Portland housing market wrap 2017

RMLS has just released a wrap of the Portland housing market for 2017.

The actual numbers may surprise some of you since affordability in this area has shown a remarkable rise as compared to just a few years ago. The biggest factor affecting rising prices has been low inventory, and that has not changed for several years. We have a very low inventory of distressed properties and almost no short sales on the market anymore; so those bargains have all but disappeared.

We closed out 2017 with an inventory in the metro area of only 1.6 months (the number of months it would take to sell all homes on the market if there were no new listings.)

Average home prices rose 8.5% during the period from December 2016 – December 2017 from $395,000 to $428,700. In the same comparison, the median sale price rose 9.5% from $347,000 to $379,900. Please check out the graph below (courtesy of RMLS) that shows how prices have risen since 2009.

Average and median sales prices December 2017

It is important to note that average price increases are just that. There are neighborhoods where values rose more, and even a few higher priced neighborhoods where values have stabilized with very little increase over the last year. For the most part the fastest rising valuations are in lower cost neighborhoods.

Forecast for 2018 Portland metro area housing market

The consensus is that housing prices will continue to rise in 2018, but the rate of inflation is forecast to slow. As long as Portland remains one of the fastest growing cities in the country and is the second most popular area for re-locations, we are likely to continue to have a higher rate of inflation than most of the country.

Unfortunately, as can be seen by average and median prices, finding a home priced below $200,000 is extremely rare; and when found is most likely either a tiny house or a major fixer. Additionally buyers should know that if and when these homes can be found, they are at best small outdated 2 bedroom, 1 bath houses. Buyers should expect to pay closer to $300,000 and up for a starter home.

Portland named as one of top nine real estate markets to watch for 2018

Portland Oregon hottest housing market in the USAccording to an article in Curbed Portland has been named one of the 9 real estate markets most likely to be active in 2018. According to author Patrick Sisson, “Curbed consulted a number of experts—representing the Urban Land Institute (ULI), RCLCO Real Estate Advisors, Zillow, Trulia, and Realtor.com—to find markets tapped to be fast-growing and most dynamic in 2018. It’s notable that many traditionally top markets, especially in the Northeast, didn’t make the cut. While each city has different strengths and upsides, they all present unique opportunities.” Portland was included in the list due to major expansion and development of our beautiful waterfront where plans are to construct 2,200 residential units, 1.5 million square feet of office space, three parks, and a public plaza and waterfront by 2020.

 

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What’s new in Oregon and Portland? Laws and regulation changes for 2018

Happy New Year!

As we ring in 2018, there are some new laws and regulations that you might like to know about as well as some tidbits of news you might find interesting.

Oregon state birds

Osprey

Western Meadowlark

 

*SCR 18 Designates the osprey as the official state raptor and the western meadowlark as official state songbird.

Is Oregon the only state that hadn’t already designated a state bird prior to 2017?

 

*Oregon state energy tax credits

As of December 31, 2017, all Oregon state energy tax credits were sunset. aints, the state of Oregon had to sunset all tax credits for home owners. However, if you check out Energy Trust of Oregon, you will find there are still rebates available for some energy improvements that include updated appliances, replacement windows and insulation, etc.

*Home energy audits required in Portland

As we have previously announced all sellers within the Portland city limits in Multnomah County are now required to have a home energy audit done on their properties PRIOR to listing their home for sale. This also applies to those selling their homes without a realtor if the home owner plans to advertise the sale via any medium. If you’d like more details, please read Home energy audit will be require for all Portland home sellers beginning January 2018. 

Audit scores will be available for all homes that have had audits performed. The report and score can be found at the Green Building Registry and will also be available on MLS listings for all properties listed on or after January 1, 2018. Homes will be scored from 1-5. The higher the score, the more efficient the home is.

For home owners, this audit can be a big plus because studies have shown that homes with high energy scores generally sell for 2-3% higher prices. It turns out buyers are definitely looking for greener homes and are willing to spend more to save cash on utility bills later on. NOTE: any home listed after January 1 will have an RMLS number starting with 18.

*Mortgage rates have risen slightly since the Feds raised overnight lending rates to banks in December. It is forecast that the Feds will raise rates up to 4 times in 2018 and mortgage rates will rise to 4.6% by the end of 2018. While rates are tied to the mortgage bond, it appears that they are again tracking the yield on the 10 year Treasury bond which hit 2.5% today for the first time in years.

*Core-Logic Case Schiller predict that the housing market will take off with a bang this year throughout the country. This is nothing new for the Portland market where new buyers have been out in force every January for the last several years.

Housing market brief wrap for 2017

Across the country Core Logic reports that housing prices rose an average of 7%. Here in Portland, those numbers ring true as we did experience a bit of a slowdown in our markets beginning late summer. This slowdown lasted throughout the rest of the year in most areas. Lucky buyers out during the end of last year found that there was little competition facing them while sellers were more disappointed to find their homes often selling at or even below list. The houses in the lower price ranges (priced below $350,000 – now considered first time home buyer range) did see more increase in value than more expensive homes and inventory is considerably lower than in higher price ranges.

*Portland slipped out of 1st place for fastest rising home prices in 2017. We were over-taken by Seattle last year but remain among the top five in the US. We had held the 1st place position for about 5 years as the rate of migration into the state was almost more than we could accommodate. We currently rank as the second most popular area for relocations nationwide. 

Here’s a great vegan sweet breakfast treat recipe for you. What a great way to start your day!

Vegan cranberry orange bread – go ahead and indulge with only 153 calories per serving

Total Time: 50m
Yield: 10-12 slices

Ingredients

  • 2 cups spelt, oat, or all-purpose flour
  • 2/3 cup sugar, unrefined if desired
  • 1/4 cup additional sugar OR stevia baking blend
  • 2 tsp baking powder
  • 3/4 tsp salt
  • 1/2 tsp baking soda
  • 2 cups cranberries, chopped (fresh or frozen-thawed)
  • 1 cup orange juice
  • 3 1/2 tbsp oil (see note for fat-free sub)
  • 2 tsp pure vanilla extract
  • 1 tbsp orange zest

Instructions

*The orange zest is important here for best flavor. The cranberries can be subbed with raspberries if needed. I can’t vouch for the taste if subbing applesauce for oil or using a flour not listed here, but multiple readers have said they liked the results of subbing applesauce for the oil, so feel free to experiment. Oat flour will yield a denser bread, which is still delicious in its own right.

Preheat oven to 350 F. Grease a 9×5 loaf pan, and line the bottom with parchment. In a large bowl, stir first six ingredients. Stir in all remaining to form a batter. Pour into the loaf pan. Bake on the oven center rack 50-55 minutes, or until bread has risen and a toothpick comes out mostly clean. Let cool completely. If you can wait, the taste and texture are so much better the next day! Leftovers can be sliced and frozen if desired. My favorite way to eat this bread is glazed with coconut butter. The glaze in the photos is 1/4 cup powdered sugar mixed with 1 tsp orange juice, which is also delicious.

 

New Federal tax law will impact some home owners and buyers in 2018

Now that Congress has passed and President Trump has signed the new tax law, some home owners, buyers and sellers will be impacted by the SALT (state and local tax limits) provisions of the new law. The $10,000 limit includes property tax, state income tax and sales taxes combined. Fortunately Portland property taxes are relatively low as compared to those paid in California or New York for instance. However the Oregon state income tax is third highest in the country at approximately 9%. On the upside, Oregonians pay NO sales tax which is a huge savings to the majority of residents.

Mortgage interest will still be deductible but will be capped at loans at or less than $750,000 beginning this year. IF you owned your home prior to 2018, the cap was $1,000,000, and that $1,000,000 mortgage amount has been grandfathered in for as long as you own your home.

Property taxes are assessed at the county level and are based on purchase price, square footage, lot size, etc. Special assessments for schools, infrastructure, etc are added to tax bills which can result in considerably different property tax bills in adjacent neighborhoods.

As the Portland metro area has grown and housing values have sky rocketed, there are now more expensive homes and more high income buyers in Oregon than just a few years ago. The end result is that we don’t know just how much the new tax laws will affect our housing market beginning this year.

If you’re contemplating buying a new house, it might make sense to check with your CPA to see how the new tax laws will affect you.

 

 

 

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Veterans beware! Some mortgage lenders are trying to take advantage of you

veteransUS government agency Ginnie Mae  and the VA have developed a task force to investigate the more than 1800 complaints about lender harassment of veterans trying to get them to refinance their current mortgages. There are several lenders that are suspected of participating in attempts to “churn” veterans; in some cases as early as only 6 months and 1 day after their initial home purchase closed. (Churning is defined as excessive trading by a broker in a client’s account largely to generate commissions. Churning is an illegal and unethical practice that violates SEC rules and securities laws.)

In addition to mortgagors calling prior clients directly, you’ve probably seen the commercials urging veterans to refinance their current mortgages with lures like “Cash out the equity in your home and get up to 100% of the current value.” Clearly the commercials don’t tell you that every time you refinance your mortgage, it costs potentially thousands of dollars in closing costs, and could increase your mortgage rate as well. This is only a good deal for you IF you really need that cash equity right now. Odds are your mortgage rate is lower than current rates, and that you are not aware that those closing costs will be added to your new loan balance. But for the lender, this is another commission; so all too often the calls are coming from the mortgage company that financed your initial purchase.

It has been reported that these lenders are very aggressive in their marketing tactics to veterans and active military families  sometimes calling often even if you have already declined their intial offer. If you have received any such calls, or begin to receive such calls, please contact the Consumer Financial Protection Bureau so the task force has a record of which lenders are engaged in this practice.

If you don’t really need the money, please be tough and tell the lender to not call again. A refinance will raise your monthly payments and will add a couple thousand dollars or more to your mortgage. Also, the longer you pay on your mortgage, the greater the amount of the payment that is going towards paying down the loan. Each time you refinance, you’re starting that clock all over again.

It’s important for every home owner to remember that the housing market is cyclical, just like the stock market. Values will drop at some point. What if you max out your financing to the current value and then need to sell when your home value is under water?

Currently anyone who has owned their home a couple years or so are sitting on equity; potentially a lot of equity depending on where you live. That’s money in the bank for you when and if you need it at a later date.

Generally we recommend that you refinance your mortgage only if you need to take cash out or if you are able to reduce your monthly payments or if there has been a change in ownership (such as due to a divorce or an inheritance, or transfer of ownership among family members). Otherwise, leave that equity where it is working for you.

 

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