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!