Luxury Homes Not Being Sold In Portland

Homes worth more than $400,000 are not moving in Portland, in fact, 87% of homes sold in November in Portland were for less than $400,000. And even more evidence that the first time home buyers tax credit worked miracles for the market: 44% of home sales were for homes between $150,000 and $250,000. I expect these percentages to only increase over the next few months, especially with the tax credit expiring at the end of April. There will be a huge fall in all sales from April through July, which will majorly suck for the market, and the economy in general.

Plumbing with PEX Pipes

My husband took an a monumental task this weekend- replacing all of the old galvanized pluming in our house with new PEX pipes. Luckily we have an unfinished basement, so all of the pluming was visible, and we only replaced the pipes up to the point where they headed up into the walls. Still, it took 2 days, with my father-in-law's assistance, and my trying to be helpful! This project was great to do because it was relatively cheap, and the supplies are available at plumbing and hardware stores. PEX is also perfect for the amateur plumber and weekend do-it-yourselfer. Learn more at Lowes.com and at Northwest Renovation

Re-plumbing the whole house has also added value, for us now, and in a future sale, because we actually have water pressure now! At the same time we added in a new high efficiency, tank-less, gas water heater. The model we picked qualifies for a tax credit, and is powerful enough to supply water to several appliances at the same time.

The important thing, I think, about this project is that we will be able to enjoy the improvements immediately. Investing in your home isn't just about adding value for resale, but improving the quality of life you have in the home.

Be Glad If You Don't Own a Home in Bend

Bend has had the biggest decline in home values between Q2 and Q3 of 2009, in the whole country! While that market has been having major issues for a long time, this large of a decrease- 5.6% according to IHS Global Insight's report "House Prices in America"- is really bad news. Eventually the market will pick back up in Central Oregon's largest city, but it may take a long time, especially since the real estate market has not yet hit bottom.

Analysis of RMLS Monthly Report

The Regional Multiple Listing Service (RMLS) reported that the Portland region’s median home price ticked down to $239,000 in November, reaching its lowest level since June 2005. That's a 20.9% drop from the August 2007 peak of $302,000. While that's not good news, there were some positive aspects of the report. Sales were up a record 72% in November compared to a year ago. Sales only could come up from 2008 though, but any good news should be celebrated!

Median Prices for Portland Oregon Homes for November 2009

Median Sales Prices for Portland Or areas, for November 2009.
North Portland: October- $237,000 November- $245,000
NE Portland: October- $262,000 November- $249,700
SE Portland: October- $206,500 November- $202,500
West Portland: October-$333,700 November- $299,000
Beaverton/Aloha: October- $219,600 November- $220,000
Tigard/Tualatin/Sherwood/Wilsonville: October- $275,000 November- $275,000
Lake Oswego/West Linn: October- $381,500 November- $357,500
Milwaukie/Gladstone/Boring/Clackamas/Estacada: October- $253,800 November- $258,000

Is Mortgage Modification Failing?

Yes! And No! It seems to be equal parts success/stagnation and failure. There are currently 697,026 in trial modifications, up from 650,994 a month ago. This seems like a lot, but of the 4 million plus people in trouble, it's a small fraction that is growing slowly. Also, these are only trial modifications, meaning that if people don't make the payments on time, or their situation changes, they can get kicked out of the program and back into their old payment plan. That is exactly what has happened to 30,650 mortgage holders. Compare that to the almost equal number-31,382- that have been promoted from trail to permanent modifications. Not that many more successes than failures, and a whole hell of a lot of stagnation.
Read more details here.

RealtyTrac has Numbers on Oregon Foreclosures

The foreclosure website www.RealtyTrac.com has released its summary of Oregon foreclosures. They are down for the 4th month in a row, from a high in July, and they are down from this time last year. No one thinks we've seen the worst of the foreclosures yet, and I expect to have 2010 really be the year of foreclosures. People have been holding onto home through unemployment assistance and family help, but as that runs out and before job growth is created, there will be another onslaught of foreclosures. That will lead to more bank owned properties for sale, which are always cheaper than those owned by a person, so average prices will continue to creep down in the next year.

Flipping is Out, Nesting is In!

And not just because it seems like everyone around you is settling down, there are actual numbers to back it up. CNNMoney.com
has a new article out which reports that people are remodeling their current homes, as opposed to moving when they need more space or a different lay out. While that doesn't mean that flipping is a thing of the past, it does show that people are no longer constantly looking for the next bigger better house. They are staying where they are because they like the neighborhood, schools, or life they have built there. The slow real estate market for sellers can't be discouraging that choice either. Flipping has had a bad rap, and it isn't a very wise career move right now, but home buyers don't have to rule out buying a fixer, putting sweat equity into it, and making a profit in two or three years. Just don't count on throwing a granite counter into a fixer and making a bundle in a month.

Sales Will Slow from Now Through the Winter

Sales are traditionally slower from Thanksgiving though February, and this year will probably not be any different. The media, government, and Realtors are all hopeful that the $8000 tax credit for first time buyers and the $6500 credit for move up buyers will encourage people to keep on the hunt during the slow season. I think that there may be a small increase from last years purchases, but it's just not fun to go look at houses and condos in the winter! Not only is everybody busy with holiday stuff, it's cold and dark in the evenings, when most people are looking at homes. If you are on the market for a new place, it can be great to persevere through the winter because there is less competition from other buyers, and sellers are usually thrilled to have anybody interested at that time. While the stats have seemed positive for the last few months, look out for the media to start decrying a second bottom for the real estate market!

FHA Considering Making Loans Tougher to Get

A bill is already in Congress, the FHA Taxpayer Protection Act, that would raise the FHA down payment from 3.5% to 5% of the purchase price. Now there are hearings to see if the Federal Housing Administration needs to make it more difficult to get a mortgage. Right now, nationally, 30% of homes are purchase with FHA loans, and it is a very important program for minority and first time buyers. In Portland so many of the homes bought in the last year or so have been with FHA financing, it was surprising to run into a deal that didn't have it. Many Representatives and Senators do not know how important FHA loans are, not just to the real estate market, but to people that would like to buy a home. The regulations are already very restrictive on the health and safety of a property, so as to protect the buyer, to tighten it up even more would prevent so many people from getting into their own home.

Third Quarter Single Family Housing Report for Portland Metro

The greater Portland Metro area, including Vancouver Wa, has had a huge reduction in months of inventory- down to 4.9 months in September of this year. The outlying counties have not fared as well as Multnomah, but all are doing better than 2008. This report released yesterday from Norris, Beggs and Simpson summarizes the price trends as follows:
"New and existing home prices have been falling systematically since the peak price period of the housing bubble in the Summer
of 2007 when median prices in metro area hit an all time high of $302,000. Across all new and existing homes, median
prices are currently 18% off peak prices during the height of the bubble. The correction has been robust, averaging an annual
price depression of 7% over the past eight quarters.
Based on the historic sales trend observed between 1994 and 2002, current
median prices are roughly 6% above their forecasted level. Price declines appear
to be slowing in pace, and the market is not far off its price equilibrium. However,
housing markets tend to “overcorrect”, and we would anticipate prices to fall
slightly below trend in the short-term."


Click here for the full report from Norris, Beggs & Simpson

Dubai Real Estate Market Has Global Effect

We've all seen the shows- the tallest building, fanciest bathroom, most man made islands and peninsulas- great examples of how crazy the real estate and hotel market are in Dubai. Now that major investors are asking for deferments on the $60 billion they owe, stock markets around the world have been shaky. A major investor in Portland doing something similar might affect local companies, and maybe one large Wall Street firm, but not have nearly the affect that companies in a tiny Middle East city/state have. With the commercial real estate crisis just starting to break, more international issues will have an effect on the stock market, as well as consumer confidence and banks ability to make residential mortgage loans.

Real Estate News Update

Here's a breakdown of the latest news on the real estate market, and my opinions of it.

• About 25% of homeowners are underwater in their homes, meaning the value of them has dropped below what they owe. This is a major issue if you have to sell, but if you don't, just wait out the market and the value will come back. The real value in a home is your life there, so if you don't have to move, stay put and be glad that you even have a house!
• Existing home sales rose 10.1% in October, a lot more than anyone expected. The media says that it is due to the first time homeowner tax credit, and low interest rates, which is true. They make that sound like a bad, thing, which its not.
• 13 people in Bend Or where just indicted for fraud based on activity during the real estate boom and bust. Tyler Fitzsimons, founder of Desert Sun Development, several of his employees, as well as employees of West Coast Bank and Umpqua Bank, are all allegedly involved in the collapse of a local real estate company.
• 22% of homes for sale in Portland are considered distressed.
• 32% of home for sale in Clark County are considered distressed.
  

Foreclosed Houses Can Be a Steal

CNNMoney.com wrote a good article on buying REO (real estate owned, a term that means the property has been foreclosed on and the bank owns it, don't ask me why!) properties and short sales. More and more of the market is turning into distressed properties like that, so it is important to know what you are getting into before you make an offer, or heaven forbid, fall in love with a house.

I don't agree with everything CNNMoney.com advised, see the original here.

1. Don't get caught up in a feeding frenzy- Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity. Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains. Don't get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price.

2. Have Your Realtor Contact lenders directly- Smart buyer's agents establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market. In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale -- buying a home for less than what the current owner owes on the mortgage -- she should talk directly to the property's asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders.

3. Get pre-approved from the lender you want to buy from- If you're trying to buy a property from, say Bank of America, it can help to get a pre-approved mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it's similar to others. Plus, you're not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.

4. Be Prepared for Fixers- Most REOs are sold as is. That can be problematic today because so many foreclosed homes are in less-than-mint conditions. Often, the former owners were struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed the properties before leavingIn 25% of cases, homebuyers persuade lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next available bidder -- one who doesn't ask the bank to pay for repairs. So be willing to consider a home that needs some work -- but budget accordingly.

5. Hire a real estate attorney- Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles. The solution is to hire a real estate attorney -- even in states where home sales are usually completed without one. Considering you're making a six-figure investment, the legal fees are cheap insurance against the risks.

6. Wait to make an offer- Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in. Have your Realtor call or email the listing agent to see if they can find out what other offers are, and what that specific bank is looking for. Maybe they won't consider FHA financing, or they are already planning on budgeting for some work.

7. Get as Many Inspections as You Can- With so many REOs in seriously deficient shape, it's essential to go over every inch with someone who can spot problems and tell you how much it will cost to remedy them. A foundation crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, an inspector can be very worthwhile insurance.

Not Married and Buying?

More and more people are buying condos and houses together before they marry, whether or not they even plan on it. This can be a great way to cement a relationship, but puts people into a whole new category that most don't even think about before deciding to buy. So how do you protect yourself and the relationship as homeowners and partners? TALK ABOUT IT! And make sure to do the following:
1. Put your intentions in writing- what will you do if you break up, loose a job, or someone passes away. In a break up it might be best to sell and divide the profits/loses equally.
2. Make a budget- who will pay for what? A 50/50 split would be nice, but rarely happens. Discuss what you want to purchase and save for in advance.
3. Make a house savings account- 6-12 months worth of expenses, including mortgage payments, utilities, etc, and large improvements you plan on in the future. If the worst does happen then you will have time to react and not loose the property.
4. Research the law- check with your Realtor and real estate attorney to find out what you can do to protect your assets and your relationships.

Monthly RMLS Report

Here we go again... The monthly numbers for the Portland real estate market from the RMLS are out. My favorite section is always the map with the median house prices by general area.

North Portland: $237,000
NE Portland: $262,000
SE Portland: $206,500
West Portland: $333,700
Milwaukie/Gladstone/Boring/Clackamas/Estacada: $253,800
Lake Oswego/West Linn: $381,500

HouseLogic.com

The National Association of Realtors has launched a beta(test) version of a new website- HouseLogic. There is a ton of great info on home repair, maintenance, and value. My favorite section is on the Tax Credits and Incentives. It breaks down what you can get credits for, such as tankless hot water heaters, how much you get, and even how big of a project it is to do the upgrade. It's a great resource if you are looking for projects to do on your current home, or want to research what you will be able to do when you buy a house.

South Waterfront Condo Auction a Success

Remember the big to-do over the auction of units at Atwater Place at the end of September? Well, the unofficial results are in, and 30 of the 40 units that had winning bids have sold. That's good news for the neighborhood, even though prices have dropped from the original values. Even with lower values, it's better to have a condo full than empty, and the success of the sale has spurred interest in other units.

Read more here.

Mortgages Staying Above Water

Zillow, the real estate website, released a report that stated that a smaller percentage of homeowners are underwater on their mortgages. This is good news! Even if Zillow isn't always correct in their values for homes, the fact that less people have homes that are worth less than the money owed on them is a good sign. Another good sign in the report was that home values didn't drop between the second and third quarter. While not rebounding, the market may at least be stabilizing over all.

Read an article about the report here.

Basics of the Extended Tax Credit

The National Association of Realtors put out a "cheat sheet" for the new tax credit for first time and move up buyers. Nothing changes for the first time buyers, it's still an $8000 federal tax credit, or $4000 each if married and filing separately. The date range is great! Instead of just saying when a contract has to close (such as November 30th) there is now a deadline for having a deal going (April 30th 2010) and then to get it closed (July 1st 2010). This will clarify most of the questions about the tax credit, I'm still getting asked if people can get the one expiring at the end of the month.

The big addition is the move up buyer credit of $6500. If you have owned your home and lived in it for 5 consecutive years out of the last 8, then you get that credit! It's great news for the market because the move up homes, usually valued over $250,000, have not been moving nearly as fast as the lower end. To make the market really buzz we need people to buy a home, have those sellers buy a more expensive property, and then repeat about 4 times!

Read the Full Cheat Sheet Here.

Blogging One Year Now!

I've been blogging regularly, usually, for a full year now. The best part has been that is has encouraged me to go out and search for more information about real estate, and process it well enough to be able to pass it on. I haven't let my personality out as much as I will in the future!

Well, enough about me, onto the really interesting stuff: The extension of the tax credit! Realtors have been hoping that the $8000 tax credit for first time buyers would be extended past November 30th, and it has. There is also a new tax credit for homeowners who are moving into a different house. A $6500 tax credit if they have lived in their current home for 5 years, which isn't as good as the first time buyers credit, but it is something.

Both credits expire at the end of April 2010, and assuming they get signed by President Obama, they hopefully will lessen the winter slump that the industry regularly sees.

Portland Builders Have New Plans

The big company builders in Portland have names that are synonymous with the real estate boom and bust: Buena Vista, Renaissance, Legend. All built McMansions during the hay day of large homes with several bedrooms, grand entrances, great rooms, and luxurious master suites. The new plan for all of them is to build smaller homes, for less money, and for less profit. This is going to be great for Portland, a city of young urbanites that stay single for longer, have roommates, and want to own their own home. The prices will stay around or under $3000, with square footage under 3000 as well. There may not be a boom for builders for many years, but they all hope to stay in business by getting back to basics.
Full Article

When Will Interest Rates Rise? Some Key Signs

Key indicators that interest rates will rise are easy to spot, once you know what you are looking for. Two to look out for in the near future are the unemployment rate and the discount rate that the Federal Reserve charges to large banks. The unemployment rate is really high now, but when it starts to fall interest rates will rise because more people will have jobs and be able to borrow money. The discount rate is only .5%, to encourage banks to borrow money from the Fed to loan to smaller business, when that starts to rise look out for interest rates! Everyone tends to forget that only a year ago rates in the 6% range were considered to be super awesome, now that they have been in the 5%s, it's easy to forget how great that is! I'm not even going to mention the 1980s (15%!).
Realtor.com

Sales of New Homes Down

For the first time since March of this year, sales of new homes have dropped 7.8% this September from last year. Median sale prices are also down from last year, but up from August. The recovery of the real estate market is not going to be one smooth line up, there will be declines and setbacks, but with the likely hood of the $8000 tax credit being renewed, and maybe expand to all home buyers, things could get better in the spring. Don't expect any big jumps from now until the market traditionally picks up in the coming year, with the tax credit expiring, no one is getting into transactions where they would depend on it. Also, December through February are always slow months, so any increase would be a surprise. http://www.oregonlive.com/news/index.ssf/2009/10/new_home_sales_fall_a_surprisi.html

Portland is Third Safest City

Portland made Forbes top 5 list of safest cities in the US, with the lowest crime rate overall. Minneapolis and Milwaukee came in 1st and 2nd, respectively, 4th and 5th were Boston and Seattle. Everything from workplace safety to traffic deaths, and natural disasters were considered. I totally agree the Portland is a very safe place, especially downtown. People seem to just be more considerate and friendly, which leads to an environment of safety.

http://www.forbes.com/2009/10/26/safest-cities-ten-lifestyle-real-estate-metros-msa.html?feed=rss_forbeslife_realestate

Home Sales Are the Highest In Last Two Years

Due primarily to the $8000 First Time Home Buyer tax credit, sales of existing homes were up 9.4% in September 2009, from 2008. This is great news, even though prices still are falling, because the more people that can sell an existing home, the more can move up and buy a more expensive one, which drives the whole real estate market in a positive way. First time home buyers have had a major impact on 2009, accounting of 45% of all sales so far this year. The reason so many new owners have entered the market is the tax credit, which all in the industry hope will be extended, if not raised, in 2010. http://money.cnn.com/2009/10/23/real_estate/existing_home_sales/index.htm?section=money_realestate

IRS Investigating First Time Buyer Fraud

Everybody has been so excited about cashing in on the $8000 First Time Home Owner tax credit, evidently even if they were not first time buyers! The IRS is investigating over 100,000 returns that claimed the credit, and have already found 167 schemes. The rules are already pretty lax, you only can't have owned property in the last 3 years in order to qualify, but people are greedy. It always pays to be honest on your taxes! http://www.realtor.org/RMODaily.nsf/pages/News2009102002?OpenDocument

Prediction of Good News from National Association of Realtors

In the Realtor magazine NAR summarized a Bloomberg News survey of 53 economists. There were asked what they thought was going to happen this quarter. The results are that:

1. Construction starts in September are expected to hit a 610,000 annual rate, the most since last November.
2. Sales of existing homes likely rose to a two-year high.
3. Because of fear of a relapse, the Federal Reserve is predicted to leave interest rates low for a few more months.
4. Building permits, a sign of future growth, probably rose to a 590,000 annual pace, also the highest level since November, the Commerce Department is likely to announce.
5. The National Association of Home Builders/Wells Fargo index is expected to rise to 20 from 19, the economists say.

All of the this points to a rise in building, which is usually done by second time home buyers. So more people will be putting their first home or condo on the market, and moving into a larger house.

http://www.realtor.org/RMODaily.nsf/pages/News2009101901?OpenDocument

7.Something Months of Inventory Holding Strong for 3 Months

We only have 7.6 months of inventory in Portland! That's great compared to last year at this time when it would have taken 10.4 months to sell everything on the market. That number has been at 7.something for 3 months now, we could use it going down to 6, which is a neutral market for buyers and sellers. Having about 7 months of inventory means that there is a slight buyers advantage. That is basically coming from the homes priced higher than $300,000, however, because anything less than that is in the range of first time buyers, who have tons of pressure to buy now and not miss out on the $8000 tax credit. More info later on the median sale prices for Portland neighborhoods

Heat Your Home with Wood, Safely

Most people love a roaring fire on a cool fall evening, especially here in the Northwest. Keeping your fireplace or wood stove operating safely though out the fall and into the winter by following these tips:

1. Every year have a chimney sweep clean and check out your chimney. They should be a member of the National Chimney Sweep Guild.

2. Clean Creosote, and prevent excessive build up by burning seasoned, hard woods.

3. Don't poke or break logs, the fire will burn out more quickly and release more carbon into the air.

4. Install a chimney cap, even if you don't use the fireplace. It will add protection against moisture and keep the critters out.

5. Keep a fire extinguisher nearby, don't leave a fire smoldering when you leave the house or go to bed, and never use any of the materials you would in a barbecue. http://blog.oregonlive.com/homesandgardens/2009/10/fireplace_safety.html

Radon Gas

Added to the seemingly never ending list of inspections that need to be done when buying a home, radon testing is becoming routine in Portland. You can't tell just by looking or smelling if radon is in any given home because it is colorless, odorless, and tasteless. It is formed during the natural breakdown of uranium in soil, rock, and water. The radioactive gas can seep into your home through cracks and holes in the foundation, and it can contaminate well water.

Radon gas has been determined by health officials to be a carcinogen that can cause lung cancer. Studies show that radon is more of a risk to smokers, but nonsmokers have a slightly elevated chance of developing lung cancer when radon levels in the home are high. The worst case scenario would be to have a smoker living in a home with high levels of radon.

The EPA recommends mitigation if levels are found to be higher than 4 pCi/L. I just heard of a house with a super high level of 14 pCi/L; mitigation is very necessary! Mitigation in existing homes can consist of several methods, used individually or alone. The most common is Soil Suction, which sucks radon gas from beneath the home, even under a basement, and vents it above the roof line. Mitigation needs to be performed by contractors who are qualified to do so, and can cost $1000-$3000.

New Rules for Real Estate

Realtors have finally settled into the new ways of working in real estate, and it's time buyers and sellers also know the reality of the market. No matter what your situation is, here are some hints for how you need to approach real estate in 2009 to 2010.

Sellers- Price your home competitively, and lower the price if you don't have any offers in the first month or two.

First-time buyers- Negotiate! Ask for the sellers to do repairs, cover closing costs, and have a reasonable closing date. You don't have complete power, but you do have a strong position, especially if the house has been on the market for more than a month.

Move-up buyers- The higher the price range, the slower the inventory is moving. If you can sell your home, you are in a great place to get an amazing deal!

Relocators- Think about resale value, look in great school districts and for home that don't need any work, you will appeal to a wide group of buyers, and not have to invest too much money on repairs if you are transferred again soon.

Buena Vista Custom Homes Owner Paying His Debts.... Very Late.

Brent Wojahn/The Oregonian

This is a great article on the infamous owner of the leading home construction company in Happy Valley. At least it was in 2005. Roger Pollock led and cashed in on the boom in the wealthy suburb, located in Clackamas County just outside of Portland city limits. His company crashed along with the prices in the area, and many other developers. But unlike the rest of them, Polluck hasn't declared bankruptcy. He's paying subcontractors, and going to court with the banks over money borrowed to fund the developments. He's also continuing to build resorts in Mexico. Rumor in the real estate world over the summer was that he was moving south of the border to evade judgments and taxes, but Polluck claims to have been in town for months, and not to be running from anything. Read the full story at http://blog.oregonlive.com/frontporch/2009/10/pollock_it_was_a_crazy_time_it.html

Solar Panels Go Discrete!

(Traditional Solar Panels Can Detract from the Beauty of Your Home)

Dow Chemical Company just announced new solar panels that will be integrated into normal shingle roofs. Unlike big bulky old fashioned ones, they won't be as obvious to passers-by, and there fore won't bring down the curb appeal of your home. The new technology will also be cheaper than traditional solar panels, as much as 30-40% less! Go green, lower your electric bill, and don't take away from the beauty of your home, sounds like a good investment to me.

http://www.reuters.com/article/GCA-BusinessofGreen/idUSTRE5944NP20091006

Pending Sales Are Up, But Does That Really Mean Sales Are Improving?

NO, it doesn't! The National Association of Realtors released numbers that show that nationwide pending home sales increased 6.4% from July to August. While this is good news, there is more activity in the market and buyers are willing to take the leap and write offers, it doesn't mean that sales are improving. With so many buyers not being able to get financing ( a whopping 1/3 of all applicants) and short sales and the new appraisal process killing deals, the pending sales may not be closing. Let's wait and see larger increases in closed sales before getting too excited. The market has not recovered yet, and may not for several more quarters.

http://seekingalpha.com/article/164445-pending-home-sales-up-failed-contracts-also-up?source=feed

It's Fall! Tips to Sell Your House During This Season

Fall can be a challenging time to sell your home, the buying frenzy of the spring and summer is over, the days are shorter, and everyone just wants to stay inside! These tips can make your home stand out from the pack, especially vacant homes that won't feel cozy or warm.

1. Curb appeal: A neat yard is a must, even if you don't have many plants or trees, keep them trimmed and prune off any dead leaves or branches. Sweep away any leaves in your entryway and on the walkway. Make sure to have a doormat outside and inside the front door so that buyers can wipe their feet on the way in.
2. Maintenance: Clean out the gutters, keep the yard waste and compost piles neat and contained, and clean storm windows.
3. Decorate: Put out fall decorations, not Halloween ones, such as wreaths, un-carved pumpkins, and and leaves and berries.
4. Coziness: Keep the house warm all day for buyers, they will want to feel at home after coming in out of the cold. Either bake or burn a candle that has a fall feel- pumpkin, cinnamon, or apple pie.
5. Paint: If you are painting your walls in preparation for selling pick light neutral colors, like pale yellow and warm beige. They will reflect the little light there is at this time of year, and not distract the buyers.

6. Light: Leave blinds and curtains open to let the natural light in, and turn on lights to make the house look and feel extra bright and warm.
While most of these tips can be used year round, remember that the buyers will be out all evening in the dark, and you want your property to feel like a warm haven for them, like their new home!

Watch Vacant Homes

A fire broke out in a vacant Happy Valley home last night. The home was known by neighbors to be a popular spot for transients, and was owned by an estate. Whether your house or a house in your neighborhood is vacant because its for sale, foreclosed on, or the owners are just on an extended trip, it is important to keep an eye on them. If your house is for sale and vacant, either you or the listing agent should be checking on it at least weekly. Make sure that all doors and windows are secure so that transients can't get in, and that all fireplaces and candles are not left burning. Also, having a pre-listing inspection will alert you to any electrical issues that could cause a fire.

http://www.oregonlive.com/news/index.ssf/2009/09/fire_burns_vacant_happy_valley.html

Sellers- Is a Short Sale Right For You? 6 Questions to Answer

I always warn buyers of short sales, they often can take too long to close, and may not ever close after months of being in escrow. For sellers the issues are different, to qualify as a short sale the home can no longer be worth the amount that has been borrowed against it, and the sellers have to have reasons why they can no longer pay the mortgage. Not a good position to be in, it does happen, and if you think that you are in this position, answer the following questions:

1) Does your home qualify? Check with your mortgage holder, but usually there has to be a drop in home values, a mortgage that is in or is near default, and a home owner who is unable to pay due to hard times.
2) Does your Realtor know what to do with a short sale? There are special certifications, or your realtor can have been through the process before, either way make sure that they are willing to stick it out!
3) Have you talked with your lender? There is a special packet of information that each lender will require, and a protocol to follow. Talk to them first to get the ball rolling, and make closing easier for the buyer in the future.

4) Will I accept the tax consequences of a short sale? Contact a tax specialist to see what the impact will be for you, you don't want to get a surprise tax bill after going through the long short sale process.

5) Can I handle the impact it will have on my credit? A short sale will damage your credit, consult with a financial advisor to see how much, and if that is the best option for you.

6) Do I have alternatives? Some lenders are willing to renegotiate your monthly payments, and the government program Hope for Homeowners can give you more information. Think outside of the box, if the payments are the problem consider taking in a roommate, or renting the whole house out while living in a smaller apartment.

If you do need to do a short sale, get a qualified team behind you, a Realtor, tax expert, a financial advisor, and an attorney are all good resources for information and support.

Portland Architecture and Design Festival 2009!

October is the month of many festivals in Portland, including the Architecture and Design Festival. The complete scheduler is here: http://www.aiaportland.org/ad09/events/

The first tour is for Small Spaces/Big Ideas http://www.aiaportland.org/ad09/events/Small-Spaces-Big-Ideas.htm. This ties into a new trend with home owners- buying and staying in smaller homes even as their families grow. Many urbanites do not want to move into even medium sized homes on the outskirts of the city, let alone the (gasp) suburbs. Schools in Portland are improving, as are neighborhoods around the city, so there is no need to move, whether they have kids or not.

Another tour that looks interesting and ties into how Portlanders live is the Ride the Rails Tour http://www.aiaportland.org/ad09/events/transit-tour.htm. With MAX expanding every year, and people of all sensibilities riding the bus, train and lightrail, this tour should open people up to seeing the city in a new light.

Fed Gives Mortgage Tips

The Federal Reserve decided that part of helping avoid another mortgage crisis is educating consumers, so they have 5 tips on what to do when looking for a mortgage on a home you are buying or when you are refinancing.

1. Know Your Budget- Your real budget, which includes what you actually bring home after taxes, and all of your expenses, not just the ones you admit to in public. Being realistic about how much you spend each month will keep you from getting in over your head.

2. Shop Around- Check with at least 3 lenders to see what you qualify for, what their rates are, and if they offer any special programs.

3. Know the Loan Costs- Each lender will put things a little differently, and either charge you more in fees up front, or give you a higher interest rate. By knowing exactly what each one is charging will help you decide who can give you the best deal.

4. Weigh the Risks and Benefits- Because each lender determines some of the fees and rules of the loan, find out what they all are so that you can get the right loan for you. Be wary of pre-payment penalties, balloon payments, and adjustable rates.

5. Ask Home Owners You Trust- Friends and family that have recently bought or refinanced might have a good referral to give you, or a name of who to avoid. Also ask if they could go back and change something, what would it be? You can then use that as an example of what not to do.

Credit is tight now, and it can be difficult to get a loan, but if you are considering buying now or in the future, talk to a lender today, they can at least put you on the right track if they can't get you a loan now.

http://realtytimes.com/rtpages/20090917_tips.htm

August Median Sale Prices for Portland Neighborhoods

North Portland: July- $234,500; August- $231,000- down $3,500

NE Portland: July- $244,000; August $249,900- up $5,900

SE Portland: July- $215,800; $211,000- down $4,800

West Portland: July- $363,300; August $327,500- down $35,800

Lake Oswego/West Linn: July- $355,000; August $405,000- up $50,000

Milwaukie/Gladstone/Boring/Clackamas/Estacada:July- $275,000; August- $262,500- down $12,500

North, NE, and SE saw little change from July to August, but West Portland and the swanky suburbs of West Linn and Lake Oswego saw huge differences. West Portland's median sale price dropped over $35,000, which is not good for this urban area. The exciting upside of this months numbers is West Linn and Lake Oswego, which rose a whopping $50,000. Prices overall may continue to fall, but it is always nice to see such a dramatic increase.

New Construction Quality on the Rise

Builders have less business, but what they are building, is being built with better materials and craftsmanship. On a 1000 point scale purchasers of new construction have raised their scores to 811. The complaints about new homes have also dropped. The cream rises in this environment, and with the competition for jobs, only the best builders with the most competitive prices are actually getting jobs now. New home owners are also putting an emphasis on the quality of materials put into their homes. They are thinking about the long term usage of the home, not of it just a place they can have for a year or two and make a profit on. In the long run this will be great for future buyers, and the market, as the homes built in these recession years become classics that people cherish and maintain.

http://money.cnn.com/2009/09/15/real_estate/home_builder_ratings/index.htm?section=money_realestate

How to Prepare Yard Plants for Fall

Fall feels like it is just around the corner, and as a terrible gardener, I was looking for some advice on what to do in my yard. I found these simple tips:

How to Prepare Yard Plants for Fall eHow.com

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10 Questions to Decide Between a New or Old House

One of the first and most general ways to narrow down your search when you decide you are ready to buy a home is to decide whether you are buying a brand new house, or an older house. There are pros and cons for each category, and within each are vastly differing styles, qualities of construction, neighborhoods, and amenities. Here are some basic things to consider before you rule either one out.

1. The Neighborhood- An established community will have developed parks, shopping, and community relationships. The mature trees and landscaping along the streets might also be a draw.

2. Maintenance and repair- No home is perfect, but the older a home is the more work it will need, and the more money will have to be put in to upgrade appliances, and do large maintenance projects, such as a new roof or repainting the exterior.

3. Home improvement- If you like working around the house, an existing home might be perfect, and if you have no idea what to do if a door has a squeaky hinge, a new house could be perfect.

4. Existing features- Existing homes are usually landscaped, and have fixtures such as blinds already in place.

5. Land- In cities older homes usually have larger lots, and newer developments have smaller yards, but often a common playground or park.

6. Location- Older homes are usually closer to the city center, newer homes are often in subdivisions away from downtown, but near a shopping center or large employer.

7. The opportunity to remodel- If you want to be able to put your own touch on a house by replacing a kitchen or adding on, an older home is a great opportunity.

8. Price- Traditionally, older homes have been cheaper than newer ones, but with the recent foreclosure crisis deals can be found in all categories.

9. Track record- With an existing home you can research the neighborhood, as well as know if a home style has become classic, or was a passing trend. Newer homes don't have that history, but they also don't have the baggage.

10. Traditional layout- Older homes have formal living and dining spaces, while newer homes are more likely to have a casual great room which is open to the kitchen.

For Sale: 3BR/2BA Single Family House in Portland, OR, $210,000

For Sale: 3BR/2BA Single Family House in Portland, OR, $210,000

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Buyer's Taking Advantage of $8000 Tax Credit

Time is running out on the First Time Buyer Tax Credit, and already hundreds of thousands of people have taken advantage of it. Nearly 310,000 buyers have submitted it for their 2008 tax returns, and up to 1.1 million have qualified so far. Most of those buyers are waiting until they file for 2009 to get the cash back, and only then will we know how many first time buyers got an $8000 check from the IRS. The National Association of Realtors estimates that an extra 350,000 homes will be sold in 2009 because of the tax credit.

http://money.cnn.com/2009/09/04/news/economy/first_time_homebuyer_tax_credit/index.htm?section=money_realestate

Foreclosers in Portland are on the Rise!

While the market is picking up for sales of homes, the good news does not spread to those that already own, and maybe loosing their homes in the near future. Foreclosures are on the rise around the great Portland Metro Area. In Multnomah new foreclosure filings are on the rise again after leveling off in the second quarter. The same thing is happening Clackamas and Washington counties. Clackamas has had an 8.5% increase in just one quarter. Washington County saw 5.1% increase in one quarter. More homes will be on the market as short sales, and bank owned once they have been foreclosed on. The market may once again have too much supply, and not enough demand, as one time home owners are turned into renters for at least a few years.

What Will a Mortgage Broker Need to Know?

The first step to buying a home today is getting pre-approved for a mortgage from lender. Be prepared for that first meeting, and be ready to have information on the following things:

1. Employment and income- 2 years if you are employeed, 5 years if you are self-employed

2. Outstanding debts- including student loans

3. Cash reserves and assets- retirement savings and gift funds

4. Down payment- cash you will pay out at closing

5. Loan purpose- new home, refinance, home equity line

6. Property use- primary residence, investment property

7. Property type- condo, single family, duplex

How to Determine the Price of Your Home

http://www.realtor.com/ has great tips for sellers as well as buyers. I found a great article on how to determine the price of your home. To break it down: Call a Realtor! We do CMAs (Comparative Market Analysis) for free, as part of a listing presentation. That will give you a good idea of the price that similar homes, in your area, have actually sold for in the past few months. Unlike just looking at what is on the market, looking at what homes have sold for gives you a better idea of how to price your home competitively. Unlike during the boom years, there is a difference in what is asked for a home, and what is actually paid for a home. http://www.realtor.com/ suggests that sellers do their own research as well, and go into your neighbors homes if they are for sale and have open houses. You will be able to see how your direct competition looks, and any improvements you can make to your home to make it more desirable.

http://www.realtor.com/home-finance/sellers-basics/how-much-is-your-home-really-worth.aspx

Condo vs. House- 5 Factors

A common question for first time buyers- Should I buy a house or a condo? Many factors should be considered in this important decision. Five main things should be considered before jumping into buying either one.

1. Location- Do you prefer living in the city center or in a more residential area?

2. Privacy- Do close neighbors bother you or do you find it a comfort?

3. Responsibility- Do you want to be independent, or have a group of neighbors to discuss problems and decisions regarding the property?

4. Maintenance- Do you love having a landlord to call when anything goes wrong? Do you like working in the yard?

5. Budget- Depending on the area, there can be a big difference in the cost of a condo vs. a house, in square feet, in maintenance, in upgrades, and don't forget HOA fees!

Financal Calculators

Yesterday one of my recommendations of things to do before you buy was to use an online calculator to get an idea of what you can afford. http://www.realtor.com/ has a bunch of great ones, including Home Affordability, Mortgage Calculator, Remodel or Move, and Rent vs. Buy.

Check them all out, plus more at the link below!

http://www.realtor.com/home-finance/financial-calculators/default.aspx

Top 10 Things to Know Before You Buy

A lot of pressure is being put on potential first time home buyers by everyone involved in real estate and finances, we don't want anyone to miss out on the $8000 tax credit! Knowing if you are really ready to buy is important; here are 10 things to know and think about now, before you start house hunting.

1. Don't Buy if You Aren't Ready to Settle Down. You are going to need to stay in the same house for 3 years to keep the tax credit, so be ready to commit to that time!

2. Check Your Credit. Make sure that your credit history is clear, and that you are current on all payments and student loans.

3. Know What You Can Afford. Use an online calculator to get a rough idea of your price range.

4. You Don't Need to Put 20% Down. Advice from parents and bosses can be good, but they often think that all buyers have to have a 20% down payment. That is no longer true, many loan programs work with 3.5% to 10% down. You can no longer expect 0% down though, those days are long behind us!

5. Find the Good Schools. Even if you don't have kids, plan on having kids, or want kids, buy in an OK district, when you go to resell it will make a difference, and the whole neighborhood usually reflects how the schools are doing.

6. Hire A Pro. Realtors spend all day every day working in the market and can help you get a great deal. We are know the buying process, which has multiplied in complexity in the last several years. We also help buyers think of things that don't normally come to mind.

7. Points vs. Rates. Talk to a mortgage broker about what is appropriate to consider in your specific situation.

8. Get Pre-Approved First. The first step in buying house is to actually go turn in all your financial information to a mortgage broker and get pre-approved, not just pre-qualified, for a mortgage.

9. Know the History of the Market in Your Target Area. This is where a Realtor comes in. In addition to just having general knowledge of the areas market, we do specific research on the street, blocks and neighborhood where you want to buy to know what a good offer is.

10. Home Inspectors are Your Friends. After you have a deal for a house, you have to, have to, have to get a home inspection. It's not required by law, but unless you are planning on tearing down the house, it's a good idea to spend a few hundred dollars and have some one tell you exactly what is going on with the property. Also, the report is the basis for asking for repairs from the seller, and the more costly they are the more likely the seller is going to want to have an inspection report to show where you got the idea that you need a whole new heating and air conditioning system!

Record Home Sales!

The National Association of Realtors released great news this morning: existing home sales are up 7.2% in July from June, and up 5% from a July 2008. This has lead many people to say that the bottom has hit! I agree, especially in the Northwest, were home prices and sales never dropped as much as in many other states. This is the biggest month to month jump in existing home sales since the NAR started recording such data in 1999. A combination of home affordability and first time buyers have caused the numbers to be better, and maintain the increases over the last 4 months.

http://money.cnn.com/2009/08/21/real_estate/home_sales_rise_in_July/index.htm?section=money_realestate

Fannie Mae and Freddie Mac Homes for Sale

Just like banks that foreclose on a property, Fannie Mae and Freddie Mac foreclose on properties where the mortgage isn't paid, and then they sell them. Programs for each government agency help buyers through the process, and offer great deals! HomeSteps for Freddie Mac gives great terms for loans including a 2 year home warranty, 3.5% of purchase price to go toward buyers' closing costs, and an appliance discount. HomePath for Fannie Mae gives even better terms! Buyers only need a 3% down payment, which can come from gift money from family and friends, there is no mortgage insurance, which lowers monthly payments, and they don't charge appraisal fees, which start at about $400. Both programs have great websites: www.homesteps.com and http://www.homepath.com/. Many lenders also work with them, check and see if your lender is qualified!