Builders, Land Development and the First-Time Home Buyer

Builders, Land Development and the First-Time Home Buyer

Builders, Land Development and the First-Time Home Buyer

The limited home inventory in Portland is tight and it’s getting tighter.

The real estate market downturn of 2007 caused most land development to come to a grinding halt. Now that the market has picked back up, builders are looking for new projects by purchasing existing homes (such as fixers, entry level etc.) to develop the land. Builders are now directly in competition with the first-time homebuyers for these homes.

How is this affecting home sales?

It’s increasing demand which increases market value if there’s competition for the house. Typically, builders can pay cash, close quickly and waive inspections as they are removing the existing house to build a more expensive home.

Is the City of Portland concerned?

Land use laws and urban growth boundaries direct development in Portland. If there’s a shortage of available land, builders are required to look at existing properties for development. I know several builders that weren’t interested in building in Multnomah county three years ago but they are now.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Changing Interest Rates of Jumbo & Conventional Home Loans

Changing Interest Rates of Jumbo & Conventional Home Loans

Changing Interest Rates of Jumbo & Conventional Home Loans

Interest rates for home loans which exceed $417,000 (jumbo loans) have been averaging a lower interest rate than a traditional 20% down conventional loan. Currently, a $250,000 loan is paying a higher interest rate than in jumbo loan.

Shouldn’t jumbo loans have a higher interest rate for putting the bank at a higher risk?

There are some changes changes that are happening in the current lending industry. Conventional loan fees have increased due to lenders sustaining losses. Also, lenders are using jumbo loans to entice wealthy individuals to serve their other financial needs such as brokerage services and financial management.

Is it going to stay this way?

No, it’s temporary. Now the high-end homes are selling, bankers are using the conventional loans to make up for some of the losses. Once the lenders start taking losses on the jumbo loans, it’ll change again.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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What does it say if my home doesn’t sell quickly?

Selling A Home

What does it say if my home doesn’t sell quickly?

One out of every seven homes in the Portland area is selling in less than three days. What does it say if your home doesn’t sell in less than three days?

It says you listed with the wrong Realtor.  Not every home can sell that fast, but if your house isn’t selling in the first couple of weeks, it’s probably one of three things; you got the wrong price, the wrong condition or the wrong marketing.

Is it good for my house to sell quickly?

It depends. If your home sold in three days above asking price, you would say yes. There is a lack of inventory right now. There is a high demand and a lack of supply.  It’s simple economics.

How does a lack of inventory affect the sale of my home?

In a market with this much demand, it’s not a bad idea to price your house just a little below current market value. You’ll get buyers emotionally involved and excited about the house which hopefully results in multiple offers.

Why would sellers price their home below market value? Shouldn’t sellers price their home above market value?

No. When we advertise an overpriced home, buyers know that it’s overpriced because it will sit on the market. If the house was priced properly, it would have sold.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Should buyers & sellers purchase a home warranty?

Home Warranty

Should buyers & sellers purchase a home warranty?

Quite honestly, home warranties are a great idea.

When we’re selling a home, it’s something we use as a value proposition. We market the home warranty to potential purchasers. During the transaction, a home warranty can help with inspection or repair negotiations.

Recently we had an inspection on one of my listings where the inspector found that the furnace was functional but it was near the end of its useful life. In lieu of replacing the $3500 furnace, the seller offered the buyer a home warranty. If something goes wrong in the near future, for a service fee of $60, the buyer will have the furnace repaired.

What is the cost of a home warranty?

A one year home warranty will cost approximately between $400-$500 depending on which company and add-ons you choose. They’re definitely worth the money.

We purchase one every year for our house. Our oven stopped functioning so we filed a claim with the home warranty company. They weren’t able to repair it due to it’s age (they couldn’t find the parts to repair it) so they purchased us a brand new $1200 oven.

Our buyer specialists search for homes that offer complimentary home warranties as it provides additional protection for the buyer. However, if we cannot find a home where the seller is offering a home warranty, we suggest for our buyers to purchase one themselves.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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16672 Fir Lane

16672 Fir Lane

16672 Fir Lane Lake Oswego, OR 97034
RMLS Listing #: 14172536

Stunning Monogram custom home brimming w/ high-end amenities boasts main level living w/ gourmet kitchen w/slab granite counters, island, wine storage & Butler pantry. Great room living w/fireplace & exposed beam ceilings, formal dining, office w/fireplace. Impressive master suite w/ two walk-in closets. Upstairs features large bonus room, three bedrooms two w/en-suite baths. Private backyard w/patio & water feature. Deeded lake access.

http://www.searchingportlandhomes.com/listing/mlsid/210/propertyid/14172536/

For 24-hr recorded information and current price, call
1-800-358-1829 ext. 2491

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Are We Headed For Another Housing Bubble?

Housing Bubble

Real estate prices are rising, but are they going up too fast? Are we headed for another housing bubble?

This is unlikely. The low supply of houses for sale is one reason that has been driving the recent upsurge in prices. We’re seeing a lot of people who are able to sell or who are finding it more attractive to sell. We should see inventory levels used up a bit.

One strong factor that we’re not heading for another housing bubble is the mortgage rates. Economists believe that they are going to continue to go up, slowly but surely. Along with this is the fact we’ve seen very little foreclosure activity of late. With some of the recent changes on how foreclosures are processed, we’re going to start to see more foreclosures and that’s going to add to our inventory help.

I just read a report from CoreLogic, one of the biggest real estate data firms, and they also admit that housing bubbles are usually spotted in hindsight. But to reach affordability levels that we saw back in our bubble here, prices would have to go up by as much as 47% or interest rates would have to rise to 6.75%.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Why You Should Buy A Home Now

7-16

Anyone who’s been thinking of buying a home may want to hurry up and follow through. But what’s the rush?

It’s all about appreciation. We’re hearing predictions that prices might still go up by as much as 12% in the next 12 months. Based on this percentage, if you wait for a month, you’ll be paying $3,000 more; if you wait for 3  more months, you might be paying an additional $9,000, and in 6 months, it could be $18-20,000 more for an  average-priced home.

Mortgage rates have been rising in the last few months, and it is expected to continue that way. This adds to the price of a house too. The Mortgage Bankers Association predicts that they’ll go up by as much as a full point this year.

If you’ve been thinking of selling your home, you should act soon as well, for the same reason. The price appreciation is based around the lack of supply while there’s a huge demand. A good percentage of our sellers who would be selling right now are those who bought in 2005-2007. They’re locked out of the market due to a lack of equity. But as prices go up, more of these people will be able to sell, so supplies will be enough for a short time. This, combined with the interest rates going up, could cool the market.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Foreclosures in Oregon

7-9

Foreclosures in Oregon for May were down sharply, a drop of 38%. But could this be the quiet before the storm?

Here’s a little bit of history. Back when the foreclosure prices started, they were using a system primarily in Oregon called trustee sales or out-of-court foreclosures. When the mortgage electronic registration system scandal started, there were questions that since the transfers and ownership of loans were not necessarily recorded in the county records, the banks did not have the authority to foreclose. The banks then started using the more expensive and lengthy court process of judicial foreclosures. The judge ruled that they can foreclose, so they could. But recently, the Oregon Supreme Court decided that not all transfers and ownership of loans had to recorded in the county records for a trustee sales or out-of-court type of foreclosure to proceed. The banks then should be able to go back to using the less expensive, quicker and easier route to foreclosure.

The good news is that with the prices going up right now, the risks of foreclosure are lessened, because if the owner can make their payments and they have equity, they could sell their home. But this new ruling could somehow affect our prices.

Nearly 30% of foreclosed homes are vacant, due to all the changes in the process and the banks taking so long to foreclose.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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What is a Pocket Listing?

7-2

When we take a listing, we are required to put it in the multiple listing service. A pocket listing is one that’s taken held by the agent but not advertised through the multiple listing service and taken straight to the seller’s direction. It’s mostly advertised through word-of-mouth between brokers. They usually have been most prevalent in the luxury and commercial real estate sectors, but now, with the limited number of homes for sale, they’re becoming more commonplace. This keeps a more private way of selling between brokers. They keep the listing in their “pocket” and then talk to other people who might be interested in buying the house.

Are there any gains from it? For buyers, in today’s competitive market, they might be able to buy a house without  getting into a bidding war. On the other hand, sellers can sell their house without tons of people traipsing through.  Some people prefer to keep things simple and confidential.

There are risks, too. The best way to get the highest dollar possible for the sellers is to expose their property to the highest number of people. Without this exposure, the biggest risk involved is under-pricing the property. For the buyer,  the biggest risk is to pay too much because the number that the seller came up with may be completely arbitrary.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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The Latest Buzz on Portland Housing Market

6-17

Are home prices still rising?

It’s a crazy market right now and home prices are still increasing.  Also, we need to consider the growth of the higher end market as it affects the average. For the true measure of value, buyers and sellers should speak with their Realtors.

We’re down to 2.5 months of inventory. If real estate agents stopped taking listings, everything that’s currently on the market would sell in 2.5 months. This is the lowest inventory since May 2006. For reference, a balanced market is 6 months of inventory. We’re seeing an influx of new listings, but due to the high demand, they’re being absorbed by the market right away. There are buyers who want to purchase a home but are unable to because of the low inventory.

Mortgage rates are increasing; they’re right around 4%. This is partly driving the frenzy; some buyers are starting to realize that if interest rates goes up, the amount of house they can afford goes down. For every 1% the interest rate increases, the affordability decreases by approximately $10,000.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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