How does the current home buyer trends compare to 2013?

It’s been fascinating to watch. Last year was the year the first-time home buyer and investor. Low interest rates coupled with appreciating home prices made sense for existing home owners to stay put while it gave an opportunity for investors & first-time homebuyers to enter the marketplace.

This year, as prices have been appreciating, we’ve seen current homeowners selling their existing homes and moving up.

Will the “move up” market impact price?

Absolutely. With the influx of homes on the market, it has created more of a demand which we feel indicates that the prices will continue to increase.

Will this be beneficial for higher-end or lower-end homes?

It seems to be more beneficial for higher-end homes as homes over $500k are starting to sell.

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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How can a drone help sell a house?

Real-estate photographers are using drones to shoot aerial shots of residential properties. It’s all about the online presence of the house. To provide buyers with a better digital representation of the property, we use drones for exterior photography. This gives the buyer a clear picture of the exterior of the home, neighborhood etc.

The drone is like a bird, you’re getting a bird’s eye view of the property which is something that isn’t available from Google Earth. Drones can fly as low as ten feet and as high as hundred feet to provide the bird’s eye view of the property.

Is there a certain kind of property that would benefit from drone photography?

When we first discovered drone photography, we considered it something for higher-end homes and estates. Now, we feel like it works for all houses without regard to size or price.

How would you arrange for a drone to take pictures of your house?

There are real estate photography services available for hire. Although there’s some question as to the legality because it’s for commercial use.

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The home building industry is picking up. This means buyers have more of a selection of homes from which to choose. Why would someone buy a “used” home, if there are newly-constructed homes available which may offer additional amenities or less of a chance of future repairs?

I don’t know if new homes necessarily always offer more than existing homes. I’ve seen plenty of five to ten-year old homes that offer as much as a newly-built home or an older home that’s beautifully remodeled with all of the latest amenities.

New home builders offer a one-year warranty but you warranties are availabile for purchase on existing homes as well. It’s important to remember that a new home’s mechanical systems have not been tested daily by a family of five. Things can still break.

Should we buy an existing home over new home?

There are purchasers who prefer new construction over existing construction. We are able to satisfy both of those preferences in the current market. However, there are three distinct advantages to buying an existing home.

The first advantage is resale. Future resale values are more secure in established areas where values have already been set. When builders build a forty-unit subdivision, it’s possible they could decide to “fire sell” the remaining properties which could affect values.

Another advantage is lot size. Lot size tends to be a smaller with a newly-built home.

Lastly, I would like to mention charm. Some purchasers find older homes more charming than newer construction.

Is financing the same for new and existing homes?

Financing is the same as long as the home has already been built. Custom-built homes financing programs may vary.

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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One reason Oregon was the top destination last year among people moving state-to-state, was housing costs.

Oregon is affordable compared to other areas. If we’re strictly talking about home prices, medium sales price in Portland at the end of 2013 was $265,000. For comparison, Seattle was around $310,000, Los Angeles around $500,000 and San Francisco around $640,000.

Are there any signs that the housing cost in the Portland will catch up with the more expensive cities?

As the numbers show, we are affordable in comparison to other major metropolitan areas. Our guess is that Portland will appreciate at the current rate.

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A “Boomerang Buyer” is someone who lost their home due to foreclosure or short sale but could be back in the market to buy another home.

Are there many boomerang buyers out there?

There are literally millions of ex-homeowners who lost their homes and may qualify to buy a home again.

How much of the factor could the boomerang buyers be in the housing market recovery?

There are a millions of potential purchasers which could have a very significant impact on the market. In fact, FHA has introduced the “Back To Work Program” to assist these buyers. The program allows buyers to obtain an FHA insured loan in as little as 12 months after a short sale or foreclosure as long as they can prove it was due to a qualified hardship.

If you’ve had a short sale or foreclosure over twelve months ago and you are thinking about purchasing a home, contact a Realtor and Mortgage Broker to see if you qualify.

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According to The Portland Business Journal, 45% of agents that were audited fell short of meeting the legal requirements to renew their real estate licenses.

A seller who’s real estate agent who’s hasn’t completed their required education may be putting both themselves and the seller at risk. It’s difficult to find out if an agent has completed all the required continuing education courses. However, you can find out how experienced by their production and chances are they will be more up-to-date with the required education to maintain their license.

The state is paying closer attention to this. We understand that they’re working on a system for course providers to be automatically notified when an agent takes a required course. While it’s likely to be an overwhelming task to keep up with the nearly 900 renewals of agents here in Oregon every month. There are nearly 19,000 agents in Oregon.

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One of the ways the federal government boosts the economy is by purchasing treasury bond and mortgage-backed securities. This is one of the reasons the mortgage interest rates have remained so low. They are planning on reducing the amount they spend on purchasing the mortgage-backed securities by approximately 10 Billion a month. They’re lowering their purchasing from 85 Billion to 75 Billion.

Needless to say, this will impact interest rates. But, they announced at the same time that they intend to keep the federal funds rate near zero for longer than they originally planned. Interest rates are a little higher, but didn’t really take much of the hit.

As the economy continues to improve, we’ve been anticipating this announcement at some point.

What will home loan interest rates be in 6 months? Well, we never know for sure, but our expectation that they will increase but still be under 5%.

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We are just a couple weeks away from new limits on FHA loans.

FHA is decreasing their loan insurance limits on January 1st, 2014 from $417,000 to a little over $362,000. That’s nearly a $55,000 dollar difference.

This change will greatly decrease the overall purchasing power of buyers who only qualify for FHA financing. FHA has less stringent credit requirements than many other loan programs. Also, FHA allows individuals who have claimed bankruptcy to qualify for home loan after two or three years. Conventional loan programs may require anywhere from four to seven years for the individual to qualify for a home loan.

Why is the FHA lowering the loan limits? As the housing market continues to recover, they are attempting to reduce their role as private capital is returning to the market. Also, since September, FHA needs to draw 1.7B dollars to cover their losses on bad loans.

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It seems as if more younger people are planning on staying in their homes longer. According to the study 27% of buyers between the ages of 25 and 44 plan to stay in their homes for 16 years or longer as compared to 18% in 2006. That’s a jump of 9%, but what’s really interesting is that the buyers on the ages of 18 and 24, over 80% of them said that they plan to be in their homes for 16 years or longer.

A number of factors can be the reason for this. For one thing, interest rates are ridiculously low right now and people are expecting them to go up so might be hard to trade in that 3.5% loan to a % loan the future. Also, more people used to see their homes as a stepping stone for their next move up home, but it seems more people are thinking conservatively money-wise nowadays.

I think it’s because of the housing bubble. People are expecting to buy a house and get an extra $100,000 in equity in just a few years.

If more people decide to stay put in their homes, could that lead to a shortage of houses for sale in higher prices?

Not necessarily. First of all a lot would depend on new housing starts right they’ll still be new household formations, so if there’s a demand, people will still build new ones. The other part of that, is that if they’re not flowing then they’re not buying.

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A survey by an outfit called HSH.com says you need to earn about $49,000 a year in Portland to cover the principal and interest payments on the average home in Portland.

That study was part of the third quarter numbers and they equate with the medium price sold in Portland at about $276,000.

Houses in Portland are not as affordable as they were a year ago. We have had appreciation somewhere at 15% in the last year which of course is good but it doesn’t mean that homes are more expensive and at the same time we’ve had interest rates go up a little bit so all that affects affordability.

The interest rate bounce around a lot they’ve definitely have gone up and it affected affordability. For every 1% rise in interest rates we lose $10,000 in house, so if you combine that with the market where home prices are going up, affordability is gonna go down. It’s a good reason to buy now.

Right now for loan rates, we got 30 year fixed at about 4.375 and they have a tendency to bounce around a little bit but they’re gonna stay right about there.

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