I Have a New Website!

I have a new website, with a blog built in, so I will no longer be updating this site.
Visit me here: BETH'S NEW BLOG AND WEBSITE
You will get multiple pages, plus video blogs!!!
Hope to see you there!

10 Reasons to Buy a House Now!

My sources are, as usual, the National Association of Realtors' Realtor Magazine, and the Wall Street Journal. Both push home ownership (I bet you can see their motivation) and so do I, but only for about 60% of the American population. Since WWII the homeownership rate hovered around that, but during the bubble of the mid 2000s it soared to 69%. So the 9% of Americans who were owning homes probably shouldn't have been. Now they have lost them, or are loosing them, and the real estate market is having to re-adjust. But on a lighter note:

1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.

2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.

3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.

4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?

5. You can get a better home. In some markets, it's simply the case that the nicest places are for-sale homes and condos.

6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.

7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.

8. It's forced savings. A part of your payment each month goes to equity.

9. There is a lot to choose from. There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.

10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.

Portland's Median Sale Prices- Some Gains, Some Losses.

North Portland: July: $227,000 August: $215,500 -$11,500
NE Portland: July: $251,500 August:$262,800 +$11,300
SE Portland: July: $197,700 August:$213,000 +$15,300
West Portland: July: $377,100 August:$353,000 -$ 24,100
Gresham/Troutdale/Sandy/Corbett/Fairview: July: $185,500 August:$205,000 +19,500
Milwaukie/Gladstone/Boring/Clackamas/Estacada: July: $240,000 August:$248,000 +8,000
Lake Oswego/West Linn: July: $416,500 August:$385,000 -$31,500
Beaverton/Aloha: July: $230,000 August: $209,500 -$ 20,500
Tigard/Tualatin/Sherwood/Wilsonville: July: $301,000 August: $275,000 -$26,000

Mortgage Defaults are Dropping, Repossessions are Rising

Banks repossessed more homes last month than they have since the beginning of the housing crisis, even as the number of homes going into default continued to drop for the 7th month in a row, according to foreclosure listing firm RealtyTrac Inc. Banks have increased foreclosures to clear out their inventories of bad loans, but despite repossessing 95,364 homes last month, they still have thousands to go.  Analysts predict that this shadow inventory will prevent home prices from bottoming out, despite a 28 percent decline in prices from 2006. “Whether it’s the sidelined, shadow, or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, Morgan Stanley housing strategist. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”
Source: Realtor Mag

97213 Market Update

Let's look at a super local market snapshot- the zip code 97213 in NE Portland Oregon. That's my zip code, and the average price and days on market are standing firm, but the buyer's market that we have had for the last few years is trending downward. This means that in NE Portland there are less buyers who are actually making purchases. For more information on home buying and selling in NE Portland, contact me at bethsilva@cbseal.com. 

Short Sale Fraud- What to Look Out For

There are always bottom feeders who will take advantage of people when they are at the lowest point of their life. In real estate it is no different. The latest scam is short sale fraud- real estate and miscellaneous agents are running 2 main schemes right now.
1. The agent negotiates for the seller with the lender to sell at a really low price, an accomplice of the agent, called a "straw man," buys at the low price, then the agent turns around and sells it for much more.
2. The seller has a friend or family member purchase the home from them as a short sale, then they turn it back over to the original owner. This may be seen by some as a way to have family "re-finance" the house, but it's fraud!
A review of sales nationwide by CoreLogic found that about 2% of short sales that sell are probably fraudulent. They looked at short sales that were flipped, and sold at a much higher price.
Since the number of short sales has risen dramatically- 400,000 so far in 2010 compared to 100,000 in 2008- more and more people could be at risk for this fraud, either as buyers or sellers.
Source: NYT 9-10-10 Bob Tedeschi

Ecotourism in Portland Or

The fourth Ecotourism and Sustainable Tourism Conference (ESTC) is in Portland today and Friday. It has drawn about 340 delegates from over 20 countries.  Put on by the International Ecotourism Society (TIES) the conference this year focuses on practical ideas. Local breweries, wineries, casinos, and institutions such as OMSI are involved. To learn more visit their website here.

New FHA Program to Help Underwater Homeowners

FHA debuted a(nother) plan yesterday to help out homeowners who are underwater on their homes. The plan will allow lenders to refinance loans, and forgive up to 10% of the amount borrowed. Borrowers must be current on their mortgages, and owe at least 15% more than the current market value of the home. This is not a required program, and lenders do not have to apply it to any loans. The government estimates that between 500,000 and 1.5 million home owners will be helped, but Barclays' analysts doubt that even 300,000 will actually be helped. We can add this to the long list of programs that the government has proposed, we'll have to wait and see if it gets implemented, or has any affect on the economy or housing market.
Source: Alan Zibel AP 9-7-10

Understanding Capital Gains

When you sell a stock, you owe taxes on your gain — the difference between what you paid for the stock and what you sold it for. The same holds true when selling a home (or a second home), but there are some special considerations.

How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate, follow these steps:

1. Purchase price: _______________________

The purchase price of the home is the sale price, not the amount of money you actually contributed at closing.


2. Total adjustments: _______________________

To calculate this, add the following:

• Cost of the purchase — including transfer fees, attorney fees, and inspections, but not points you paid on your mortgage.
• Cost of sale — including inspections, attorney fees, real estate commission, and money you spent to fix up your home just prior to sale.
• Cost of improvements — including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

3. Your home’s adjusted cost basis: _______________________

The total of your purchase price and adjustments is the adjusted cost basis of your home.

4. Your capital gain: _______________________

Subtract the adjusted cost basis from the amount your home sells for to get your capital gain.

A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.
  
• You have not sold or exchanged another home during the two years preceding the sale.
  
• You meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

Source: Realtor Magazine

Staging Your Home