Foreclosure Numbers Today are Nothing like 2008!
Tuesday, May 9, 2023
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Why Today’s Housing Market Is Not About To Crash
Tuesday, May 9, 2023
Why Today’s Housing Market Is Not About To Crash
There’s been some concern lately that the housing market is headed for a crash. And given some of the affordability challenges in the housing market, along with a lot of recession talk in the media, it’s easy enough to understand why that worry has come up.
But the data clearly shows today’s market is very different than it was before the housing crash in 2008. Rest assured, this isn’t a repeat of what happened back then. Here’s why.
It’s Harder To Get a Loan Now
It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one. As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.
Things are different today as purchasers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is.
Unemployment Recovered Faster This Time
While the pandemic caused unemployment to spike over the last couple of years, the jobless rate has already recovered back to pre-pandemic levels (see the blue line in the graph below). Things were different during the Great Recession as a large number of people stayed unemployed for a much longer period of time (see the red in the graph below):
Here’s how the quick job recovery this time helps the housing market. Because so many people are employed today, there’s less risk of homeowners facing hardship and defaulting on their loans. This helps put today’s housing market on stronger footing and reduces the risk of more foreclosures coming onto the market.
There Are Far Fewer Homes for Sale Today
There were also too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. Today, there’s a shortage of inventory available overall, primarily due to years of underbuilding homes.
The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.6-months’ supply. There just isn’t enough inventory on the market for home prices to come crashing down like they did in 2008.
Equity Levels Are Near Record Highs
That low inventory of homes for sale helped keep upward pressure on home prices over the course of the pandemic. As a result, homeowners today have near-record amounts of equity (see graph below):
And, that equity puts them in a much stronger position compared to the Great Recession. Molly Boesel, Principal Economist at CoreLogic, explains:
“Most homeowners are well positioned to weather a shallow recession. More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.”
Bottom Line
The graphs above should ease any fears you may have that today’s housing market is headed for a crash. The most current data clearly shows that today’s market is nothing like it was last time.
What Experts are Saying About the Mt. Hood Spring Housing Market?
Tuesday, April 25, 2023
What Are the Experts Saying About the Spring Housing Market?
The housing market’s been going through a lot of change lately, and there’s been uncertainty surrounding what will happen this spring. You may be wondering if more homes will go on the market, what’s next with home prices and mortgage rates, or what the best advice is for someone in your position right now.
Here’s what industry experts are saying right now about the spring housing market and what it means for you:
Selma Hepp, Chief Economist, CoreLogic:
“We see more competition among buyers . . . Housing supply also tends to grow during the spring months. And this is also the time of year when relatively more migration happens, as people graduate and move elsewhere looking for jobs.”
Greg McBride, Chief Financial Analyst, Bankrate:
“I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices.”
Rick Sharga, Founder and CEO, CJ Patrick Company:
“If you can find a home you love and can afford at today’s prices, don’t wait. Home prices in most of the country are unlikely to crash, and mortgage rates will only come down very gradually if they decline at all this year.”
Jeff Tucker, Senior Economist, Zillow:
“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual.”
Bottom Line
If you’re thinking about selling your house, this spring’s a great time to do so while inventory is still so low. And if you’re in a good position to buy, lean on your team of expert advisors for the best advice. Whatever your plans, let’s connect to make sure you’re able to navigate the spring housing market with confidence.
New District Ranger at the Mt. Hood National Forest
Monday, April 24, 2023
Here's the latest news from the Mt. Hood National Forest! New District Ranger
Mt. Hood National Forest
Forest Service News Release
Mt. Hood Welcomes New District Ranger
Mt. Hood National Forest is pleased to announce Nicholas Seibel as the new Zigzag District Ranger, beginning May 8. The Zigzag Ranger District spans 250,000 acres on the west side of the Forest, including busy campgrounds and trails, ski areas, and summer cabins. The district also includes most of Bull Run Watershed, which provides drinking water to about a million Oregonians.
“Zigzag Ranger District is receiving national attention and investment for Forest Service priorities,” said Mt. Hood National Forest Supervisor Meta Loftsgaarden. “Nick has a wealth of experience leading and collaborating with teams during complex projects. He’s the right person to help lead the implementation of these key priorities for both the Forest and our communities.”
Seibel is a retired combat controller in the U.S. Air Force, where he served for 24 years. During his military career, Seibel deployed to combat zones seven times, taking part in numerous high-risk missions providing support to both air and ground forces.
Seibel has extensive experience in emergency management, including leading task forces during national emergencies such as hurricanes Harvey and Irma. As a member of Oregon Air National Guard Seibel has come to know Mt. Hood well, leading and participating in search and recovery missions to locate and rescue lost or injured hikers.
Seibel lives in West Linn with his wife, son, and their two dogs. The Seibel family enjoys spending time together in the great outdoors, and they frequently explore Mt. Hood skiing, hiking, and camping.
“As someone who has always had a deep love and appreciation for the outdoors, I am thrilled to join the Zigzag Ranger District and Mt. Hood community,” said Seibel. “The opportunity to be a part of a team that stewards the natural beauty of this stunning mountainous region while supporting outdoor recreation is inspiring and fulfilling.”
Seibel succeeds previous District Ranger Bill Westbrook, who retired in late winter after 16 years in Zigzag.
What’s the Difference Between a Home Inspection and an Appraisal?
Thursday, April 20, 2023
What’s the Difference Between a Home Inspection and an Appraisal?
If you’re planning to buy a home, an inspection is an important step in the process. It assesses the condition of the home before you finalize the transaction. It’s also a different step in the process from an appraisal, which is a professional evaluation of the market value of the home you’d like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. Here’s the breakdown of each one and why they’re both important when buying a home.
Home Inspection
Here’s the key difference between an inspection and an appraisal. Bankrate says:
“In short, while an appraisal helps you understand a home’s value, inspections help you understand a home’s condition.”
The home inspection is a way to determine the current state, safety, and condition of the home before you finalize the sale. If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you as a buyer have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your real estate agent is a key expert to help you through this part of the process.
Home Appraisal
The National Association of Realtors (NAR) explains:
“A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage.”
When you apply for a mortgage, an unbiased appraisal (which is required by the lender) is the best way to confirm the value of the home based on the sale price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.
This is especially critical in today’s sellers’ market where low inventory is driving an increase in bidding wars, which can push home prices upward. When sellers are in a strong position like this, they tend to believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.
However, the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there’s ever any confusion or discrepancy between the appraisal and the sale price, your trusted real estate professional will help you navigate any additional negotiations in the buying process.
Bottom Line
The inspection and the appraisal are critical steps when buying a home, and you don’t need to manage them by yourself. Let’s connect today so you have the expert guidance you need to navigate the entire homebuying process.
Mt. Hood National Forest Opens for Woodcutting!
Tuesday, April 18, 2023
Great News for folks who like to cut their own firewood! The Mt. Hood National Forest has just released this info. Don't forget to get your permit. You can cut up to six cords of wood annually!
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Think Twice Before Waiting for Lower Home Prices on Mt. Hood
Monday, April 17, 2023
Think Twice Before Waiting for Lower Home Prices
As the housing market continues to change, you may be wondering where it’ll go from here. One factor you’re probably thinking about is home prices, which have come down a bit since they peaked last June. And you’ve likely heard something in the news or on social media about a price crash on the horizon. As a result, you may be holding off on buying a home until prices drop significantly. But that’s not the best strategy.
A recent survey from Zonda shows 53% of millennials are still renting right now because they’re waiting for home prices to come down. But here’s the thing: the most recent data shows that home prices appear to have bottomed out and are now on the rise again. Selma Hepp, Chief Economist at CoreLogic, reports:
“U.S. home prices rose by 0.8% in February . . . indicating that prices in most markets have already bottomed out.”
And the latest data from Black Knight shows the same shift. The graph below compares home price trends in November to those in February:
So, should you keep waiting to buy a home until prices come down? If you factor in what the experts are saying, you probably shouldn’t. The data shows prices are increasing in much of the country, not decreasing. And the latest data from the Home Price Expectation Survey indicates that experts project home prices will rise steadily and return to more normal levels of appreciation after 2023. The best way to understand what home values are doing in your area is to work with a local real estate professional who can give you the latest insights and expert advice.
Bottom Line
If you’re waiting to buy a home until prices come down, you may want to reconsider. Let’s connect to make sure you understand what’s happening in our local housing market.
Mt. Hood Vacation Rentals
Saturday, April 8, 2023
Mt. Hood vacation rentals are some of the most popular types of properties that buyers look for in our area. If you are thinking about purchasing a Mt. Hood vacation rental and want to do some research you might want to check out some helpful websites that will help you gather information. With over 800 vacation rentals in the Mt. Hood area including Government Camp, Rhododendron, Welches and Brightwood, you know we are a mecca for vacation rentals.
All of these websites offer information on short term rental markets, occupancy rates, average nightly rates, and revenue projections.
- AirDNA https://www.airdna.co/:
- VRBO: https://www.vrbo.com/
- Booking.com
- TripAdvisor: https://www.tripadvisor.com
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