Be among the first to know about newly listed foreclosure properties in Central Oregon!
With nearly 1 in 18 listed residential properties in the Bend area currently lender owned, I have launched a service to provide you with up-to-the-minute information on any newly listed and reduced price foreclosure properties throughout Central Oregon!
This new service provides you with "live" information directly from the MLS via email, so you'll be just as much in the know on available foreclosures as local real estate agents!
The service can be customized to fit exactly what you're looking for (area, price range, size, etc.) so you can be sure to get only those properties that are of interest to you.
So if you are currently in the market to buy a foreclosure or have been thinking about it, call or email me and I'll get you set up to receive free, up-to-the-minute emails on foreclosure properties.
Saturday, December 20, 2008
Wednesday, December 17, 2008
Record Low 10 Year Treasury Yields
On the heels of the Fed's rate cuts yesterday and an accompanying statement that read in part that it "will employ all available tools" to promote economic growth, the average yield for 10 year Treasury notes fell below 2.15% earlier today for the first time since the Treasury began providing daily data in 1962.
30 year Treasuries also hit their lowest yields since sales of the security began in 1977, averaging 2.63%.
While there is no direct relationship between the two, mortgage rates tend to follow the direction of 10 year Treasury yields. With rates for 30 year mortgages already near historical lows, will we see them fall below 5 percent in the near future?
30 year Treasuries also hit their lowest yields since sales of the security began in 1977, averaging 2.63%.
While there is no direct relationship between the two, mortgage rates tend to follow the direction of 10 year Treasury yields. With rates for 30 year mortgages already near historical lows, will we see them fall below 5 percent in the near future?
Tuesday, December 16, 2008
Fed Cuts Rates Even More Than Anticipated
The Federal Open Market Committee voted unanimously to cut the fed fund target rate to a historic low of 0% to .25% from 1% earlier today.
In addition, the Fed also lowered its discount rate, the rate charged by the Federal Reserve for loans to commercial and investment banks, from 1.25% to .5%.
As noted here before, these rate cuts should lead to lower rates on home equity lines of credit (HELOCs) as well as other consumer debt.
Interest rates on 30 year fixed rate mortgage loans are now ranging around 5%, which is well below historical norms.
The monthly principal and interest payment on a 30 year loan of $240,000 at 5% would be about $1290. At 6%, the payment would be about $150 more, or $1440. Today's rates provide quite an increase in purchasing power.
In addition, the Fed also lowered its discount rate, the rate charged by the Federal Reserve for loans to commercial and investment banks, from 1.25% to .5%.
As noted here before, these rate cuts should lead to lower rates on home equity lines of credit (HELOCs) as well as other consumer debt.
Interest rates on 30 year fixed rate mortgage loans are now ranging around 5%, which is well below historical norms.
The monthly principal and interest payment on a 30 year loan of $240,000 at 5% would be about $1290. At 6%, the payment would be about $150 more, or $1440. Today's rates provide quite an increase in purchasing power.
Core Inflation Unchanged From October
The Labor Department reported that "core inflation" remained unchanged in November from a month earlier and was 2% higher than a year ago. A 2% annual inflation rate is widely believed to be within the target range preferred by most central bankers.
"Core inflation" excludes food and energy, as these tend to be more volatile than other goods and services. For example, energy prices have fallen about 70% since July and 17% in November alone! This is most obvious to most of us when it's time to fill up the gas tank.
The Federal Open Market Committee is meeting today and most analysts expect a rate cut of .5%. The recent inflation numbers make that scenario even more likely now.
"Core inflation" excludes food and energy, as these tend to be more volatile than other goods and services. For example, energy prices have fallen about 70% since July and 17% in November alone! This is most obvious to most of us when it's time to fill up the gas tank.
The Federal Open Market Committee is meeting today and most analysts expect a rate cut of .5%. The recent inflation numbers make that scenario even more likely now.
Monday, December 8, 2008
Home Sales Slow In November
Despite mild weather, the presidential election and uncertainty about the overall economy seemed to keep buyers preoccupied and on the sideline last month.
The pace of sales for single family, stick-built houses on less than an acre in the Bend area slowed noticeably in November, with only 68 reported closed sales. There were 97 closings in the same month a year earlier and 112 in October 2008.
The median sale price of homes sold in November was $260,585 and the median price per square foot was $132.6/sf, down from $339,000 and $167/sf from a year earlier.
The pace of sales for single family, stick-built houses on less than an acre in the Bend area slowed noticeably in November, with only 68 reported closed sales. There were 97 closings in the same month a year earlier and 112 in October 2008.
The median sale price of homes sold in November was $260,585 and the median price per square foot was $132.6/sf, down from $339,000 and $167/sf from a year earlier.
Tuesday, November 18, 2008
New Listing, NE Bend, Near Mtn. View High
Not a short sale or foreclosure; just a great value! This 3 bedroom, 2.5 bathroom home features extensive wood flooring inside and pavered walks and patio outside. It's only a couple short blocks to Mtn. View H.S. and close to Ponderosa Elementary School, a planned 159 acre park, Costco, St. Charles Hospital, theaters, shopping and dining. Also includes a hot tub and custom built storage shed. Only $239,900!Call me today if you or someone you know would like to see this well-priced home!
Wednesday, November 5, 2008
Existing Home Sales Show Legs
For the third in the last four months, sales of existing homes on less than one acre in Bend nearly matched the number reported a year earlier. 81 sales were reported in October, compared to 83 in October 2007.
Prices held up pretty well overall also. The median sale price per square foot of existing houses on less that an acre was $158.4/sf in October, versus $161.2/sf a year earlier. (Keep in mind that the $/sf figure is useful in gauging the health of the market overall and not for determining the price of one specific property.)
With prices down substantially from the highs of 2005/2006, more buyers are out looking to see what they can get for their money. And many are happily surprised to find out they can now buy a house that they couldn't afford a year or two ago.
Prices held up pretty well overall also. The median sale price per square foot of existing houses on less that an acre was $158.4/sf in October, versus $161.2/sf a year earlier. (Keep in mind that the $/sf figure is useful in gauging the health of the market overall and not for determining the price of one specific property.)
With prices down substantially from the highs of 2005/2006, more buyers are out looking to see what they can get for their money. And many are happily surprised to find out they can now buy a house that they couldn't afford a year or two ago.
Saturday, November 1, 2008
October Home Sales Keep Pace
Sales of existing homes on less than 1 acre in Bend in October were close to the number recorded a year earlier.
As of today, 75 sales have been reported for October. And with the month ending on a Friday, I expect to see a few more October sales reported next week. 83 houses were reported sold in October of 2007.
In addition, the median sale price per square foot of houses on less than one acre actually increased in October from a year earlier, from $161.2/sf to $161.8/sf.
Though one month is hardly a trend, these are more signs that we just might be bumping bottom on the housing market slowdown.
As of today, 75 sales have been reported for October. And with the month ending on a Friday, I expect to see a few more October sales reported next week. 83 houses were reported sold in October of 2007.
In addition, the median sale price per square foot of houses on less than one acre actually increased in October from a year earlier, from $161.2/sf to $161.8/sf.
Though one month is hardly a trend, these are more signs that we just might be bumping bottom on the housing market slowdown.
Wednesday, October 22, 2008
Dramatic Rise in California Home Sales
According to information released by MDA Dataquick, home sales in California jumped 65% in September from a year earlier.
And perhaps more importantly, the sales recorded in September were also up about 6% from August.
While more than half of the existing home sales recorded in California last month were foreclosure resales, and the median price of those sales was down 34.2% from a year earlier, it does provide proof that there are ready, willing and able buyers today.
This is a good sign for the market locally since California is a big feeder market for Central Oregon. There's no doubt that some of these recent home sellers are now in the process of relocating to the Bend and buying homes here.
According to Dataquick, the inflation-adjusted mortgage payments homebuyers committed themselves last month were back to where they were in early 2001, before home prices shot up so drastically.
Speaking from personal experience, it seems to me that there are more people out "kicking tires" and inquirying about properties listed for sale.
Hopefully this trend will continue from here on.
And perhaps more importantly, the sales recorded in September were also up about 6% from August.
While more than half of the existing home sales recorded in California last month were foreclosure resales, and the median price of those sales was down 34.2% from a year earlier, it does provide proof that there are ready, willing and able buyers today.
This is a good sign for the market locally since California is a big feeder market for Central Oregon. There's no doubt that some of these recent home sellers are now in the process of relocating to the Bend and buying homes here.
According to Dataquick, the inflation-adjusted mortgage payments homebuyers committed themselves last month were back to where they were in early 2001, before home prices shot up so drastically.
Speaking from personal experience, it seems to me that there are more people out "kicking tires" and inquirying about properties listed for sale.
Hopefully this trend will continue from here on.
Monday, October 20, 2008
Bend Still Drawing Press
CNN.com's Travel writer Naomi Lindt featured Bend in a recent article.
http://www.cnn.com/2008/TRAVEL/getaways/10/15/bend.oregon/index.html
http://www.cnn.com/2008/TRAVEL/getaways/10/15/bend.oregon/index.html
Wednesday, October 15, 2008
Real Estate Auctions - Don't Buy 'Em!
While real estate auctions are most often associated with distressed properties up for bid on courthouse steps, some companies are trying to take advantage of today's market by pitching auctions as a viable alternative to traditional marketing methods. But are auctions worth the thousands of dollars sellers are required to pay upfront to the auctioneer regardless of whether their property actually sells? And do buyers necessarily get a good deal buying at auction?
Auction company owners and employees like to portray the auction process as effective at establishing a property's market value. But “true” market value is ultimately determined by exposure to the biggest, broadest market possible. And today, with widespread public access to MLS information and a seemingly infinite number of real estate websites allowing visitors to search for property online, reaching a broad market of potential buyers is easier than ever. Auctions certainly don’t expand the market any further.
A property seller would be much better off listing their property with a real estate agent at the minimum price they are willing to accept (think of it as the "reserve price" used at auctions) and stating that they will not be responding to any offers for x number of days to ensure that the property receives broad exposure. This is a common strategy with lender-owned properties and it sometimes results in multiple offers. And unlike the auction process, it costs the seller nothing!
Another quirk about auctioned properties is that they’re typically sold “as is.” A winning bidder is often required to put down a non-refundable deposit BEFORE having the property professionally inspected or even appraised! Of course, a bidder could elect to have a house inspected and/or appraised beforehand. But who in their right mind would be willing to shell out hundreds or even thousands of dollars to do so before having some type of assurance that they will have first dibs on the property? What about inspecting it afterward? While this is possible, keep in mind that the seller is not obligated to fix any defects discovered. A buyer’s only options then are to go forward with the sale or forfeit thousands of dollars of deposit money.
Furthermore, most auctions allow the seller to set an unpublished “reserve” price. If no bid meets or exceeds the reserve amount, the seller is not obligated to sell. Any bidder who has paid out money to have the property inspected and/or appraised is SOL. Does that seem like the best way to go about buying a house?
There is an auction scheduled to be held in Bend tonight. I'll write about the results soon, though I'm not expecting much.
Auction company owners and employees like to portray the auction process as effective at establishing a property's market value. But “true” market value is ultimately determined by exposure to the biggest, broadest market possible. And today, with widespread public access to MLS information and a seemingly infinite number of real estate websites allowing visitors to search for property online, reaching a broad market of potential buyers is easier than ever. Auctions certainly don’t expand the market any further.
A property seller would be much better off listing their property with a real estate agent at the minimum price they are willing to accept (think of it as the "reserve price" used at auctions) and stating that they will not be responding to any offers for x number of days to ensure that the property receives broad exposure. This is a common strategy with lender-owned properties and it sometimes results in multiple offers. And unlike the auction process, it costs the seller nothing!
Another quirk about auctioned properties is that they’re typically sold “as is.” A winning bidder is often required to put down a non-refundable deposit BEFORE having the property professionally inspected or even appraised! Of course, a bidder could elect to have a house inspected and/or appraised beforehand. But who in their right mind would be willing to shell out hundreds or even thousands of dollars to do so before having some type of assurance that they will have first dibs on the property? What about inspecting it afterward? While this is possible, keep in mind that the seller is not obligated to fix any defects discovered. A buyer’s only options then are to go forward with the sale or forfeit thousands of dollars of deposit money.
Furthermore, most auctions allow the seller to set an unpublished “reserve” price. If no bid meets or exceeds the reserve amount, the seller is not obligated to sell. Any bidder who has paid out money to have the property inspected and/or appraised is SOL. Does that seem like the best way to go about buying a house?
There is an auction scheduled to be held in Bend tonight. I'll write about the results soon, though I'm not expecting much.
Wednesday, October 1, 2008
Number and Pace of Home Sales Up From Last Year
Despite widespread reports of buyers having difficulty obtaining loans and a slowing economy, September sales reported to MLS show that 119 stick-built houses on less than one acre were sold in Bend. This is the highest number of sales reported in at least a year. A year ago, 114 houses were reported sold in September. The 119 houses sold last month is also a big improvement from the 97 reported sold in August.
In addition, the amount of time it took to sell a house in the just completed 3rd quarter was less than a year ago. The median days on the market (DOM) for houses sold in the 3rd quarter was 137 days. A year ago it took more than 2 weeks longer, with a median DOM of 153 days. And the pace quickened even more last month, to a median of 132 DOM.
The median price of houses sold in September was $277,900, 16.2% less than a year ago.....and 26.8% below 2 years ago.
On a price per square foot basis, the change is even more dramatic; last month, the median sale price per square foot for stick-built houses on less than an acre in Bend was $139.3/sf. A year ago, this number was $182.7/sf and in September 2006, it was $197.8/sf.
There are plenty of great houses to see (about 1500 are listed for sale in Bend) and interest rates are still near historical lows (around 6% for a 30 year fixed rate)
If you haven't looked in a while and are curious to see what you can get for your money now, or you want to know what your house is worth in today's market, call me, with no obligation, of course.
In addition, the amount of time it took to sell a house in the just completed 3rd quarter was less than a year ago. The median days on the market (DOM) for houses sold in the 3rd quarter was 137 days. A year ago it took more than 2 weeks longer, with a median DOM of 153 days. And the pace quickened even more last month, to a median of 132 DOM.
The median price of houses sold in September was $277,900, 16.2% less than a year ago.....and 26.8% below 2 years ago.
On a price per square foot basis, the change is even more dramatic; last month, the median sale price per square foot for stick-built houses on less than an acre in Bend was $139.3/sf. A year ago, this number was $182.7/sf and in September 2006, it was $197.8/sf.
There are plenty of great houses to see (about 1500 are listed for sale in Bend) and interest rates are still near historical lows (around 6% for a 30 year fixed rate)
If you haven't looked in a while and are curious to see what you can get for your money now, or you want to know what your house is worth in today's market, call me, with no obligation, of course.
Tuesday, September 23, 2008
4000sf Custom Home plus Shop on 2.5 Acres in Bend
This beautiful 4000sf custom home is on a private, serene 2.5 acre lot along the river-like COI main canal and has 1.25 acres of water rights. Horses are allowed.
It includes a 40' x 50' shop with RV hookups and utilities run to it. It is also framed for an apartment or office.
All this and it's in town, only only a short walk to distinguished Lava Ridge Elementary and SkyView Middle Schools and the new Les Schwab corporate headquarters!
$1,250,000
Call me today to schedule your private showing.
Friday, September 19, 2008
Renaissance Homes To File Bankruptcy
Randy Sebastian, president of Portland-based Renaissance Homes, disclosed in an email letter I received earlier today that the company plans to file Chapter 11 bankruptcy.
Sebastian's letter says that Renaissance plans to "conduct 'business as usual' while in Chapter 11" by selling off its existing inventory of completed houses, finishing those houses currently under contract but not yet completed and starting any new homes that are pre-sold.
According to wikipedia, "a chapter 11 filing is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations." (For more on Chapter 11 bankruptcy, check out wikipedia).
Renaissance currently has several projects at various stages of development throughout the northwest, including Aspen Rim (Renaissance Ridge) in southwest Bend, Fremont Place in Bend's Northwest Crossing neighborhood and Shevlin Pines off Shevlin Park Road on the way to Shevlin Park in Northwest Bend.
Visit Renaissance-Homes.com for more information.
Sebastian's letter says that Renaissance plans to "conduct 'business as usual' while in Chapter 11" by selling off its existing inventory of completed houses, finishing those houses currently under contract but not yet completed and starting any new homes that are pre-sold.
According to wikipedia, "a chapter 11 filing is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations." (For more on Chapter 11 bankruptcy, check out wikipedia).
Renaissance currently has several projects at various stages of development throughout the northwest, including Aspen Rim (Renaissance Ridge) in southwest Bend, Fremont Place in Bend's Northwest Crossing neighborhood and Shevlin Pines off Shevlin Park Road on the way to Shevlin Park in Northwest Bend.
Visit Renaissance-Homes.com for more information.
Tuesday, September 16, 2008
FREE Document Shredding Event To Benefit Local Food Bank
I'm very happy to announce that my associates and I at Steve Scott Realtors are partnering with SecureShred on Saturday, October 4, 2008, to provide residents the opportunity to safely destroy personal documents and gather donations for a local food bank. SecureShred, a division of Bend Garbage and Recycling, will offer on-site document destruction at no cost to the public.
You may bring all documents to be destroyed without removing staples, brads or paperclips. No advance sorting is necessary. The truck will destroy items right there on site, including binders!
In return, we ask that you bring a bag of non-perishable food items for the NeighborImpact Food Bank. Providing food to 32 local agencies in Crook, Deschutes and Jefferson counties, NeighborImpact is part of the Oregon Food Bank statewide network. Cash donations and checks will also be accepted in lieu of non-perishable food.
This event will take place at Steve Scott Realtors parking lot, 685 SE 3rd Street, Bend, from 8 a.m. until noon. If you have any questions, please call me at 541.410.9060.
Please note that this event is open to residential shredding only and does not include commerical businesses.
You may bring all documents to be destroyed without removing staples, brads or paperclips. No advance sorting is necessary. The truck will destroy items right there on site, including binders!
In return, we ask that you bring a bag of non-perishable food items for the NeighborImpact Food Bank. Providing food to 32 local agencies in Crook, Deschutes and Jefferson counties, NeighborImpact is part of the Oregon Food Bank statewide network. Cash donations and checks will also be accepted in lieu of non-perishable food.
This event will take place at Steve Scott Realtors parking lot, 685 SE 3rd Street, Bend, from 8 a.m. until noon. If you have any questions, please call me at 541.410.9060.
Please note that this event is open to residential shredding only and does not include commerical businesses.
Thursday, September 11, 2008
More Experts Expect Housing Bottom Next Summer
A group of so called experts predicted Wednesday that the nation's real estate market will stabilize next summer.
During a forum held in New York yesterday by Standard and Poor and the Chicago Mercantile Exchange, several well-respected economists agreed that the housing market will level off next summer as overall price declines make more houses more affordable to more prospective buyers and mortgage loan money becomes more readily available as the current credit crisis passes.
For more on this story, click here: http://money.cnn.com/2008/09/11/real_estate/bottoms_coming_up/index.htm?postversion=2008091115
During a forum held in New York yesterday by Standard and Poor and the Chicago Mercantile Exchange, several well-respected economists agreed that the housing market will level off next summer as overall price declines make more houses more affordable to more prospective buyers and mortgage loan money becomes more readily available as the current credit crisis passes.
For more on this story, click here: http://money.cnn.com/2008/09/11/real_estate/bottoms_coming_up/index.htm?postversion=2008091115
Tuesday, September 9, 2008
Rates Fall Below 6% On Takeover Of Fannie, Freddie
Mortgage interest rates have fallen below 6% this week following the news Sunday that the Treasury Department will take over Fannie Mae and Freddie Mac. The rate on a 30 year fixed rate mortgage now stands at around 5.875%
Since the two entities' debt is now backed by the full faith and credit of the U.S., buyers of mortgage backed securities are now willing to accept lower yields, closer to those of treasury bonds which are perceived to be "risk free." This narrower yield spread in turn leads to lower interest rates on home loans.
Since the two entities' debt is now backed by the full faith and credit of the U.S., buyers of mortgage backed securities are now willing to accept lower yields, closer to those of treasury bonds which are perceived to be "risk free." This narrower yield spread in turn leads to lower interest rates on home loans.
Friday, September 5, 2008
Home Sales Dip In August
89 stick built houses on less than an acre in Bend have been reported sold to the MLS of Central Oregon. This is 18 fewer than were reported sold in July and 55 less than a year ago.
The median sale price also declined, from $289,000 in July to $278,865 in August but the median price paid per square foot actually increased. Buyers paid $154.9 per square foot in August versus $153.7 in July. In July 2007, the median sale price was $350,000 and the median price per square foot was $177.5.
Meanwhile, sellers were able to sell much faster in August than in July, or even more quickly than a year earlier for that matter. Of the 89 houses sold it August, the median days on the market (DOM) was just 92 days. In July it was 143 days and a year earlier the median DOM was 134 days.
I think two of the main reasons houses sold more quickly is that a) there are more bank-owned houses that are "priced to sell" and b) more home sellers realize that proper pricing is critical in today's market.
Home sales activity typically peaks in September and October, as sales contracts that were written in July and August are completed. But this is anything but a typical market so we'll have to wait and see how this fall compares.
There are plenty of nice houses to look at, interest rates are still good (at around 6.5% for a 30 year fixed), FHA loans are readily available with only 3% down (that's less than $8400 at August's median sale price) and home sellers are very motivated. If you've considered buying, give me a call at 410.9060 and let's get started!
The median sale price also declined, from $289,000 in July to $278,865 in August but the median price paid per square foot actually increased. Buyers paid $154.9 per square foot in August versus $153.7 in July. In July 2007, the median sale price was $350,000 and the median price per square foot was $177.5.
Meanwhile, sellers were able to sell much faster in August than in July, or even more quickly than a year earlier for that matter. Of the 89 houses sold it August, the median days on the market (DOM) was just 92 days. In July it was 143 days and a year earlier the median DOM was 134 days.
I think two of the main reasons houses sold more quickly is that a) there are more bank-owned houses that are "priced to sell" and b) more home sellers realize that proper pricing is critical in today's market.
Home sales activity typically peaks in September and October, as sales contracts that were written in July and August are completed. But this is anything but a typical market so we'll have to wait and see how this fall compares.
There are plenty of nice houses to look at, interest rates are still good (at around 6.5% for a 30 year fixed), FHA loans are readily available with only 3% down (that's less than $8400 at August's median sale price) and home sellers are very motivated. If you've considered buying, give me a call at 410.9060 and let's get started!
Thursday, September 4, 2008
Building A Better Central Oregon Seeking Nominations
I have been asked this year to sit on the Building A Better Central Oregon committee by the Central Oregon Association of Realtors.
The committee is responsible for reviewing selected commercial and residential construction and renovation projects that enhance the beauty and vitality of the central Oregon community.
The committee is currently seeking nominations.
The basic criteria for qualified properties or projects is that they 1) must have been completed within the past two years, 2) make a significant impact on and enhancement to the community and 3) be either new construction or renovation/restoration.
In addition, a project will be more highly considered if it is visible to the public, privately funded and incorporates locally sourced materials.
The Building A Better Central Oregon awards were created in the early 1980s as a way to recognize individuals who were investing in the the community by renovating and improving older homes. In the more than 20 years since its start, the program has grown substantially and now includes commercial and residential building projects, including new construction.
If you would like to submit a property/project for consideration, please contact me. Please be able to provide general information on the project along with photos. Renovations and restorations projects will require before and after photos.
Nominations are being accepted through September 21 and awards will be given out at an awards ceremony later in the Fall.
The committee is responsible for reviewing selected commercial and residential construction and renovation projects that enhance the beauty and vitality of the central Oregon community.
The committee is currently seeking nominations.
The basic criteria for qualified properties or projects is that they 1) must have been completed within the past two years, 2) make a significant impact on and enhancement to the community and 3) be either new construction or renovation/restoration.
In addition, a project will be more highly considered if it is visible to the public, privately funded and incorporates locally sourced materials.
The Building A Better Central Oregon awards were created in the early 1980s as a way to recognize individuals who were investing in the the community by renovating and improving older homes. In the more than 20 years since its start, the program has grown substantially and now includes commercial and residential building projects, including new construction.
If you would like to submit a property/project for consideration, please contact me. Please be able to provide general information on the project along with photos. Renovations and restorations projects will require before and after photos.
Nominations are being accepted through September 21 and awards will be given out at an awards ceremony later in the Fall.
Friday, August 29, 2008
Buyers Willing To Offer Full Price
Even in today's challenging market, buyers will pay list price and more if they perceive they're getting value for their money.
More than half of the stick built home sales on less the one acre in Bend this month have sold for at least 95% of their asking prices. In fact, 25% sold at or above list price! (Stick built houses on less than an acre account for well over 80% of all residential sales.)
The properties sold run the gamut, from typical owner occupied houses to rentals, short sales and bank owned foreclosures. So contrary to popular opinion, home sellers do not need to price in a "cushion" to negotiate with when marketing their houses. Often just making a house presentable and accessible and pricing it correctly is all that is needed to attract an acceptable offer.
If you're considering selling, contact me to find out what your property is worth, with no obligation of course.
More than half of the stick built home sales on less the one acre in Bend this month have sold for at least 95% of their asking prices. In fact, 25% sold at or above list price! (Stick built houses on less than an acre account for well over 80% of all residential sales.)
The properties sold run the gamut, from typical owner occupied houses to rentals, short sales and bank owned foreclosures. So contrary to popular opinion, home sellers do not need to price in a "cushion" to negotiate with when marketing their houses. Often just making a house presentable and accessible and pricing it correctly is all that is needed to attract an acceptable offer.
If you're considering selling, contact me to find out what your property is worth, with no obligation of course.
Wednesday, August 27, 2008
More Lenders Coming To Grips With Realty Reality
As foreclosures continue to mount nationwide and with prices still declining, lenders are now more willing than ever to work with struggling homeowners to help keep them in their homes.
Hope Now, a consortium of loan servicers, lenders and investors reportedly restructured 192,034 loans in July alone. Of these, 80,000 or 42% involved permanently modifying the loan terms to make them more affordable. A year ago, only 24% of the workouts arranged included permanent modifications. The remaining 112,034 workouts involved new repayment plans. The coalition reports helping more than 2 million borrowers during the last 13 months.
Many lenders, servicers and investors were initially reluctant to restructure the original loan terms. But as it's become more obvious that the problem is widespread and not likely to turnaround anytime soon, they are now cooperating more with borrowers.
Surprisingly, the majority of struggling borrowers do not contact their lenders to try and arrange a solution. According to Faith Schwarz, the executive director of Hope Now, of 1.6 million letters sent out by the coalition since November 1 2007 to borrowers 60 days past due, 80% of borrowers had not contacted their lenders a month after receiving the letter.
If you or someone you know is struggling with making your mortgage payment, please contact your lender. Communication is key. And the sooner the better.
If you'd like to discuss your situation with me in strict confidence and without obligation, please call.
The Hope Now alliance can be reached at http://www.hopenow.com/
Hope Now, a consortium of loan servicers, lenders and investors reportedly restructured 192,034 loans in July alone. Of these, 80,000 or 42% involved permanently modifying the loan terms to make them more affordable. A year ago, only 24% of the workouts arranged included permanent modifications. The remaining 112,034 workouts involved new repayment plans. The coalition reports helping more than 2 million borrowers during the last 13 months.
Many lenders, servicers and investors were initially reluctant to restructure the original loan terms. But as it's become more obvious that the problem is widespread and not likely to turnaround anytime soon, they are now cooperating more with borrowers.
Surprisingly, the majority of struggling borrowers do not contact their lenders to try and arrange a solution. According to Faith Schwarz, the executive director of Hope Now, of 1.6 million letters sent out by the coalition since November 1 2007 to borrowers 60 days past due, 80% of borrowers had not contacted their lenders a month after receiving the letter.
If you or someone you know is struggling with making your mortgage payment, please contact your lender. Communication is key. And the sooner the better.
If you'd like to discuss your situation with me in strict confidence and without obligation, please call.
The Hope Now alliance can be reached at http://www.hopenow.com/
Tuesday, August 12, 2008
FHA Loans Gain Status In Today's Market
Lack of having the required down payment is the second most common reason potential buyers give as to why they don’t or can’t buy a house (just behind high home prices).
When times were good and money was cheap, the ability to fog a mirror was about all it took to get a home loan; lack of a down payment was rarely an issue and FHA-type loans were seldom used. But now most traditional lenders are demanding 5% or more down.
FHA however still guarantees loans with just 3% down. The difference between 5% down and 3% down may not sound like much, but it’s $6000 on a loan of $300,000. In fact, with the allowable FHA limit in Deschutes County now at $447,500, a buyer can get in to a house with a down payment of nearly $9000 less than a traditional lender would require.If not having enough for a down payment is one reason why you've been holding off from buying a house, call me to find out more about FHA and other low down payment options. You might be closer to making your dream of being a home owner come true than you think!
Friday, August 8, 2008
Cost Of Getting A Home Loan Increases
Fannie Mae reported today a loss of $2.3 billion for the 2nd quarter. Earlier this week, Freddie Mac announced that it lost $821 million in the same period. As a result, both have said they will be making changes that will make mortgage loans harder and more expensive to get.
In effort to shore up their books, Fannie and Freddie will impose higher fees on lenders who sell loans to them. In turn, these lenders will pass their increased costs through to borrowers, which will result in higher interest rates for home loans.
In addition, Fannie will stop buying Alt-A loans by the end of the year. Alt-A loans are often used by borrowers who can't document their incomes, such as self-employed individuals. In the recent past, these people were able to obtain loans based primarily on their credit scores, often with little or no money down. In the wake of the housing market bust and the credit crisis, this option has been pretty much taken off the table.
In effort to shore up their books, Fannie and Freddie will impose higher fees on lenders who sell loans to them. In turn, these lenders will pass their increased costs through to borrowers, which will result in higher interest rates for home loans.
In addition, Fannie will stop buying Alt-A loans by the end of the year. Alt-A loans are often used by borrowers who can't document their incomes, such as self-employed individuals. In the recent past, these people were able to obtain loans based primarily on their credit scores, often with little or no money down. In the wake of the housing market bust and the credit crisis, this option has been pretty much taken off the table.
Monday, July 28, 2008
Builders Take Bigger Hit Than Other Homesellers
In June of 2008, 114 homes on less than an acre were reported sold in Bend. This was down 25% from the 152 sold a year earlier. But it was new homes that saw the biggest slowdown in activity; sales of newly built houses were down 47% in June while existing home sales decreased by a relatively modest 16%.
And where new home sales accounted for 3 of every 10 houses sold in June '07, one year later that number was down to 2 in 10.
And finally, the number of standing spec houses for sale (newly built but yet to be sold) continues to shrink as many have been sold and builders pull back from building more.
While not meaning to imply that we're out of the woods just yet, I think this is on more sign that we are slowly making our way through this challenging market environment.
And where new home sales accounted for 3 of every 10 houses sold in June '07, one year later that number was down to 2 in 10.
And finally, the number of standing spec houses for sale (newly built but yet to be sold) continues to shrink as many have been sold and builders pull back from building more.
While not meaning to imply that we're out of the woods just yet, I think this is on more sign that we are slowly making our way through this challenging market environment.
Friday, July 25, 2008
One In Three Houses For Sale Is Vacant
Of the approximately 1536 existing stick built houses on less than one acre currently listed for sale in Bend, more than one third are vacant.
Data pulled from the MLS of Central Oregon shows that 555 houses on less than 1 acre are standing vacant and listed for sale. Of these, 252 are new spec homes and 303 are existing houses.
The 555 vacant houses represent about 36% of all stick built houses currently listed for sale in Bend.
Since there is no need to coordinate schedules with multiple individual home sellers, it is much easier to get in and see a lot of vacant houses in a short period of time. If you'd like to get out and see what's currently for sale, feel free to give me a call to set up a time to go out and take a look...410-9060.
Data pulled from the MLS of Central Oregon shows that 555 houses on less than 1 acre are standing vacant and listed for sale. Of these, 252 are new spec homes and 303 are existing houses.
The 555 vacant houses represent about 36% of all stick built houses currently listed for sale in Bend.
Since there is no need to coordinate schedules with multiple individual home sellers, it is much easier to get in and see a lot of vacant houses in a short period of time. If you'd like to get out and see what's currently for sale, feel free to give me a call to set up a time to go out and take a look...410-9060.
Thursday, July 24, 2008
Sales, Prices Up in June
Numbers from the MLS of Central Oregon show that home sales activity in Bend increased in June, with 114 stick built houses on less than an acre reported sold during the month. Sales reported for May totaled 106 houses.
The median price per square foot for houses on less than an acre sold in June was also up from a month earlier. Of the 114 sold in June, the median $/sf was $165.6, compared to $154.8 in May.
Finally, the median sale price for houses on less than an acre also increased to $315,000 in June, up from $302,500 in May.
The median price per square foot for houses on less than an acre sold in June was also up from a month earlier. Of the 114 sold in June, the median $/sf was $165.6, compared to $154.8 in May.
Finally, the median sale price for houses on less than an acre also increased to $315,000 in June, up from $302,500 in May.
Monday, June 30, 2008
Preliminary Numbers Show Signs of Stability
The housing market in Bend may indeed be finding its footing. 94 closed sales of houses on less than 1 acre have been reported so far in June. May's final number came in at 106 closed sales. I would suspect we'll see at least a few more closed sales for June logged over the next few days.
Prices too seem to be leveling off after months of decline. The median price of a home in Bend on less than 1 acre sold in June was $315,000 with 1916sf. In May, the median sold price was $302,500 and had 1954sf. So we actually saw the $/sf price increase from $154.8 to $164.4.
I'll report back next week to see how the final numbers turn out.
Prices too seem to be leveling off after months of decline. The median price of a home in Bend on less than 1 acre sold in June was $315,000 with 1916sf. In May, the median sold price was $302,500 and had 1954sf. So we actually saw the $/sf price increase from $154.8 to $164.4.
I'll report back next week to see how the final numbers turn out.
Thursday, June 12, 2008
Interest Rates Jump
Interest rates for mortgages have moved significantly higher over the last 30 days, as investors have been spooked with fears of inflation.We've talked about the correlation between mortgage rates and 10 year treasury yields before and that relationship is evident in the graph above.
As higher food and energy costs begin to be felt worldwide, and with Fed chair Ben Bernanke now talking about supporting the dollar against other currencies, investors are beginning to anticipate higher rates in the future. This expectation drives the value or price of fixed income securities, like 10 year treasuries, lower and their corresponding yields higher. This in turn leads to higher rates for mortgages.
High Rates Mean Less Purchasing Power
In the last 60 days, rates on 30 year fixed rate loans have increased from around 5.6% to near 6.25%. For a loan of $300,000, this means about $125 more per month, an increase of 7%.
Another way to look at this is that a payment of $1850 at 5.6% would buy you a $321,732 loan. Now that same $1850 buys only $300,000.
Is Now The Time To Buy?
Though I don't expect home prices to increase quickly anytime soon, I do think we'll see higher interest rates going forward. And as rates increase, your purchasing power decreases. So even if home prices continue to go down, higher mortgage rates may cause your monthly payment to remain the same or even increase.
So if you've been considering buying a home, now is a good time to get out and look; there are lots of houses to look at and rates are still historically low.
Monday, June 9, 2008
May Sales Numbers Show Increase In Activity, Prices
Sales of stick built homes on less than 1 acre in the Bend/Tumalo/Alfalfa area showed an increase in both sales volume and sales price in May from a month earlier.
103 houses were reported sold in May, with a median sales price of $305,000. This compares to April's sales figures of 92 houses with a median sales price of $273,500.
Price paid per square foot of homes sold in May increased as well to $155.5/sf compared to April's median of $154.3/sf.
103 houses were reported sold in May, with a median sales price of $305,000. This compares to April's sales figures of 92 houses with a median sales price of $273,500.
Price paid per square foot of homes sold in May increased as well to $155.5/sf compared to April's median of $154.3/sf.
Monday, June 2, 2008
Prices Hold Steady
Preliminary numbers indicate that the price per square foot for houses on less than an acre sold in May held steady from April at $154.6/sf.
While this is down from a year ago, when the price per square foot was $197.6, it is another sign that we may be bumping bottom on prices.
Closed sales also held fairly steady in May, with 97 reported sales versus 91 in April. Then again, sales typically pick up in late spring and through the summer.
With 15+ months of inventory available, there is a great selection of houses to choose from. Give me a call if you're interested in seeing what's out there.
While this is down from a year ago, when the price per square foot was $197.6, it is another sign that we may be bumping bottom on prices.
Closed sales also held fairly steady in May, with 97 reported sales versus 91 in April. Then again, sales typically pick up in late spring and through the summer.
With 15+ months of inventory available, there is a great selection of houses to choose from. Give me a call if you're interested in seeing what's out there.
Thursday, May 29, 2008
Four Month Numbers Show Big Change
It's hardly news that housing prices in Central Oregon have receded from the highs reached from late 2005 until the beginning of 2007. But going over the sales numbers from the first four months of this year and comparing them to those of the last several years yields some very interesting things.
Sales Activity Finding Its Footing?
There were 158 reported sales of stick-built houses on less than an acre in the Bend/Tumalo/Alfalfa area from January 1 through April 30 this year. While this is considerably less than the volume for that same period going back to at least 2001 (in 2005, there were 513 sales reported!), it is close to the 168 houses sold in the first four months of 2007.
Based on these comparable numbers and the recent activity I'm seeing, I hazard to guess that we're now bumping bottom in terms of sales activity.
Relative Prices
The median sale price of the 158 houses sold on less than one acre from Jan. 1 through Apr. 30 was $245,000, down about 5% from the $258,650 reported over this same period in 2007. But what's most telling is what you get for your money!
$258,650 in the first four months of 2007 would buy you a 3 bedroom, 2 bath house with 1333 square feet. That's $194 per square foot. Over this same period this year, the median house reported sold grew to 1596 square feet and cost $245,000. That's only $154 per square foot, or 21% less than just one year ago!
Historical Price Appreciation
While some years we see a higher rate of price appreciation and other years a lower one, the annual increase in house prices going back several decades averages around 8%.
Starting with the median price per square foot reported for the first 4 months of 2001, $94.8, and adding 8% year over year, the median price/sf in 2008 would come in at $162.5.
At $154 per square foot, the median price per square foot for the reported sales in the Jan. thru April period this year is more than 5% lower than the historical average.
Another sign that we're bumping bottom?
Sales Activity Finding Its Footing?
There were 158 reported sales of stick-built houses on less than an acre in the Bend/Tumalo/Alfalfa area from January 1 through April 30 this year. While this is considerably less than the volume for that same period going back to at least 2001 (in 2005, there were 513 sales reported!), it is close to the 168 houses sold in the first four months of 2007.
Based on these comparable numbers and the recent activity I'm seeing, I hazard to guess that we're now bumping bottom in terms of sales activity.
Relative Prices
The median sale price of the 158 houses sold on less than one acre from Jan. 1 through Apr. 30 was $245,000, down about 5% from the $258,650 reported over this same period in 2007. But what's most telling is what you get for your money!
$258,650 in the first four months of 2007 would buy you a 3 bedroom, 2 bath house with 1333 square feet. That's $194 per square foot. Over this same period this year, the median house reported sold grew to 1596 square feet and cost $245,000. That's only $154 per square foot, or 21% less than just one year ago!
Historical Price Appreciation
While some years we see a higher rate of price appreciation and other years a lower one, the annual increase in house prices going back several decades averages around 8%.
Starting with the median price per square foot reported for the first 4 months of 2001, $94.8, and adding 8% year over year, the median price/sf in 2008 would come in at $162.5.
At $154 per square foot, the median price per square foot for the reported sales in the Jan. thru April period this year is more than 5% lower than the historical average.
Another sign that we're bumping bottom?
Wednesday, May 14, 2008
Zillow Reports Bend Area Prices Down 13.4%
According to Zillow, home prices in Bend decreased 13.4% in the 1st quarter compared to the 1st quarter of 2007.
Though I don't rely on Zillow to determine home prices (especially in Central Oregon), these latest numbers are somewhat in line with what we know already; prices have come down from the highs reached in the summer of 2006.
Though I don't rely on Zillow to determine home prices (especially in Central Oregon), these latest numbers are somewhat in line with what we know already; prices have come down from the highs reached in the summer of 2006.
Wednesday, April 30, 2008
Fed Lowers Rates Yet Again
For the 7th time since last September, the Federal Reserve cut its target for the federal funds rate earlier this week. The rate, charged on overnight loans between banks, now stands at 2%, down a cumulative 3.25 percentage points in the last 8 months. The Fed simultaneously cut the discount rate, charged on direct loans to banks and securities dealers, from 2.5% to 2.25%.
What It Means For Mortgage Rates
Though there is no direct correlation between the fed funds rate and interest rates on mortgage loans, many investors look to the yield on 10 year treasury notes as a barometer for 30 year mortgage rates. While treasuries are considered "risk free," mortgage rates generally about 1.5% to 2.0% (150 to 200 basis points) higher than 10 year treasuries to compensate for the risk that a home loan will not be repaid.
With the 10 year yield now at 3.86%, rates on 30 year mortgage loans are right around 6%, certainly at the higher end of the historic margin range. This is an indication that buyers of mortgage backed securities are still somewhat risk averse, expecting higher inflation and/or more challenges in the real estate market.
But since most HELOCs (home equity lines of credit) and consumer rates (credit cards, etc.) directly track the prime rate, and the prime rate typically tracks the fed funds rate, expect to see some relief on these rates immediately.
What It Means For Mortgage Rates
Though there is no direct correlation between the fed funds rate and interest rates on mortgage loans, many investors look to the yield on 10 year treasury notes as a barometer for 30 year mortgage rates. While treasuries are considered "risk free," mortgage rates generally about 1.5% to 2.0% (150 to 200 basis points) higher than 10 year treasuries to compensate for the risk that a home loan will not be repaid.
With the 10 year yield now at 3.86%, rates on 30 year mortgage loans are right around 6%, certainly at the higher end of the historic margin range. This is an indication that buyers of mortgage backed securities are still somewhat risk averse, expecting higher inflation and/or more challenges in the real estate market.
But since most HELOCs (home equity lines of credit) and consumer rates (credit cards, etc.) directly track the prime rate, and the prime rate typically tracks the fed funds rate, expect to see some relief on these rates immediately.
Thursday, April 17, 2008
Foreclosures and Short Sales
Many people have been asking lately about foreclosures and short sale properties. From these conversations, it's become clear to me that there is a lot of confusion about these two vastly different transactions.
A quick and simple way to distinguish the two is to think about "foreclosures" (often referred to as "bank-owned" or REO properties) as those properties that are now owned by the lender (REO is bank jargon for "real estate owned"). A "short sale" is an alternative to foreclosure.
A "short sale" property is still owned by the borrower/homeowner but will require a lender's approval before it can be sold, since the borrower/homeowner will not clear enough from the sale to pay off the outstanding loan amount. The following link does an excellent job of describing the challenges involved with short selling a property.
http://online.wsj.com/article/SB120839380851021529.html?mod=residential_real_estate
Keep in mind that as a buyer, you stand a much better chance (not to mention a much faster and easier process) finding a "bargain" by purchasing a "foreclosure" versus a "short sale."
A quick and simple way to distinguish the two is to think about "foreclosures" (often referred to as "bank-owned" or REO properties) as those properties that are now owned by the lender (REO is bank jargon for "real estate owned"). A "short sale" is an alternative to foreclosure.
A "short sale" property is still owned by the borrower/homeowner but will require a lender's approval before it can be sold, since the borrower/homeowner will not clear enough from the sale to pay off the outstanding loan amount. The following link does an excellent job of describing the challenges involved with short selling a property.
http://online.wsj.com/article/SB120839380851021529.html?mod=residential_real_estate
Keep in mind that as a buyer, you stand a much better chance (not to mention a much faster and easier process) finding a "bargain" by purchasing a "foreclosure" versus a "short sale."
Monday, April 7, 2008
March Numbers Show More Buyers, Lower Prices
89 single family homes on less than an acre were reported to have closed escrow in the greater Bend area in March. The median sale price was $293,000 or $159.1/sf.
33 more homes were reported sold in March than in February. Sales activity however was down substantially from a year earlier; 159 homes were sold in March 2007.
The median price a year ago was $358,000, reflecting a $/sf price of $182.7 per square foot.
33 more homes were reported sold in March than in February. Sales activity however was down substantially from a year earlier; 159 homes were sold in March 2007.
The median price a year ago was $358,000, reflecting a $/sf price of $182.7 per square foot.
Tuesday, March 18, 2008
Fed Lowers Rates, DOW Soars
The Federal Reserve cut it Fed-Funds Target Rate by .75 percentage points today to 2.25%. The Fed has now cut the rate by a full 3% since September.
Though many investors had hoped for a full point reduction, the 75 basis points was only the second time the fed has cut that drastically since at least 1994. And any disappointment on Wall Street was quickly put aside, as the Dow Jones Industrial Average recorded a gain of more than 420 points, a surge of 3.5%.
Commercial banks began lowering their prime rates by an equal amount, to 5.25% from 6%. Some variable rates, especially Home Equity Lines of Credit (HELOC), are directly tied to the prime rate so consumers should see some immediate relief.
Mortgage Rates
Many of the Fed's rate cuts to date have not fully filtered through to home buyers. Though the Fed started cutting rates in September, rates rose above 6% in February from about 5.5% in December. They've only recently dropped below 6% again.
Among "Jumbo" loans, rates are actually higher now than they were last July, mainly because investors are reluctant to buy securities backed by such loans.
Though many investors had hoped for a full point reduction, the 75 basis points was only the second time the fed has cut that drastically since at least 1994. And any disappointment on Wall Street was quickly put aside, as the Dow Jones Industrial Average recorded a gain of more than 420 points, a surge of 3.5%.
Commercial banks began lowering their prime rates by an equal amount, to 5.25% from 6%. Some variable rates, especially Home Equity Lines of Credit (HELOC), are directly tied to the prime rate so consumers should see some immediate relief.
Mortgage Rates
Many of the Fed's rate cuts to date have not fully filtered through to home buyers. Though the Fed started cutting rates in September, rates rose above 6% in February from about 5.5% in December. They've only recently dropped below 6% again.
Among "Jumbo" loans, rates are actually higher now than they were last July, mainly because investors are reluctant to buy securities backed by such loans.
Thursday, March 6, 2008
FHA Raises Conforming Loan Limits
The Federal Housing Administration announced today that mortgage loan amounts backed by Fannie Mae and Freddie Mac will rise to a maximum of $729,750 in more than 70 counties across the U.S. The previous maximum amount for these loans, known as "conforming loans," was $417,000.
While the counties now eligible for the highest amounts are in California, New York and other high priced areas, the new conforming limit in Bend was increased to $447,500.
Lower "jumbo" rates
It is anticipated that allowing Freddie and Fannie to guarantee loans up to the new limits will encourage lenders to reduce interest rates on loans above the previous threshold of $417,000, so called "jumbo" loans. Prior to the credit crunch which began last summer, the difference in rates between conforming and jumbo loans was around .25 percent. The current tighter credit market has seen this spread increase to as much as 1 percent.
What this means locally
The new loan limit will not only help Central Oregonians qualify for bigger loan amounts. Another, perhaps bigger, benefit locally is that increased conforming limits in our "feeder" markets (particularly California) will help those people wanting to move here improve the chances of selling their existing houses, as more buyers will be able to afford higher priced homes there. The new conforming limit in San Diego is $696,500, Sacramento $580,000 and Riverside-San Bernadino $500,000.
The new rates are supposedly temporary and set to expire Dec. 1 of this year.
Here's a link to a table showing the new limits by MSA:
http://online.wsj.com/public/resources/documents/loanlimits0308.xls
While the counties now eligible for the highest amounts are in California, New York and other high priced areas, the new conforming limit in Bend was increased to $447,500.
Lower "jumbo" rates
It is anticipated that allowing Freddie and Fannie to guarantee loans up to the new limits will encourage lenders to reduce interest rates on loans above the previous threshold of $417,000, so called "jumbo" loans. Prior to the credit crunch which began last summer, the difference in rates between conforming and jumbo loans was around .25 percent. The current tighter credit market has seen this spread increase to as much as 1 percent.
What this means locally
The new loan limit will not only help Central Oregonians qualify for bigger loan amounts. Another, perhaps bigger, benefit locally is that increased conforming limits in our "feeder" markets (particularly California) will help those people wanting to move here improve the chances of selling their existing houses, as more buyers will be able to afford higher priced homes there. The new conforming limit in San Diego is $696,500, Sacramento $580,000 and Riverside-San Bernadino $500,000.
The new rates are supposedly temporary and set to expire Dec. 1 of this year.
Here's a link to a table showing the new limits by MSA:
http://online.wsj.com/public/resources/documents/loanlimits0308.xls
Tuesday, March 4, 2008
I'm Not Calling A Market Bottom But.....
After seeing the median home price in Bend climb by about 50% in 2 years (2004 to 2006), I'll be among the last you'll hear claim that we've hit bottom as far as prices are concerned.
But what about interest rates?
The average rate on a 30 year fixed rate loan is now about 6%. The lowest rate we've seen on these loans in the last 40+ years is about 5.25% The highest rate since 1970 was close to 18.5%, in 1981. http://www.freddiemac.com/pmms/pmms30.htm
With interest rates currently near historical lows (not to mention the accelerating rate of inflation), it is highly unlikely that we'll see interest rates go significantly lower any time soon. It's a better bet that rates will increase this year.
Purchasing power versus purchase price
Which brings me to the main point of this blog entry: While most people are concerned about the price they pay when buying a home, you may want to pay more attention to interest rates these days.
Let's say you could afford to buy a house you really like for $350,000 today. Putting 5% down ($17,500) and paying 6% on a loan for the balance would equal a payment of about $2000 a month.
But maybe you're hesitant because you think prices will come down even more. Let's assume you're right and prices do fall further, say 10% this year (a dramatic decrease by almost every account). If that were to happen, a year from now you could buy a house comparable to the one you like today at $350,000 for just $315,000.
Now let's also suppose that mortgage rates start returning closer to their historical average (about 8.5%) and a year from now the rate on a 30 year fixed is 7.25% (certainly a possibility, especially considering that rates were at about 6.7% less than 8 months ago and inflationary pressures are increasing).
Under this scenario, even though you pay a lower price, your payment would go up $50 a month simply because interest rates ticked up a bit closer to their historical average!
What to do
If you've even remotely considered buying a home in the next couple of years but are waiting for prices to fall further, talk to your bank today to find out the loan amount you qualify for and what the corresponding payment would be. This is a fast and easy process and costs you nothing. You can then start looking at houses and be in a great position to buy the home that's just right for you.
Feel free to call me to discuss your situation in more detail or to begin your search for a new home!
But what about interest rates?
The average rate on a 30 year fixed rate loan is now about 6%. The lowest rate we've seen on these loans in the last 40+ years is about 5.25% The highest rate since 1970 was close to 18.5%, in 1981. http://www.freddiemac.com/pmms/pmms30.htm
With interest rates currently near historical lows (not to mention the accelerating rate of inflation), it is highly unlikely that we'll see interest rates go significantly lower any time soon. It's a better bet that rates will increase this year.
Purchasing power versus purchase price
Which brings me to the main point of this blog entry: While most people are concerned about the price they pay when buying a home, you may want to pay more attention to interest rates these days.
Let's say you could afford to buy a house you really like for $350,000 today. Putting 5% down ($17,500) and paying 6% on a loan for the balance would equal a payment of about $2000 a month.
But maybe you're hesitant because you think prices will come down even more. Let's assume you're right and prices do fall further, say 10% this year (a dramatic decrease by almost every account). If that were to happen, a year from now you could buy a house comparable to the one you like today at $350,000 for just $315,000.
Now let's also suppose that mortgage rates start returning closer to their historical average (about 8.5%) and a year from now the rate on a 30 year fixed is 7.25% (certainly a possibility, especially considering that rates were at about 6.7% less than 8 months ago and inflationary pressures are increasing).
Under this scenario, even though you pay a lower price, your payment would go up $50 a month simply because interest rates ticked up a bit closer to their historical average!
What to do
If you've even remotely considered buying a home in the next couple of years but are waiting for prices to fall further, talk to your bank today to find out the loan amount you qualify for and what the corresponding payment would be. This is a fast and easy process and costs you nothing. You can then start looking at houses and be in a great position to buy the home that's just right for you.
Feel free to call me to discuss your situation in more detail or to begin your search for a new home!
Monday, January 28, 2008
Have We Hit A Housing Trifecta?
Conforming 30 year fixed rate mortgages are now averaging just a tad under 5.5%, while "Jumbos," those loans above $417,000, are now in the 6.5% range. Less than 6 months ago, these rates were closer to 6.3% and 7.2% respectively.
To put this in perspective, a $400,000 loan 6 months ago had a monthly payment of about $2476 (P&I). Today, the payment for that same loan amount would be $2271, a savings of $205 per month!
Another way to look at this is to consider the increase in your purchasing power. 6 months ago, a payment of $3395 would get you a loan of about $500,000. That same payment today would give you almost $37,000 more!
Home prices have come down, there are many nice houses for sale and interest rates are very low; a housing trifecta! You just might now be able to buy that house of your dreams! Call me to find out. After all, it doesn't hurt to look.
To put this in perspective, a $400,000 loan 6 months ago had a monthly payment of about $2476 (P&I). Today, the payment for that same loan amount would be $2271, a savings of $205 per month!
Another way to look at this is to consider the increase in your purchasing power. 6 months ago, a payment of $3395 would get you a loan of about $500,000. That same payment today would give you almost $37,000 more!
Home prices have come down, there are many nice houses for sale and interest rates are very low; a housing trifecta! You just might now be able to buy that house of your dreams! Call me to find out. After all, it doesn't hurt to look.
Saturday, January 5, 2008
More On Vacant Houses
As a follow up to the last post, 46% of houses on less than 1 acre and currently listed for sale in Bend are vacant according to data from MLS.
There are 1256 stick built houses on less than an acre listed for sale. Of those, 256 are vacant "existing" houses and 328 are "new construction" with completion dates of February 29 or sooner.
While it's doubtful that all of the "new construction" listed with completion dates between now and the end of February will be finished as scheduled, there are still a lot of empty houses waiting for buyers.
There are 1256 stick built houses on less than an acre listed for sale. Of those, 256 are vacant "existing" houses and 328 are "new construction" with completion dates of February 29 or sooner.
While it's doubtful that all of the "new construction" listed with completion dates between now and the end of February will be finished as scheduled, there are still a lot of empty houses waiting for buyers.
39% Of Homes For Sale Are Vacant
According to data culled from the MLS, 634 out of the 1639 stick-built houses, townhomes and condos currently listed for sale in the greater Bend area are vacant. That's 39% of the total inventory of houses for sale.
475 of the vacant properties are listed as new construction. Of these, 396 show that they're completely built or will be by the end of February.
475 of the vacant properties are listed as new construction. Of these, 396 show that they're completely built or will be by the end of February.
Thursday, January 3, 2008
Inventory Declines Over 10% In One Week!
Nearly 200 housing units were taken off the market in the greater Bend area between December 30th and January 2nd, resulting in a decline of more than 10% in the supply of residential properties for sale.
Most of the properties were removed from the market due to the expiration of listing contracts.
No doubt that many of these properties will be relisted, but any reduction in our inventory is a step towards a better market environment.
Most of the properties were removed from the market due to the expiration of listing contracts.
No doubt that many of these properties will be relisted, but any reduction in our inventory is a step towards a better market environment.
Subscribe to:
Posts (Atom)