Help For High End Home Buyers

Required Down Payment For Jumbo Loans Lowered

Check out this article from the Wall Street Journal

http://m.us.wsj.com/articles/SB10001424052702303936904579177643725556078?mg=reno64-wsj

This is great news for higher end home buyers. .... and sellers!

Higher Interest Rates Affecting Home Prices In Bend

Interest Rates Increase

After touching a low in the mid-3% range, the interest rate for a 30 year mortgage loan spiked above 4.5% this summer on speculation that the Federal Reserve would announce at its September meeting a tapering of its purchases of long-term US Treasuries and mortgage-backed bonds.

After retreating a bit following news that the Fed's bond buying would continue, the rate settled in the 4.5% range.  And while that's still low historically (see rate history below), the relatively higher rate has begun to impact home prices in the Bend area.

Price Paid Per Square Foot Falls

Buyers paid a median price of $150.02 per square foot for a house in the Bend area in September, down from $156.98/sf in August.  And the median price per square foot  paid last month was lower than the $152.67/sf paid in the 3rd quarter overall, and the $151.15/sf paid in Q2.

Higher Cost Of Money

Think of interest rates as the cost of money.  Like any other product or service, as the price increases, fewer people are willing or able to afford it.

To put this in perspective, the principal and interest payment on a $250,000 30 year loan at 3.5% is about $1123 per month. But at 4.5%, the monthly payment increases to about $1267.  That $144 monthly increase is the difference between some potential buyer's willingness or ability to purchase a home.

Silver lining for home sellers

It's not all bad news though.  The good news for those thinking of selling?   The median sale price in the 3rd quarter ($293,438) was 19.5% higher than a year earlier ($245,550).  And the dollar per square foot price increased even more.  At $152.67/sf, the Q3 median price per foot increased 20.2% from Q3 2012 ($127.03/sf).  For the owner of a 2000 square foot house, that's an increase in equity of more than $51,000!

As always, please forward, post and share this message.  And please let me know your thoughts by posting your comments below.

2012 Bend Home Sales Near 2006 Levels

After plateauing in 2011 following two years of notable improvement, the number of homes sold in Bend increased significantly last year, approaching levels not seen since the delirious days of 2006.

After peaking at 2,884 sales in 2005,  2,088 homes were sold in 2006 as the market began to teeter over the 2nd half of that year.  Home sales dropped precipitously in the following years, hitting a low of 1,121 in 2008.  But in 2009 buyers began to take advantage of  prices that were about 40% lower than they had been at the market's peak, and sales rebounded to 1,556 that year.  Sales volume increased again in 2010, but at a much slower rate, to 1,681 homes sold.    

But despite the number of sales in 2006 and 2012 being somewhat similar, that's where any real resemblance between the two years ends.  In 2006, the median sale price was $187.98/sf, or $350,581 for a 1865 square foot house.  Last year, that number was $118.91/sf ($222,000 for 1867sf).  That's a discount of 36.7%!  And let's not forget that the average interest rate for a 30 year fixed rate mortgage in 2006 was 6.41%, compared with 3.66% last year!  Now that's a breathtaking increase in purchasing power!

Let me know your thoughts on where you think the Bend real estate market is headed in 2013 and beyond by writing your comments below.  And please be sure to call me at 541.410.9060 for any real estate help or advice you, your family or friends may need. 

Bend Housing Market Robust

To quickly answer your question why it's been nearly seven and a half months since I last posted.....no, I didn't die....or retire....or find another career.  In fact, the answer is quite the opposite.  2012 has been one of the busiest years in a long time for me, and quite honestly, I haven't been very effective at carving out the time to put the numbers together and share my thoughts here about the real estate market in Bend (I suppose that's obvious!).  Anyway, as you'll see below, the market in Bend has been cranking this year too.....so let's jump right in and have a look!

This past Sunday marked the end of the 3rd quarter, providing a good time to look back over 2012 and compare it to where we were at this time last year.  Through September, the number of closed sales is up 17.1%....and the median sales price to date is 12.3% higher.  Even on a dollar-per-square-foot basis (which I think is more useful than the median price of recently sold homes when comparing the overall change in market value), the price per square foot paid for stick built houses on one acre or less in Bend so far this year has increased from $106.00/sf to $116.42/sf , 9.4%% higher.

The 3rd quarter was no exception.....in fact, the pace of sales and the rate at which prices rose accelerated over the past 3 months.  The number of houses sold increased 25.2% from the same period last year, from 425 homes sold to 532.  The median price increased to $235k from $205k (14.6%) and the price paid per square foot jumped 10%, from $112.89/sf to $124.21/sf in Q3 this year.

The amount of time it took to sell a home in the 3rd quarter remained essentially the same from last year, averaging about 4 to 4.5 months from the time a home is listed for sale until a sale is closed.

Please call or email me with any questions you may have, or to talk specifics about buying a home in Central Oregon or selling one you currently own in the area.

Bend Housing Market Remains Splintered

The real estate market in Bend continues to fracture along various price points.  Consider the sales activity outlined below for houses priced up to $250k, between $250k and $400k and above $400k.

Many houses below $250k are receiving multiple offers, or selling quickly (there are currently 145 for sale in this price range, with 77 closed sales last month; a 2 month supply, indicating a seller’s market).

In the mid-range ($250k to $400k), 26 sold last month and 144 are currently listed for sale (5 to 6 months of inventory – typically considered a balanced market)

Above $400k, 157 houses are currently for sale, with only 14 sold last month (11 months of supply – definitely a buyer’s market).

If you're curious to know what your house would sell for, or are interested in possibly buying a new home (the rental market is very good right now), please call me at 541.410.9060. 

Cash Sales Increase 11% In 2011

The number of houses purchased in Bend last year by buyers paying cash increased 11% from a year earlier, and accounted for more than 1 of every 4 closed sales.

452 of the 1688 stick built houses on less than an acre sold in the area in 2011 were cash deals.  This was up from 406 in 2010, when cash sales made up 24% of 1690 closed transactions.

Distressed Properties Continued To Drive Market In 2011

Distressed properties (short sales and foreclosures) accounted for a large portion of sales in Bend last year, continuing a trend we've witnessed over the last few years.  52.4% of all sales of stick built, single family houses on lots of one acre are less were either short sales or foreclosures in 2011.  In 2010, distressed property sales represented just over 51% of total sales.  What changed last year however was the mix of those distressed sales.

Short Sales Outnumber Foreclosures

While the term "short sale" has become ubiquitous in Central Oregon since the market crash, last year's total reached a new high water mark.  465 short sales were closed last year, making up 27.6% of all sales.  This represents a 20.5% increase from 2010, when 386 properties sold were short sales (22.8% of all home sales).

And while too many houses are still being foreclosed on, there's a glimmer of hope that the worst may be behind us.  Foreclosure went from representing 34.2% of all sales in 2010, to just under 24.8% last year.  And the picture improved even more over the 2nd half of the year, when foreclosure sales made up just 18.7% of the total.  The overall number of bank-owned properties sold in 2011 decreased by nearly 28% from a year earlier, from 579 to 418. 

Average Time To Complete Short Sale Improves

It seems everyone has heard at least one horror story about the special challenges of short sales, including often having to wait weeks, and sometimes even months, for an answer. But there's positive news on this front as well.

While short sales continued to take longer to close than other types of home sales last year (162 days versus 110 days), on average, short sales took 51 fewer days to close in 2011 than they did in 2010.  That's almost 2 months faster!

But, if you or someone you know is considering a short sale, don't assume that any agent can handle your transaction.  I've been recognized as a Certified Distressed Property Expert (CDPE) by the Distressed Property Institute and have extensive experience in handling short sales and foreclosures.  I offer free, confidential consultations.  Please call me at 541.410.9060 to arrange a time discuss your options.