New Appraisal Regulations

In the Real Estate industry the new regulations on appraisers has been causing quite a stir. The new rules- called the Home Valuation Code of Conduct- were drafted by New York Attorney General Andrew Cuomo and are meant to separate lenders and appraisers. Evidently people think that lenders have been pushing appraisers to value homes much higher than the agreed sale price, which caused the mortgage meltdown. As I understand it, however, the majority of lenders did not push appraisers, some independently may have, and some appraisers may have been pushing prices up too, there are bad apples in every barrel. But these new regulations go too far, now appraisers can't be selected based on experience or area of expertise. Some have focused on specific neighborhoods, or types of property. Now most appraisers will have to contract with an "appraisal management company" which will take a percentage of their fee, and randomly assign them to appraisals as they are requested. While some regulation is needed, and appraisers have and continue to need licensing and continuing eduction, like all professions, New York does not need to press their own standards on the nation, or to over regulate real estate, which is trying to rebound and recover along with the rest of the economy.

Gen X and Gen Y: Echo Boomers

Those of us born between 1979 and 1995 aren't just Gen X or Gen Y any more, we're now also called Echo Boomers, the children of the original Baby Boomers. Though we evidently can't escape the shadow of our parent's and their massive effect on American society, we will overshadow them in Real Estate. These generations will have 5 million more home buyers than the Boomers did when they entered the market. The housing market should recover quickly because of the demand of these buyers, but the prices might not rise quickly. Those entering the job market today are earning less than those that started 10 years ago. Today in Portland Oregon, and across the country, it is a Buyer's Market, and those buyers younger, more demanding, and more technologically advanced than any that the Real Estate industry has seen before, and they know it!

Median Sales Prices: May 2009

Here's the breakdown on median sale prices of homes in different areas of Portland Or:
North Portland: $229,000
NE Portland: $255,000
SE Portland: $219,900
West Portland: $367,500
Milwaukie, Gladstone, Boring, Clackamas, Estacada: 265,000
Lake Oswego/ West Linn: $350,000

Blogging From Home

Oh the joys of being my own boss! I was up early today showing a condo on the South Waterfront here in Portland, and now I'm at home. Next on the agenda is a home inspection, which I don't think will be a problem (knock on wood).

I haven't spent much time at the South Waterfront, except for at the Old Spaghetti Factory, and I was surprised by how many restaurants are down there. I was expecting all of the business spaces under the condos to be empty, but there were a lot that are leased, and up and running! Now if we can just get the city to pick a bridge, and build it...

I always have people asking me about investing in a condo in that area, and I have always been leery of giving an emphatic go ahead, but I think that my mind has been changed! As long as the market picks up and those condos actually start selling, and stop loosing value, it could really turn into a nice neighborhood.

Oil Tank Decommissioning

Today I went to a great class by the DEQ, sponsored by First American Title downtown. I learned so much! Evidently there are an estimated 100,000 underground storage tanks for heating oil in Oregon, and about 80,000 in Portland alone. They are so prevalent because oil companies put the tanks in for free after WWII, but now they are old, leaky, and have been replaced by natural gas lines. Decommissioning oil tanks found on properties has become a common occurrence during the sale of a house, but it is not required by law. The Oregon Department of Environmental Quality (DEQ) has a list of license service providers (www.deq.state.or.us/lq/pubs/docs/tanks/hot/LicensedServiceProviders.pdf) who can locate the tanks, test the soil for contamination, remove or decommission the tank, remove contaminated soil, and test for air quality in the home. This all costs money, of course, but the sooner the oil is gone and the area is clean, the cheaper it will be. The DEQ is not in charge of doing any of the decommissioning, only certifying, after it's all done, that the proper procedures were followed. Once they review the paper work, photos, and lab results, they can issue a letter of closure for the site. To find out if the property you want to buy, or currently own, has had an oil tank found, decommissioned, and closed by DEQ, search there online database at www.oregon.gov/DEQ and the less information put in the fields, the better, usually the house number will be enough. The letter of closure is very important, just having the certificate from the licensed service provider does not mean that the job was done correctly. It can take 4-6 weeks to get it, but they can rush jobs for imminent closings.

Broker's Opens

Little Known Fact: Real Estate brokers tour to houses held specially open for us during the week, usually as soon as a house goes on the market. We do so to better know the market, so see what's new, and to get free food!

The down side? Having to tell brokers that the property they have listed is overpriced, too messy, or has no appeal to buyers. Most of the homes that I have been in on brokers opens are lovely, if they are occupied the sellers have obviously taken a lot of time to clean up and make the home as presentable as possible, and the brokers also do their part by having lovely snacks and desserts. Once in a while though there is a house that has too much going on! Too much furniture, too many personal items, too much dirt, too many pets, and too much of a bad odor! I never like going to these opens, I don't like being the barer of bad news!

On average houses the food can be distracting, sometimes I walk away and don't remember much other than the cake that was served! I have specific brokers that I know always have the best spread, and you better bet that I make sure to go to their brokers opens. So, don't ask me to lunch on Tuesday, I'm out driving around Portland looking a property and having a lovely buffet!

Selling: Go Green!

Finally, a real motivator for greening up your home: it may sell faster! Not that you should need more of a reason than it improves the environment, saves you money, and raises the value on your home. But, if you do, then making your home more desirable to buyers should be all it takes. According to the National Association of Home Builders as many as 90% of home buyers think that energy efficiency is an important factor when deciding on a home. So don't appeal to 10% of buyers, upgrade appliances, add insulation, install water conserving fixtures, and landscape with local plants. Not only will the new improvements make your home more visually appealing to buyers, it will also tug at their green hearts. After all, you put your home on the market to sell, so do all you can to sell it!

Mortgage Rates Starting to Rise

Well, anyone watching mortgage rates closely has not been having such a happy week. The rates on conventional and FHA loans have started to rise, not a lot, they are still under 6%, but we are no longer looking at the 4% range! This does mean that there have been less applications for refinancing, http://www.bloomberg.com/apps/news?pid=20601087&sid=aZb6bu33Whng, so the banks won't be as busy. That's good news for people buying and selling houses, because loans will be approved and funded quicker, which means it will be less likely that we have 60 day closing dates, and fewer extensions. You might end up paying a little more for the loan, but at least it will close in a reasonable period of time!

Open Houses: Why Realtors Follow You Around!

http://www.northpeel.com/news/article/70383

This article tells the story of why Realtors follow guests at an open house as they tour: THEFT! Not just of jewelry and electronics, but prescription drugs and information that can be used for identity theft. I know from my own experience as a first time buyer that having a broker tail you, constantly saying things like "this is the kitchen, and the bathroom, and look at the windows!" is really annoying. In vacant houses it's perfectly fine to tell them that you are going to explore by your self. But, in occupied homes, especially higher end ones, the Realtor not only wants to make sure you see all the special features, they also have an obligation to the owners to protect their belongings, and make sure the house is secure. So don't give us dirty looks, it's not fun to tell people they are looking at a bedroom, but it's way better to do that and feel silly, than to find out later that day that the owner's back pain medicine or credit card application is missing! Security is also why brokers ask guests to sign in, and also to show how great of a turn out there was to the owners. So be kind to the brokers, they just want to sell a house, and not get blamed for any illegal activity!

More Pending Sales Predicts More Closed Sales

Not all houses on the market that go pending close, many result in a failure for the buyer and seller to come to agreement over repairs, financing, or many other issues. In April, however, pending sales rose 6.7%, after also rising 3.2% in March. While the amount of sold homes didn't rise as much, and probably won't in June either, the rise of pending sales is a good sign for the real estate market. The more homes that go pending signifies that more people are making offers on homes, that means that they are at least getting into the market. While not every deal that goes pending makes it to closing, a lot do, and that will raise the percentage of homes sold in the next few months.