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December 29, 2005
John Fairchild, CEO of Lynnwood-based Pacific Crest Savings Bank, thinks the Puget Sound region's robust housing market will slow down in 2006. He says builders are telling him they're having trouble finding affordable lots in convenient locations. Then there are rising interest rates and governmental regulatory pressure on lenders to tighten the way interest-only and option-arms are underwritten. These factors will eliminate many buyers from the market. In recent months a high percentage of new home loans were in the interest-only and option-arms category. Fairchild says this will greatly affect first-time home buyers who have been driving the housing market. Add up the factors, and it appears the housing market will slow down in 2006 without much price relief for home buyers, he says.