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Buying on Mt. Hood? Start With A Pre-Approval

Monday, September 25, 2023
by Liz Warren

Beginning with Pre-Approval



 

If you’re looking to buy a home this fall, there are a few things you need to know. Affordability is tight with today’s mortgage rates and rising home prices. At the same time, there’s a limited number of homes on the market right now and that’s creating some competition among buyers. But, if you’re strategic, there are ways to navigate these waters. The first thing you’ll want to do is get pre-approved for a mortgage. That way you’ll know your numbers and can set yourself up for success from the start of your home search.

What Pre-Approval Does for You

To understand why it’s such an important step, you need to know what pre-approval is. As part of the homebuying process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you know how much money you can borrow. Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow. Why does this help you, especially today? With higher mortgage rates and home prices impacting affordability for many buyers right now, a solid understanding of your numbers is even more important so you can truly wrap your head around your options.

Pre-Approval Helps Show Sellers You’re a Serious Buyer

Let’s face it, there are more buyers looking to buy than there are homes available for sale and that imbalance is creating some competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you make an offer on a home. But getting pre-approved for a mortgage can help you stand out from other hopeful buyers.

As an article from Wall Street Journal (WSJ) says:

“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Pre-approval shows the seller you’re a serious buyer that’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or financial issues.

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. The more prepared you are, the better chance you have of getting the home you want. Connect with a trusted lender so you have the tools you need to purchase a home in today’s market.

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Are More Homes Coming on the Market on Mt. Hood?

Monday, September 18, 2023
by Liz Warren

Are More Homes Coming onto the Market?



 

An important factor shaping today’s market is the number of homes for sale. And, if you’re considering whether or not to list your house, that’s one of the biggest advantages you have right now. When housing inventory is this low, your house will stand out, especially if it’s priced right.

But there are some early signs that more listings are coming. According to the latest data, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.

More Homes Are Coming onto the Market than Usual

It’s well known that the busiest time in the housing market each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. Sellers are anticipating this and ramping up for the months when buyers are most active. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.

But here’s what’s surprising. Based on the latest data from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. You can see both the normal seasonal trend and the unusual August in the graph below:As Realtor.com explains:

“While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season . . .”

While this is only one month of data, it’s unusual enough to note. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.

What This Means for You

If you’ve been putting off selling your house, now may be the sweet spot to make your move. That’s because, if this trend continues, you’ll have more competition the longer you wait. And if your neighbor puts their house up for sale too, it means you may have to share buyers’ attention with that other homeowner. If you sell now, you can beat your neighbors to the punch. Mt. Hood only has 35 properties currently for sale!

But, even with more homes coming onto the market, the market is still well below normal supply levels. And, that inventory deficit isn’t going to be reversed overnight. The graph below helps put this into context, so you can see the opportunity you still have now: 

Bottom Line

Even though inventory is still low, you don’t want to wait for more competition to pop up in your neighborhood. You still have an incredible opportunity if you sell your house today. Let’s connect to explore the benefits of selling now before more homes come to the market.

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New STR Rental Regulations Approved by Board of County Commissioners

Friday, September 8, 2023
by Liz Warren

Board of County Commissioners approves Short-Term Rental regulations

Date

Rules will affect STRs in unincorporated areas in 90 days

The Board of County Commissioners unanimously approved rules and regulations regarding short-term rentals (STRs) earlier today. The action was taken after two public hearings were held on the issue – one earlier today, and one last month.

The regulations will take effect after 90 days (Dec. 6), and only affect the unincorporated areas of Clackamas County – there will be no effect on STRs located within city limits.

The Board of County Commissioners intends to revisit these regulations in two years in order to evaluate the cost and efficacy of the program and make a determination whether to continue, amend, or discontinue the regulations.

Residents are encouraged to review the STR regulations, which were adopted as presented at this morning’s Business Meeting. Those regulations can be found online on the county’s STR webpage where future updates can be found.

Before going into effect, the county will post the registration application (for owners/operators) online.

The Board of County Commissioners was effusive in their thanks this morning to the many members of the public that provided testimony in person and over Zoom at both public hearings, as well as many more that emailed in their perspectives. Changes were made to the proposed regulations in-between the time of the first and second public hearings in response to community input. Watch today’s hearing.

Changes

Clackamas County currently has no STR regulations. These new regulations will require all STRs in unincorporated Clackamas County to register with the county. The process will be free and an in-home inspection will not be required. When registering, the property owner and/or manager will certify that the property meets safety standards and that they will abide by the STR program rules. These include, but are not limited to:

  • STR owners will continue to pay the county’s transient lodging tax (6%) 
  • The STR regulations impose a .85% user fee on the total rental amount 
  • No STR may be publicly advertised for rent unless it has been registered with Clackamas County 
  • STRs shall comply with all building and fire standards  
  • STR registration identification numbers shall be included on any advertisement or rental platform 
  • Contact information of a party responsible for the STR shall be posted at all times while paying guests are on the property, in an area and size readily visible from the nearest public roadway. (Per the draft STR rental application, that person/company must be available 24/7 and able to respond to complaints within two hours. See pages 10-11.)  
  • The number of STR occupants shall not exceed the number authorized in the registration. Fifteen occupants is the maximum.  
  • Notice shall be clearly posted in the STR that identifies and informs occupants of the county's noise control ordinance  
  • Adequate parking – one off-street motor vehicle space per sleeping area – is required. There are exceptions to this for certain areas of the Mount Hood community. 
  • Vehicles shall never block access for emergency vehicles, access to the premise, or a parked motor vehicle. These violations, or other parking performed in a manner that violates the county’s current parking and towing ordinance standards, may subject the offending vehicle to immediate tow. 
  • The proposed STR regulations do not apply to hotels, motels, bed and breakfast facilities, hostels, campgrounds, lodging and resort accommodations in commercial zones, recreational vehicle camping facilities, or organizational camps

Violations

Clackamas County encourages any residents/parties to cooperate directly to resolve conflicts arising from an STR. First attempts to remedy violations should be to contact the posted STR representative. If a person does not respond within 24 hours or does not adequately remedy the issue, the county should be notified. Further details:

  • Clackamas County reserves the right to immediately revoke registration if it determines an STR is a fire or life safety risk 
  • Clackamas County reserves the right to review pertinent financial records or visit the STR to ensure violations have been resolved at any reasonable time 
  • When noncompliance of the STR regulation is suspected, the county shall issue up to two warnings in writing 
  • An owner that operates an STR without an approved registration or while suspended shall be subject to penalties

Members of the media may contact Clackamas County Public Affairs’ Dylan Blaylock. STR owners and interested parties with questions can contact Policy Advisors Caroline Hill or Everett Wild at 503-655-8581 or [email protected].

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Mortgage Rates: Past, Present, and Possible Future

Wednesday, September 6, 2023
by Liz Warren

Mortgage Rates: Past, Present, and Possible Future



 

If you’re hoping to buy a home this year, you’re probably paying close attention to mortgage rates. Since mortgage rates impact what you can afford when you take out a home loan – and affordability is a challenge today – it’s a good time to look at the big picture of where mortgage rates have been historically compared to where they are now. Beyond that, it’s important to understand their relationship with inflation for insights into where mortgage rates might go in the near future.

Giving Context to the Sticker Shock

Freddie Mac has been tracking the 30-year fixed mortgage rate since April of 1971. Every week, they release the results of their Primary Mortgage Market Survey, which averages mortgage application data from lenders across the country (see graph below):

Looking at the right side of the graph, mortgage rates have increased significantly since the start of last year. But even with that rise, today’s rates are still below the 52-year average. While that historical perspective is good context, buyers have gotten used to mortgage rates between 3% and 5%, which is where they’ve been over the past 15 years.

That’s important because it explains why the recent jump in rates might have you feeling sticker shock even though they’re close to their long-term average. While many buyers have adjusted to the elevated rates over the past year, a slightly lower rate would be a welcome sight. To determine if that’s a realistic possibility, it’s important to look at inflation.

Where Could Mortgage Rates Go in the Future? 

The Federal Reserve has been working hard to lower inflation since early 2022. That’s significant because, historically, there’s been a connection between inflation and mortgage rates (see graph below):

This graph shows a pretty reliable relationship between inflation and mortgage rates. Looking at the left side of the graph, each time inflation moves significantly (shown in blue), mortgage rates follow suit shortly after (shown in green).

The circled portion of the graph points out the most recent spike in inflation, with mortgage rates following closely behind. As inflation has moderated a bit this year, mortgage rates haven’t yet made a similar move.

That means, if history is any guide, the market is waiting for mortgage rates to follow inflation and head back down. It’s impossible to accurately predict where mortgage rates will go for sure, but moderating inflation means mortgage rates going down in the near future would fit a well-established trend. 

Bottom Line

To understand where mortgage rates may be going, it’s helpful to look at where they’ve been in the past. There’s a clear connection between inflation and mortgage rates, and if that historical relationship holds true, the recent decline in inflation may mean good news for the future of mortgage rates and your homeownership goals.

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How Inflation Affects the Housing Market on Mt. Hood

Thursday, August 31, 2023
by Liz Warren

How Inflation Affects the Housing Market



 

Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two.

The Relationship Between Housing Inflation and Overall Inflation

Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if they weren’t living in them.

Much like overall inflation measures the cost of everyday items, shelter inflation measures the cost of housing. And for four consecutive months, based on that survey, shelter inflation has been coming down (see graph below):

Why does this matter? Well, shelter inflation makes up about one-third of overall inflation, as measured by the Consumer Price Index (CPI). So, when shelter inflation moves, it leads to noticeable moves in overall inflation. That means the recent dip in shelter inflation might be a sign that overall inflation could fall in the months ahead.

That moderation would be a welcome sight for the Federal Reserve (the Fed). They’ve been working to get inflation under control since early 2022. While they’ve made some headway (it peaked at 8.9% in the middle of last year), they’re still trying to get to their 2% goal (the latest report is 3.3%). 

Inflation and the Federal Funds Rate  

What’s the Fed been doing to lower inflation? They’ve been increasing the Federal Funds Rate. That interest rate influences how much it costs banks to borrow money from each other. When inflation climbed, the Fed responded by raising the Federal Funds Rate to keep the economy from overheating.

The graph below shows the relationship between the two. Each time inflation (shown in the blue line) starts to climb, the Fed raises the Federal Funds Rate (shown in the orange line) to try to get it back to their target of 2% (see below):

The circled portion of the graph shows the most recent spike in inflation, the Fed’s actions to raise the Federal Funds Rate to fight that, and the moderation of inflation that happened in response to that hike. As inflation gets closer to the Fed’s current 2% goal, they may not need to raise the Federal Funds Rate much further.

A Brighter Future for Mortgage Rates?

So, what does all of this mean for you? While the actions coming out of the Fed don’t determine mortgage rates, they do have an impact. As Mortgage Professional America (MPA) explains:

“. . . mortgage rates and inflation are connected, however indirectly. When inflation rises, mortgage rates rise to keep up with the value of the US dollar. When inflation drops, mortgage rates follow suit.”

While no one can predict the future for mortgage rates, it’s encouraging to see the signs of moderating inflation in the economy. 

Bottom Line

Whether you’re looking to buy, sell, or just stay informed about the housing market, let’s connect.

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Rhododendron 1939 Cabin Bordered By Mt. Hood National Forest

Sunday, August 27, 2023
by Liz Warren

 

Rhododendron 1939 Cabin Bordering Mt. Hood National Forest

  Huge Garage for Storage and 720 sq. ft. of bonus finished space               Stone Fireplace in a 1939 Rhododendron Cabin

This cedar cabin is a gem in the woods on deeded land. It borders Mt. Hood National Forest property and you can hear the sounds of popular Still Creek only a stone's throw from the back of the property. A beautiful stone fireplace is the centerpiece of the living room. A propane stove and a pellet stove heat the home. There are wood floors and original paned windows. This would be a great vacation home for skiers, hikers or mountain bikers in this fantastic location with easy access to all Mt. Hood recreational activities. Big bonus includes a huge two story garage for all your mountain toys. Upstairs is a 720 square foot bonus storage area, in home office space, or additional living area. There's room for a vehicle in the garage plus a workshop. The cabin was built in 1939 and family owned for over forty years. Tons of wood throughout. Original rustic kitchen with pantry area and a spacious utility mud room too. A charming deck looks onto the National Forest. Outside storage shed too. Located on about a quarter of an acre of land, it's tucked away on a quiet road yet you can walk to a store, coffee and food in Rhododendron across the walking bridge that takes you over the Zig Zag River! Mountain biking trails are near by and Still Creek Road will take you the back way to Trillium Lake! A 27 hole golf course is only five minutes away. It's a quick one hour drive from Portland yet seems like you're hours away in this location. Don't miss this exceptional opportunity.

Listed for $600,000

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Camp Creek Fire Update

Sunday, August 27, 2023
by Liz Warren
 
Mt. Hood National Forest
 
Forest Service News Release
 
Camp Creek Fire Update- Aug. 26, 5:30 p.m.
 
After a warm and dry day, as well as more accurate mapping, Camp Creek Fire is estimated at 900 acres. An infrared flight is scheduled tonight that will provide an even better estimate and fire perimeter. While the fire did grow today, the abundant forest duff material and dense forest provided a lot of fuel and put up a large smoke column relative to the size of the fire.
 
Great Basin Team #1 will assume management of the fire beginning at 6 a.m. Sunday, Aug. 27. The team brings many additional resources and capacity to help plan and implement fire suppression. There will be a dedicated Facebook page for the Camp Creek Fire, in addition to a dedicated Inciweb.nwcg.gov webpage to share updated fire information more frequently.
 
####
 
USDA is an equal opportunity provider, employer, and lender.
 
Photo of Camp Creek Fire Aug. 26, from the northwest.
 
 
Mt. Hood National Forest
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Why Median Home Sales Price Is Confusing Right Now

Monday, August 21, 2023
by Liz Warren

Why Median Home Sales Price Is Confusing Right Now



 

The National Association of Realtors (NAR) is set to release its most recent Existing Home Sales (EHS) report tomorrow. This monthly release provides information on the volume of sales and price trends for homes that have previously been owned. In the upcoming release, it’ll likely say home prices are down. This may seem a bit confusing, especially if you’ve been following along and reading the blogs saying home prices have hit the bottom and have since rebounded.

So, why would this say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each one. NAR reports on the median home sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.

The Center for Real Estate Studies at Wichita State University explains median sales prices like this:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”

Investopedia helps define what a repeat sales approach means:

“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”

The Challenge with the Median Home Sales Price Today

As the quotes above say, the approaches can tell different stories. That’s why median home sales price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again.

Bill McBride, Author of the Calculated Risk blog, sums the difference up like this:

“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”

To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.

That’s why using the median home sales price as a gauge of what’s happening with home values may be confusing right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable.

That’s why a greater number of ‘less-expensive’ houses are selling right now – and that’s causing the median home sales price to decline. But that doesn’t mean any single house lost value. 

When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median home sales price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates.

Bottom Line

For a more in-depth understanding of home price trends and reports, let’s connect.

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STR's on Mt. Hood

Sunday, August 13, 2023
by Liz Warren

Here's the latest announcement:

Board holding public hearings for short-term rental regulations. Public strongly encouraged to provide feedback; Rules would affect STRs in unincorporated areas The Board of County Commissioners has approved moving forward with a public hearing process to consider implementing rules and regulations regarding short-term rentals (STRs).

This action triggers two future public hearings on the proposed regulations. The next hearing is slated for during the board’s regular weekly Business Meeting September 7th at 10:00 a.m. The public is encouraged to provide testimony at these hearings. Residents and interested parties can do so either in-person or over Zoom. If the County Code is amended, the regulations will take effect only within the unincorporated areas of Clackamas County – there would be no effect on STRs located within city limits.

This program is considered to be a pilot program, and would be in effect for two years from the time of being enacted. Proposed changes Clackamas County currently has no STR regulations. Proposed regulations would require all STRs in unincorporated Clackamas County to register with the county. The process would be free and an in-home inspection would not be required.

When registering, the property owner and/or manager would certify that the property meets safety standards and that they will abide by the STR program rules. These include, but are not limited to: STR owners will continue to pay the county’s transient lodging tax (6%) The proposed STR regulations impose a .85% user fee on the total rental amount No STR may be publicly advertised for rent unless it has been registered with Clackamas County STRs shall comply with all building and fire standards STR registration identification numbers shall be included on any advertisement or rental platform Name/contact information of a party responsible for the STR shall be posted at all times while paying guests are on the property, in an area and size readily visible from the nearest public roadway. That person/company must be available 24/7 and able to respond to complaints within two hours. The number of STR occupants shall not exceed the number authorized in the registration. Twelve occupants is the maximum. Notice shall be clearly posted in the STR that identifies and informs occupants of the county's noise control ordinance Adequate parking – one off-street motor vehicle space per sleeping area – is required Vehicles shall never block access for emergency vehicles, access to the premise, or a parked motor vehicle. These violations, or other parking performed in a manner that violates the county's current parking and towing ordinance standards, may subject the offending vehicle to immediate tow. The proposed STR regulations do not apply to hotels, motels, bed and breakfast facilities, hostels, campgrounds, recreational vehicle camping facilities, or organizational camps

Violations

Clackamas County encourages any residents/parties to cooperate directly to resolve conflicts arising from an STR. First attempts to remedy violations should be to contact the posted STR representative. If that person does not respond within 24 hours or does not adequately remedy the issue, the county should be notified. Further details: Clackamas County reserves the right to immediately revoke registration if it determines an STR is a fire or life safety risk Clackamas County reserves the right to review pertinent financial records or visit the STR to ensure violations have been resolved at any reasonable time When noncompliance of the STR regulation is suspected, the county shall issue two warnings in writing An owner that operates an STR without an approved registration or while suspended shall be subject to penalties Next steps As this action is a potential county ordinance change, two public hearings at least 13 days apart are required. After that time if passed, the ordinance would be effective after 90 days or immediately if the Board declared an emergency. Before going into effect, the county would post the registration application online.

Interested parties can provide testimony during the public hearings at the two Business Meetings, and can also submit written comments for the record to [email protected] with the subject line “STR Regulation Comments.” The full proposed regulations can be found online. STR owners and interested parties with questions can contact:

Policy Advisors Caroline Hill or Everett Wild at

503-655-8581

or

[email protected]

Future updates about the project and public hearings can be found at

www.clackamas.us/str

.

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There's Only Half the Inventory of a Normal Housing Market Today

Tuesday, August 8, 2023
by Liz Warren

There's Only Half the Inventory of a Normal Housing Market Today



 

Wondering if it still makes sense to sell your house right now? The short answer is, yes. Especially if you consider how few homes there are for sale today.

You may have heard inventory is low right now, but you may not fully realize just how low or why that’s a perk when you go to sell your house. This graph from Calculated Risk can help put that into perspective: 

As the graph shows, while housing inventory did grow slightly week-over-week (shown in the blue bar), overall supply is still low (shown in the red bars). Compared to the same week last year, supply is down roughly 10% – and it was already considered low at that time. But, if you look further back, you’ll see inventory is down even more significantly.

To gauge just how far off from normal today’s inventory is, let’s compare right now to 2019 (the last normal year in the market). When you compare the same week this year with the matching week in 2019, supply is about 50% lower. That means there are half the homes for sale now than there’d usually be.

The key takeaway? We’re still nowhere near what’s considered a balanced market. There’s plenty of demand for your house because there just aren’t enough homes to go around. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”

So, if you want to list your house, know that there’s only about half the inventory there’d usually be in a more normal year. That means your house will be in the spotlight if you sell now and you may see multiple offers and a fast home sale. 

Bottom Line

With the number of homes for sale roughly half of what there’d usually be in a more normal year, you can rest assured there’s demand for your house. If you want to sell, let’s connect now so your house can shine above the rest while inventory is so low.

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