Strategies For Mt. Hood Sellers
Saturday, February 19, 2022
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Buyers Are Lining Up to Purchase on Mt. Hood
Wednesday, February 16, 2022
More People Are Planning To Buy a Home Soon
While some homeowners may be tempted to hold off until spring to list their houses, you should know – homebuyers aren’t waiting. Demand is high today as more people are trying to beat rising mortgage rates. As a result, eager buyers are entering the market or moving their plans up so they can make their purchases as soon as possible.
The most recent Consumer Confidence Survey finds that, of those surveyed, the percentage of people planning to buy over the next six months has increased substantially since last fall (see graph below):
As the graph shows, the number of consumers fast-tracking their plans to purchase a home has crept up over the past three months. That indicates many buyers are evaluating their strategy and realizing they should act sooner rather than later. And for homeowners planning to sell, it’s a signal that now may be the time to list.
While more people are moving their plans up, others are actively putting theirs in motion. Time on the market is a great indication that homebuyers are motivated and moving quickly. According to a recent realtor.com report, the average home sold faster this January than any January on record.
Danielle Hale, Chief Economist at realtor.com, notes:
“Homes sold at a record-fast January pace, suggesting that buyers are more active than usual for this time of year.”
What Does That Mean for You?
Homebuyers are rethinking their strategies and moving their plans forward. Others are making their moves today. That means demand for your house isn’t just increasing – it’s high right now.
And because there are so few homes available for determined purchasers to choose from, if you’re planning to sell your house this year, doing so sooner means you can take advantage of high buyer demand before more houses are listed in your neighborhood. Why is this important? Because as more houses are put up for sale, buyers will have more options. But until then, your house will be in the spotlight.
Bottom Line
With so many buyers eager to make a purchase, you could benefit by listing your house soon. To understand how strong buyer demand is in our area, let’s connect so you can start making your plans today.
December Newsletter for Mt. Hood Real Estate
Monday, January 3, 2022
In case you missed this:
HAPPY NEW YEAR!
These are interesting times for Mt. Hood real estate as we head into 2022. After reviewing Novembers final sales we see a total of 18 closing with six sales under $400,000. Timberline Rim, one of the mountains most affordable subdivisions, saw five sales with three over a half a million dollars! November also produced the first $500,000 forest service cabin sale! More "off the chart" record breaking numbers were in Collins Lake at Government Camp. Three units have sold since July for $537,000, $557.000 and one at $606,000.
Needless to say, nearly every property that hits the market has five or more offers on the table making this the most amazing sellers market in Mt. Hood history. Two thousand twenty two will be very interesting if we don't get more inventory soon. Currently there are seven properties for sale and three are over a million dollars.
Recent snows may have slowed buyers down a little bit but the bottom line is once the current eleven pending sales close we will be down to nearly zero properties. Who knows what next year will look like at this point. This year we had a 30% increase in prices which was probably the greatest of all the areas tracked in our multiple listing. No doubt about it, Mt. Hood is the place to be!
Listed below are Novembers closed sales in Brightwood, Welches, Rhododendron and Government Camp.
December National News
U.S. Real Estate Overview
Note: November 2021 data below are the most recent released by the National Association of Realtors.
Existing-home sales rose in November, denoting three consecutive months of increases, according to the National Association of Realtors®. Three of the four major U.S. regions reported growth in monthly sales, while the fourth region held steady in November. From a year-over-year perspective, only one region experienced a rise in sales as the three others saw home sales decline.
Total existing-home sales (transactions that include single-family homes, townhomes, condominiums and co-ops) grew 1.9% from October to a seasonally adjusted annual rate of 6.46 million in November. Sales fell 2.0% from a year ago (6.59 million in November 2020).
“Determined buyers were able to land housing before mortgage rates rise further in the coming months,” said Lawrence Yun, NAR’s chief economist. “Locking in a constant and firm mortgage payment motivated many consumers who grew weary of escalating rents over the last year.
“Mortgage rates are projected to jump in 2022, however, I don’t expect the imminent increase to be overly dramatic.”
Yun forecasts the 30-year fixed mortgage rate to average at 3.7% by year-end of 2022.
Total housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.
The median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 ($310,800), as prices increased in each region, with the highest pace of appreciation in the South region. This marks 117 straight months of year-over-year increases, the longest-running streak on record.
“Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market,” said Yun. “Therefore, housing prices continue to march higher due to the near record-low supply levels.”
Yun noted that inflation and the pace of price appreciation is expected to subside next year. Last week, NAR held its third annual Real Estate Forecast Summit, featuring economists and housing experts whose consensus found inflation would likely ease in 2022 at a 4% rate, while home prices are expected to rise at a moderate pace of 5.7%.
Properties typically remained on the market for 18 days in November, equal to October and down from 21 days in November 2020. Eighty-three percent of homes sold in November 2021 were on the market for less than a month.
In October, first-time buyers were responsible for 26% of sales in November, down from 29% in October and from 32% in November 2020. NAR's 2021 Profile of Home Buyers and Sellers – released earlier this month – reported that the annual share of first-time buyers was 34%.
Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in November, down from 17% in October and up from 14% in November 2020. All-cash sales accounted for 24% of transactions in November, equal to October’s percentage, and up from 20% from November 2020.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07 in November, equal to October’s rate. The average commitment rate across all of 2020 was 3.11%.
Investing in Real Estate
Today's low interest rates and rising home prices have created some great investment opportunities!
Investing in real estate has unique advantages over other types of investments. Let's take a look at some of the reasons why real estate investment should be on the "short list" for many investors:
- Interest in mortgage loans are tax-deductible. Investors can lower their tax liability while increasing their equity.
- Renters pay down your mortgage loan. Investors reap the benefits of rental income, which offsets your mortgage cost and build equity.
- Real Estate values increase over the long term. Real Estate is limited and will always be in demand.
- 1031 exchanges are available to defer taxable income when you are ready to sell.
Many investors are taking advantage of these great market conditions. Have questions? Give us a call. We are happy to help!
Are bi-weekly payments right for you?
Many people ask about bi-weekly payment plans designed to reduce the interest paid out over the course of your loan. These programs help the borrower budget an extra payment a year, and over time this can knock years off the repayment schedule.
Many people are surprised to learn that they can do this themselves without any special programs, simply by submitting an extra principal payment as they are able. By submitting an extra payment, you get the advantages of an early payout, without the extra contractual obligation. Want more information on other mortgage options?
Contact us today for our list of preferred local mortgage experts who can help you position yourself for a great year in 2020!
It's Now Much Easier to Buy A Home
Why It Just Became Much Easier To Buy a Home
Since the pandemic began, Americans have reevaluated the meaning of the word home. That’s led some renters to realize the many benefits of homeownership, including the feelings of security and stability and the financial benefits that come with rising home equity. At the same time, many current homeowners have decided their house no longer meets their needs, so they moved into homes with more space inside and out, including a home office for remote work.
However, not every purchaser has been able to fulfill their desire for a new home. Here are two obstacles some homebuyers are facing:
- The ability to save for a down payment
- The ability to qualify for a mortgage at the current lending standards
This past week, both of those challenges have been mitigated to some degree for many purchasers. The FHFA (which handles mortgages by Freddie Mac, Fannie Mae, and the Federal Housing Administration) is raising its loan limit for prospective purchasers in 2022. The term used to describe the maximum loan amount they will entertain is the Conforming Loan Limit.
What Is the Difference Between a Conforming Loan and a Non-Conforming Loan?
Investopedia explains the difference in a recent post:
“Conforming loans are the only loans that meet the requirements to be acquired by Fannie Mae and Freddie Mac. Jumbo loans, which exceed the conforming limit, are the most common type of nonconforming loan.”
What Difference Does It Make to Me as a Home Buyer?
A Forbes article earlier this year explains the benefits of a conforming loan and why they exist:
“Since lenders can’t sell non-conforming loans to Fannie Mae or Freddie Mac to free up their cash, they’re a bit riskier for the lender. This is especially true for jumbo loans, which aren’t backed by any government guarantees. If you default on a jumbo loan, it’s a huge blow to the lender.
Thus, lenders generally charge higher interest rates to compensate, and they can have even more requirements. For example, lenders who give out jumbo loans often require that you make a down payment of at least 20% and show that you have at least six months’ worth of cash in reserve, if not more.”
What Happened Last Week?
The FHFA has significantly increased its Conforming Loan Limits for 2022. Sandra L. Thompson, FHFA Acting Director, explains in the press release that:
“Compared to previous years, the 2022 Conforming Loan Limits represent a significant increase due to the historic house price appreciation over the last year. While 95 percent of U.S. countie​s will be subject to the new baseline limit of $647,200, approximately 100 counties will have conforming loan limits approaching $1 million.”
This means that more homes now qualify for a conforming loan with lower down payment requirements and easier lending standards – the two challenges holding many buyers back over the last year.
The Federal Housing Administration (FHA) also increased its Conforming Loan Limits for 2022. That could also mean an easier path to homeownership for many prospective buyers. As the Forbes article explains:
“FHA loans can be very beneficial if you don’t have as much savings, or if your credit score could use some work.”
Bottom Line
Buying your first or your next home may have just gotten much easier (less stringent qualifying standards) and less expensive (possibly lower mortgage rate). Let’s connect to discuss how these changes may impact you.
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The Truth Many Headlines Overlook About the Real Estate Market
Tuesday, November 23, 2021
Don’t Believe Everything You Read: The Truth Many Headlines Overlook
There are a lot of questions right now regarding the real estate market as we head into 2022. The forbearance program is coming to an end and mortgage rates are beginning to rise.
With all of this uncertainty, anyone with a megaphone – from the mainstream media to a lone blogger – has realized that bad news sells. Unfortunately, we’ll continue to see a rash of troublesome headlines over the next few months. To make sure you aren’t paralyzed by a headline, turn to reliable resources for a look at what to expect from the housing market next year.
There are already alarmist headlines starting to appear. Here are two recent topics you may have seen in the news.
1. foreclosures Are Spiking Today
There are a number of headlines circulating that call out the rising foreclosures in today’s real estate market. Those stories focus on an overly narrow view on that topic: the current volume of foreclosures compared to 2020. They emphasize that we’re seeing far more foreclosures this year compared to last.
That seems rather daunting. However, though it’s true foreclosures have been up over the 2020 numbers, it’s important to realize that there were virtually no foreclosures last year because of the forbearance plan. If we compare this September to September of 2019 (the last normal year), foreclosures were down 70% according to ATTOM.
Even Rick Sharga, an Executive Vice President of the firm that issued the report referenced in the above article, says:
“As expected, now that the moratorium has been over for three months, foreclosure activity continues to increase. But it's increasing at a slower rate, and it appears that most of the activity is primarily on vacant and abandoned properties, or loans in foreclosure prior to the pandemic.”
Homeowners who have been impacted by the pandemic are not generally the ones being burdened right now. That’s because the forbearance program has worked. Ali Haralson, President of Auction.com, explains that the program has done a remarkable job:
“The tsunami of foreclosures many feared in the early days of the pandemic has not materialized thanks in large part to the swift and decisive foreclosure protections put in place by government policymakers and the mortgage servicing industry.”
And the government is still making sure homeowners have every opportunity to stay in their homes. Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB), issued this statement just last week:
“Failures by mortgage servicers and regulators worsened the impact of the economic crisis a decade ago. Regulators have learned their lesson, and we will be scrutinizing servicers to ensure they are doing all they can to help homeowners and follow the law.”
2. Rising Mortgage Rates Will Slow the Housing Market
Another topic that’s generating frequent headlines is the rise in mortgage rates. Some people are expressing concern that rising rates will negatively impact the housing market by causing home sales to dramatically decline. The resulting headlines are raising unneeded alarm bells. To counteract those headlines, we need to take a look at what history tells us. Looking at data over the last 20 years, there’s no evidence that an increase in rates dramatically forces sales to come to a halt. Nor does home price appreciation come to a screeching stop. Let’s look at home sales first:
The last three times rates increased (shown in the graph above in red), sales (depicted in blue in the graph) remained rather consistent. It’s true that sales fell rather dramatically from 2007 through 2010, but mortgage rates were also falling at the time. The next two instances showed no meaningful drop in sales.
Now, let’s take a look at home price appreciation (see graph below):
Again, we see that a rise in rates didn’t cause prices to depreciate. Outside of the years following the crash, prices continued to appreciate, just at a slower rate.
Bottom Line
There’s a lot of misinformation out there. If you want the best advice on what’s happening in the current housing market, let’s connect.
Is there a housing bubble on Mt. Hood?
Tuesday, July 20, 2021
3 Charts That Show This Isn’t a Housing Bubble
With home prices continuing to deliver double-digit increases, some are concerned we’re in a housing bubble like the one in 2006. However, a closer look at the market data indicates this is nothing like 2006 for three major reasons.
1. The housing market isn’t driven by risky mortgage loans.
Back in 2006, nearly everyone could qualify for a loan. The Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130. As an example of the difference between today and 2006, let’s look at the volume of mortgages that originated when a buyer had less than a 620 credit score.
Dr. Frank Nothaft, Chief Economist for CoreLogic, reiterates this point:
“There are marked differences in today’s run up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”
2. Homeowners aren’t using their homes as ATMs this time.
During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).
Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over $8 billion.
Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is half of what it was in 2006.
3. This time, it’s simply a matter of supply and demand.
FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months.
Builders also overbuilt during the bubble but pulled back significantly over the next decade. Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Mac, explains that pullback is the major factor in the lack of available inventory today:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Here’s a chart that quantifies Khater’s remarks:
Today, there are simply not enough homes to keep up with current demand.
Bottom Line
This market is nothing like the run-up to 2006. Bill McBride, the author of the prestigious Calculated Risk blog, predicted the last housing bubble and crash. This is what he has to say about today’s housing market:
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while because Millennials need houses. Prices will keep rising for a while because inventory is so low.”
Proposed Regulations for Short Term/vacation Rentals in Unincorporated Clackamas County
Saturday, October 10, 2020
Here is the latest update on vacation rental study by Clackamas County:
Good afternoon,
After months of delay because of the COVID-19 pandemic and the wildfires, the Clackamas County Board of Commissioners has scheduled a policy session on short-term rental regulations for 3 p.m., Tuesday, Oct. 13, to review the major points of the draft regulations and set public hearings. The tentative plan is to hold public hearings and have the Board take action before the end of 2020, with any new regulations going into effect on July 1, 2021.
More details are in the staff report for the meeting. You can connect to the Zoom meeting to observe and see the staff report athttps://www.clackamas.us/meetings/bcc/presentation/2020-10-13-1.
As you may remember, the draft regulations were first created in 2019 at the request of the Board of Commissioners, in response to the increasing number of residents who use their homes for short-term or vacation rentals. The regulations include provisions for short-term rental owners to register with the county and pay a fee, and for enforcement of the regulations to be carried out by either the Sheriff’s Office or Code Enforcement, depending on the issue.
Clackamas County defines a short-term rental, or vacation rental, as a dwelling unit, or portion of a dwelling unit, that is rented to any person or entity for lodging or residential purposes, for a period of up to 30 consecutive nights.
Key components of the proposed regulations include rules regarding maximum occupancy, off-street parking, garbage pick-up, quiet hours, and fire and safety requirements. All short-term rentals would be subject to the same regulations, except that short-term rental properties inside the Portland metropolitan urban growth boundary would be required to be the owner’s primary residence or located on the same tract as the owner's primary residence. (The owner would not be required to be there when the short-term rental was occupied.) Details are available online at www.clackamas.us/planning/str.
For more information, contact Principal Planner Martha Fritzie at [email protected] or 503-742-4529.
You received this email because you have expressed an interest in regulations for short-term rentals in unincorporated Clackamas County. If you no longer wish to receive these emails, please let me know. Thank you.
Ellen Rogalin, Community Relations Specialist
Clackamas County Public & Government Affairs
Transportation & Development | Business & Community Services
503-742-4274 | 150 Beavercreek Road, Oregon City, OR 97045
Office hours: 9 am – 6 pm, Monday-Friday
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