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!
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!
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!
