We Owe All Our Success to You

 Thanks for helping us make 2016 one of the best years ever in the Portland real estate market!

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We wanted to take a moment to reflect back on 2016 and how you helped us make it great.

We really appreciate all of our new and repeat clients that helped our business this year. I also want to thank everyone who sent us referrals—I can't even begin to tell you how important they are to us!

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Thanks for helping us make this year a great one. 

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This year was an amazing one for the Portland real estate market. We saw some of the most extensive price appreciation that our country has seen in some time. In fact, we led the nation for most of the year in percentage-based appreciation. We expect 2017 to be a very similar year, even though I think the appreciation rate will slow a little bit.

If you or anyone you know is interested in buying or selling a home in the Portland area as we head into 2017, send them our way and we'll treat them well. We appreciate you thinking of us.

Happy Holidays!

How Can a Lender Help You?

Today I’m here with Pete Wease, our preferred lender, to discuss a few things about his job as a lender. For instance, what is the best part of his job? What makes a transaction a home run?

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Today I’m here with Pete Wease, our preferred lender, to discuss job satisfaction on the lending side of things. 

One of the best parts of Pete’s job is when a client gets to the closing table and signs the dotted line. “They’re smiling ear to ear,” Pete says. “That is the biggest sign of job satisfaction for me.” He knows that his clients are feeling a sense of pride and ownership when they close on their home. 

Unfortunately, there are situations where a transaction shows signs of trouble. When it looks like a deal might fall apart, Pete just takes a step back, reflects, and communicates with the client to find a solution. “Any time we close a transaction, that’s a home run,” Pete says. “The bottom line is, I am here to help you close on your loan.” 

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Communication and proper preparation will get you to the closing table.

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There are times when a transaction may not be able to close. Pete says, “If I can’t help you now, I will help you in the future.” Pete believes that preparation and communication are crucial to making it to the closing table. 

If you have any questions for Pete, you can give him a call at 503-267-6391 or email him at PeteW@FairwayMC.com. We have been working with Pete for four years now and it’s been a fantastic experience. We have nothing but good reviews for Pete here, so we highly recommend that you reach out to him if you are thinking of buying a home.  

If you have any other real estate questions, just give us a call or send us an email. We would be happy to help you!

Don't Kill Your Home Deal With This Mistake

Certain surprises can arise during the home buying process that can ruin the transaction if mishandled. If you don't handle your credit properly during this time, you might kill your own deal.

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There are some surprises that can seemingly come out of nowhere in a real estate transaction that can take the wind out of your sails or even completely kill a deal. To help me break these surprises down in order to help you avoid them, I've brought in mortgage expert Peter Wease with Fairway Independent Mortgage.
 
According to Peter, the number one killer is opening up new credit. Some home buyers want to buy a new car or new things for their new home like furniture, curtains, paint, etc. Even worse–many buyers open credit without telling their lender. You should avoid opening any new credit at all when buying a house. The house should be the only thing you're focusing your finances on.

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Opening new credit is the best way to ruin your mortgage qualification.

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After you close, then you can think about those new purchases. In the early steps of the process, your lender will run a credit check, and your mortgage qualification is based on your credit at that time. If that changes midstream, your credit score or debt-to-income ratio could change, and your lender might not be able to get you approved in the end.
 
If you need help with a home loan or a refinance or you have any questions for him, give him a call at 503-267-6391.
 
If you have any questions for me or you're thinking about buying or selling a home in Portland, give me a call or send me an email. I'd love to help you in any way I can!

The Current Health of the Portland Market

I like to use the Case-Shiller monthly report to examine the health of our market and to examine where we're headed. Based on the most recent report, we look to be headed in the right direction.

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To examine the market on a monthly basis, one tool we like is the Case-Shiller S&P Index that you can get online. It continues to show us appreciation across the country at a healthy 5%. The report is broken down into 10 and 20-city composites, with Portland in the 20-city composite.
 
Portland is leading the way in this report. The 20-city composite was actually down slightly in this last report from 5.1% to 5%, but Portland is at 12.4% appreciation. Before you overreact to that, understand that we were even higher than that at one point. We're starting to see it trend downward, but that's a good thing.
 
The report also notes that most analysts are expecting the Fed to raise interest rates this December. Even if they do, though, the impact on mortgage rates and the mortgage industry are going to be so minimal that we'll still see these historically low rates, so there's nothing to get too worried about.

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Portland is leading the way.

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We also get questions all the time about whether we're in a bubble that's going to pop soon. We're so programmed with bubbles these days that I believe we just overreact. We know we're not in a bubble by looking at outstanding mortgage debt and seeing that we're about 12.6% lower than what it was at its peak in the 1st quarter of 2008, and we're not seeing much growth there.
 
In the video above, you can see a table that demonstrates how healthy the indexes are compared to the peak of the market in 2006 and the trough of 2012. We're starting to see the market shift, and we need to see the market shift. We're not seeing up to 10 offers on almost everything, and that's a good thing.
 
If you have any questions at all about where our market is going and what it means to you as a buyer, seller, or homeowner, give me a call or send me an email. I'd love to hear from you!

Why Are Transaction Timelines Longer in the Portland Area?

The average business day turn times for different counties here in Portland are varying to a strange degree. This is because there just aren’t enough appraisers for all the people moving into Portland. 

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Our office recently had a transaction that was supposed to close at the end of September but got postponed by half of a month purely because the appraisal took so long to come in. Why?

Today we’ve invited Peter Wease, our preferred lender from Fairway Independent Mortgage, to talk about turn times for appraisals in the Portland area and how they’re affecting transaction timelines. According to Peter, this type of delay isn’t uncommon. His company has been tracking this type of occurrence for the past year, and they see weekly updates based on different counties.

As you can see in the video above, on September 18th, Clackamas County’s average business day turn time was almost 21 days. On October 3rd, it increased to 23 days. This is in contrast, however, to Washington County, whose average business day turn time dropped from 28 days on September 18th to 16.5 days on October 23rd.

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The appraisers need help.

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The primary factor in this kind of drastic variance from county to county is the fact that roughly 111 people are moving to Portland every single day, and there just aren’t enough appraisers to keep up. The best way to change this turn time, then, is to get more help to the appraisers.

Another consequence of this situation is that appraisal fees have soared. Appraisers are getting inundated by other appraisal management companies, so they’re demanding higher fees and being more selective in which appraisals they choose to undertake. Who pays for that increase? The customer. It’s unfortunate, but it’s the truth.

The moral of the story is that, for the time being, it’s going to be hard to close a transaction in just 30 days in the Portland area. You’d be well-advised to prepare for it to take as long as 45 or even 50 days. In addition, let your clients know about what’s going on with these turn times so they can prepare as well.

If you have any other questions for Pete about current mortgage rates, you can call him at 503-267-6391.

As always, if there’s anything else you’d like us to address relative to the mortgage finance aspect of real estate transactions, give me a call or send me an email. I look forward to talking with you soon!

What If the First Home You See Is the One?

If you fall in love with the first home you see, should you buy it? Most Realtors would say yes, but I recommend comparing that home to others on the market. 

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If you fall in love with the first property you see, should you buy it or keep looking at other homes?

Some Realtors will say that if you fall in love with the first home you see, you have entered buyer nirvana. You can write an offer, move into the home, and they can move on to the next deal. I think that is a big mistake.

You may still wind up buying the first home you see, but I think it is still very important to compare that first home to other homes. In my 16 years as a Realtor, I have seen many people fall in love with the first home they see and I always encourage them to continue looking at other homes.

You need to compare that property to the others to see what you will get in terms of amenities, size, and finishes. You also need to pay attention to the location. Many buyers tend to overlook these factors, especially when they are buying a new construction home. There is something appealing about the fact that no one else has lived in the property, which makes it easy for buyers to fall in love with new homes.

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You need to compare the first home you see to other properties.

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When that happens, you may not notice that the backyard is not conducive to your family’s needs. You may also overlook the fact that the property backs up onto a busy street, which will be a hindrance when it comes time for you to sell the home. New construction buyers don’t look at properties this way, and they should.

Even if you are buying an older home, you still need to compare the first property you see to other homes available on the market. You may really like the first home only to discover that, for $10,000 more, you can get the perfect home for you and your family.

That said, you can take things too far by looking at too many homes and getting confused about what you want. I’m not saying to go out and look at dozens of homes; just look at a few others. This is probably the biggest investment you will make in your lifetime, so you want to make sure you choose the right property and avoid buyer’s remorse.

If you have any questions about finding the right home or about real estate in general, give me a call or send me an email. I would be happy to help you!

Knowing What You Want vs. What You Need in a Home

I believe homeownership is the American Dream. When you buy a home, though, it is important to understand the difference between what you want in a home and what you need. How can you tell the difference?

The first thing I’d advise is pulling out a pen and a piece of paper and writing down two columns. In the left-hand column, list all of the things that you have today. In the right-hand column, list all the things you want. From left to right, your list should expand. This will be the criteria you will use to shop for a new home.

Make lists detailing what you want and what you need in a home.

Whatever amenities you end up listing in the right-hand column, it’s important to keep in mind that you may not get all of them in this next purchase. If your new home doesn’t have all the amenities that you want, I would strongly encourage that you start looking for ways to save money so that somewhere down the line you can procure them.

I often see people make upgrades to their home solely as part of their strategy for selling it. This is a mistake—you’re spending money that you don’t get a dollar-for-dollar return on. If you’re making upgrades, do it for yourself first. Reap the benefits of how it contributes to the home’s sale later.

If you have any questions you’d like answered, just shoot me an email or give me a call. I’d love to help in any way I can!

How Steve Stood Out from Other Agents

“They were great. We’re going to close on the new house in about a week. Steve was available and attentive. Figuring things out when we weren’t clear about how things were going. It was great, he did a fantastic job. When we were working on getting our current home closed, we have a Solar City agreement and there was a clause in it that the underwriters/buyers didn’t like and we couldn’t figure out what the problem was and Steve was the one that managed to talk to the lender and resolve the confusion and keep things moving along. And he was so available and willing to explain things and made us feel like we were in good hands. I don’t think other Realtors would have done that for us.“

Structuring an Offer in Portland With Our Current Market

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You’ve found the perfect home, and you’re ready to write an offer. What should that offer look like relative to price? The answer depends largely on the market. In today’s real estate market, we’re not seeing those situations where you can be much - if at all - under the asking price. If it’s a beautiful home in a great area, expect to pay more than asking price.
 
One of the ways we reiterate this information is our Market Overview Report. This month for Northwest Portland, the report shows a list-to-sales price ratio of 97.7%; so we’re getting 97.7% of asking price with an average sales price of $557,000. There are also 142 homes for sale on the market, with 229 currently pending. That’s 161.3% of the overall market with a 1.37-month level of inventory.

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IF YOU'RE READY TO WRITE AN OFFER, EXPECT TO PAY MORE THAN ASKING PRICE.

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For Northeast Portland, we’re seeing a list-to-sales price ratio of 99.1%. That’s telling you that many homes are selling for well over asking price. There are also 175 homes for sale, with 353 pending in the spring market, so 201% of that whole market is basically pending. And, finally, it shows a month of inventory number of .93 - not even a month’s worth of inventory.

These numbers explain how the market is so explosive right now. We like to use this information we produce monthly to understand the market a bit more specifically from our point of view, which we can then turn around and use to educate our clients. They can then see factually what’s going on in the market and why their offer needs to be strong. If you want to know what’s going on in a different part of Portland than where you live, for instance, it’s a great way to keep your finger on the pulse.

Shoot us an email if you’d like to see this report delivered to your own inbox, and if you have any other questions don’t hesitate to call.

Is Your Portland HVAC System Properly Maintained?

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Sam Murzea, from MP Heating and Air Conditioning in Portland, is our go-to vendor when our clients have issues with HVAC systems. When Sam checks on these units, he often finds they aren’t maintained properly. Typically, people forget about their HVAC units and don’t know anything is wrong until they’re hot in the summer or cold in the winter. This is exactly why Sam suggests an annual checkup.

In an annual checkup, Sam’s team will check out all the electrical components, mechanical components, filters, coils, and everything else. This inspection will eliminate your stresses and worries about your HVAC system, all year long. If you have an AC unit, they can clean it in addition to checking the condenser and other components. Their goal is to prevent breakdowns and future repairs. 

In between these annual checkups, Sam recommends changing air filters regularly. Different systems require different change intervals. He also recommends changing filters every 30 days in order to ensure the best performance.

If you ignore all of these things, you may end up with no heat on the coldest day of the year or no air conditioning on the hottest day of the year! Additionally, carbon monoxide can leak. To keep your family comfortable and safe, perform regular maintenance on your HVAC units. Pay attention to it, and definitely don’t forget about it!

If you have any further questions, please don’t hesitate to contact Sam or myself. We look forward to working with you!

Is the Portland Market Heading Towards a Bubble?

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Portland is continuing to see an explosive real estate market. I’ve mentioned this before, but we are part of a 20-city composite for a Case Shiller S&P index that looks at national housing trends. The data that just came out last week shows the overall index leveling off a little bit. In January, we saw a 5.7% appreciation average across the 20 cities and that’s dipped down a bit to 5.4%.

However, in Portland we are still continuing to lead the pack with a 11.9% appreciation rate. We attribute our continued growth to a strong job market, strong housing demand, and the high quality of living we have here in the Pacific Northwest.

What’s also interesting is that mortgage defaults continue to be low, much lower than they have been in the past. We are at about a .75% default rate, which is a good place to be. Year-over-year price changes within that 20-city composite have remained very stable, right around the 5-6% range. 

I get asked if we’re headed toward a housing bubble quite often, and my answer continues to be no. There are so many other factors that are propping up the real estate market. Our appreciation rate may not continue to be 11%, and it shouldn’t, because it’s not healthy. However, there is a huge upside to our market, and homes are still as affordable as ever.

For someone making a 20% down payment, their mortgage payments would only take about 15% of their income. Just 10 years ago, that figure was near 25%. A middle income family doesn’t need to stretch their wallet in order to buy a home, a statement that has been echoed by the National Association of Realtors’ Chief Economist, Lawrence Yun.

If you have any questions for me about the Portland market, don’t hesitate to reach out by phone or email. I would love to hear from you.

Are There Loans that Don’t Require a Down Payment?

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Have you been wondering what’s going on in the world of low down payment loans? Today, we are going to discuss a great mortgage loan down payment option that you have right here in Portland. We are here to discuss things with Peter Wease of Fairway Independent Mortgage, our preferred lender. Many people think $0 down home loans are a myth, but we can assure you they are not. They are here, and you could get one today.
 

USDA loans are loans from the department of agriculture and are intended for rural housing, which expands beyond the urban growth boundary. You can get a USDA loan with 100% financing, meaning you will pay $0 down. There are a couple caveats with this loan, including that the home has to be past the urban growth boundary, which is detailed in the video above in the non-shaded areas. Your household income also may not exceed 115% of the median income.
 
This is a fantastic opportunity for someone to get in the market and own a home with no money down. Rents are going up, and this is a great option for telecommuters who would be working from home anyways without the need to commute.
 
If you have any questions for us or are interested in using a loan like this to purchase a home, give us a call or send us an email. We would love to talk to you!

Don’t Miss these Expert Portland Home Finance Tips

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Today I have Peter Wease with me and he will be helping us to discuss some changes that have happened with mortgage financing in Portland. Some of my viewers from last episode were concerned that Portland real estate may be entering a bubble, but I think those concerns are unfounded.

What has changed with mortgage financing in Portland is the creation of the CFPB, the Consumer Finance Protection Bureau. This is supposed to promote fairness and transparency for the consumer. TRID (TILA-RESPA Integrated Disclosure) was also designed to give the consumer time to look at the numbers during the closing process in a real estate transaction. It simply gives the consumer more time during the closing of a sale. Basically, everything in the transaction must be disclosed in paper. 

This prevents erroneous fees and charges from being issued to the consumer. Furthermore, this prevents bad loans from being made, and this will ultimately prevent another bubble from forming. People borrowing money today are much more protected now than they were in the past.

If you have any questions about these changes, please don’t hesitate to contact me!

Inventory Levels Are Incredibly Low in Portland

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Today, we’ll talk about the dynamics of the Portland real estate market. We’ll also examine why our inventory levels are causing relative appreciation in our area.   

Portland continues to experience a brisk, fast-paced real estate market. Part of that is due to healthy job growth, and Portland has also been ranked as one of the best places to live in several publications. There aren’t many homes for sale, but demand is skyrocketing.

If a real estate market has less than 6 months of inventory, it’s considered a seller’s market. In a seller’s market, home prices go up. A neutral market has 6 to 7 months of inventory, and home prices will only appreciate due to inflation. A buyer’s market has more than 7 months of inventory, and prices will depreciate.
 

Portland is in a firm seller’s market. Beaverton has less than a month of inventory. Northwest Portland has a month-and-a-half of inventory. Northeast Portland has about a month’s worth of inventory, and North Portland has 6/10ths of a month of inventory. This is what we’re seeing across Portland, especially in entry level price ranges.

Since homes are in such high demand, if you’re a buyer, you will probably face multiple offer situations. We recently helped a client make an offer on a property. He’s in escrow right now, but he had made 7 other offers on different properties before this one was accepted. It’s very competitive right now.

If you have any questions, give us a call or send us an email. We would be happy to help you!

Why 2016 Is the Year to Buy in Portland

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Is 2016 the right year for you to buy a home? The short answer is yes.

Here’s why: the S&P Shiller numbers show that in October of 2015, Portland saw an annualized appreciation rate of 10.9%. Along with Denver and San Francisco, Portland is leading the nation in home appreciation. From an investment standpoint, this is a fantastic time to buy.

If you buy now instead of waiting for a year, you will save a lot of money. Today, you can get a $250,000 home with a 4.01% interest rate. Your monthly payment would be $1,195. If rates go up as they’re projected to, that same home will cost $263,250 with a 4.8% interest rate. Your monthly payment will go up to $1,381 if you wait a year to buy a home. 

If you get in the market today, you will save a lot of money. Don’t wait for next year. If you look at it from a monthly standpoint, you can go out to dinner or make a dent in that car payment with the money you saved. Annually, that money can go towards a vacation or pay off a couple credit cards. Over 30 years, if you buy now, you will save $67,032.

As you can see, it’s a great time to be in the market. If you have any questions, give us a call or send us an email. We would be happy to help you!