few thousand a year. (If the lot value in private hands is $500,000 then the lease is $25,000 a year.) The Forest Service may also cancel the lease and ask you to remove your cabin. Then you are left with nothing. Ask your lender if they will loan on a property like this, I doubt many will because of the risks involved.

Searching for Lake Wenatchee property

The search tools that consumers have at their disposal are poor at finding waterfront property in Leavenworth and Lake Wenatchee. This is especially true for local Leavenworth sites like http://www.lakewenatcheehomes.com/ or my competitors at Leavenworth Properties and Lake Wenatchee Properties. This is a function of the IDX program available to us at this time. The mapping isn't as useful, but http://www.windermere.com/ does allow consumers to search for waterfront listings.

If you want to see current Lake Wenatchee waterfront homes click here or for waterfront lots click here or email me at any time and I will send you a list of the current available properties.

Update March 2008

The search function has now been updated for the Lake Wenatchee Real Estate site. You can now search easily for waterfront properties on by categories that include lakes, rivers and creeks.

Riverfront Lots in Leavenworth

Buying a riverfront lot in Leavenworth or Lake Wenatchee Washington?

Recently I wrote an article about buying a riverfront home in Leavenworth. I talked about the different options such as the Wenatchee River, the Chiwawa River and Icicle Creek. For some people, buying a home on the river doesn't compare to building a custom home on the river.

Building lots in Leavenworth and Lake Wenatchee (Plain) are more expensive every year. This is especially true with riverfront.

In 2006, 15 parcels on the river sold in the Leavenworth area. The average lot sold for $246,000 for a lot under 1.5 acres in size. The median price for a lot was $275,000.

In 2007, through the end of July, 5 riverfront lots have sold. The average price is $307,000 for approximately 1 acre.

Currently, there are 6 active lots on the market with a median price of $385,000. The least expensive is $279,000.

3 lots are under contract (pending) with an average price of $273,000.

I generally tell buyers that they should expect to pay $300,000 for a riverfront lot in today's Leavenworth real estate market. If you are interested in low bank that doesn't flood or a specific location, such as the Icicle River, you probably can expect to pay more. (Lakefront is another story all together - probably double the price.)

With only 6 lots on the market, there really isn't a huge number of choices for the consumer to pick from. The best thing to do is become very familiar with the market and be prepared (emotionally and financially) to move quickly when the right property becomes available.

Click here to search all Leavenworth properties or click here for riverfront properties in Leavenworth. (Unfortunately the second link is only good until September 07 - email me for current listings.)

Leavenworth Riverfront Properties

Buying a riverfront home in Leavenworth? Ever dreamed of a log cabin on the river in Plain? How about Icicle Creek?

For many home buyers in the Leavenworth, Plain and Lake Wenatchee area buying a riverfront home has been a lifelong dream.

There a number of rivers to choose from:

The Little Wenatchee River and the White River flow into Lake Wenatchee from the Glacier Peaks Wilderness Area. There are a few opportunities here, but they are rare. Homes on these rivers are far from services and are likely to feel very remote. Winter access is something to think about – skiing or snowmobiling in may be your only option.

The Wenatchee River provides most of the opportunities for riverfront living. The Wenatchee River starts at Lake Wenatchee and heads down to Leavenworth (via Tumwater Canyon) and then on past Peshastin, Dryden, Cashmere and Monitor to Wenatchee where it meets the Columbia River.

Most of the river recreation in the Leavenworth area takes place on the Wenatchee River. This includes rafting, kayaking and tubing.

Some neighborhoods that have Wenatchee River frontage are Bretz Road and Bretz Drive, River Road, Plain Ranches, Alpine Acres, Ponderosa, Alpensee Strasse, Icicle Road and Riverbend Drive.

The Chiwawa River

The Chiwawa River flows 37 miles from its start at Chiwawa Mountain in the Glacier Peak Wilderness to the Wenatchee River east of Lake Wenatchee. Most of the Chiwawa River is located in land managed by the U.S. Forest Service, though some private riverfront is available near the mouth.

Neighborhoods that have access to the Chiwawa River include Chiwawa River Pines and Shugart Flats.

Nason Creek

Nason Creek flows into the Wenatchee River near the Nason Creek Campground which is adjacent to the South entrance of Lake Wenatchee State Park. Nason Creek flows from the Stevens Pass area and is close to Highway 2 for much of its downhill journey.

Icicle Creek

Icicle Creek flows from Icicle Canyon down to the Wenatchee River near downtown Leavenworth. Much of Icicle Creek flows through land managed by the U.S. Forest Service in Icicle Canyon.

Neighborhoods with Icicle Creek access include Icicle Island, Icicle Road, East Leavenworth Road, and Old Bridge Road. It is important to note that the river on your right when you head out Icicle Road from Leavenworth is actually the Wenatchee River!

Other Creeks

The following creeks are a little smaller - babbling brooks that may dry up at the end of a hot summer -Chumstick Creek or Little Chumstick, Bjork and Eagle Creeks. If you are looking for "riverfront" these creeks may disappoint you. I happen to have a small creek in my backyard and I love it.

The Market for Riverfront Homes

In 2006, 13 riverfront properties sold in the Leavenworth and Plain area. The average home sold for $654,000 with a median sales price of $625,000. The average riverfront home was just over 2000 square feet.

Currently we have 11 homes on the river for sale in Leavenworth. The least expensive home is $500,000 and the average asking price is $840,000.

2007 brought Leavenworth its first riverfront condominium project - The Boulders. These 6 luxury condos are located on Alpensee Strasse within walking distance of downtown Leavenworth. Each 2 bedroom unit is 1500 square feet and comes with 2 fireplaces, 10 foot ceilings, granite countertops and awesome Wenatchee River views. Prices start at $595,000 for the 3 available units.

My partner Allyson has a nice 3 bedroom home on River Road for sale. This house has a short trail down to some great low bank waterfront on the Wenatchee River and great views of the river from the house and the deck. You can see a tour of this Wenatchee River home here.

Click Here to Search for Leavenworth Homes or click here for Riverfront Homes in Leavenworth . (Unfortunately this link is only good until Sept 07, e-mail me for the most current listings.)