Portland ranked second greenest city in the US

 

downtown Portland goes green

Going green in Portland….This photo says it all!
Portland embodies “green” with a public train,public bus and a bicycle rider all traveling down a tree lined street in downtown Portland

As reported in a recent article published in Architectural Digest this year  Listshack compiled data on cities with populations of 1 million or more residents to compile a list of the greenest cities in America. Their criteria included “five factors, or “green” data points: The number of LEED certified buildings per each 1,000 residents, the percentage of the city’s land area that is parkland, the number of miles of bike lanes per 10,000 residents, the number of farmers’ markets per 10,000 residents, and the number of electric car plug-ins per 10,000 residents. Population also played a role when determining the rankings; everything was brought to scale by looking at the factors per either 1,000 residents or 10,000 residents so the largest MSAs wouldn’t win just based on their size.”

Austin Texas topped the list, followed by Portland Oregon in the number 2 spot.  Washington D.C./Arlington/Alexandria, Virginia, area ranked 3rd, the greater Boston area 4th and the San Jose/Sunnyvale/Santa Clara area of California ranked 5th. Rounding out the top 10 spots were New York/Newark/Jersey City all the way into Pennsylvania; followed by Hartford/West Hartford/East Hartford, Connecticut; then Providence/Warwick, Rhode Island; San Francisco/Oakland/Hayward; and finally Cincinnati, Ohio, and its neighboring areas in Kentucky and Indiana. Seattle; Tucson, Arizona; San Diego; all received honorable mentions. 

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How to win the battle of bugs and weeds around your home and garden with all natural products

It’s the battle of people versus the bugs and weeds as both try to take over our homes and gardens. Take heart, for the most part we can co-exist with most bugs without damaging the environment or killing off the good bugs. Personally I have no love for the weeds, so weeds be gone is my motto as long as I can do it without chemicals and too much work on hot summer days. 

Bugs
Did you know that most bugs have a sense of smell and there are some common household items that bugs do not like the smell of?
1. Vinegar – very few bugs will tolerate and spend time around an area sprayed with vinegar, so feel free to use it liberally to deter pests. This is especially helpful to drive ants out of your house. Personally I wipe down kitchen counters almost daily with vinegar. It works.
2. Essential oils such as peppermint, lavender, tea tree, citrus or neem oils have spiders literally taking their spider webwebs elsewhere. They smell through their feet, so you don’t have to actually spray the spiders, just their webs, and they won’t even walk on them. You can make up a spray bottle with any of a combination of several of these oils, add a few drop of dish detergent, find your target and spray. Keep this on hand because the effects are not forever, so you will have to repeat as needed to keep walkways etc free of spider webs. This works equally well indoors and outside too. By the way, to keep spiders outside, trim plants about a foot away from your foundation.


3. Coffee grounds are great to keep slugs out of your garden beds. If you’re a coffee drinker you probably have plenty around to surround your veggies or favorite young plants with the used coffee grounds. Slugs don’t like that coffee grounds stick to their bellies so they move on. If you don’t drink coffee, try going to the nearest Starbucks or other cafes. They are usually thrilled to have you take coffee grounds away for them, and the plus is that coffee grounds actually nourish the soil. This is so much better than dumping slimy trays of dead slugs that have gone after your good beer in a bowl. Yes slugs love beer, but it’s a nasty mess to clean up.

Weeds
weeds

Is this how big weeds look in your garden?

Weeds are a never ending battle but one that is easily won if you keep on top of it. While some people swear by Round up,  it’s highly toxic and pollutes the ground, gets into ground water, and really does not kill weeds any better than a simple mix of:
1 gallon regular 5% household vinegar
1 cup table salt
1 teaspoon dish detergent
Mix the above in a sprayer and wait for a sunny day to tackle the weeds. It’s best if you can catch the weeds before they flower and set seeds, but if not, just go at it, and repeat as necessary. You should see most weeds die off within hours and certainly within a few days. 
IMPORTANT note here though is that this mix is so effective that you need to be careful to not spray on any plants you care about directly. It will kill your plants as quickly as the weeds you were after. 
If you have weeds growing around the roots of favorite plants, sorry but your best best is to just dig them up.

If weeds have already set seed they’re ready to sprout up somewhere else, so keep vigilant and keep your garden not only looking better but healthier too. Remember those weeds compete with your plants for nutrients in the soil. 

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2017 Oregon Legislative session ends saving important benefits for home owner

The 2017 Oregon legislation session ended last week. Here’s a recap of some of the laws that affect home owners.

HB 2004 – Tenants Rights – failed

Just this week, the long disputed tenants rights bill failed to pass in the Oregon legislature. This is very sad news for tenants, but a huge relief for landlords. It was a poorly written bill that would have enhanced protection for tenants, but was unfairly anti landlords. Tenants will certainly be working to protect their rights again next year, and hopefully a better bill will be written and passed.

In the meantime, renters will retain the rights they already have, which differ from city to city. Before moving, renters should check with the tenants rights groups for the city they are considering moving to so they understand what laws apply to them already, and which laws do not. 

HB 2006 – Mortgage Interest Deduction – failed

This bill would have eliminated the MID (mortgage interest deduction) for individuals making $100,000 or more ($200,000 for joint filers). HB 2006 would have also capped the amount of interest that could be deducted for those individuals making under $100,000 ($200,000 for joint filers) at $15,000 on their primary residence. In addition, the bill would have eliminated the MID for second homes. This bill didn’t get the attention from the public that it probably should have, but the OAR (Oregon Association of Realtors) fought it on home owners behalf. 

With ever increasing housing prices and mortgages, this bill would have hurt just about every home buyer who paid anything close to current average prices for property, especially in the early years of a mortgage when just about all of the principal and interest portion of the payment goes to interest. The interest rate deduction helps middle class families and should not be eliminated. 

HB 2771 – Eliminating the Deductibility of Property Taxes – failed

House Bill 2771 would have phased out the itemized deduction for real property taxes for incomes between $50,000 and $125,000 for single taxpayers and between $100,000 and $250,000 for joint taxpayers. In addition, the bill would have eliminated the ability to deduct property taxes for single tax payers making $125,000 or joint tax payers making $250,000 or more in a year.

Again OAR fought this bill on behalf of all home owners. Home owners should not be the only ones who contribute to state budget shortfalls. And tenants should be equally concerned about these laws since bills eliminating tax write offs for landlords would only serve to increase rents to help those property owners shoulder the additional costs.

 

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Average Portland home prices soar to $423,700 while mortgage rates dip slightly

houses make you moneyNationwide, housing inventories have reached crisis proportions. There is a severe lack of available homes for sale everywhere. Home values are increasing an average of 5+% throughout the country. But here in the Pacific NW, home prices are surging faster than anywhere else in the country. Average prices in Seattle are up about 12% per year, while Portland in the #2 position is seeing average value increases of 10.7%.

Remember, these are average price and value increases. There are some neighborhoods with lower inflation rates, but there are also many with much higher rates. Currently zip code 97233 (Centennial, Rockwood and Mill Park) is leading the metro area seeing prices and values up 19.7% for 2016 and early 2017! This means that if you are currently a home owner in 97233, you’ve watched your home value increase about $2500 – $5000 every month for the last year and a half – depending on size and condition of your home and immediate neighborhood. Still closer in areas such as Tualatin, Tigard, West Hills, Hawthorne, Rose City, Alberta and more are also seeing inflation between 10-15% annually so you’re not being left behind. 

Spring and early summer months are the busiest months of the year for home purchases. 

Buyers are out in droves, so homes are selling as quickly as they hit the market; often with multiple offers and often selling for considerably more than list price.

According to RMLS, new listings for May hit their highest level in May 2017 since May 2008 but demand was so strong that inventory levels actually dropped .2 months (down from 1.7 months to 1.5 months once again.)

What does this mean for buyers?

If you are a prospective home buyer, once you make up your mind that you’re ready to get out and start looking at homes, there are a few things that you should get in order before you proceed. First and foremost, whether you’re paying cash or financing the purchase, get your finances in order.

  1. If you are going to be financing the purchase, get your pre-approval. This means you will need to get your paperwork together for that lender. 
  2. If you’re a cash buyer, be sure your funds are free to use (if you need to sell stocks or move funds from a retirement account, that shouldn’t be left until the last minute.
  3. If you need to sell a home, get it on the market. I know this could put you in a difficult position of needing to move in with friends or stay in a hotel if your house sells too quickly, but sellers need to know that you’re serious and you will need to present proof of your ability to go through with the purchase if your offer is accepted.

Many sellers won’t even allow you to view a home or consider an offer from you without the above business details being in order.

This doesn’t mean that you shouldn’t go out and take a look at a few homes just to see what’s available in your price range. But, it really doesn’t make a lot of sense to just go out looking at lots of homes until you’re a serious buyer because prices and values are moving so quickly. The home you’re viewing today at $300,000 will cost and be worth considerably more in 6 months. Still some looking around in advance will help you understand better what your dollars will buy in different neighborhoods, and that’s a good thing to know as you begin this process. 

Strike while the iron’s hot

Boom markets never last forever. The markets ebb and wane all the time. But the old adage to “strike while the iron’s hot” has never made more sense.

strike while the iron's hotMost buyers are not looking for their forever house. They just want a home of their own and the stability of knowing that their monthly payments are locked in (other than tax and insurance increases). Of course obvious. Your purchase starts making you money in the form of equity often before the transaction even closes, and of course the tax advantages can’t be overlooked either. Mortgage interest, property taxes and even mortgage insurance are all tax deductible, so your monthly income rises once you become a property owner.  

 

You might like to read 15 fastest selling neighborhoods in Portland as of June 13, 2017

 

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Pacific NW cities dominate fastest rising home prices in the US

Portland skyline with Mt Hood

Seattle skyline

Portland skyline with Mt Hood

 

 

 

 

 

 

 

The 20 largest cities comprise the list of metro areas that most economists watch as they compile statistics about how most of the economy is functioning. Of course, the same 20 cities are those that are most watched for housing market statistics and trends. In the Pacific Northwest, the most watched cities are Seattle and Portland. AND, Seattle and Portland are #1 and #2 cities in the country with the greatest price and valuation increases for 2016 and into 2017. 

For several years since the housing recovery began Portland topped the list of 20 with the fastest rising housing prices in the country, but we’ve dropped to the #2 position as Seattle has surged ahead of us. Currently Seattle is seeing average 12% annual home price increases, while here in Portland we’re close behind at 10.7%.

Average home prices in Seattle reached $700,000 last month while Portland home average prices increased to $425,000

Like Seattle, in Portland new home construction homes are the priciest; renovated old turn of the century homes are almost as costly, while mid century homes are where the “bargains” can be found.

Developers are snapping up run down mid century homes where they can split the lot and build 3 skinny houses at a huge profit. But developers also love the high end neighborhoods and have no qualms about tearing down those beautiful old estates to cash in on the higher prices of new construction homes.

 

 

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Did you know that money really does grow on trees?

Most people who live in the northwest visit parks often and appreciate the trees for their appearance, the shade they provide and the ambiance they create. We love our parks. But did you know that trees on your property really do add value to your home? Actually, most buyers are aware of the value of trees, perhaps somewhat intuitively, since homes with trees and attractive landscaping appear more inviting. Realtors know how much buyers appreciate beautiful landscaping which is why you will often see information about the landscaping, trees, etc in a property description. Now there is real scientific data to support what we all knew.

According to a study conducted by the the Pacific Northwest Research Center of the United States Forest Service planting a tree in front of your house will increase the sales value by approximately $7,130 in the Pacific Northwest. 

“Two recent studies by Geoffrey Donovan, an economist and research forester at the Pacific Northwest (PNW) Research Station, and David Butry, an economist with the National Institute of Standards and Technology, yielded specific dollar values for street and neighborhood trees in Portland, Oregon, and for yard trees that provide summer shade in Sacramento, California. This research is important to city governments, communities, and environmental organizations because it helps them make a case for publicly funded “green infrastructure,” that supports many environmental and social amenities.”

These studies have enabled scientists to develop a “benefit-calculation model” to come up with realistic valuations for absence or presence of trees and mature landscaping on a homes value. The algorithm used is similar to the methodology used by appraisers in determining the value of a 3 bedroom house vs a 2 bedroom house in the same neighborhood. 

 

street trees in a neighborhoodFor home owners, trees are a valuable asset, and trees in your own yard, or better yet, street trees throughout a neighborhood make the whole neighborhood appear lush and inviting and raise the values for all home owners nearby. According to a University of Washington research survey:

  • Mature trees in a yard add 2%
    • Mature trees on the street add at least 3% for all home owners on the street
    • Trees in the front yard add 3-5%
    • Mature trees in high-income neighborhoods add 10-15%. Incidentally, it has been found that higher valued neighborhoods have far more tall mature trees than more suburban neighborhoods. 

benefits of treesBut beyond the value of mature trees on the sales price of your home, trees help in many other ways that put real cash in your bank account. You’ve probably heard all this before but here goes the list:

  1. Trees add shade, which keeps your house cooler during the hot summer months. In fact, according to the Forest Service, a tree planted on the west side of your house can reduce air conditioning use by 30% in a single year. 
  2. Trees clean the air of contaminants and if you remember your science classes breathe in carbon dioxide and breathe out clean oxygen which decreases your carbon footprint while cleaning the air around you. This in turn cuts down global warming. 
  3. Mature trees are a great wind break and again can help reduce your heating costs up to 30% a year by effectively reducing a 35 mph wind to 10% during the coldest windiest months of the year. 

The city of Portland has been paying attention to how trees add value, not only to a home owner, or a neighborhood, but also to the city. As home values continue to rise, cities benefit by higher property taxes. Portland has been paying attention so as early as 2013 Portland decided to plant 33,000 trees throughout the metro area within 5 years, especially in the 55% of the city where more trees were needed. We are still in the process of competing that plan. This not only adds to the city coffers, but also is part if the city plan to keep Portland green.

Are you ready to start growing your own money trees?

You don’t have to buy fully grown trees which are expensive and much more difficult to plant. You can start with smaller plants, perhaps as small as in 1 gallon pots and watch those trees grow along with the equity in your home.

You might also want to read more about Factors that can increase the value of your home

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Mortgage Rates dip again

Mortgage rates have backed off the highs we saw right after the start of the year when the stock market went into overdrive. There were lenders quoting rates at or near 4.5% at that time. The good news is that rates appear to be below 4% again, so if you’re thinking of buying, this is still a good time. Who knows how long this will last? Just a reminder that you need to shop lenders. Rates can vary as much as 1/4% – 1/2% from lender to lender. 
 
The average home price in the Portland metro area has again topped $400,000. This also means tthat homes priced below $300,000 are becoming harder to find, even when they are fixers, and they sell quickly. Single family detached homes priced below $200,000 have all but disappeared now though there are still condos and town homes available from time to time. With the higher prices, we’re seeing much more home sales activity in outlying areas in NE and SE Portland. According to RMLS statistics neighborhoods east of I-205 are seeing a surge in popularity and in fact a few neighborhoods are reporting more sales in 2017 than some of the very popular close in areas like Multnomah Village, Concordia or Hawthorne. 

For those who are waiting for the inevitable slowdown in housing prices, it is forecast that we are unlikely to see that until 2020 because economists at city planning say that the Portland metro area is currently about 24,000 housing units short of demand and it will take that long for developers to catch up. 
If you are “forced” to buy a home further out from downtown, I wouldn’t fret about it. I doubt it will be long before the bellweathers that forecast that a neighborhood is great, like the opening of a New Seasons or Trader Joes always seem to follow where the population is moving, so watch for news that a new store is opening in outer NE or SE Portland.

By the way, for those of you on the west side, Forest HIlls, Bethany, Beaverton, Tigard, and HIllsboro are still right up there for number of sales as people continue to buy on the west side of town too. In fact, Forest Hills/Bethany had the most sales during the fist quarter of 2017.

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FHA and VA raise loan limits in Oregon

We thought it was never going to happen, but rising home prices and values have finally caught the attention of the powers that be and both the FHA (Federal Housing Administration) and VA (Veterans Administration) have finally increased loan limits to $408,250 in the Portland metro area and in Yamhill County. That’s a pretty decent increase from $368,000. Conventional financing, (Fannie Mae and Freddie Mac) have also increased loan limits to $424,100.

If you live in other counties in Oregon, please check to find out what your current FHA loan limits are. It appears from a brief check that VA loan limits are the same as the new FHA limits in all Oregon counties.
 
This is no way keeps pace with the ever higher prices in our area, but it will make purchasing a home easier for many buyers, especially those who are using FHA and VA financing.

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How long do hot water heaters last? Is it time to replace yours?

tags on hot water heatersDo you have any idea how old your hot water heater is? There should be a tag on the front of your water heater that looks similar to the photo. At the very least it should have the model number and serial number so you can google those numbers to find out the age. But many more labels are similar to the photo with the actual age the unit was purchased and installed in your house.

The BAD news is that most home water heaters are too old to be considered safe anymore. The average life span of a water heater that has been well maintained is only 8-10 years. After that many will develop leaks that could lead to flooding and expensive damage to your property.  The good news is that water heaters are relatively inexpensive to replace. Read more about saving money if you replace your hot water heater this year…

If you’re even thinking you might move one day, rather than purchasing another water heater that stores water, you might look into an instant on hot water source. Yes, they cost more, but:

  1. If you purchase a qualifying instant on hot water system, you will qualify for an Oregon tax credit (which can offset part of the cost of the unit).
  2. Your investment will increase the value of your house – and the more energy efficient items you have in your home, the higher the value (up to 4% more than a comparable home in the same neighborhood with a lower energy score.)

Most states offer tax credits and other forms of rebates to property owners who install energy efficient appliances. In Oregon, energy saving appliances and home improvements could qualify for both an Oregon state tax credit AND an Energy Trust of Oregon rebate for the 2017 tax year. Unfortunately, all federal tax credits for energy improvements expired in 2016, and to date there has been no discussion about extending those credits for 2017.  

 

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Housing market takes off like a rocket in Oregon and Washington in 2017

 

lockbox activity end of Jan

RMLS reports showed massive increases in buyers looking at homes during the week ending January 22, 2017. Washington viewings were up 54.3% while Oregon viewings increased by 47.8%.

It is not unusual to see almost frenzied buyer activity during the month of January. We’ve seen it every year since the housing market recovery began in 2012. This year buyers are citing the added pressure to find a home as quickly as possible because we are seeing significant increases in mortgage interest rates which has many buyers scrambling to lock in a their home before rates go any higher. Buyers are very aware that banks will have free reign to start raising rates as quickly as possible this year, especially since President Trump has been saying that he will be rolling back many banking regulations via Executive order very quickly. The only thing that has kept a slight damper on massive rate hikes since Trump’s election is competition. Banks do want your business, so they can’t charge ahead and start increasing rates willy-nilly so to speak.

But in talking with mulitple mortgage lenders, I’m finding that rates are anywhere from 1/2% – 1% higher than they were just a couple months ago. Last week, lenders quoted best 30 year mortgage rates ranging from 3.8% – 4.5%!  That’s a huge range, so it definitely pays to shop around. The average rate quoted was 4.25% for all the lenders surveyed.

One of the factors that is hindering buyers in the Portland metro area is the extreme shortage of inventory. As of the end of December 2016, inventory had again dropped to almost record lows at 1.3 months (the amount of time it would take to sell all inventory if no new listings are added.)

Buyers do need to be aware that the shortage in inventory with high demand WILL push prices higher. If you couple the higher prices with higher rates, unfortunately many potential buyers could find themselves priced out of the market.

You might like to read How inflation affects your ability to buy a house ~ perhaps more than you think. 

 

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President Trump signs executive order eliminating the 1/4% FHA mortgage rate cut just announced

A new President, a new day! But not a good day for first time home buyers nor President Trump supporters.

With one quick stroke of his pen, on day one, President Trump took back the FHA mortgage insurance rate cut that had just gone into effect on January 9, 2017. For the average home buyer using FHA financing, this will cost each of you an average of $500 per year. Here in the Portland area, this will cost you between $700 – $900 per year. Not necessarily a deal breaker for many of you, but why in the world did he do that?

FHA has the reserves now to support this rate drop. Perhaps you should ask him.

Please read the article just published yesterday about this rate cut for more information

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FHA lowers mortgage insurance premium for most home buyers – maybe?

In an effort to attract more home buyers to the FHA financing option, on January 9th, FHA announced a reduction in the monthly mortgage insurance premium that most home buyers will pay by 25 basis points for new mortgages closing on or after January 27, 2017.**

FHA says that they have finally reached a stable point in their finances after the enormous losses they endured during the housing collapse. The last four years of housing growth and stability has allowed the FHA to recoup their losses and they want to pass some of these savings on to home buyers to make housing more affordable.

To put this into perspective, for a mortgage of $368,000 (the maximum allowable mortgage for the Portland metro area at this time), this would equate to a monthly savings on your payment of approximately $76.00 (an annual savings of $912).

However, it’s important to remember that mortgage rates have risen over the last several months. We are no longer seeing the low rates we had grown accustomed to over the last 4-5 years at below 4%. Average 30 year fixed rate loans as of today are around 4.25%, even for those with the best credit. So this .25% rate reduction for FHA mortgages only partly offsets the rate increases. Still, every little bit helps, and FHA is the best financing option for prospective home buyers with less than 5% down payment.

In contrast, a conventional home loan will cost the home buyer more to purchase. While there are conventional loans requiring as little as 3% down payment, these are available to only those with the best credit scores; AND the mortgage rate rises for buyers with less than 20% down. FHA rates are the same for those with low down payments  and less than perfect credit, though there is a minimum credit score requirement of at least 620-640 at this time.

**NOTE: I apologize for this footnote, but just as I hit publish on this article, the following news came across: As of yesterday, National Mortgage News reported that Trump is recommending that this reduction in mortgage insurance premiums be delayed until it can be further reviewed by his new Secretary of Housing and Urban Development Ben Carson. This is purportedly just one of the Executive orders that he intends to sign as soon as he is inaugurated.

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2016 Portland housing market wrap

Final housing stats for 2016 are out. There weren’t many surprises, but there were a few.

Overall, the market was not quite as hot as 2015. Total sales were down a bit for the year, but not by much. According to RMLS, “Activity was cooler in 2016 than in 2015. Comparing all of 2016 to 2015, new listings (41,121) increased 0.7. Closed sales (32,798) decreased 1.5% and pending sales (33,234) decreased 3.9%.”

2016 housing market value increases

Housing values increased by an average of approximately 11.4% for the year for all homeowners throughout the Portland metro area. (Of course, some neighborhoods saw bigger increases while others saw a bit less. But there were no neighborhoods that saw values decrease during the year.) So, for those of you still on the fence about buying, owning a house is not only a good way to stabilize the percentage of your monthly income that goes towards putting a roof over your head; it also makes home ownership a very good investment for your future.

shopping for a houseAs of the end of 2015, the average home price was $347,000 but by the end of 2016, that number had risen to $395,000! Clearly Portland is no longer a low priced city to retire in. There has been a lot of speculation about whether or not we are soon going to be the next Seattle or San Francisco in terms of home values. That remains to be seen, but Portland is still a lot more affordable than either of those cities which in part is what is driving so many migrants to our area.

Extreme weather caused slowdown for housing market in December 2016

December 2016 experienced quite a slowdown in home purchases and listings with the extreme weather we experienced for much of the month, but that should come as little surprise to anyone. January 2017 is also off to a bit of a slow start with the recent snow storms, but is expected to pick up as the snow melts away and warmer, or at least drier weather returns.

Get your buying hats and shoes on. Housing inventory closed out 2016 at only 1.3 months (the number of months all houses would be sold if no there were no new listings.) But, we are seeing quite a lot of new listings hitting the market already this month, so we expect buyers to hit the streets as we have seen in January for the last few years. 

In case you missed it, you might want to read Seattle – Portland fastest rising home prices nationwide

 

 

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Feds raise rates today – how will that affect you?

Today the Feds announced just the second rate increase since 2008. The justification for the rate increase was that the economy continues to get stronger and move closer to the 2% inflation rate that the Federal Reserve considers a solid rate of inflation for a healthy economy.

Fed speak indicated that it is anticipated there will be 3 more rate increases in 2017. 

Federal funds rates do not directly affect mortgage rates but…

Federal funds rates are the rates that banks charge each other for short term loans they need to keep their reserves at a set level to ostensibly prevent another bank melt down.

The federal funds rate can directly affect the cost of housing, rates paid on credit cards, auto and other installment loans and student loan rates.

Mortgage rates are not directly tied to federal funds rates, but banks do find ways to pass on current and anticipated future costs to consumers. With the forecast that bank short term borrowing rates are likely to increase at least three times in the next year, banks are already looking at the losses they will be incurring on the hundreds of millions of 30 year fixed rate loans with rates at and below 4% that have been funded over the last 8 years; as well as losses they will sustain on new mortgages funded now before more rate increases kick in during the coming years. 

However, to put all this in perspective, the banks have been paying basically zero per cent over the last 8 years, while the lowest mortgage rates funded during that same time period was 3.5%. Not to mention that banks have been charging fifteen to twenty percent on credit card debt. This is why most banks are not hurting at all, and in fact have been more profitable than ever over the last several years since the recession ended. 

As regard mortgages, as of today, the average rate for a 30 year fixed rate loan has risen to 4.3%, up from 3.5% available from many lenders to the most qualified buyers just a few weeks ago. 

Still on the fence about buying a house? The forecast is that rates will continue to rise which will reduce buying power for most applicants. It is possible mortgage rates could rise as much as one per cent in 2017. If you’re currently home shopping, be sure to keep in touch with your lender AND keep your pre-approval up to date so you’re aware of how much you can afford at all times. 

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Seattle – Portland fastest rising home prices nationwide

sold - sale pending signsAccording to the S&P CoreLogic Case-Schiller home price index, Seattle and Portland are leading the country with the fastest rising home prices in the twenty major metropolitan areas they follow. Seattle has had year over year price increases of 11% annually through September 2016, while Portland follows right on Seattle’s heels at 10.9%. Remember, these are average prices and some neighborhoods within these metro areas have seen prices rise much more dramatically year over year. 

According to Professor Gerard Mildner at Portland State University’s Center for Real Estate, the issue is that developers are just not building enough housing to meet the demand. He added that here in the Portland metro area, “We’re building about 20 percent fewer housing units in the last three years as compared to the years between 1990 to 2007.” At the same time, our rate of growth as been explosive with as many as 150 new residents moving into Portland every single day! That number varies from report to report, but numbers I’ve seen range from as low as 112 daily to as high as 165 people migrating into Portland daily. 

Housing inventory has sat at or below 2 months (the time it would take to sell all listed homes based on current demand if there were no new listings) for the last few years, and demand is on the rise with recent rate increases. 

How much has demand risen?

Lockbox activity 12-4-2016

Just to give you some perspective on demand, check out the chart issued by RMLS that shows the amazing increase in number of home viewings the week ending December 4, 2016!

Since the election, rates have been rising at the fastest pace we’ve seen in years, so buyers are jumping off the fence and getting to work finding that new house. On average rates are up at least 1/2% in the couple weeks! 

 

 

 

Is Portland experiencing a housing bubble?

The general consensus is NO. 

First of all, the population and business influx that we are seeing in this decade did not exist prior to the housing collapse on 2007-2008. Sure we saw people moving to Portland from all over the country, but the jobs increases due to the movement of big industry creating satellite offices here is a relatively new phenomenon. 

We have not seen the wage increases that would support price increases continuing at the rate we’ve seen over the last 3-5 years (up 32.5% in the last 5 years), but the lending guidelines (assuming that they are not over-turned with the new administration) are so much more stringent that current home owners and buyers are not nearly as likely to default as they were during the recession. High risk banking and lending practices and loan products have all but disappeared. 

Home ownership remains an American dream

Most  people interviewed want to be home owners. There is stability in knowing what your housing payment will be from year to year (versus rapidly rising rents); and where else can you see as great a return on your investment as current home owners are seeing?

As mentioned above, until supply catches up to demand, housing prices in Portland will continue to rise. At least that is the forecast until at least 2020. To be sure, the rate of inflation in housing values will slow as supply catches up to demand. There could even be a 10% price reduction in the next 10 years, but if your home value has increased by 30% and more, that’s not devastating, especially if you know your housing payment will not increase. 

Please read more in the article published by Ettro Capital in November 2016.

 

 

 

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Housing market forecast for 2017 – Portland Oregon

Housing prices UPHousing prices and mortgage rates have very different factors driving the direction of both. If rates rise, will housing prices drop? I’m asked this question all the time. Many people assume that rising rates should cause housing prices to drop.

The truth is that no one can say for sure what’s going to happen with the housing market in the future. We know for a fact that both prices and rates are cyclical; but that’s because of all the many outside factors that influence the two markets. And to be sure, it’s important to remember that these are two very different markets.

Mortgage rates are tied to the Mortgage bond market

When demand for mortgage bonds drop, the yield on the bonds tends to rise and mortgage rates will follow suit. The demand for bonds tend to rise when Wall Street is in a slump. This causes the price for bonds to rise, so the yield drops and rates drop too. Conversely, when the bulls take over Wall Street, as we are seeing since the recent presidential election, institutions sell bonds and buy stocks. As bond prices fall, rates rise.

It would be an over simplification to say this is always true – there are always other factors that are part of this equation, but in general, WATCH WALL STREET! There is no doubt that when the Feds stop buying mortgage bonds to keep that market stable, mortgage rates WILL rise. The 10 year Treasury bond yield, which historically mortgage rates tended to mirror has risen more than 1% since the elections, and mortgage rates have followed though not quite as quickly. Mortgage rates bottomed at around 3.5% and that rate was available as recently as a few weeks ago. As of today, average 30 year fixed rate loans are available at 4.3%.

Housing prices are tied to supply and demand

Unlike mortgage rates, the price of housing is dependent primarily on supply and demand. When inventory is very low, as we have seen in Portland since about 2012, housing prices rise until inventory catches up, or demand drops.

Here in Portland the forecast is that housing prices WILL CONTINUE TO RISE for at least the next couple years. It will take that long for there to be enough inventory to meet the demand. Though, if mortgage rates rise dramatically, many potential home buyers will be priced out of the market.

Why is housing inventory so low in the Portland metro area?

  1. Migration – there are far more people moving into Portland than out. As of 2015 migration numbered approximately 112 people moving into Portland every day! Portland’s population is now at approximately 2.5 million residents and still growing. More recently we are hearing migration numbers have increased to closer to 150 new residents every day.
  2. Jobs and the economy – Industries are moving into Portland bringing some of their own employees with them, and boosting the economy by adding jobs for local residents. Recently, Amazon announced that they will be opening a giant warehouse in Washington county that will employ approximately 1000 people! Add this to Uber, Google, Airbnb, Ebay, plus all the smaller tech start ups, and you can see that there are jobs in this area, and people migrate to areas where employment is available.
  3. Climate – Unlike California and much of the southwest, Oregon has a fabulous moderate climate. Yes, it does rain approximately 141 days of the year, but most of those days we see some sunshine too. And the temperatures are moderate. We have few days below freezing or above 90 degrees. The rain keeps Oregon green and water prices low as compared to much of the country. 141 days of rain means we rarely have water rationing. There’s plenty of water to go around, even for those who like long showers. 
  4. Competition from institutional buyers – with prices relatively low and on the rise, institutional buyers such as hedge funds find Portland a great place to invest so they buy up much of the lower priced housing; competing directly with home buyers who actually live here. Unfortunately they hold these properties as investments and drive up the rental costs along with the housing prices. 
  5. Green economy  – Travel and Leisure magazine ranked Portland the greenest city in America in 2015. 
  6. Millenials are moving to Portland in huge numbers due to all the above factors and have been choosing Portland since around 2010.

All these trends are likely to continue which will continue to contribute to ever higher housing prices.

 

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Election is over – watch mortgage rates rise

The election is over, and whether you supported Trump or Clinton, we all have to face that we are now looking at President-elect Donald Trump. As you know, he promised when elected, during his first hundred days he would push to roll back much of what President Obama accomplished. Unfortunately for consumers, this means much of the consumer protection legislation that was passed could disappear or be seriously revised. 

Since the recession, the Feds have kept interest rates low and continued government subsidies for mortgage bonds to keep mortgage rates low. However, Fed Chairman Yellin has already signaled that an interest rate hike in December is likely and that mortgage bond subsidies will end at that time.

Mortgage rates up approximately 1/2% in last few weeks

In the meantime, mortgage rates started rising even before the elections, and have picked up speed since the results were announced. Lenders tell me that average mortgage rates are already up about 1/2% in the last few weeks. Corporate America and of course this includes banks, are thrilled about the plan to lower taxes on the corporations and the wealthy. If you couple those tax cuts with regulation roll backs, who really knows where mortgage rates could go? 

One of the potential Fed Chairmen that Trump has been talking with has said that it’s time for rates to return to a more normal level. This means we could be looking at as much as a 2% increase over the next 2 years. That would normalize our mortgage rate environment which many of you may have forgotten typically runs around 6%.

Stay tuned. This could be a very different year than the last eight years since the recession. 

 

 

 

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Fall and early winter are best seasons for both home buyers and sellers

Fall colors

Fall colorsLate October through the end of December  are always the best months for home buyers and sellers to either get their properties listed or hit the streets in search of the perfect house. This may sound counter-intuitive, but the reason is low inventory and serious buyers.

Relatively speaking few people list their homes during the latter part of the year, especially as we move closer to the holidays. Home owners get involved in home decorating, holiday shopping and of course, all those special holiday activities. They’re busy and don’t want to be bothered with keeping their homes as clean and orderly as possible for potential buyers.

Buyers also get busy, but serious buyers are looking to take advantage of less competition, hoping to avoid bidding wars and perhaps more negotiating power with sellers. Besides, even if they cant close a sale prior to year end, moving into a new home is a great way to start a new year. 

Feds meet again in December

The Feds are scheduled to meet again in December. The elections will finally be behind us, but there has been a lot of talk about raising interest rates one last time this year. Wall Street has seen corporations reporting strong earnings for the 3rd quarter of this year which makes it even more likely that the dreaded rate hikes could be upon us sooner rather than later. 

There are even rumors that the Feds will back off on their massive purchases of mortgage bonds low which have been keeping mortgage rates so low since the recovery began in 2012. Remember, even a small increase in mortgage rates will affect your buying power.

So, whether looking to buy or sell, don’t write off the later months in the year. 

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Portland ranks #1 best city to live by Bankrate

Recently Bankrate rated all the metro areas in the U.S. and determined which are the best and worst cities to live in based on multiple criteria.

Best places to live in the US

Metro differences that matter

According to Bankrate, “Based on Wachter’s advice and some of our own research, we selected factors that influence the overall cost and benefits of home ownership and set about finding the best data available to measure them. They include:

  • Property taxes.
  • Affordability.
  • Property insurance costs.
  • Foreclosure rates.
  • Maintenance costs.
  • Average monthly home energy costs.
  • Appreciation rate.
  • Rent hedging.”

Out of a possible score of 80, Portland ranked the highest with at total score of 60.58.

Unlike many similar rankings, Portland was the only west coast city among the top ten, with other west coast cities such as Seattle, San Francisco, San Jose, Los Angeles and San Diego considerably lower in the rankings.

Portland had among the lowest foreclosure rate in the country, and THE lowest costs for property insurance!

Read more: http://www.bankrate.com/finance/real-estate/best-worst-places-for-homeowners.aspx#ixzz4L12M3KY2

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Should Portland home sellers be required to get a home energy score before selling?

energy star logo as seen on most appliancesThe city of Portland is proposing that all Portland city residents be required to have an energy audit and obtain a home energy score prior to listing their homes. There are approximately 160,000 single family homes in the city of Portland, but fewer than 2% of owners have an energy score. Why does this matter?

As shoppers, and we’re all shoppers, we want as much information about what we’re buying as we can get. We look for labels on food, automobiles, energy labels on appliances, etc. But home buyers want more information, and without an energy audit and score, that information is not readily available.

The framework for energy audits for houses in Portland was first established in 2009. By 2013, the training program for certifying energy scoring professionals was underway, and yet, here we are close to the end of 2016, and fewer than 600 Portland houses have had an audit done.

Portland has a Climate Action Plan that proposes that by 2050 Portland will reduce carbon emissions by 80%. But how can we achieve that goal without knowing how much carbon is emitted into the atmosphere by each house without audits? We already know that residential buildings account for approximately 50% of the total carbon being released into the atmosphere from buildings. (According to the proposal, “By April 2017, 80 percent of Portland’s commercial building square footage will be reporting energy performance.”)

More about energy audits

Before everyone panics, you should know that an energy audit takes only 45 minutes to an hour to complete, and costs only approximately $150-$250 per house. On the upside, a house with a high energy score will generally sell for up to 4% more than one with a low score, or no score at all. (With average home prices in Portland now around $400,000, you just might net a lot more money when you sell your house.) So, in spite of a lot of opposition, this is really a no brainer for both buyers and sellers alike IF the proposal is drafted property (see below for reasons to opposition). Most home owners are upgrading their homes all the time. So why not pay a little extra for more energy efficient appliances, better insulation, and regular home maintenance to improve your energy score? It makes your home more comfortable to live in and reduces your energy bills to boot.

The other upside to going energy efficient is that there are both state and federal tax credits for many of these purchases, as well as rebates issued by Energy Trust of Oregon, and sometimes even the approved contractors who install these purchases. I’ve even been told by one prior client that installing an electric heat pump instant hot water system was almost a net zero purchase with all the credits he received for the purchase. AND, of course, if you’ve ever looked at your Portland water/sewer bill, you will have noticed that the sewer portion of the bill is usually higher than the water usage portion of the bill. With instant on hot water, you’re not paying for all that water that runs down the drain while you wait for the hot water to get to your kitchen, bathrooms, and laundry room.

And one last benefit is that with a good energy score, when you sell your house, you qualify for appraisers who are certified to value your home with your energy upgrades. That is no small bonus these days when all too often homes are appraising lower than actual sales price.

How will this information be passed on to prospective buyers? Home owners can obtain a score at any time and report their scores to the city of Portland via mail, fax or online. The city will make this information available on Portlandmaps.com, and of course, listing agents will enter this information into the RMLS when the house is listed.

Why so much opposition to requiring energy audits?

According to PMAR (Portland Metro Association of Realtors), this proposal is poorly drafted.

  1. There aren’t enough certified auditors yet, and most who are certified are also selling some of the “green” products you might purchase anyway.
  2. There are multiple scoring systems. In any given metro area, the scoring model must be consistent so consumers will understand the reports and scores.
  3. We are already experiencing an appraisal crisis here in the Portland metro area. It’s not unusual for it to take 4-6 weeks and even longer in more outlying areas to get an appraisal done. Are there enough appraisers out there who are certified to value energy efficient homes?
  4. The audit must be completed prior to listing a house. For someone who is ready to list now, this could delay that transaction, perhaps for months. This could potentially be a disaster for someone who has just lost a job or is experiencing some other type of life crisis.
  5. Why are banks exempt from this disclosure?
  6. Why are rental properties exempt from this disclosure?
  7. Finally, why does this proposal apply only to homes within the Portland city limits? Does this mean that home buyers in Washington, Clackamas and Clarke counties don’t care about energy efficiency?

What other cities have passed similar policies?

Several U.S. cities have passed similar disclosure policies for their market, including Austin, Texas; Berkeley, California; Santa Fe, New Mexico; and Boulder, Colorado. Internationally, residential disclosure policies are in effect in the United Kingdom, Denmark and Australia. The reduction in carbon emissions is apparently already noticeable where audits are required.

Please read the full scope of the proposal for more information.

 

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Is Amazon planning to open an office in Portland?

Amazon logo

Amazon logo

 In 2015, Amazon bought out Portland’s Elemental Technologies. At that point, the Portland Business Journal began speculations that the purchase could signal a much bigger Amazon presence in Portland in the coming years. They were talking potential Intel sized expansion with multiple campuses since Intel began with just one campus all those many years ago. There are few businesses with the financial capability to support multiple campuses, but Amazon is definitely one of those businesses.

There is no confirmation from Amazon yet, but apparently the word around town; according to Portland Business Journal reporter Malia Spencer is that Amazon is recruiting developers for a Portland office. Rumor has it that interviews will begin in July and positions could be filled as early as August this year.

What does a big Amazon presence in Portland mean for our housing market?

More jobs for those in the higher income levels means more competition for a housing market that can’t keep up with demand already. This generally signals that our housing prices will continue to rise. We’ll just have to watch to see how this all pans out this summer and beyond. 

 

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Friends of Trees of Portland

snoozing in you hammock

I know, this sounds like a “tree hugger” article waiting to happen. Well, it is, and it’s not.

If you’re not familiar with Friends of Trees, please allow me to introduce this great non-profit organization whose only mission is to bring people together to plant and care for city trees and green spaces in Pacific Northwest communities; including trees for your own property.

Through their Neighborhood Trees program, homeowners buy trees at a great discount to plant with their neighbors at weekend plantings. For $35-$75, you’ll receive a healthy 8-12′ tree, delivery, hole digging, planting assistance, mulch, stakes, and follow-up maintenance checks: a $200 value! They also offer scholarships to people who can’t afford a tree, and if you need a permit to plant trees in your mowing strip, they’ll even help you with the permitting process (which is free).

 

Through the Green Space Program, trained crew leaders guide volunteers at weekend events to restore green spaces.

Since Friends of Trees was founded by Richard Seidman in 1989, they have planted nearly half a million trees and native plants in the Portland – Vancouver and Eugene-Springfield metro areas. This year they have also expanded into the Salem metro area as well.

Street trees add value to every house in your neighborhood

IF you’ve been thinking about planting a fruit tree in your yard, or a towering Douglas Fir (Oregon’s state tree), Friends of Trees is currently giving away several fruit tree varieties and lots of evergreen trees too. They can even tell you which trees would be best for your mowing strip, if you’d like to get your neighborhood involved in planting great street trees that will not only look great, but will also increase the value of every home in your neighborhood by as much as 8-10%. Sure property values are soaring around here anyway, but who wouldn’t like to see their property value increase another 8-10% as these trees grow and create that inviting ambiance so many of us are drawn to when we drive down tree lined streets.

snoozing in you hammock

OR – you might share your hammock with a bear?

More benefits of planting trees in your front and back yards

  1. Trees help clean the air of pollutants.
  2. Trees provide shade during the hottest weather which will lower your utility bills.
  3. Trees make a great hammock support. Why not plant 2 trees at hammock distance apart in your yard? Can you picture yourself sitting back on a hot day, under the shade of your trees, reading a book, drinking an Oregon craft beer or one of our local wines, and just relaxing? Does it get any better than this?
  4. And in case you missed it, trees add value to your home.

 

If you’re looking for an opportunity to give back to the community, Friends of Trees is always looking for volunteers. You can find more information about volunteer opportunities and needs by visiting their website. Personally I’ve just signed up to pour beer on July 2nd at the  Portland Craft Beer Festival in the Friends of Trees booth. Sounds like fun, a great way to meet new people, and give back while enjoying the day. (And you thought you might have to plant a tree? They could use help with workers who plant trees too and if you’re working with some great people, that can be a lot of fun too). 

Convinced yet? Check out the trees that are currently available in your neighborhood and sign up to get started today.  The selection will vary so you don’t have to actually choose your tree today. In fact, volunteer planting season runs from October – May, so their assistance in getting a tree into your yard is over for the season, but you can always choose a tree to plant yourself.

You might also want to read:

Factors that can increase the value of your home

 

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Leading economist says Portland home buyers ARE at risk of being priced out of the market

Housing prices UP

Housing prices UPHome buying has become an exasperating experience for buyers across the nation. With high demand and ever increasing prices, the fear is that before buyers can find a house that suits their needs and budgets they will be priced out of the market.

Leading economist and Nobel prize winner Robert Shiller of the S & P Case-Shiller housing price index recently wrote a column for the NY times about this very subject.

According to Shiller, unless you are trying to purchase a home in Portland or San Francisco, your fears are perhaps a little overblown. “There is reason to believe that double-digit increases won’t continue for long in individual cities,” Shiller writes. “Short-term variations abound, but for the most part, the differences in long-term home price increases in individual cities are about plus or minus one percentage point annually.”

Shiller went on to add that San Francisco and Portland are notable exceptions to the above where home prices have grown almost two percentage points above average annually since 1987. According to Shiller, the primary reason for Portland’s explosive increases in home values is the incredible population growth which demographers project will continue at least until 2050!

Migrants are NOT the only ones buying homes in Portland

Wall StreetCompounding the problem of too few homes for the growing population in Portland is the fact that huge investment companies are not only buying the big multi-family properties, they are also investing in single family homes too, and have found that east Portland is especially attractive because of the lower prices relative to those in the rest of the metro area.

Unlike years ago, where big investors, such as Hedge funds, insurance companies, pension funds, and the Berkshire Hathaway scale of investors were interested only in commercial properties and multi-family buildings of 100 units or more.

Big institutional investors are buying up Portland because our property values are relatively low and there are no other safe havens for the type of money they have to invest. The stock market is too rocky while bonds offer little to no returns. These investors are parking their funds where they see growth above average growth potential, and Portland is one of those markets.

“A series of reports by the nonprofit Investigate West found that Wall Street was scooping up single-family rentals in Portland by the hundreds. And where did one of the investors – Blackstone, a multinational private equity firm – raise some of its capital? Oregon’s own Public Employees Retirement System, or PERS. (Investigate West found that Blackstone had invested in more than 45,000 single-family rentals in 14 areas around the country, but not in Oregon. Another company, American Homes 4 Rent, pursued a similar strategy in Portland.)” When investors buy single family homes, they usually buy in bulk and pay cash, and so are directly competing with the average Portland home buyer.

The recent rent hikes in both housing and commercial buildings may be only the beginning of the hikes to come as these investors see current leases expiring.

 

 

 

 

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Portland housing value increases top the nation again – How high can we go?

Housing prices UP

Housing prices UPAccording to Standard & Poor’s Case-Shiller home price index, Portland again had the fastest increasing home values in the country for the 6th straight month. Of the 20 metro areas that Case-Shiller watches most closely, there were only three cities that have shown double digit increases in home values over the last year. Seattle and Denver rounded out the top three.

According to Case-Shiller spokesperson, the Pacific Northwest has been the hottest region in the country, with no slow down in sight. It’s the law of supply and demand, and with 500 migrants moving to the Portland metro area weekly, there is a real shortage of housing that cannot be overcome over the short term.

Portland average home values inch above $400,000 for the first time ever

The average price of a house sold as of the end of May was $402,500 while the median price hit $354,500! Listing prices have increased as well, with the average price of properties currently on the market now at $383,000; up 11.8% from this time last year.

Portland inventory held steady from April at 1.4 months (the number of months all homes would be sold if no new homes are listed), but that’s a long ways from 6 months which signals a balanced market where inflation in values drops back to a normal pace of approximately 3% annually.

Across the country, housing prices have increased a more normal 5.8% average. The big builders should be dancing in the street if they weren’t being forced to pay so much for land, and jump through so many hoops to get approvals for new developments.

How high can prices go?

At some point, this rapid increase in prices and values will have to slow. Wages are simply not keeping pace with this pricing inflation causing more
buyers to be priced out of the market everyday. But for now, forget the lotto – owning a home is raising the net worth of home owners throughout the Pacific Northwest. And Portland is still the lowest priced big city on the West Coast. 

 

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Portland home values soar 17% in last year ~ average home prices hit $385,000!

sold - sale pending signs

sold pendingAs of the end of the first quarter of 2016, houses within the Portland city limits have soared an almost astonishing 17% over the last year (according to Zillow). Throughout the rest of the metro area home values are up approximately 13% – not quite 17%, but still a very good return on any investment these days. In many areas of Portland, housing values have hit record new highs, and just keep rising.

To make matters even worse, inventory dropped again to almost new record lows of only1.3 months (the time it takes to sell all the houses currently listed if there are no new listings). Many buyers I work with say that trying to buy a house is almost like having a second job. It is not for the faint of heart or those who are easily discouraged. Buyers need to be ready to get out and look at new listings the day it goes active because any house could be sold in just one day, often with multiple offers. And buyers need to be ready for “rejection.” It’s not unusual for buyers to make offers on many houses before they get one accepted. This is not personal folks. Money talks.

Buyers – don’t even think about a low ball offer; not in this market (unless the house has been listed longer than a week or two.)  Sellers know this is their market and most are prepared to wait for the right offer to come along. 

Average home values in Portland metro area hit $385,000

It’s true that the averages include the prices of homes in the highest priced areas of Portland;  but this is the highest average price we have ever seen, and it’s just going higher. With big industries moving into Portland and employment on the rise, there are more buyers out there with bigger budgets helping to push prices up. 

Home buyers with lower budgets should consider the suburbs

The typical Portland suburb does NOT look like this. This is a photo of a suburb in Las Vegas.

The typical Portland suburb does NOT look like this. This is a photo of a suburb in Las Vegas.

The “dreaded suburbs” has many would be buyers thinking gloom and doom. Millennials and those with larger budgets have their eyes on being close in to down town Portland and are willing and able to pay the higher prices. Just last week in the very popular Hawthorne/Belmont district there were only 3 listings.

But the suburbs aren’t the end of the world. There are some really beautiful neighborhoods outside of the I-5 corridor. With home values up at least 13% over the last year those who move to the suburbs are still making a very respectable return on their investments! Of course, it’s always possible that many of these suburban neighborhoods will sprout little boutique shopping areas too, and in time, you might find that you actually like where you were able to buy at a lower price. You get a lot more house for the money in the suburbs. Remember that the Division shopping area didn’t appear until PokPok restaurant opened and that was only 10 years ago.

Businesses are also moving to the suburbs

It’s not new that businesses are moving out from downtown Portland. Property costs are  lower in the suburbs, so many big companies choose to build their campuses further out. Look at Intel, Nike, Columbia Sportswear, and all the high tech companies out in Beaverton and Hillsboro; or Xerox, Sysco Food Systems, Mentor Graphics and Flir Systems down in Wilsonville and you’ll find those suburbs are where the employees are moving to be closer to their jobs; and their housing markets are thriving too. As a lot of start ups are moving into Portland, we’re finding that many of them are also locating out in the suburbs. 

At some point, housing inventory will catch up to demand, and the market will slow. That 13% return on your investment will definitely help you purchase another house, perhaps in a more desirable location if you choose to. You’re certainly not going to see that kind of return paying rent (which is also increasing at unprecedented rates of 14% per year). Buyers need to remember that a house is more than just a place to live; it’s also an investment for the future. It’s not even unforeseeable that housing prices could dip again one day. It has happened many times historically, so it could happen again.

When will the housing market craziness end? Is this just another housing bubble?

We’re hearing “bubble” everywhere, but few analysts or economists think this is a bubble. Portland property values have been lagging behind all the major metro areas on the west coast forever. It is in part why 500 people are moving to Portland every week. And of course, that high rate of migration into Portland is fueling our high demand and low housing inventory. Plus approximately 25% of all home sales are cash buyers! With all these factors in place, this housing boom was predicted. Even Forbes magazine named Portland one of the housing markets most likely to outperform this year. That prediction is certainly coming true now. 

However, virtually everyone believes that the market will cool, but very likely not before 2018. It will take that long for inventory to catch up to demand. Note, that cool is the word here, not bubble bursting. Eventually the housing market will stabilize and we will retreat to more normal 3% annual home value increases. But inventory has to rise to more like 3-6 months before that will happen. For better or worse, this is our housing market now, and anyone who wants to buy a house has to play in this market. It’s quite an experience. 

What about buyers with budgets of less than $300,000?

Buyers with budgets of less than $300,000 absolutely should be looking outside the inner corridor to find a home, especially if they need a house with 3 bedrooms and 2 baths. Inside the inner corridor, few homes are priced below $300,000 and most are major fixers or tear downs and often require cash buyers. But even close in to I-205, home prices are rising almost as quickly as just across the interstate. Neighborhoods like Park Rose, Maywood and Mill Park took off last year. Others further out such as Milwaukie, Gladstone and even Gresham were among the hottest selling neighborhoods in the metro area. And on the west side, Beaverton and Hillsboro are definitely hot too. 

You may even find that you like living in the suburbs where there is less traffic and your money allowed you to buy a larger home than would have been possible closer in. And with the exception of the new housing developments, most Portland suburbs do not feature “every house looks the same” type of atmosphere. Most of our suburbs are a great mix of older homes, lots of mid-century style homes (which, by the way are definitely coming back into vogue), as well as newer infill homes. There are lots of quaint tree lined streets and evidence of pride of ownership further out. Stranger things have happened, and it could happen to you.

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Portland home prices hit new median highs as of end of 2015

It’s official. Throughout the Portland-Vancouver metro area, home prices have hit new median highs as of the end of 2015. All four counties have surpassed the values and prices last seen prior to the housing crash of 2007.

What’s driving all this growth? I’ll recap some of the reasons covered in the past, and add a couple new reasons that aren’t as common knowledge.

  1. Approximately five hundred new people are taking up residence in this area every week and they need a place to live.
  2. More high paying jobs are being created as technology businesses create outposts and new offices in the Portland area.
  3. The extreme volatility in the stock market has many investors re-thinking the wisdom of investing on Wall Street. Institutional investors are buying up the Portland housing market and are aggressively competing with all cash offers often at premium prices as they consider our market a better investment than Wall Street. Portland is currently the 2nd most desirable area for institutional investors in the country.
  4. Mortgage rates remain low for those still financing their purchases.
  5. Millennials have entered the housing market.
  6. Record low housing inventory has buyers driving up prices with bidding wars as new buyers try to get into the housing market. This is especially true for houses priced at or below $400,000.
  7. Builders have been very much behind the eight ball in catching up to housing demand; though big developers such as DR Horton and Lennar Homes just completed purchases of huge tracts of land. Still it will be a couple years before they are able to sell houses on those parcels because plans must be submitted to cities for approval of developments and of course the infrastructure has to be completed before they can even start building houses.

It seems that every day new articles cross my desk talking about just how hot the market is in Portland, but the prognosis for how long this housing boom will last continues to be extended. Last year the “experts” were saying that we would see a robust market at least through 2016, but now some experts say that with the unprecedented job growth, low housing inventory, and rate of migration to this area, our housing market may very well not slow down until sometime in 2018! 

 

 

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Which Portland neighborhoods saw 20+% median price increases in 2015?

median price increases in Portland

 

Did you know that RMLS now breaks up the Portland metro area in 122 neighborhoods (primarily for statistical purposes)? While most neighborhoods throughout Portland saw median price* increases last year of 10% and more, a few just rocked the statistics with greater than 20% median value increases in 2015. Several of those areas have been rising stars for a few years now, such as Woodstock, Cully, Kerns, and Sabin, but there were some surprises east of I-205, such as Mill Park, Park Rose, and Centennial. But the biggest single median price gainer was East Columbia which saw a 42.1% increase in median prices for the year!

It’s true that a few of the neighborhoods that saw the biggest increases were lower priced areas (average home list prices below $250,000), but a few now have median prices at or above $400,000, so price was not the single factor that contributed to the gains. However price has been a factor in driving attention to those areas that have emerged over the last few years.  

How did your neighborhood fare? Check out the interactive map here, along with a chart with even more statistics by neighborhood. (Please note that the interactive map includes a second map showing neighborhoods outside Portland city limits). And if you’d like even more information about the value of your house these days, please feel free to contact me directly and I’ll be happy to do more research for  you.

Overall, real estate remains on fire throughout the Portland metro area. Bidding wars continue to be the norm, especially for homes that are basically move in ready. It’s becoming increasingly difficult to find any listings priced under $225,000 anymore as avearge and median prices continue to rise due to demand exceeding inventory. This trend is expected to continue at least through 2018, when it is hoped that new construction will catch up to demand. 

 

*median price = half of all homes sold were above prior median price and half were below

 

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The average home in Portland Oregon increases in value $2.82 every hour

girl saving pennies in piggy bank

Did you know that the average price of a home in Portland has risen to $357,500 as of the end of February 2016? That’s a huge increase over the average sales price of $283,300 at the end of February in 2013. Put another way, a home owner who purchased a home in February 2013 at an average price of $283,300 has seen their value increase by $74,200! That means that home owner was actually earning $2.82 in equity every hour from the day they closed until now.

Remember this represents an average price and value increase over the last three years. In some areas of the Portland metro area, values were increasing at a much higher rate, and of course the reverse is true that many areas saw lower rates of inflation.

For those who are still waiting to buy a home, or are trying to save for the down payment, are you saving at a rate of $2.82 every hour?

Yes, this is all based on averages. Not all future potential home buyers can afford an average priced house or $357,500. If this is you, should you just give up on your dream of home ownership?

The truth is that  less than half of all home buyers can afford an average priced home in Portland anymore. These last two years in particular have seen an explosion in home values due to low inventory, low mortgage rates, and the number of competing buyers (which is being exasperated by the high migration rate to Portland. 

Many buyers are moving further out from downtown to make the dream of home ownership a reality. The end result is that prices east of I-205 and south of I-84 are now sky-rocketing too.  Yes, the hottest neighborhoods are still predominantly close in to downtown Portland, but areas way further east, such as Gresham, or southeast, such as Oregon City and SE Portland are in high demand lately, and this is likely to continue as we move through 2016 and even into 2017-2018. In the southeast, Woodstock and Milwaukie have seen almost astonishing growth. 

Where will the next hot neighborhoods be?

There is really no definite way to predict which areas will take off and become the next Alberta, Sellwood or Hawthorne, but buyers should look for anchor restaurants that see a lot of traffic. Just look at what happened on Division Street after PokPok opened just 10 years ago. Also watch for great little coffee shops to open nearby. Sure Starbucks is a good indicator, but a boutique coffee shop where residents are comfortable hanging out with laptops and tablets are even more significant. Little shops are likely to follow to hopefully cash in the traffic generated by the anchor establishments, and a new “in” neighborhood can emerge. You’ll know your area has fully emerged if a Trader Joes or New Seasons opens nearby, but that takes a while. 

In the meantime, enjoy your new home and work with neighborhoods to beautify where you live.

Your piggy bank will thank you. 

 

 

 

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Portland tops the list of fastest rising home prices in US for last 3 months

home price appreciation 2015 in USAccording to a recent article in the Oregonian, Portland continues to lead the nation with the fastest rising home prices in the U.S. with prices rising more than 10% in 2015 (followed by San Francisco and Denver. Seattle and Dallas were the next runners-up with price increases above 9%). For the last couple months of 2015, and now two months into 2016, the market is screaming hot and home prices just keep rising.

For those considering buying a house, you should know that prices for starter homes are closing in on $300,000 in most of the Portland metro real estate market. To be sure, there are homes still priced in the low to mid $200,000 – $250,000 range, but with more buyers than available properties, bidding wars are the name of the game. Within hours of being listed, sellers will receive often multiple offers, resulting in a sale price 20-30% higher than list price.

I’ve heard it many times, “I’ll just wait for the market to cool off.” But the forecast is that the demand is so high most economists forecast that this condition is likely to persist well into 2018 (when it is anticipated that new construction should catch up to demand.)

Where are houses priced under $250,000 in Portland?

If your budget and pre-approval is for less than $250,000, you should be looking in SE Portland. I know, everyone wants to live as close in to downtown as possible. The “hottest” neighborhoods are moving east too. It used to be that everyone wanted to buy west of 82nd Street. Last year that barrier moved to I-205, and this year we are looking at almost anywhere between I-205 and 130th as hot neighborhoods. But there are pockets east of 130th that are getting to be equally as hot.

Currently prior overlooked neighborhoods such as Maywood, Park Rose, or Mill Park are becoming the Montevillas and Cully neighborhoods of last year.

How to spot neighborhoods on the rise

Forecasting where the new boutique areas will pop up is tough, but here are some signs to watch for:

  1. Restaurants opening to anchor a shopping area – remember that Division street started with the opening of Pok Pok and just expanded from there to be one of the hottest little neighborhoods in town.
  2. A great little café offering freshly baked pastries and more atmosphere than a Starbucks.
  3. Nearby strip malls that can easily become little boutique malls.
  4. Small boutique type shops squeezing into more commercial strip malls.

You will know the neighborhood is “on the map” if a Trader Joes or New Seasons market opens nearby. But by then, it’s already too late to get in on what has already become a trendy neighborhood.

 

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Portland-Vancouver metro area home prices hit new highs

Housing prices UP

 

 

Housing prices UP

 

 

It’s official. Throughout the Portland-Vancouver metro area, home prices have hit new median highs as of the end of 2015. All four counties have surpassed the values and prices last seen prior to the housing crash of 2007.

 

There are multiple causes for this explosive growth:

  1. Five hundred new migrants are moving to this area every week and they need a place to live.
  2. More high paying jobs are being created as technology businesses create outposts and new offices in the Portland area.
  3. Investors love Portland housing

    Investors & Portland housing

    The extreme volatility in the stock market has many investors re-thinking the wisdom of investing on Wall Street. Institutional investors are buying up the Portland housing market and are aggressively competing with all cash offers often at premium prices as they consider our market a better investment than Wall Street. Portland is currently the 2nd most desirable area for institutional investors in the country.

  4. Mortgage rates remain low (for many below 4% last week for 30 year fixed rate loans.)
  5. Millennials have entered the housing market.
  6. Record low housing inventory has buyers driving up prices with bidding wars as new buyers try to get into the housing market. This is especially true for houses priced at or below $400,000.
  7. Builders have been very much behind the eight ball in catching up to housing demand; though big developers such as DR Horton and Lennar Homes just completed purchases of huge tracts of land. Still it will be a couple years before they are able to sell houses on those parcels because plans must be submitted to cities for approval of developments and of course the infrastructure has to be completed before they can even start building houses.

It seems that every day new articles cross my desk talking about just how hot the market is in Portland causing the prognosis for how long this housing boom will last continues to be extended. Last year the “experts” were saying that we would see a robust market at least through 2016, but now some experts say that with the unprecedented job growth, low housing inventory, and rate of migration to this area, our housing market will very likely not slow down until sometime in 2018!

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Banana peels, coffee grounds and egg shells are gardeners’ best friends

Bananas egg shells and coffee grounds

Tips to organically nourish your soil for spring and summer planting

Bananas egg shells and coffee groundsIt’s never too early to start preparing your soil for spring planting. When the rain gives way to those intermittent sunny days, many of us start just can’t wait to get our veggies into the ground, or plant flats of color to chase away the gloom. February is still a little early for most of the planting we’ll get to when the weather really warms. Here are a few tips to get a jump start on feeding your soil organically with banana peels, coffee grounds and egg shells.

To compost or not?

If you’re an avid gardener or just ready to tackle your first garden, you’ve certainly heard a lot about composting all your kitchen scraps; from fruit and vegetables to egg shells and coffee grounds, composting is a great way to enrich your soil. But composting, even if you’re using a composting bin, attracts bugs, and who wants all those bugs and bug larvae around? There is an easier way to use some of that waste.

Banana peels can be cut into smaller pieces and placed into the ground around the base of your plants, just an inch or so below the surface is all that is necessary but deeper is better. They are full of all kinds of great nutrients like potassium, phosphorus, and calcium, and other minerals your plants need. OR, if preparing soil for your veggie garden, get those banana peels into the ground now so they can break down before you’re ready to plant. There are many other ways you can use banana peels – such as drying and grinding them up, but this is by far the easiest. (Don’t leave the peels on the surface of your beds unless you want to attract bugs and squirrels.)

Coffee Grounds are rich in nitrogen a nutrient that all plants need to flourish. Contrary to popular belief, the grounds are not acidic but are pretty much PH neutral, so can be added around any type of plants. Be sure to start slowly with coffee grounds though, just adding a tablespoon or so a week, and stop using if you see existing plants start to react badly to them.

Egg shells add calcium to soil and have the added benefit of deterring slugs. Crush eggshells – just put in bag and crush with your foot or hand, and scatter around the base of plants, especially those that slugs like to eat. The sharp edges keep slugs away, but soften and break down quickly, so you need to put fresh shells out every week or so for best results.  

Vinegar is NOT for mulch but is an organic weed killer. It will kill plants as well, so use carefully. If you’ve looked out in your garden or lawn recently, you have probably noticed that dandelions and crab grass are already growing. 5% vinegar (which is what you buy at the store) will fry those tender young dandelions and crab grass shoots, and will kill them to their deep roots. Yes, you might see brown spots in your lawn, but it’s better than hundreds of dandelions appearing and taking over your lawn later in the year. Unlike chemical weed killers, vinegar won’t harm the soil for the grass that will soon take over that brown spot. Vinegar is best sprayed to make sure you get the whole plant. If going after well- established dandelions, you might need to spray them a couple times to kill them off, but they shouldn’t be producing offspring once well sprayed the first time.

 

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Portland housing market posts biggest nationwide gains for 2015

Average Median Sales Prices Portland metro 2015

                                Portland metro area average/median sales prices 2007-2015

S&P’s Case Shiller’s most recent housing report, (which includes statistics only through November 2015), the Portland housing market has seen the biggest gains in housing prices year over year than any other city in the country.

“Portland prices were the strongest, rising 11.1% compared with a year ago. San Francisco, at 11%, and Denver, at 10.9%, followed. Some 14 cities had stronger yearly price gains in November than in October.

While the composite index is still roughly 12% lower than the peak set in summer 2006, Dallas, Denver and Portland have all touched fresh highs. San Francisco prices have pulled even with the earlier peak.”

(If you bought a house for $300,000 in November 2014, your home is very likely now worth approximately $333,000! That’s nice appreciation in just one year, especially when compared to the national average of only 5.8% price increases over the last year. Only??? A 5.8% home price increase in one year is historically a very high rate.

Will Portland housing prices continue to increase at this same pace in 2016?

Forecasts for the housing markets nationwide are a bit mixed. Low housing inventories, coupled with job growth and low mortgage rates have buyers motivated and have been driving housing value increases for the last few years. But some say that buyers are tired of over-paying for housing and are being much more picky already this year.

In Portland, rapidly rising home prices have been exacerbated by our explosive population growth over the last decade. Technology businesses are moving into Portland with outpost offices here and many new start-ups have their home offices here. This is bringing in higher than average wage earners with money to spend, including on housing. And of course Portland’s reputation has gone from “why would anyone choose to live in Portland where it rains all the time?” to “Portland is a great place to live.” So we keep topping the charts for number of people migrating here from other states around the country and even around the world.

The truth is that while home prices have risen dramatically in Portland, the west coast continues to attract people from around the world for our climate, life style, and all that the west coast has to offer. Portland housing prices are about half the price of homes in cities such as Seattle, San Francisco, Los Angeles, and San Diego.

Upside – rent increases in Portland forecast to slow

Last year we reported that Portland led the nation in rental rate increases. In fact, we were dubbed the toughest rental market in the country. It was not uncommon for renters to receive notices that their rent was being increased by up to $500 a month and more.

Bidding wars for rental properties in some of the “most desirable” neighborhoods became all too common.

Last year we saw average rent increases of 9.7% metro-wide. Zillow predicts that number will drop to 3.8% in 2016.  Hopefully they are right. Still, at only 3.8% increases, Portland is forecast to have the 6th highest rate of rent increases nationwide in 2016.

Will the housing market crash again?

housing bubbleThere are many would be buyers out there who are calling this housing market a bubble ready to burst at any minute. The truth is that housing values, similar to the stock market, do go up and down, though not nearly as dramatically or as quickly. 

Now that lending standards have tightened, there is less likelihood that we’ll see another crash like that of 2007. So if you’re buying, you should be thinking a bit longer term. Most home owners tend to keep their properties an average of seven years before they start thinking about moving up or down sizing. Home ownership, for those who can stay the course, has always been a good investment. You are not just investing. You are also locking in your monthly payments for the long term, and putting away equity for your retirement years.

 

 

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Portland home sales for December 2015 blast through all prior records in pricing and number of sales


sold pendingThe Portland Oregon real estate market closed out December 2015 on fire. While home buyers typically take a break during the holidays, there was literally NO slowdown in the Portland housing market. Sold and Sale pending signs dominated the landscape throughout the metro area.

December 2015 sales were 21% higher than those for December 2014, and were the most sales ever recorded for December in the Portland metro area in the 24 years these records have been maintained.

Average home prices also rose in December to $367,000, up $36,000 from last year during the same month, and up $20,000 from just one month earlier in November 2015.

Portland home inventory drops to lows not seen since 1999

Due to the surge in buyers, real estate inventory dropped to 1.2 months (the number of months it would take to sell all houses on the market if there were no new listings). This is the lowest housing inventory Portland has seen since 1999.

According to RMLS statistics, 2015 beat out 2014 on all averages including number of pending sales, closed sales, new listings, sales and median prices.

Many realtors and lenders credit this surge of home buying activity to the anticipated rise in mortgage rates, which fortunately has not yet occurred. But we can’t lose sight of the fact that rents in this area are rising so fast, that for many, home ownership is actually cheaper than renting, and offer the advantage that monthly payments are locked in for the life of the loan (principal and interest).

Analysts predict drop in number of home buyers in 2016

For 2016, some analysts are predicting a slight drop in the number of home buyers as rising prices could price them out of the real estate market. But with rents rising as fast, if not faster than home prices; some of those renters could get more motivated to buy a house as quickly as possible; if for no other reason than to lock in their monthly housing payments.

In fact we are already seeing price increases on existing listings; and new construction is already pricing higher for homes under construction than buyers paid for identical homes during 2015.

Buying versus renting – tough call for many Portland area residents

Research and sales show that a large percentage of renters would like to be home owners. But with rents rising as fast, if not faster than home prices, it’s becoming increasingly difficult to save for a down payment. Many long time renters could get more motivated to buy a house as quickly as possible if for no other reason than to lock in their monthly housing cost.

For more information about what is driving the Portland metro real estate market, you might want to read:

Portland among top four housing markets in the US

Businesses moving to Portland citing affordability as #1 factor

Zillow rates Portland among top 10 housing markets for 2016

Portland rents among fastest rising in the country

 

 

 

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Portland among top four housing markets in the U.S.

Move over Silicon Valley. The hottest tech sectors in the U.S. are now Boston, San Francisco, Seattle and Portland.

Portland skyline with Mt HoodAccording to a spokesperson at Redfin, “We’ve talked a lot this year about the great tech migration and how the influx of tech companies, tech workers and tech money is affecting the real estate market in places like Portland, Seattle, Denver and Boston. It should be no surprise that major tech hubs were home to some of the fiercest bidding wars this year, but even we were taken aback when we crunched the numbers to find the nation’s most competitive neighborhoods for home buyers in 2015.

The 30 most competitive neighborhoods of 2015 were all located in just four cities: Boston, Portland, San Francisco and Seattle. The rankings are based on several indicators of competition, including the percentage of homes that sold above asking price, how quickly homes went under contract and the percentage of Redfin offers that faced bidding wars.” In fact, the rankings on the charts below were compiled based on a lot of Redfin broker stats, so other reports could differ somewhat from this list.

As has been reported previously, Portland has been aggressively courting technology companies, and the tactic is working. Many of the high tech industry giants already have offices here, and new tech start-ups are locating here attracted by the relatively lower cost of living as well as other amenities that Portland offers.

As you can see from the chart below, according to Redfin, Portland’s hottest neighborhoods included Hawthorne, Belmont, Brentwood, and Woodstock. Check out the columns showing percentage paid above list price, price increases, and percentage of cash buyers! While most tech businesses report that they are looking for their talent first in the talent pool within Portland, they all too often find themselves being forced to recruit from around the world to find people with the right education, skills and experience to fill the positions.

This is in no way meant to imply that only the four neighborhoods named below were hot in 2015. All of the Portland metro area has been feeling the pressure in the housing market; due to new residents, home buying college graduates, and current residents who are looking to become first time home owners, or to move up or down within the markets.

New and expanding businesses are locating throughout the metro area, and of course, every buyer is looking for different features in their neighborhoods.

Home buying in the four cities mentioned Redfin’s report has definitely become challenging and the forecast is that this trend will continue well into 2016.

REdfin statsREdfin stats2

 

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Feds raise rates .25% today – banks follow with prime rate increase

Janet YellenAs was very much anticipated, the Feds did go ahead and raise rates .25% today. The vote was 10-0 in favor of the rate hike, with 2 members of the FOMC board abstaining from voting.

According to a CNBC report, “The new target will go from 0 percent to 0.25 percent to 0.25 percent to 0.5 percent. Most members expect the new rate to coalesce around 0.375 percent before the next hike, according to a chart showing individual member expectations.”

Due to the recent recession, the Feds had moved the overnight lending rate to 0% exactly 7 years ago today, on December 16, 2009. This is the first rate hike since that time.

Janet Yellen also said that the Fed policy will remain accommodating, and the board will watch for further improvements in the labor market and the target 2% inflation rate before making additional rate increases. “FOMC officials made it excessively clear in post-meeting documents that the pace of increases will be gradual and dependent on the quality of economic data.”

“However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

The statement also added this sentence to ensure markets that the pace will be slow: “The committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen.”

Wall Street loved that the wait and uncertainty is finally over and the stock market rallied big time today after hearing the decision. All indices were up at least 1% as of close of the market this afternoon.

The yield on the 10 year treasury note (which mortgage rates are closely tied to) did rise from about 2.08% at the open of trading today, to close at 2.24%. This is still very much in the range that it has been trading at for months now, so no real changes to mortgage rates as of the close of the market today. However, the major banks have already announced a .25% increase in their prime rates which could cause at least a .25% increase in mortgage rates just about immediately.

It is anticipated that there will be as many as 3 more rate increases in 2016.
 

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Get ready for soaring housing prices and rents in Portland 2016

Just a few hours ago, for the first time ever, the Portland Metro Council voted NO to expanding the UGB (Urban Growth Boundary) for the Portland metro area. The boundary has been expanded each time the Metro council has met since it was first established 40 years ago.

high density housingMetro counselors interviewed stated that they believe there is already enough room within the urban growth boundary to accommodate forecast growth, assuming that local governments adhere to the general plan and build an additional 123,000 housing units by 2035. The plan is that 80% of that 123,000 new units will be multi-family housing in downtown Portland, within major designated urban centers and along transportation corridors. Only 20% (24,600 units) of the new housing will be single family housing according to the master plan.

Critics are already saying that they feel this decision could lead to housing prices  soaring even more than had been forecast prior to this announcement. It is also likely to lead to higher rents in the area, though Portland already has a shortage of rental units now.  According to the most recent growth  forecasts for the next 20 years:

  • The population in the Portland metro area will increase by 400,000 people to 2.7 million;
  • The population of the city of Portland will increase by 260,000 people;
  • There will be an additional 140,000 jobs created in the city of Portland alone.

The Portland City Council will be meeting next week to try to determine how to accomplish the goals set forth in the updated Comprehensive Plan without sacrificing “livability” in the city of Portland.

Since 2012, the Portland metro area has experienced what has often been called a “home buying frenzy.” This year alone we have seen housing prices rise 10%. And according to RMLS, housing inventory dropped again in  October to only a 1.8 month supply.

The fallacy here is that the majority of home buyers prefer high density multi-family dwellings. As I have previously reported, the majority of buyers are looking for detached single family dwellings and don’t even want to look at attached dwellings, never mind condo developments. Yes, there is demand for condos and town homes, especially in the downtown areas; but this is not the preference of 80% of the population.

Neighborhoods throughout Portland are already protesting the high rate at which some of our beautiful older homes are being demolished to make way for 2-3 homes on the same property. Recently residents of Eastmoreland paid a developer $800,000 to save the land with a house he had purchased to demolish. The protest centered around his plans (which had been approved) to cut down 3 giant sequoia trees to make room for 2 houses where only one had stood among the majestic trees.

Will other neighborhoods have to fork out more money to buy back homes from developers? Just imagine how our area will change if another 30,000 houses are torn down to make room for multi-family dwellings.

But will our housing prices soar next year based on this news and the updated Comprehensive Plan for the Portland metro area? Historically, when demand exceeds supply, prices rise due to competition. Can our home buyers get any more competitive than we have seen over the last few years? Time will tell, but the forecast for 2016 is continuing low inventory and increasing home prices.

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The number 1 misconception about home financing

Typical down payments for home buyers 2015During and after the great housing crash of 2007-2008, home financing became almost impossible. Even the most qualified buyers had a  hard time getting a mortgage. At that point, in order to purchase a house, most buyers needed at least 20% down to qualify.

Unfortunately, the idea that 20% down payment is still required to purchase a house has persisted and is keeping many who would like to purchase a home on the sidelines scrambling to save that cash.

As you can see from the graphic, very few buyers actually put 20% down in 2015.  In fact, the average down payment for first time home buyer was only 4%, and even repeat buyers put down only 13%. Most buyers, even those with cash, opted to use that money to pay off debt and establish a rainy day fund.

It’s true that lending regulations remain much tougher than prior to the crash. A good credit history is still important, and with the exception of veterans and rural property buyers, 100% financing is just about impossible to find. However, financing is available with credit scores as low as 620, and as little as 3.5% down for just about anyone. Self employed buyers can sometimes even obtain a mortgage with only one year of tax returns.

Banks are flush with cash these days, and one of their favorite investments is housing. With money readily available for qualified buyers, you might check with your favorite lender, or call me for a referral to discuss the assorted lending options that are available to you.

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The wealth gap widens between home owners and renters

Increasing gap in wealth renters vs home ownersAs you can see from the graphic prepared by the NAR (National Association of Realtors), based on a survey completed by the Federal Reserve, home owners have always had a significantly higher net worth (between 31% – 46% ) than renters. This gap has been widening since the start of the economic recovery in 2010, while renters have actually seen their net worth decrease.

Of course, most of this is due to the equity that has been accumulating in their homes. This spread is forecast to continue to widen over the next few years as rents continue to rise, while home owner payments remain relatively stable. The forecast for 2016 is that home prices and values will continue to rise which will add more to home owners’ net worth and wealth.

At the same time, increasing rents will eat away more and more at individual’s wealth.

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Number of distressed properties in Portland dropping in 2015

distressed properties in Portland metro area

 

The number of distressed properties continues to drop, especially short sales.

According to RMLS Portland metro when comparing percentage share of the market, third quarter to second quarter 2015:
• When comparing third quarter to second quarter 2015, distressed sales as a percentage of new listings decreased by 0.3% (5.4 v. 5.7%).
• In a comparison of third quarter to second quarter 2015, distressed sales as a percentage of closed sales decreased by 0.3% (6.4 v. 6.7%).
• Short sales comprised 1.4% of new listings and 1.7% of sales in the third quarter, down 0.2% and 0.5% from the second quarter of 2015, respectively.
• Bank owned/REO properties comprised 4.0% of new listings and 4.7% of sales in the third quarter, down 0.1% and up 0.2% from the second quarter of 2015, respectively.

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Housing forecast for winter 2015 through 2016 in Portland metro area

real estate sold sign for newsletter2015 has seen just about the hottest housing market in Portland’s history. Sales were up about 25% over 2014, and it seems there is no shortage of buyers in sight as we wind out the year. We did see a bit of a slowdown in September, but this is typical as families get into back to school mode. Year-to-date, we have seen metro wide price increases of almost 10% for 2015 (higher in some areas).

October housing activity has picked back up again and this trend is expected to continue throughout the winter months and into 2016. Inventory has been at 1.9 months for a few months now, and isn’t budging as buyer demand is still outpacing the number of new listings hitting the market. According to Zillow, “The median value in the region is $295,600, and the median sale price is north of $300,000.” Many buyers have already been priced out of the market, and for those waiting for prices to drop, don’t hold your breaths. That scenario is not forecast for the upcoming year at all.

In fact, most economist believe that while price appreciation should slow when inventory finally catches up to demand, we are unlikely to see any “housing crash” any time in the near future. Due to much more stringent lending standards, forecasts are for a stable housing market at least through 2022!

duplex - Portland ORInvestment property prices rising as much as single family housing

We are seeing the same pricing increases in multi-family properties as we are seeing in single family homes. In fact, there are some statistics that point to even greater increases in multi-family pricing because of the recent huge increases in rents here in the Portland metro area. Multiple offers are common as competition heats up to grab a share of the rising rental income.

For buyers of multi-unit properties, location is every bit as important as for home buyers. Buyers should be watching for properties in areas with easy access to mass transit, though should expect to pay a premium for properties in the best locations. Renters always expect to pay higher rent in good areas than in marginal areas, so you will recoup your investment even when you pay more for the property.

It’s important for investors to be realistic about prices for multi-unit properties. If the average house price is $300,000 for a given area, you shouldn’t expect to purchase a duplex (basically 2 houses) for at or close to the same price. In fact some investors are rehabbing multi-unit properties and selling each unit individually for great profits.

 

 

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Portland ranks as the toughest housing rental market in the country

Are you ready for another “negative” Portland ranking? I guess it’s all in how you read and interpret the data, but people are still moving into Portland at a rate that has our housing market and infrastructure bursting at the seams. It really shouldn’t be a surprise to learn that there aren’t enough rentals, so rental rates rise.

According to Zillow.com, Portland rents have risen 7% year after year, but other sources paint a more dismal picture. The average rent in Portland is now at $1516 per month, and that’s for a 1 bedroom apartment. If you’re looking for a house to rent, think much much more depending on size and location.

Did you know that bidding wars for rentals have become common, and not just close in Portland. Apartment managers are reporting that they have dozens of applicants within minutes of posting apartments, condos and houses for rent on sites such as Craigslist. And of course, the majority of rental units in the best apartments, condos, etc. never make it to Craigslist. Managers have waiting lists and are reporting zero vacancy rates.

Apt for rent in the Pearl

The Portland area has the tightest rental market of any major city in the United States, according to the U.S. Census Bureau. Only 3 percent of apartments here are vacant at any given time—half as many as were available three years ago. Again, this is in part because of the inflow of new residents. But it’s also because during the housing boom, no one was building apartments, so with more people and less housing, we’re bursting at the seams.

If you are looking for a rental unit in the Pearl district – are you ready for this? Rents are increasing an average of 15 – 20 percent annually! Great place to own a rental unit, if you can afford to buy one.

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September Portland housing market – still hot and favoring sellers

Another offer not accepted

Is this how you feel after you hear you’ve had another offer rejected?

The Portland housing market closed out August much like the rest of 2015. As of the end of August, we still had less than 2 months inventory in listings, which is not good news for home buyers. Some are speculating that the situation could get even tougher during the winter months when typically fewer home owners will list their properties for sale.

While we did see inventory rise from 1.6 months to 1.9 months between July and August this year, these numbers still scream “sellers’ market” throughout the Portland metro area. We also saw a bit of a drop in demand during August, as compared to July 2015, but an increase of just about 20 percent of homes sold during August 2015 as compared to August 2014.

According to an article on Oregonlive.com, “The average sale price through August of this year was $353,200, a 6.2 percent increase over the same period of time in 2014. The median sale price rose 7 percent, from $285,000 to $305,000.”

Typically fall signals a slowdown in the housing market. This usually means that buyers who are really serious have less competition for the homes out there. But there is such pent up demand this year that we just don’t know what the fall and winter seasons will bring this year. And, for those who prefer to wait until after the holidays, if 2016 is anything like 2015 this year, home buyers were out in force as early as New Years’ Day in 2015.

The forecast for 2016 in Portland is more of the same; huge home buyer demand and low housing inventory at least through the spring months, which of course will cause a continued rise in both home prices and values. Sellers are still receiving multiple offers on their homes, even fixers, often within hours of a listing going live.

And if you think the Portland housing market is an anomaly, you should know that Portland didn’t even make the most recent list of 25 hottest housing areas nationwide.

I know this sounds a bit like gloom and doom for home buyers, but for those who are serious and persistent, are available to view houses as they are listed, and make offers very quickly, their efforts will be rewarded.

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Milwaukie OR prices climb 18% from last year

Milwaukie OR on the mapHas Milwaukie OR become one of the hottest cities in the Portland metro area? It appears that so many buyers have been priced out of NE and SE Portland that home buyers are looking elsewhere to spend their dollars. Milwaukie has long been an outlyer in the recent Portland metro area housing boom since 2012, but the new Orange line of the Max, scheduled to open on September 12th has brought a lot of attention to the area.

The city of Milwaukie has spent a lot of money improving and updating the downtown area. The waterfront park has undergone a major update and the Farmers market is one of the largest and most diverse in the metro area too. But perhaps the driving factor in the popularity of Milwaukie over the last year has been the opening of the Orange MAX line, scheduled for September 12th.

While home prices have soared in nearby areas, home buyers have been looking just a bit south of Sellwood, Eastmoreland. The end result is that home buyers have finally discovered Milwaukie and are snapping up properties as quickly as they are listed. Home values have soared 18% in just the last year, while housing inventory has dropped to only about 50% of what was available just a year ago. It looks like that trend is likely to continue, especially for homes within walking distance of the new MAX station located just a short distance south of downtown Milwaukie. Residents of Milwaukie had fought the new MAX line fearing that it would cause property values to drop and crime to increase. But in fact, just the opposite has happened so far. Even big investors from outside the metro area are now swooping into Milwaukie buying up large parcels of land for future development.

The grand opening of the new MAX line is scheduled for September 12th with lots of events scheduled that day at all Orange line stations on the way to downtown Portland.

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Mortgage rates drop as Wall Street plunges

rates drop (2)Mortgage rates are again dropping as world economic news has Wall Street selling off in virtually every category. (If you check your 401k or IRA balances, you might notice those balances are about the same as what you would have seen in 2013!) In fact, the DOW has now dropped to lows not seen since May 2014. Prior to this latest sell off, the DOW had topped 18000 and with strong jobs reports and economic news, and appeared to be headed for 19000 perhaps by year end.

Forget Greece. It’s all about the Chinese economy, or so many news outlets would have you believe. But there’s even more going on that is only starting to make the business headlines. Bloomberg news reported this week that Brazil’s stock market is nearing a bear market. Many economists believe that Brazil is headed towards a severe recession, perhaps the worst since 1930s.

And just this morning on CNBC, analysts were saying this sell off is a delayed reaction to the FOMC possibly raising interest rates next month. It appears that what is going on with Wall Street is what we have seen before – panic selling and scheduled sell offs of huge volumes of investments by Mutual Funds, Hedge funds and individual investors alike.

Mortgage Rates drop too

While our tumbling stock market is bad news for investors and savers, it should be music to the ears for home buyers as mortgage rates plunge below 4% for best qualified home buyers.(you might want to read: Do you qualify for best mortgage rates?)

In other better news for home buyers, Janet Yellen (FOMC Chairman) is now hedging on her very strong (almost commitment) to begin raising U.S. interest rates in September. Economic instability in 2 of the worlds’ leading economies outside the U.S. along with the Wall Street sell off will very likely will impact U.S. businesses, so the FOMC is watching China, Brazil, Greece and the rest of the world to try to determine ahead of September 15th, just how much impact all this news will have on our own economy to determine if next month IS a good time to start increasing interest rates. IF FOMC acts , mortgage rates are very likely to follow.

Where are Portland home values headed?

Just a few weeks ago, Wall Street sentiment was that home values will continue to rise for at least the rest of this year, and well into 2016. And, did you know that Oregon ranks #5 in the nation for most increased values since the recession? Did you know that just last month, Portland experienced the single busiest July in RMLS history for home sales?

Update 8/21/15 1:16pm

Wall Street just closed with the DOW down more than 500 points! After a 350 point drop yesterday, and drops everyday this week, Walls street has plunged more than 10% this week alone, S & P approximately 19%, and NASDAQ down 20% this month. So what does this mean for the housing market, here in Portland and in the U.S?

Unfortunately we don’t have answers yet. We never do, until the correction on Wall Street is over and investors start buying the drops rather than selling. We could see a lot of buyers move to the sidelines with a “wait and see” posture. Still, if history is any indicator, long term investors could do worse than buying homes right now. All previous corrections in history have always produced higher values over the long term. AND, mortgage rates did drop more today making homes more affordable. Also, with some buyers moving to the sidelines, there will very likely be less competition for the few houses out there right now.

As Warren Buffet has always said; “Buy when everyone else is selling, not when they’re buying.” If the Feds go ahead and raise rates in September, buyers may not see an opportunity like this one for many more years to come.

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Factors that can increase the value of your home

street trees in a neighborhood

street trees in a neighborhoodReal estate agents know that valuing a home isn’t rocket science, but determining value is not nearly as cut and dried as the algorithms used by well-known property search sites in their estimated values.

According to House Logic, there are many factors that can influence the price buyers will be willing to pay for your home.

**Millenials cite “walkability” as the number 1 factor that influences their decision about location. In Portland, we are seeing more and more neighborhoods creating small shopping districts that home owners can walk to for groceries, coffee shops, fine dining, and boutique and retail shopping. Homes in walkable areas will see value increases of $4,000 – $34,000, depending on the type of shops and restaurants nearby. Clearly little boutique shops and dining are favored, and result in the higher valuations of neighborhoods. But just being able to walk to a local park is important too.

**Highly rated schools

**County or state parks or golf courses nearby can increase the value of a home more than you might imagine.

  • A public park within walking distance can increase the value 8-20%
  • A natural area can increase the value on average about $10,000
  • A nearby golf course can raise the value approximately $8,000.

**Here’s a surprise – House Logic says a nearby Walmart that stays open 24/7 could increase your home’s value 1-2% and if very nearby another 1%. In Portland, Walmart stores are not all that popular but are gaining traction. But watch for areas where a New Seasons or Trader Joe’s market is either proposed or ready to open. Those are sure signs that the neighborhood is either prospering or is definitely on the rise in desirability and values.

**Additional dwelling spaces (whether a separate building or a basement with a separate entrance) can increase your home’s value 24-34%. These separate units are in high demand but are relatively rare in the Portland metro area.

**Trees are a valuable asset – and trees in your own yard, or better yet, street trees throughout a neighborhood make the whole neighborhood appear lush and inviting and raise the values for all home owners in your neighborhood. According to a University of Washington research survey:

    • Mature trees in a yard add 2%
    • Mature trees on the street add at least 3% for all home owners on the street
    • Trees in the front yard add 3-5%
    • Mature trees in high-income neighborhoods add 10-15%

While all the above factors can influence the value of your home, you can’t move your home to a better location to attract buyers. Still, if you want to add value, something as relatively easy and inexpensive as planting a tree or two in your mowing strip can definitely enhance not only your house, but the looks of your entire neighborhood too. Imagine if everyone on your street planted just one tree today how much more inviting your street would look in just 5 years.

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Have you checked your credit recently?

Credit reportI’m sure it’s not a surprise to anyone that ID theft is alive and thriving these days.Did you know that approximately 1 of every 4 people in the U.S. has at least one error or derogatory item on their credit reports? And yet, with all the threats out there, most people are pretty lax about keeping tabs on their credit information. Just last week I personally received an updated report and found, much to my surprise, that someone else is using my social security number!

  1. Do you know if there is information on your credit report that is not yours? Or that was reported in error?
  2. Do you have a relative with a similar name? Or is someone else also using your social security number and causing information to reported on your report that isn’t yours?
  3. Do you have an old collection that was filed against you that you never cleared or that you thought you had cleared but was never reported as paid?

Everyone should monitor their credit on a continual basis. There are several credit monitoring services that you can purchase for as little as $10 a month, AND there are multiple free sources for obtaining your credit information as well. All three credit bureaus offer you one free report annually, and several businesses allow you to pull your credit at least several times a year at no charge.

As surprising as this may sound to many of you, the first time that many people learn there are errors on their credit reports is when they apply for a mortgage. Oops! Here you are, all all ready to go out house hunting and find a $5.00 collection on your report. No big deal, or so you think, but that $5.00 collection for cable TV service you were sure you had canceled on a prior move, can cost you a 100 points or more on your credit score. and can cost you thousands of dollars on your mortgage because of the higher rate you will have to pay, if in fact you qualify.

Fixing errors isn’t hopeless, but it takes time and could be more work than you might think. And if the $5.00 collection was a valid charge, paying it will help your score, but not nearly as much or as quickly as your score dropped due to the non-payment of a legitimate bill.

Be sure to check all credit that is being reported to make sure that it is yours. Look for names that your credit report shows using your social security number. Check to make sure the credit bureaus are showing your current address.

How to fix errors on your credit report – This article will outline the fastest, easiest way to fix errors on your credit report yourself, but be warned, it can still take 30 days or more to have errors removed. The reward is an immediate increase in your credit score, and a clean credit report. Errors that have been disputed and removed can never appear on your reports again. 

In March this year, “Eric T. Schneiderman, the New York State attorney general, announced that his office had reached a sweeping settlement with the agencies, affecting consumers nationwide, which was prompted by an investigation that began in 2012.” This is a huge victory for consumers because it will not only make correcting errors on your report easier to fix, but it will change how some information is weighted in computing your scores. The credit reporting agencies have announced that the changes will be implemented over the next 3 years, so don’t expect over night progress. But rather than outsourcing all disputes to employees overseas, the agencies have agreed to hire specially trained personnel to handle all disputes to make sure that they are handled correctly and promptly. AND best of all, information from collectors will no longer be given more weight than documentation from consumers.

While we’re waiting for these sweeping changes to take effect, please, if you haven’t done so recently – Check your credit report today. Don’t wait until you need credit to find out there are errors that can be fixed. The more frequently you monitor your report, the faster you will discover errors, and the easier those errors are to fix.

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Alert: Hackers target home buyers

Hacker at work - https://de.wikipedia.org/wiki/HackerAs if buying a property weren’t stressful enough, the NAR (National Association of Realtors) has just advised us that Internet hackers are now targeting home buyers. It was only a matter of time before hackers went after the vast sums of money involved in purchasing a home, but this time the route to the hacking is a bit different than in most cyber crime-schemes.

Apparently hackers are now targeting realtors’ email accounts and silently watching those emails for information that will allow them to re-route buyers closing funds to their own bank accounts. As closing approaches, escrow officers send buyers instructions, including what to bring to closing, amount of funds required, and where and how to wire funds to close the transaction. The hacker will also send the buyer what appears to be an official looking email from the “title company” with “updated instructions” on where to wire funds. (Remember that your agent and escrow officer have been communicating frequently during your purchase, so hackers have the official signatures each has been using, and these are easy enough to copy to make your email with updated escrow instructions look legit.) Some hackers may even include other information about your transaction to make the email look even more like it has come from a trusted source.

Generally speaking, this will not impact the majority of buyers who hand carry a cashiers’ check to the title company at closing. But, for out of state buyers and cash buyers, it is not uncommon for funds required for settlement to be wired to the title company. By watching emails exchanged between buyers and their agents, hackers gain information about how the purchase will be financed as well as the scheduled closing date.

How can you protect yourself from hackers?

  1. Make sure that your realtor is taking every step possible to keep hackers out of their email. Personally I change my password frequently which makes watching my email much more difficult for hackers, and I use strong passwords that hackers would be unlikely to guess.
  2. It is very uncommon for a real estate agent to request sensitive information from buyers, especially via email. We don’t need your bank statements (unless you are a cash buyer) or any information with your social security number. That type of information should always be handled by your lender. When we do require proof of funds for a cash transaction, buyers should always redact most of your account number (leaving only the last 4 digits), and should send proof of only enough funds required to settle the purchase. If you are able to encrypt the email, that would be even better.
  3. Before wiring funds, always double check with your escrow officer to make sure that you have the correct wiring information for your bank. Be sure to keep and check old emails you have received from the title company to make sure you are calling or emailing the correct person, because hacker contact information is almost always included in the scam emails you receive.
  4. Don’t click on any links in the email, giving the hacker access to your email (if they don’t already have it).

It’s an Internet world out there, but there are always steps you can and should take to protect yourself, and that I take to protect you if you are my client. Unfortunately, once the funds are wired, even to an incorrect account, the money is gone.

The good news is that banks, title companies and realtors are all being notified of this new threat and are all taking whatever steps we can take to tighten security on your behalf. But at the end of the day, responsibility for issuing correct wiring instructions is still yours. So, be careful out there. Check and double check your information before you pass on wiring instructions to your bank, and you should be fine.

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Portland home sales and values continue to soar in June 2015

Portland OR closed home sales hru 6-2015According to RMLS, the median sales price for homes sold in June rose to $320,000; 2.2% higher than the median price in May 2015.

The continual rise in values is being fueled almost entirely by an almost record low inventory of homes for sale. As of the end of June, there was only a 1.6 month supply of homes listed. This means that at the current rate of consumption, all homes currently on the market will be gone in 1.6 months. This is the lowest inventory level since the peak of the mid 2000s housing boom. (A healthy market has closer to a 6 month supply of homes for sale at any given time.)

Currently a home listed becomes a “closed sale within 45 days! By comparison, last year at this time, it took closer to 60 days for a new listing to close.

On the upside, this year has seen a 5% increase in the number of homes listed, which can be taken as a vote of confidence that demand is very high, so this hot market is likely to continue for a while yet.

Lane County sees record home sales for June 2015

As Portland metro area housing is soaring, more and more buyers are finding themselves being priced out of our market. Never fear, there are other great places to live in Oregon, as home buyers are moving out of the metro area in search of “more bang for their buck.”

According to realtors in Lane County, the market is on fire. Most have never experienced the buyer frenzy that has moved south creating the hottest market Lane County has ever seen since RMLS started keeping records in Lane County in 2001. Like Portland, inventory is down while the median home price has risen dramatically from $210,000 in May 2015 to $229,000 last month.

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Yellen speak points to rate hike at September FOMC meeting

Janet YellenJanet Yellen spent 2 days last week testifying before Congress. There was a lot of discussion about Fed policy, but the big question was…

When should we expect the Feds to raise the over-night rate to banks?

It seems that we have been talking about this rate hike for so long with no action that most people are beginning to doubt that it will ever happen.

Janet Yellen has been in the hot seat numerous times over the last few years. She is more than adept at seeming to answer very direct questions without providing very direct answers. Still, the general take-away last week is that Ms. Yellen suggested that the long awaited and dreaded first rate hike is likely at the September 2015 FOMC meeting.

Yellen noted that all the Fed requirements for the first rate hike are not yet in place and may not be for several years; but holding rates at or near zero must end at some point, and this should probably happen sooner rather than later. Yellen did emphasize though that the Feds will proceed slowly, carefully monitoring the effects of the hike when it happens. She emphasized that at all costs, the Federal Reserve will proceed with caution.

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Mortgage rates creeping up

10 year bond yields

10 year bond yields

According to CNBC this morning, the yield on the 10 year Treasury bond moved up dramatically this morning causing some concern that mortgage rates (closely tied to the yield on the 10 year bond) are following. Best mortgage rates quoted this morning are between 4% – 4.53%.**

Last week, we saw the yield on the bond about 10 basis points lower than this morning, and of course, this could be a concern for our very robust housing market here in the Portland metro area.

Why did the 10 year bond yield rise so much this morning? This was mostly driven by international news:

  • The Greek bail out
  • Chinese markets on the rise
  • Iranian nuclear deal looks like it might be a go this time

All of these international crises that have been heavily weighing on US stock markets, look like they might be averted finally. Could this be the combination of events that will lead the Feds (led by Federal Reserve Chairman Janet Yellen) to raise over-night bank rates in their September meeting? This would most certainly be a signal that mortgage rates will move up in tandem.

According to the chart above, we are very near the high yield for the 12 months.

** Best 30 year rates on conventional financing are for those with 740 credit scores and 20% down payments. Rates are similar for FHA financing but also include PMI.

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