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What's the Future of the Mt. Hood Real Estate Market?

Tuesday, May 31, 2022
by Liz Warren

What Does the Rest of the Year Hold for the Housing Market?

What Does the Rest of the Year Hold for the Housing Market? | MyKCM
 

If you’re thinking of buying or selling a house, you’re at an exciting decision point. And anytime you make a big decision like that, one thing you should always consider is timing. So, what does the rest of the year hold for the housing market? Here’s what experts have to say.

The Number of Homes Available for Sale Is Likely To Grow

There are early signs housing inventory is starting to grow and experts say that should continue in the months ahead. According to Danielle Hale, Chief Economist at realtor.com:

“The gap between this year’s homes for sale and last year’s is one-fifth the size that it was at the beginning of the year. The catch up is likely to continue, . . . This growth will mean more options for shoppers than they’ve had in a while, even though inventory continues to lag pre-pandemic normal.”

  • As a buyer, having more options is welcome news. Just remember, housing supply is still low, so be ready to act fast and put in your best offer up front.
  • As a seller, your house may soon face more competition when other sellers list their homes. But the good news is, if you’re also buying your next home, having more options to choose from should make that move-up process easier.

Mortgage Rates Will Likely Continue To Respond to Inflationary Pressures

Experts also agree inflation should continue to drive up mortgage rates, albeit more moderately. Odeta Kushi, Deputy Chief Economist at First American, says:

“… ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”  

  • As a buyer, work with trusted real estate professionals, including your lender, so you can learn how rising mortgage rate environments impact your purchasing power. It may make sense to buy now before it costs more to do so, if you’re ready.
  • As a seller, rising mortgage rates are motivating some homeowners to make a move up sooner rather than later. If you’re planning to buy your next home, talk to a trusted real estate advisor to decide how to time your move.

Home Prices Are Projected To Continue To Climb

Home prices are forecast to keep appreciating because there are still fewer homes for sale than there are buyers in the market. That said, experts agree the pace of that appreciation should moderate – but home prices won’t fall. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022. . . Given the extremely low inventory, we're unlikely to see price declines, but appreciation should slow in the coming months.” 

  • As a buyer, continued home price appreciation means it’ll cost you more to buy the longer you wait. But it also gives you peace of mind that, once you do buy a home, it will likely grow in value. That makes it historically a good investment and a strong hedge against inflation.
  • As a seller, price appreciation is great news for the value of your home. Again, lean on a professional to strike the right balance of the best conditions possible for both selling your house and buying your next one.

Bottom Line

Whether you’re a homebuyer or seller, you need to know what’s happening in the housing market, so you can make the most informed decision possible. Let’s connect to discuss your goals and what lies ahead, so you can pick your best time to make a move.

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Craftsman Style Zig Zag Riverfront Cabin

Thursday, May 19, 2022
by Liz Warren

Caution, dream cabin just hit the market!

This is one of the larger cabins in the Mt. Hood National Forest on the Zig Zag River. Lots of craftsman touches and plenty of room for friends and family. Open great room with log accents. Floor to ceiling windows with lots of natural light. Three bedrooms, one bath with over 1400 square feet. Outstanding location on the Zig Zag River! Enjoy the outdoors on your huge deck!  $510,000

Zig Zag Riverfront Cabin With Soaring Fireplace

Mt. Hood Waterfront Cabin near Government Camp          Zig Zag River on Mt. Hood

Soaring Ceiling in this Craftsman Style Zig Zag Riverfront Cabin near Mt. Hood

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The One Thing Every Homeowner Needs To Know About a Recession

Thursday, May 19, 2022
by Liz Warren

The One Thing Every Homeowner Needs To Know About a Recession

The One Thing Every Homeowner Needs To Know About a Recession | MyKCM
 

A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.

The National Bureau of Economic Research (NBER) defines a recession this way:

“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”

To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.

The One Thing Every Homeowner Needs To Know About a Recession | MyKCM

The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.

Bottom Line

We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.

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National Wildfire Awareness Month

Thursday, May 12, 2022
by Liz Warren

Although it's hard to believe as we sit under storm clouds and record breaking rain we are approaching our fire season on Mt. Hood. After power shut downs from past fires locals are way more prepared for what will come our way. I don't know any one who doesn't own a generator. This article from Fox 12 details new rules for power shut down notifications during wildfires. 

Here are tips directly from the FEMA website:

The United States Fire Administration promotes simple ways to prevent a fire from affecting your home and community, including:

  • Reduce amount of flammable materials and brush that can burn around your home by removing pine needles, dry leaves or other highly flammable materials.
  • Protect your roof: Trim branches that overhang your home and remove any leaves, needles, and sticks from your roof and gutters. 
  • Move wood piles and small propane tanks away from your (and your neighbor’s) home, 30 feet or more is best.
  • Embers from a burning fire can get under an unprotected porch or through vents. To prevent this, install a wire mesh screen with openings no larger than 1/8th inch.  

Be prepared in case you need to evacuate:

  • Keep important documents in a fireproof safe, on a USB drive, or store password protected documents online.
  • Check your home insurance to make sure your policy protects your current home value and includes wildfires.
  • Give yourself time and evacuate early if possible. If you can’t leave, designate a room that can be closed off from outside air in case air conditions become hazardous.
  • Make your household emergency plan and go-kit.  When making plans, don’t forget the needs of pets.  Make sure that you know more than one way out of your neighborhood.
  • Sign up to receive emergency alerts and notices for your community.
  • Ready.gov offers vital safety tips on what to do before, during, and after a wildfire.

Another important thing to consider is buying flood insurance. After a wildfire, flood risk increases due to the inability of charred vegetation and soil to absorb water. Rainstorms after a wildfire lead to increased runoff down slopes and into channels, streams, and rivers.  Flooding after fire can be fast, severe, and include mudflows as runoff picks up debris, ash, and sediment from the burn scar. Flood insurance can protect property owners from catastrophic financial impacts of flooding following a wildfire.

Wildfires can develop and spread quickly, leaving little time to get somewhere safe. Know what to do to keep yourself, your family, and your pets safe and take steps now to protect your future.

Last updated March 17, 2021

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Mortgage Rates Impact on Your Mt. Hood Purchase

Monday, May 9, 2022
by Liz Warren

How Today’s Mortgage Rates Impact Your Mt. Hood  Purchase

How Today’s Mortgage Rates Impact Your Home Purchase | MyKCM
 

If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home you can afford to buy that’s within your financial reach. Mortgage rates directly impact the monthly payment you’ll have on the home you purchase. So, when rates rise, so does the monthly payment you’re able to lock in on your home loan. In a rising-rate environment like we’re in today, that could limit your future purchasing power.

Today, the average 30-year fixed mortgage rate is above 5%, and in the near term, experts say that’ll likely go up in the months ahead. You have the opportunity to get ahead of that increase if you buy now before that impacts your purchasing power.

Mortgage Rates Play a Large Role in Your Home Search

The chart below can help you understand the general relationship between mortgage rates and a typical monthly mortgage payment within a range of loan amounts. Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within that range, while the red is a payment that exceeds it (see chart below):

How Today’s Mortgage Rates Impact Your Home Purchase | MyKCM

As the chart shows, you’re more likely to exceed your target payment range as mortgage rates increase unless you pursue a lower home loan amount. If you’re ready to buy a home, use this as your motivation to purchase now so you can get ahead of rising rates before you have to make the decision to decrease what you borrow in order to stay comfortably within your budget.

Work with Trusted Advisors To Know Your Budget and Make a Plan

It’s critical to keep your budget top of mind as you’re searching for a home. Danielle Hale, Chief Economist at realtor.com, puts it best, advising that buyers should:

“Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response.”

No matter what, the best strategy is to work with your real estate advisor and a trusted lender to create a plan that takes rising mortgage rates into consideration. Together, you can look at your budget based on where rates are today and craft a strategy so you’re ready to adjust as rates change.

Bottom Line

Even small increases in mortgage rates can impact your purchasing power. If you’re in the process of buying a home, it’s more important than ever to have a strong plan. Let’s connect so you have a trusted real estate advisor and a lender on your side who can help you strategize to achieve your dream of homeownership this season.

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Willamette Week Article on Mt. Hood Real Estate Appreciation

Wednesday, May 4, 2022
by Liz Warren

A recent article in Willamette Week states home prices in Rhododendron were up 47% over last year. Read article here.   The article is about folks moving out of Portland for less expensive housing so they can qualify to buy. This seems to be happening everywhere. Notice there are three of our burgs on Mt. Hood listed in the chart below. These numbers are coming from Zillow based on comments in the article. 

Willamette Week Stats from article May 2022

Recent RMLS statistics for the Mt. Hood area in March 2022 says our year over year for the entire area including Government Camp was 37.3%. If you add in another 10% for the 2020-2021 season, I can see where these numbers are coming from. I thought the Rhododendron comment was a little misleading under the main heading. These stats are for two years of sales vs. one year of sales. 

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Bear Alert from Oregon State Fish and Wildlife

Monday, May 2, 2022
by Liz Warren

Bears are waking up from hibernation and are becoming active in your area. At this time of year, these hungry bears will be trying to get into every food source they can, including garbage, old grills, birdfeeders, and anything else that smells like food. Take steps to avoid conflict with bears by removing bird feeders and securing attractants. A bear's strongest sense is smell and they can pick up a scent from over a mile away.

Don’t reward bears with easily available food (including birdseed), liquids, garbage and scraps from a barbeque or grill. Intentional or unintentional feeding of bears teaches them to approach homes and people. This is dangerous for humans and bears. Keep Bears Wild by following the BearWise basics above and sharing this information with your neighbors. A community effort will be more effective in preventing conflicts with bears. For more information on living with bears visit https://www.dfw.state.or.us/wildlife/living_with/black_bears.asp

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Today’s Home Price Appreciation Is Great News for Existing Homeowners On Mt. Hood

Monday, May 2, 2022
by Liz Warren

Today’s Home Price Appreciation Is Great News for Existing Homeowners On Mt. Hood

Today’s Home Price Appreciation Is Great News for Existing Homeowners | MyKCM
 

If you’re planning to sell your home this season, rising prices are great news for you. But it’s important to understand why prices are rising to begin with. One major factor is supply and demand.

In any industry, when there are more buyers for an item than there are of that item available, prices naturally rise. In those situations, buyers are willing to pay more to get the product or service they’re looking for when options are scarce. And that’s exactly what’s happening in the current real estate market.

Selma Hepp, Executive, Research & Insights and Deputy Chief Economist at CoreLogic, puts it like this:

“With so few homes, buyers are once again left with fierce competition that’s driving the share of homes that sold over the listing price up to 66% . . . With the continued imbalance between supply and demand, home prices are likely to have another year of strong gains and are expected to average about 10% growth for the year.”

Because it will take some time for housing supply to increase, experts believe prices will continue rising. The latest Home Price Expectations Survey forecasts what will happen with home prices over the next 5 years. As the graph below shows, while the rate of appreciation will moderate over the next few years, prices will continue rising through 2026:

Today’s Home Price Appreciation Is Great News for Existing Homeowners | MyKCM

What This Means When You Sell Your House

If you’re a homeowner, the projection for continued price appreciation this year opens up an opportunity to move. That’s because it may give your equity a major boost. Equity is the difference between what you owe on your house and its market value. The amount of equity you have increases as you make your monthly payments and as rising home prices drive up the market value for your home.

Growing equity is a powerful tool for homeowners. When you sell your house, the equity you’ve built comes back to you in the sale. That money could be enough to cover some (if not all) of your down payment on your next home.

Of course, if you want to know how much equity you have in your current house, it’s crucial to work with a real estate professional. They follow current market trends and can help you understand your home’s value when you’re ready to sell.

What This Means for Your Next Purchase

But today’s rising home values aren’t just good news if you’re ready to sell. Because price appreciation is forecast to continue in the years ahead, you can rest assured your next home will be an investment that should grow in value with time. That’s one of several reasons why real estate has been rated the best investment in a recent Gallup poll.

Bottom Line

If you’re weighing whether or not you should sell your house this season, know rising home values may be opening up an opportunity to use equity to fuel your move. Let’s connect so you can find out how much your home is worth and to learn more about all the benefits you have in today’s market.

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Buyers Are Lining Up To Make Offers on Your Mt. Hood Property

Friday, April 29, 2022
by Liz Warren

          

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Why the Mt. Hood Real Estate Market is Not a Bubble

Thursday, April 21, 2022
by Liz Warren

Why This Housing Market Is Not a Bubble Ready To Pop

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM
 

Homeownership has become a major element in achieving the American Dream. A recent report from the National Association of Realtors (NAR) finds that over 86% of buyers agree homeownership is still the American Dream.

Prior to the 1950s, less than half of the country owned their own home. However, after World War II, many returning veterans used the benefits afforded by the GI Bill to purchase a home. Since then, the percentage of homeowners throughout the country has increased to the current rate of 65.5%. That strong desire for homeownership has kept home values appreciating ever since. The graph below tracks home price appreciation since the end of World War II:

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

The graph shows the only time home values dropped significantly was during the housing boom and bust of 2006-2008. If you look at how prices spiked prior to 2006, it looks a bit like the current spike in prices over the past two years. That may lead some people to be concerned we’re about to see a similar fall in home values as we did when the bubble burst. To help alleviate those worries, let’s look at what happened last time and what’s happening today.

What Caused the Housing Crash 15 Years Ago?

Back in 2006, foreclosures flooded the market. That drove down home values dramatically. The two main reasons for the flood of foreclosures were:

1. Many purchasers were not truly qualified for the mortgage they obtained, which led to more homes turning into foreclosures.
2. A number of homeowners cashed in the equity on their homes. When prices dropped, they found themselves in an underwater situation (where the home was worth less than the mortgage on the house). Many of these homeowners walked away from their homes, leading to more foreclosures. This lowered neighboring home values even more.

This cycle continued for years.

Why Today’s Real Estate Market Is Different

Here are two reasons today’s market is nothing like the one we experienced 15 years ago.

1. Today, Demand for Homeownership Is Real (Not Artificially Generated)

Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home. Today, purchasers and those refinancing a home face much higher standards from mortgage companies.

Data from the Urban Institute shows the amount of risk banks were willing to take on then as compared to now.

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

There’s always risk when a bank loans money. However, leading up to the housing crash 15 years ago, lending institutions took on much greater risks in both the person and the mortgage product offered. That led to mass defaults, foreclosures, and falling prices.

Today, the demand for homeownership is real. It’s generated by a re-evaluation of the importance of home due to a worldwide pandemic. Additionally, lending standards are much stricter in the current lending environment. Purchasers can afford the mortgage they’re taking on, so there’s little concern about possible defaults.

And if you’re worried about the number of people still in forbearance, you should know there’s no risk of that causing an upheaval in the housing market today. There won’t be a flood of foreclosures.

2. People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

As mentioned above, when prices were rapidly escalating in the early 2000s, many thought it would never end. They started to borrow against the equity in their homes to finance new cars, boats, and vacations. When prices started to fall, many of these homeowners were underwater, leading some to abandon their homes. This increased the number of foreclosures.

Homeowners didn’t forget the lessons of the crash as prices skyrocketed over the last few years. Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has more than doubled compared to 2006 ($4.6 trillion to $9.9 trillion).

The latest Homeowner Equity Insights report from CoreLogic reveals that the average homeowner gained $55,300 in home equity over the past year alone. Odeta Kushi, Deputy Chief Economist at First American, reports:

“Homeowners in Q4 2021 had an average of $307,000 in equity - a historic high.”

ATTOM Data Services also reveals that 41.9% of all mortgaged homes have at least 50% equity. These homeowners will not face an underwater situation even if prices dip slightly. Today, homeowners are much more cautious.

Bottom Line

The major reason for the housing crash 15 years ago was a tsunami of foreclosures. With much stricter mortgage standards and a historic level of homeowner equity, the fear of massive foreclosures impacting today’s market is not realistic.

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