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Mt. Hood Real Estate Market is a Sweet Spot for Sellers

Thursday, July 6, 2023
by Liz Warren

Today’s Housing Inventory Is a Sweet Spot for Sellers



 

One of the biggest challenges in the housing market right now is how few homes there are for sale compared to the number of people who want to buy them. To help emphasize just how limited housing inventory still is, let’s take a look at the latest information on active listings, or homes for sale in a given month, as it compares to more normal levels.

According to a recent report from Realtor.com: 

 “On average, active inventory in June was 50.6% below pre-pandemic 2017–2019 levels.”

The graph below helps illustrate this point. It uses historical data to provide a more concrete look at how much the numbers are still lagging behind the level of inventory typical of a more normal market (see graph below):

It’s worth noting that 2020-2022 are not included in this graph. That’s because they were truly abnormal years for the housing market. To make the comparison fair, those have been omitted so they don’t distort the data.

When you compare the orange bars for 2023 with the last normal years for the housing market (2017-2019), you can see the count of active listings is still far below the norm.

What Does This Mean for You? 

If you’re thinking about selling your house, that low inventory is why this is a great time to do so. Buyers have fewer choices now than they did in more normal years, and that’s continuing to impact some key statistics in the housing market. For example, sellers will be happy to see the following data from the latest Confidence Index from the National Association of Realtors (NAR):

  • The percent of homes that sold in less than a month ticked up slightly to 74%. 
  • The median days on market went down to 18 days, showing homes are still selling fast when priced right. 
  • The average number of offers on recently sold homes went up to 3.3 offers.

Bottom Line

When supply is so low, your house is going to be in the spotlight. That’s why sellers are seeing their homes sell a little faster and get more offers right now. If you’ve thought about selling, now’s the time to make a move. Let’s connect to get the process started.

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Fire Caution for Mt. Hood Over the Fourth of July

Tuesday, June 27, 2023
by Liz Warren
 
Mt. Hood National Forest
Forest Service News Release
 
Do your part to prevent
wildfires this Independence Day
 
For many, the Fourth of July means celebrating our country’s independence with barbecues, camping, and fireworks. The Mt. Hood National Forest encourages people to enjoy the holiday weekend safely – and to be especially mindful of wildfire prevention on your public lands.
 
Visitors to national forests should always use caution to prevent human-caused wildfires. Every year, unattended campfires are the number one source of wildfires on Mt. Hood National Forest. To reduce wildfire risk, please consider the following:
 
  • Before visiting, learn of any local fire restrictions by checking our website at: https://www.fs.usda.gov/main/mthood/fire or by contacting one of our district offices.
  • Build campfires in open areas, preferably in existing fire rings.
  • Make sure campfires are fully out and cool to the touch before leaving the area using the water and shovel technique. Never leave a campfire unattended. This video demonstrates how to properly build and extinguish a campfire: https://tinyurl.com/4drjvu3e
  • When smoking, always dispose of cigarette debris in an ashtray.
  • Avoid driving and parking in tall grasses. Exhaust particles and hot exhaust pipes can start grass fires. Even chains dragging along the ground, such as those on ATVs, can spark fires.
 
Fireworks (including sparklers, bottle rockets, and smoke balls) are prohibited on federal land regardless of the season or weather. Violators can be subject to a maximum penalty of a $5,000 fine and/or up to six months in jail. Anyone who starts a wildfire can be held liable for suppression costs.
 
As you plan your visit to the Forest this summer, please “know before you go.” Road and trail conditions can change quickly, and recreation sites can fill up early in the day, so it’s important to have a backup plan. Always check the weather forecast, carry the 10 essentials, and contact one of our district offices for current conditions before your trip.
 
More information about recreation sites, seasonal road closures, and areas impacted by wildfire damage is available on our website: https://www.fs.usda.gov/mthood
 
Have a happy and safe Independence Day!

  

 

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Why You Need a Real Estate Agent to Sell Your House

Tuesday, June 27, 2023
by Liz Warren

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How Owning a Home On Mt Hood Grows Your Wealth with Time

Friday, June 16, 2023
by Liz Warren

 


 

Some Highlights

  • If you’re thinking of buying a home this year, be sure to factor in the long-term benefits of homeownership.
  • Over time, homeownership allows you to build equity. On average, nationwide home prices appreciated by 290.2% over the last 32 years.
  • That means your net worth can grow significantly in the long term when you own a home. Let’s connect so you can start your homebuying journey today.
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Comparing Today's Mt. Hood Market to the Past

Friday, June 9, 2023
by Liz Warren

Why You Can’t Compare Now to the ‘Unicorn’ Years of the Housing Market 



 

Some Highlights

  • Comparing housing market metrics from one year to another can be challenging in a normal housing market – and the last few years have been anything but normal. In a way, they were ‘unicorn’ years.
  • Expect unsettling housing market headlines this year, mostly due to unfair comparisons with the ‘unicorn’ years.
  • Let’s connect so I can share the data that puts those headlines in the proper perspective.
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Buyer and Seller Guides for Buying and Selling This Summer

Thursday, June 8, 2023
by Liz Warren

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Mt. Hood's Real Estate Market Is the Strongest of Our Lifetime

Thursday, June 8, 2023
by Liz Warren

This Real Estate Market Is the Strongest of Our Lifetime



 

When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point. 

1. The Current Mortgage Rate on Existing Mortgages

First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (FHFA), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):

Now, there’s a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they downsize, with today’s higher mortgage rates, it could cost more.

Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.

2. The Amount of Homeowner Equity

Second, Americans are sitting on tremendous equity right now. According to the Census and ATTOM, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):

In the industry, the term for this is equity rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.

But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.

Bottom Line

We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.

 

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The Main Reason Mortgage Rates Are So High

Wednesday, June 7, 2023
by Liz Warren

The Main Reason Mortgage Rates Are So High



 

Today’s mortgage rates are top-of-mind for many homebuyers right now. As a result, if you’re thinking about buying for the first time or selling your current house to move into a home that better fits your needs, you may be asking yourself these two questions: 

  1. Why Are Mortgage Rates So High?
  2. When Will Rates Go Back Down?

Here’s context you need to help answer those questions.

1. Why Are Mortgage Rates So High? 

The 30-year fixed-rate mortgage is largely influenced by the supply and demand for mortgage-backed securities (MBS). According to Investopedia: 

“Mortgage-backed securities (MBS) are investment products similar to bonds. Each MBS consists of a bundle of home loans and other real estate debt bought from the banks that issued them . . . The investor who buys a mortgage-backed security is essentially lending money to home buyers.”

Demand for MBS helps determine the spread between the 10-Year Treasury Yield and the 30-year fixed mortgage rate. Historically, the average spread between the two is 1.72 (see chart below):

Last Friday morning, the mortgage rate was 6.85%. That means the spread was 3.2%, which is almost 1.5% over the norm. If the spread was at its historical average, mortgage rates would be 5.37% (3.65% 10-Year Treasury Yield + 1.72 spread).

This large spread is very unusual. As George Ratiu, Chief Economist at Keeping Current Matters (KCM), explains:

“The only times the spread approached or exceeded 300 basis points were during periods of high inflation or economic volatility, like those seen in the early 1980s or the Great Financial Crisis of 2008-09."

The graph below uses historical data to help illustrate this point by showing the few times the spread has increased to 300 basis points or more:

The graph shows how the spread has come down after each peak. The good news is, that means there’s room for mortgage rates to improve today.

So, what’s causing the larger spread and making mortgage rates so high today?

The demand for MBS is heavily influenced by the risks associated with investing in them. Today, that risk is impacted by broader market conditions like inflation and fear of a potential recession, the Fed’s interest rate hikes to try to bring down inflation, headlines that create unnecessarily negative narratives about home prices, and more.

Simply put: when there’s less risk, demand for MBS is high, so mortgage rates will be lower. On the other hand, if there’s more risk with MBS, demand for MBS will be low, and we’ll see higher mortgage rates as a result. Currently, demand for MBS is low, so mortgage rates are high.

2. When Will Rates Go Back Down?

Odeta Kushi, Deputy Chief Economist at First American, answers that question in a recent blog:

“It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal and provides investors with more certainty. However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.”

Bottom Line

The spread will shrink when the fear investors feel is eased. That’ll mean we should see mortgage rates moderate as the year goes on. However, when it comes to forecasting mortgage rates, no one can know for sure exactly what will happen.

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Home Prices Didn't Crash on Mt. Hood!

Monday, June 5, 2023
by Liz Warren

Oops! Home Prices Didn’t Crash After All



 

During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts:

Jeremy Siegel, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business:

“I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.”

Mark Zandi, Chief Economist at Moody’s Analytics:

"Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.” 

Goldman Sachs: 

“Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.”

The Bad News: It Rattled Consumer Confidence

These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the December Consumer Confidence Survey from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year.

The Good News: Home Prices Never Crashed

However, home prices didn’t come crashing down and seem to be already rebounding from the minimal depreciation experienced over the last several months. 

In a report just released, Goldman Sachs explained:

“The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ”

Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: Case-Shiller and the FHFA. Here are the numbers each reported:

Home values seem to have turned the corner and are headed back up.

Bottom Line

When the forecasts of significant home price depreciation were made last fall, they were made with megaphones. Mass media outlets, industry newspapers, and podcasts all broadcasted the news of an eminent crash in prices.

Now, forecasters are saying the worst is over and it wasn’t anywhere near as bad as they originally projected. However, they are whispering the news instead of using megaphones. As real estate professionals, it is our responsibility – some may say duty – to correct this narrative in the minds of the American consumer.

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Fastest Growing Home Price in the Metro Area: Rhododendron, Welches and Brightwood!

Saturday, June 3, 2023
by Liz Warren

I just read this recent article by KOIN on the cites with the fastest growing home prices in the Portland-Vancouver area. Our Mt. Hood area dominates the landscape with the following stats:

Rhododenrdron Oregon one of the fastest growing pricing towns in the Portland-Vancouver area

Most impressive was the five year price change with all in the over 50% range!

Camus, Washington placed # 1 and Dundee, Oregon placed # 2.

 

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Displaying blog entries 121-130 of 1878

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