Wednesday, September 30, 2015

Drop in Rates Ramps Up Mortgage Demand

Mortgage applications – for both refinancings and home purchases – surged nearly 14 percent for the week ending Sept. 18, according to the Mortgage Bankers Association.  The surge follows on the heels of the Federal Reserve’s decision not to raise interest rates last week, which helped push mortgage rates down and entice more borrowers.
Read more: Fed Votes to Hold Off on Rate Hike, For Now
Refinance applications rose 18 percent week-to-week, while home purchase applications increased 9 percent. Home purchase applications are now at the highest level since June and are 27 percent higher than the same week one year ago, MBA reports.
"The increase in purchase activity was solely driven by applications for conventional purchase loans, which reached the highest level since June 2013,” says Mike Fratantoni, MBA’s chief economist. “That time period was the so called ‘taper tantrum,’ when mortgage rates picked up significantly following Fed communication to slow the pace of its asset purchases. Overall, the purchase market continues to show strength.”
Mortgage rates moved lower during the week but by the end of the week the average of the 30-year fixed-rate mortgage was unchanged from the previous week at 4.09 percent, MBA reports. MBA notes that mortgage rates were moving lower as of Tuesday, amid a sell-off in the stock market. Rates this week had fallen to the lowest level in four months, MBA reports.
Source: “Weekly Mortgage Applications Surge 13.9% on Rate Dips,” CNBC (Sept. 23, 2015)

Thursday, September 24, 2015

Top Housing Markets for First-Time Buyers

The number of first-time home buyers is on the rise, reaching a 32 percent share of existing-home sales in May – the highest since September 2012, according to the National Association of REALTORS®.
Which cities hold some of the best deals for first-time buyers? WalletHub recently compared 300 U.S. cities to find the most favorable housing markets for first-time home buyers. Researchers analyzed markets for 18 key metrics, ranging from housing costs to property taxes and crime rates. In the study, large cities had populations of more than 300,000 people; midsize cities had populations of 150,000 to 300,000; and small cities had a population of fewer than 150,000.
The following are the best large, midsize, and small cities for first-time home buyers, according to WalletHub's analysis:

Home Values Pull Up in More States

Home values in 29 states and the District of Columbia are within their historically normal range, according to Freddie Mac's latest housing index.
The Multi-Indicator Market Index now stands at a value of 81, indicating a national housing market that is on its outer range of stable activity. The MiMi has improved 6.17 percent year-over-year and has rebounded 37 percent since its all-time low in October 2010. Still, the index remains significantly off its high of 121.7.
Housing Markets to Watch
The MiMi bases the stability of housing markets on home-purchase applications, payment-to-income ratios, proportion of on-time mortgage payments, and local employment. The states with the highest MiMi values are California, District of Columbia, Hawaii, Montana, North Dakota, and Utah. Forty-six of the 100 metro areas the MiMi analyzes also have values in the stable range, with Fresno, Calif.; Austin, Texas; Honolulu; Salt Lake City; and Los Angeles among the top performers.
"Nationally, all MiMi indicators are heading in the right direction for the second consecutive month and improving more than 6 percent from the same time last year," says Len Kiefer, Freddie Mac's deputy chief economist. "Florida has some of the most improving housing markets in the country, largely a reflection of more borrowers becoming current on their mortgage payments as the local employment picture improves and house prices rebound. The one area of the country that has been slow to respond has been the Northeast. However, we've started to see these housing markets turn around, especially in Pennsylvania, Connecticut, New Hampshire, Vermont, and Maine."
Many markets in the Northeast are still weak, Kiefer says, but "they're steadily trending in the right direction, and their pace of improvement is accelerating. Overall, the West remains especially strong, with many markets posting double-digit growth in their MiMi purchase-applications indicator compared to a year ago and helping to keep the country on pace for the best year of home sales since 2007."
Source: Freddie Mac

How to Spot a Bad HOA

Your buyers can avoid their own homeowner association horror story by keeping an eye out for these items during the search.
What’s the difference between a good, mediocre, and downright bad homeowner association? It’s not entirely a matter of opinion. There are specific items to look at and questions to ask that can tell your buyers whether they’re buying into an HOA that will only give them headaches. This information is particularly important in condominiums, where the HOA usually is responsible for maintaining the exterior of the buildings. If they aren’t careful, your buyers could face paying a big special assessment for years of neglected capital improvements after they close. The bill they’re typically stuck with could be anywhere from $1,000 to $30,000. (In some cases, they've gone over $100,000!) Help your buyers perform due diligence before closing by assisting them in identifying issues to minimize the element of surprise. While this isn’t intended to be legal advice and there may be other items to look at other than those mentioned in this article, this should give you ideas for how to advocate for your buyers when dealing with HOAs.

Look at the Community as a Whole

Is it run-down? Don’t solely focus on the one property your buyer is purchasing. When the HOA is responsible for maintaining the buildings, check out neighboring units and common spaces along with the home your buyer is purchasing. Here are some telltale signs of an HOA that isn’t on top of its responsibilities:
  • Are the fences rusting?
  • Are the building signs in disrepair?
  • Does the asphalt look like gravel?
  • Are the pool and other amenities clean and in good working order?
  • What is the age and condition of the roofs?
  • Do the buildings need to be painted?
  • Are there staircases and balconies in poor shape that the HOA is responsible for maintaining?
  • When were the buildings last treated for termites? Have they been neglected, with a higher risk of unknown termite damage throughout the community?
  • Are there problems with siding?
  • Are there grading issues causing flooding?
  • What is the condition of the gutters, fascia, and other fixtures?

Look at the Reserve Study

First of all, make sure you and your buyers know what this is. A reserve study details an HOA’s long-term funding plan, showing, most important, how much it currently has to offset maintenance costs. It’s the most important tool to determine the financial health of the HOA.
  • What is the percent funded? Zero percent to 30 percent means it’s at high risk of a special assessment; 31 percent to 70 percent is a medium risk; 71 percent to 100 percent is low risk.
  • How much does the reserve study recommend the HOA saves each year, and how much is the HOA actually saving?
  • Has the HOA been following the reserve study and making capital improvements?
  • How much money can you foresee being needed compared to what the HOA has saved?

Proactively Ask Questions

Encourage your buyer to call and ask the HOA or HOA management company questions. You may need to make it a condition of the purchase contract that the seller will provide the answers if the HOA management company won’t answer you or your buyer. Keep these questions in mind:
  • Have there been any special assessments before? Get the details and ask if there is discussion about having another one.
  • Have there been any lawsuits or are any expected? Check court records.
  • How many insurance claims has the HOA had?
  • If roofs are an HOA responsibility, are there plans to transfer the burden to the owner? How many roof repairs have there been in the last couple years?
  • Are there plans to change the HOA’s covenants, conditions, and restrictions?
  • Have there been any repairs from extensive water or termite damage in the last couple years?
Your buyer must review the HOA’s covenants, rules, meeting minutes, violation policy, collection policy, and other aspects. Make your buyers a checklist to help them do their due diligence. Help them become an educated buyer on HOA living.
Ignorance isn’t bliss for your clients — or you — when it comes to HOAs. Agents and sellers could potentially avoid lawsuits by making buyers aware of all issues before they close on a property in an HOA. Remember, approximately 70 percent of HOAs are underfunded and in poor condition due to lack of maintenance. These are not HOAs “protecting our property values.”
This problem is not going away by keeping our eyes closed. The first step in improving HOAs is having real estate professionals who will educate buyers on how an HOA should operate. Buyers need to be involved and concerned with the HOA business that they are becoming a part of before closing — and they need to stay involved after closing.

Wednesday, September 23, 2015

NAR: Existing-Home Sales Stall in August

After several consecutive months of increases, existing-home sales dropped in August while home prices also showed signs of moderating, according to the National Association of REALTORS® latest home sales report. All four regions across the country saw a dip in sales last month.
Regional Snapshot
Here's an overview of how existing-home sales performed across the country in August.
  • Northeast: existing-home sales remained at an annual rate of 700,000. Sales are 6.1 percent above a year ago. Median price: $271,600, up 2.4 percent year-over-year.
  • Midwest: existing-home sales dropped 1.5 percent to an annual rate of 1.28 million in August. Sales are 5.8 percent above a year ago. Median price: $181,100, up 4 percent from a year ago.
  • South: existing-home sales dropped 6.6 percent to an annual rate of 2.14 million in August. Sales are still 5.9 percent above August 2014. Median price: $196,300, up 6 percent from a year ago.
  • West: existing-home sales fell 7.8 percent to an annual rate of 1.19 million in August. Sales remain 7.2 percent above a year ago. Median price: $321,300, which is 7.1 percent above a year ago.
"Sales activity was down in many parts of the country last month – especially in the South and West – as the persistent summer theme of tight inventory levels likely deterred some buyers," says Lawrence Yun, NAR's chief economist. "The good news for the housing market is that price appreciation in the last two months has started to moderate from the unhealthier rate of growth seen earlier this year."
Here's an overview of market's performance in August:
  • Home prices: The median existing-home price for all housing types was $228,700 – 4.7 percent higher than a year ago. August marks the 42nd consecutive month of year-over-year gains.
  • Total home sales: Existing-home sales – completed transactions that include single-family homes, townhomes, condos, and co-ops – dropped 4.8 percent to a seasonally adjusted annual rate of 5.31 million. Sales still remain 6.2 percent above a year ago.
  • Housing inventories: Total housing inventory at the end of August increased 1.3 percent to 2.29 million existing homes available for sale. That still marks 1.7 percent lower than a year ago. At the current pace, unsold inventory is at a 5.2-month supply, up from 4.9 months in July. "With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors," says Yun.
  • First-time buyers: The percent share of first-time buyers rebounded to 32 percent in August, an increase from 28 percent in July. That also matches May's highest share of first-time home buyers of the year. A year ago, first-time buyers comprised 29 percent of all buyers.
  • Days on the market: Properties, on average, stayed on the market for 47 days in August, up from 42 days in July but below the 53 days a year ago. Short sales were on the market the longest at a median of 124 days in August, while foreclosures sold in 66 days. Non-distressed homes took 45 days to days. Forty percent of homes sold in August were on the market for less than a month.
  • All-cash sales: The percentage of all-cash transactions dropped to 22 percent in August, down from 23 percent a year ago. Individual investors -- who make up the bulk of cash sales -- purchased 12 percent of homes in August, unchanged from a year ago. Sixty percent of investors paid cash in August. 
  • Distressed sales: The percentage of distressed sales last month matched the lowest share since NAR began tracking such data in October 2008. Foreclosures and short sales remained at 7 percent in August, down from 8 percent a year ago. Broken out, five percent of sales last month were foreclosures while 2 percent were short sales. On average, foreclosures sold for a discount of 18 percent below market value in August, while short sales were discounted 12 percent.

Bank Giant Is More Cautious Over FHA Loans

JPMorgan Chase is treading carefully over originating Federal Housing Administration loans, a loan product designed to help first-time home buyers with lower credit scores and less down payments. Growing regulations and threats over litigation from government regulators have mostly stalled originations of FHA loans.
"FHA requirements are down to a 520 FICO [credit score] and you only have to put 3.5 percent down; that's subprime lending, and we're not in the subprime lending business," Kevin Watters, CEO of Chase Mortgage Banking, told CNBC. JPMorgan Chase is the second largest mortgage lender in the country. With FHA loans, however, it doesn't even fall within the top 100.
Chase Mortgage has not stopped originating FHA loans entirely. However, it's FICO requirements are higher and its loans are more expensive to price since they view them as riskier.
"It's not just the [Consumer Financial Protection Bureau] or Fannie and Freddie's rules or Treasury's rule's or Ginnie Mae, who's the servicer for FHA—you've got 584 different state and local rules too," Watters says. "So you're trying to make sure you abide by all these different rules, and it just gets very complicated, very expensive, so for us in FHA, we've priced FHA for the risk we see in FHA, and so we've got a higher price than other people so customers are going to other places."
Wells Fargo, the nation's largest mortgage lender, also has raised minimum FICO score requirements for FHA borrowers.
Some independent lenders, however, are stepping up to fill in the gap from big banks with FHA lending.
But big banks' move away from low-down payment options for home buyers is hindering the housing market, says Lawrence Yun, the National Association of REALTORS®' chief economist.
"I believe that it will have a measurable impact in holding back some of the first-time buyers," Yun told CNBC. "Therefore I think from a government policy point of view, they need to look at, very broadly, any mistake the lender has done or broken the law and go after it, but any uncertain lawsuit that comes out of right and left [field], that's going to hold back the market recovery."
Source: "Chase Mortgage CEO Red Flags FHA Loans," CNBC (Sept. 21, 2015)

How Much House Can I Afford in the Top 100 Metros?

How Much House Can I Afford in the Top 100 Metros?

Tuesday, September 22, 2015

Gary Keller's Real Estate Market Update - Keller Williams Realty

Gary Keller's Real Estate Market Update - Keller Williams Realty

More Lenders Say They're Easing Up on Credit

More lenders say they're loosening up some of their lending standards across all loan types, according to Fannie Mae's third quarter 2015 Mortgage Lender Sentiment Survey.
The survey shows the gap between lenders who are reporting an easing in credit as opposed to those who are reporting a tightening climbed 20 percentage points and 18 percentage points over the prior three months for GSE eligible and non-eligible loans – new survey highs. Additionally, more lenders say they plan to ease credit standards over the next three months.
Opening the Credit Box
"For the first time in seven quarters, we see a pronounced increase in the share of lenders, particularly medium- and larger-sized lenders, reporting on net an easing of credit standards in both GSE eligible and non-GSE eligible loan categories," says Doug Duncan, Fannie Mae's chief economist. "This is a significant result in light of public discourse on credit availability and standards. … We expect lenders' tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion."
Source: "Lenders Report Mortgage Credit Standards Are Easing," RISMedia (Sept. 20, 2015)

Better to Buy Than Rent, Index Shows

Owning a home is expected to produce greater wealth, on average, than renting, shows a national index produced by Florida Atlantic University and Florida International University.
"The U.S. as a whole is still in clear buy territory," says real estate economist Ken Johnson, one of the index's authors. "The cities of Cincinnati, Chicago, Cleveland, and New York City are deep into buy territory."
The Beracha, Hardin & Johnson Buy vs. Rent Index reveals whether current market conditions favor buying or renting a home in terms of wealth creation over a fixed holding period relative to historical market conditions or alternative investment opportunities. It examines the housing market within 23 of the largest cities in the U.S.
The index found that two cities – Miami and Portland -- that have been in more favorable renting territory are "pulling back" and are now "coming back toward a toss-up between buying and renting," says Johnson. "That's a good sign for home pricing in Miami and Portland as it suggests prices are going to level off in these metro areas."
Meanwhile, Dallas, Denver, and Houston are showing signs of dipping slightly deeper into renter territory due to flat income growth, and, in Houston particular, also rapid property appreciation, according to the index.

Monday, September 21, 2015

Local real estate market cools slightly in August

By Gordon Oliver, Columbian Business Editor


The Southwest Washington real estate market showed some cooling in August, with declines from July in closed sales and new listings, and only a slight increase in pending sales.
Pending sales, at 849 for the month, were 21.5 percent above the August 2014 level and slightly ahead of the 833 offers from July 2015, according to the Market Action report issued by RMLS, the Portland-based real estate listing service. The pending sales count for August was the highest for that month since 2005, when 1,052 offers were accepted.
Closed sales, at 744 for the month, were more than 12 percent higher than last August but were down by 9.3 percent from July of this year. New listings were also up by 12 percent year over year, but the month’s 933 new listings were 14 percent lower than in July.
The inventory of homes for sale in August was 2.6 months, the sixth consecutive month that the inventory count was between two and six months. In August 2014, there were enough homes for sale to last 3.8 months. Homes sold this August spent an average of 60 days on the market, about the same as in July.

Pent-up demand

The August median sales price of a home in Southwest Washington was $266,900, up 6.8 percent from last August but down from $273,700 in July.
Terry Wollam, managing broker at ReMax Equity Group in Vancouver, said the lower monthly number reflects weakness in the high-end housing market.
“Prices did not drop, but we saw less upper-end homes sell during this time frame,” Wollam said. “We should see a bump in October’s closings for upper-end homes due to a pent-up demand.”

Freddie: 30-Year Rates Stay Below 4%

Average fixed mortgage rates mostly stayed calm this week, ahead of the Federal Reserve's vote on an interest-rate hike for the first time in more than nine years, Freddie Mac reports in its weekly mortgage market survey.
"The Treasury market was relatively quiet this week, and as a result the 30-year mortgage rate barely budged," says Sean Becketti, Freddie Mac's chief economist. "Low mortgage rates help to support housing markets, which continue to bring good news."
The Federal Reserve voted Thursday to not raise rates yet, but Becketti says that even when the Fed does decide to raise short-term interest rates, "we don't expect a significant impact on the housing market. We're still on track for the best year of home sales since 2007 … While our outlook incorporates a moderate increase in mortgage rates over the next 18 months, rates are likely to remain low by historical standards and should not be a determining factor for most Americans looking to purchase a home."
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 17:
  • 30-year fixed-rate mortgages: averaged 3.91 percent, with an average 0.6 point, rising from last week's 3.90 percent average. A year ago, 30-year rates averaged 4.23 percent.
  • 15-year fixed-rate mortgages: averaged 3.11 percent, with an average 0.6 point, inching up slightly from last week's 3.10 percent average. Last year at this time, 15-year rates averaged 3.37 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.92 percent, with an average 0.5 point, increasing from last week's 2.91 percent average. A year ago, 5-year ARMs averaged 3.06 percent.
  • 1-year ARMs: averaged 2.56 percent, with an average 0.2 point, dropping from last week's 2.63 percent average. A year ago, 1-year ARMs averaged 2.43 percent.
Source: Freddie Mac

Fed Votes to Hold Off on Rate Hike, For Now

The Federal Reserve voted Thursday to keep interest rates unchanged, amid concerns over the global economy and financial market volatility. But Fed officials hinted that a modest policy tightening could occur later this year.
The Fed's benchmark short-term rate has stayed near zero since December 2008, which has also helped to keep mortgage rates low ever since. Economists have been largely predicting for months that the Fed would likely raise rates in September, the first time in almost nine years.
"The outlook abroad appears to have become less certain," Fed Chair Janet Yellen said in a news conference. A recent drop in U.S. stock prices as well as an increase in the value of the dollar already were showing signs of tightening financial market conditions, which was likely to slow economic growth in the U.S.
"In light of the heightened uncertainty abroad … the committee judged it appropriate to wait," says Yellen. Fed officials continued to say they want to see "some further improvement in the labor market" and be "reasonably confident" that inflation will increase before they press ahead on rate increases.
Thirteen of 17 Fed policymakers say they foresee increasing rates at least once this year – down from 15 at the last meeting in June. Four Fed policymakers say rates should not be raised until at least 2016. The Fed will hold policy meetings again in October and December.
Source: "Global Economy Worries Prompt Fed to Hold Rates Steady," Reuters (Sept. 17, 2015)

Thursday, September 17, 2015

Housing Affordability Takes Another Dip

As rising home prices continue to outpace income gains, Americans across the nation are finding it harder to buy, according to the National Association of REALTORS®’ latest reading of its Housing Affordability Index.  
From NAR's recent sales report: Home Prices Reach an All-Time High
The median price for a single-family home in the U.S. is up 5.8 percent from a year ago, at $235,500 as of July. The Western region of the country has seen the largest year-over-year increases in prices at 8.4 percent, followed by the South at 7.1 percent and Midwest at 6.5 percent. The Northeast saw the slowest price growth at 1.8 percent, according to NAR.
Affordability has fallen from one month ago in all regions of the United States, with the West posting the largest drop in the affordability index (2.1 percent). The South dropped the least in affordability month-over-month, falling only 0.4 percent. Compared to a year ago, affordability has fallen in all regions, except the Northeast which saw a 2 percent increase. The West again posted the largest decline in affordability year-over-year at 4.3 percent, and the Midwest had the smallest decline of 3 percent.
“Housing markets with low inventory levels may continue to experience rising home prices—however, improvement in job creation and steady income gains help offset major price growth,” writes NAR Research Data Specialist Michael Hyman on the Economists’ Outlook blog. “Mortgage applications are currently down for new and existing homes which could be seasonal or a sign that rising rates are having an impact on affordability.”
Source: “Housing Affordability Numbers for July,” National Association of REALTORS® Economists’ Outlook blog (Sept. 15, 2015)

91% of Properties Now Have Equity

About 759,000 properties regained equity in the second quarter, bringing the total number of residential mortgages that are lower than their property's value to about 45.9 million. That equates to about 91 percent of all mortgaged properties. Borrower equity has risen year-over-year by $691 billion, according to CoreLogic’s second quarter equity report.
“For much of the country, the negative equity epidemic is lifting,” says Anand Nallathambi, CoreLogic’s CEO and president. “The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets."
CoreLogic predicts home prices to rise an additional 4.7 percent over the next year, and if that prediction holds true, 800,000 home owners could regain positive equity by July 2016.
The majority of positive equity is centered on the high-end housing market. CoreLogic’s report finds that 95 percent of homes valued at more than $200,000 have equity, compared with 87 percent of homes valued at less than $200,000.
Still, the total number of mortgaged residential properties with negative equity remains elevated at 4.4 million – or 8.7 percent of all properties with a mortgage, according to CoreLogic’s report. Negative equity refers to a home owner who is “underwater,” owing more on their mortgage than their home is currently worth.
Of the more than 50 million residential properties with a mortgage, about 9 million or 17.8 percent have less than 20 percent of equity and 1.1 million – or 2.3 percent – have less than 5 percent equity.
“Borrowers who are ‘under-equitied’ may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints,” CoreLogic notes. These borrowers are also more at risk of moving to negative equity if home prices fall.
Five states alone accounted for nearly 32 percent of negative equity in the United States. The states with the highest percentage of mortgaged residential properties in negative equity are Nevada (20.6%), Florida (18.5%), Arizona (15.4%), Rhode Island (13.8%), and Illinois (13.1%). By large metro area, Tampa-St. Petersburg-Clearwater, Fla., had the highest percentage of residential properties in negative equity territory at 20.2 percent, followed by Phoenix-Mesa-Scottsdale, Ariz. (15.4%), Chicago-Naperville-Arlington Heights, Ill. (15.3%), Riverside-San Bernardino-Ontario, Calif. (12.3%), and Warren-Troy Farmington Hills, Mich. (11.8%).
On the other hand, the states with the highest percentage of mortgaged residential properties in positive equity are Texas (97.9%), Alaska (97.6%), Hawaii (97.5%), Montana (97.2%), and Colorado (96.7%). Of large metro areas, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of properties with positive equity at 98.1 percent, followed by Portland-Vancouver-Hillsboro, Ore./Wash. (97.8%), Dallas-Plano-Irving, Texas (97.8%), Anaheim-Santa Ana-Irvine, Calif. (97.5%) and Denver-Aurora-Lakewood, Colo. (97.5%).
Source: CoreLogic

Wednesday, September 16, 2015

August Residential Highlights - Portland Metro - August 2015 - What is the market doing! See here now

August Residential Highlights

The Portland metro area saw slightly cooler real estate activity in August, but all measures remain


2015 Pending sales-(3,347) ended 23.8% stronger than August 2014 - 2,704

This was 4.2% lower than July 2015 Pending offers at 3,494

The last August where there were more pending sales in the same month for the Portland metro

area was in 2005- (3,771)

Closed sales- (3,098) ended 19.8% above August 2014-(2,586 )

This is a 10.3% drop from July 2015 which posted (3,452) closed units.

New listings August 2015, - were up 8.3% (3,880), stronger than August 2014 – (3,581) 

This is down 9.2% from July 2015 numbers of (4,273) units

Inventory rose slightly in August to 1.9 months. Total market time decreased slightly, to 41 days.

There are currently a total of 5,837 active residential listings in the Portland metro area.

Year to Date Summary

Activity has been higher in 2015 than in 2014 across the board. Pending sales (24,784) are up

24.4%, closed sales (22,026) are up 21.8%, and new listings (30,314) are up 8.5% for the year thus


Average and Median Sale Prices

Prices continue to rise in 2015 compared to 2014. Comparing each year through August, the

average sale price rose 6.2% from $332,600 to $353,200. In the same comparison, the median sale

price rose 7.0% from $285,000 to $305,000

From PMAR - Portland Metro Market Action Report for full copy of this report please email me at

Housing Shortage Is Running Up Prices, Rents

A shortage in housing – caused by a drastic slowdown in homebuilding activity – has pushed up home values too much in some areas and made rents unusually high, according to the National Association of REALTORS®. Unless construction activity picks up soon, rising prices will make homes less affordable and rents too, NAR warns.
Homebuilding activity for all housing types is underperforming in about two-thirds of 146 metros measured and that has prompted a significant drop in available homes for sale, according to NAR.
"In addition to slow housing turnover and the diminishing supply of distressed properties, lagging new home construction — especially single family — has kept available inventory far below balanced levels," says Lawrence Yun, NAR's chief economist. "Our research shows that even as the labor market began to strengthen, homebuilding failed to keep up and is now contributing to the stronger price appreciation and eroding affordability currently seen throughout the U.S."
Adding to the housing shortage, millions of home owners are still underwater – meaning they still owe more on their mortgages than their home is currently worth. That will keep a significant number of properties off the market. Also, distressed property sales are down, currently comprising about 9 percent of the market, which is down significantly from 35 percent just a few years ago
"The demand for buying has drastically improved this year and is propelling home sales to a pace not seen since 2007," says Yun. "As local job markets continue to expand, the pool of home buyers will only increase. That's why it's crucial for builders to begin shifting their focus from apartments to the purchase market and make up for lost time."
The median sales price for a single-family home reached an all-time high in June at $236,400 – that's higher than the previous record of $230,400 reached during the housing boom in July 2006, according to NAR. Renters are also being squeezed. Rental costs are up 4 percent nationwide, while incomes have only risen 2 percent.
"We are having a nationwide housing cost problem," Yun told the Huffington Post in a recent interview.
Source: "REALTORS® Worry About Growing Housing Shortage," Consumer Affairs (Sept. 14, 2015) and "Real Estate Has Become Unaffordable," Huffington Post (Sept. 9, 2015)

College Major as Predictor of House Prospects?

Graduates' college major may have a lot to do with how much home they can afford later on, according to a new analysis by®.
For example, for engineering majors, they'll likely be successful in the housing market. Out of 300 majors evaluated by®, petroleum engineers had the highest salaries that translated into being able to afford more house. Petroleum engineers had a midcareer salary of $168,000 and grads of that major could afford to buy up to $744,000 – more than three times the national average list price.
On the other end of the spectrum, education and liberal arts majors didn't fare as well as engineering jobs. Early-childhood education had a midcareer salary of $38,000, which is barely enough to purchase a home at $168,000 (which is below the national median). Social work is also among the lowest paid careers, with a midcareer salary of $45,700.® used Payscale's midcareer salary estimates and®'s own affordability calculator to calculate the maximum price typical grads could afford after working for 10 years according to their major. Midcareer employees with a bachelor's degree earn a median salary of $77,006, which means they can afford a house costing up to $341,000 – about 60 percent more than a high school graduate.
Source: "How Your College Major Predicts What House You Can Afford,"® (Sept. 14, 2015)

Monday, September 14, 2015

Portland's Teardown Throwdown . Radio | OPB

Portland's Teardown Throwdown . Radio | OPB

Vancouver had nation's fastest-rising rents, website finds; Portland in 3rd

Small apartments are trending in Portland
Rents in Portland and Vancouver are rising faster than nearly anywhere else in the nation, according to a new analysis. (Randy L. Rasmussen/The Oregonian)

The price of renting a two-bedroom apartment in Vancouver – Washington, not Canada – rose faster this summer than any other city in the country, according to an analysis by the online rental marketplace Apartment List.
Portland and Seattle weren't far behind. Those cities tied for third place, with Miami being the only city outside of the Pacific Northwest in the top four.
Vancouver showed a 9.8 percent year-over-year increase in rent in July, according to the website. Miami rents increased by 9.3 percent, and Seattle and Portland came in at 8.5 percent.
Portland also has the 13th-highest rent in the nation, with a two-bedroom apartment averaging $1,550 per month. Seattle, at $2,100 a month, ranked eighth on the list. Vancouver was lower on the list – a two-bedroom apartment there rented for $1,050 in July, according to Apartment List.
San Francisco had the highest rents in the nation, by far, with a two-bedroom apartment averaging $4,750, the analysis found. New York came in second at $3,390.
To come up with the rankings, Apartment List used the "several hundred thousand" monthly listings on its website.
-- Luke Hammill

Surge in sales leads to tighter housing market | 2015-09-09 | HousingWire

Surge in sales leads to tighter housing market | 2015-09-09 | HousingWire

Friday, September 11, 2015

Check out the Portland Market Action Report for Augusst 2015 - Questions about the market I'd love to chat!

Rising Prices Squeeze Out Young Buyers

"One can say that we are having a nationwide housing cost problem," says Lawrence Yun, the chief economist for the National Association of REALTORS®, in a new interview with The Huffington Post. Housing's affordability problem remains a barrier particularly for first-time buyers wanting to enter the market.
Indeed, the latest existing home sales report shows that the share of first-time home buyers was 28 percent in July, down from 30 percent in June.
Home prices have been rising faster than the median household income of about two percent annually, and as of June 2015, home prices were up six percent annually, according to NAR.
Read more: First-Time Home Buyers Are Receding
The lack of available housing is one cause of these booming prices, with current home building activity at only half of the normal level.
In the recent REALTORS® Confidence Index Survey, REALTORS® report that homes are increasingly becoming unaffordable and that sellers are reluctant to move because they can't find affordable homes.
"Home prices are rising anywhere from 3-4 times as fast as people's income," says Yun. "Rents are double the income growth rate. This is unhealthy, unsustainable. The only way to tame the housing costs is to have more supply. So, maybe relaxing the regulations on small-size banks so they can lend to the homebuilders. We have a mismatch, a dramatic shortage, of owner-occupant homes that are available for sale."
Millennials in hot markets like San Francisco and Washington D.C. are having a tough time purchasing homes due to rising rental costs, which makes it hard to save for a downpayment, as well as a lack of income growth, the burden of student-loan debt, and tough mortgage underwriting standards.
However, in smaller markets away from the coasts, many young buyers are finding affordable deals, and the cities are evolving to meet their needs. "Many middle parts of the country, like Des Moines and Grand Rapids now have a vibrant downtown, with millennial walking communities and strong job creation," says Yun. "In these markets, homes are quite affordable. So those millennials with jobs will be able to quickly convert into home purchase."
Sources: "Real Estate Has Become Unaffordable," The Huffington Post (Sept. 9, 2015) and "Sales to First-Time Buyers: 28 Percent of Sales in July 2015," Economist Outlook blog (Sep. 9, 2015)

Selling Concerns Grow Among Home Owners

Consumer attitudes toward the home selling climate are pulling back to their April 2015 level and receding from a four-year high in sentiment that was reached two months ago, according to a newly released index by Fannie Mae. The Home Purchase Sentiment Index pulls results from Fannie Mae's consumer National Housing Survey in providing a monthly predictive indicator of how the overall housing market is performing.
Read more: Sellers Remain Hesitant to List Homes
"Expectations of rising mortgage rates and increasing concerns in the last six months about the direction of the economy seem to be weighing on consumers' assessment of the housing market," says Doug Duncan, Fannie Mae's chief economist. "Those who think it's a good time to buy or sell a home have consistently pointed to favorable mortgage rates as the primary reason for their optimism. Those who think it's a bad time to buy or sell a home have consistently pointed to unfavorable economic conditions as the primary reason for their pessimism. Still, the four-year upward trend in the HPSI indicates that consumers remain fairly optimistic about the housing market."
The index revealed the following:
  • The number of respondents who said that it's a good time to purchase a home climbed to 63 percent, increasing 2 percentage points from last month's all-time survey low.
  • The number of consumers who say now is a good time to sell rose 2 percentage points to 47 percent. The percent of respondents who say it is a bad time to sell also increased to 44 percent.
  • The number of consumers who believe home prices will rise over the next 12 months dropped to 47 percent.
  • The percentage of Americans who believe mortgage rates will rise in the next 12 months increased 3 percentage points to 54 percent.
  • The percentage of respondents who say their household income is significantly higher than it was a year ago dropped to 24 percent. Those who say it is significantly lower dropped to 12 percent.
Source: Fannie Mae

Thursday, September 10, 2015

Total PORTLAND Market Overview Report - Need one specific to where you live? Email me at

‘No Californian’ Stickers Slapped on For Sale Signs

Portland real estate professionals are increasingly finding their For Sale signs in the city vandalized with “no Californians” stickers that show a silhouette of California with a red slash through it.
Home buyers frustrated by Portland’s booming housing market are reportedly placing the stickers on the For Sale signs and sticking most of the blame on Californians.
“A lot of these homes are going into bidding wars and going over the asking price,” says Quinn Irvine of M Realty. “And a lot of these guys are getting outbid. And I think they’re going around to agents who have properties that have sold over the ask price and putting anti-California stickers.” 
Real estate professionals report they are dealing with more out-of-state buyers in the area, many of whom are coming from California. But they say out-of-state buyers are coming from everywhere.
Lori Fenwick with Premiere Property Group says someone covered her name on a For Sale sign in the yard of one of her listings and replaced it with the words: “STOP THE BUBBLE.”
"There's the lowest inventory we've had in over 10 years, and people are frustrated," Irvine says. "They're basically blaming Californians for raising their real estate prices."

Wednesday, September 9, 2015

Top Metros for Millennial Workers

Despite the rising rents in some of the most popular cities for young people, a recent study by PayScale, a data-driven benefits and compensation firm, shows that many of those places are ultimately the most rewarding for millennials just starting out in the workforce.
To find out which cities were the best options for young workers, PayScale analyzed data from 650,000 surveys filled out over the last two years by millennials, and weighed factors like compensation, benefits, length of commute, overall job satisfaction, job stress, and opportunities to grow with the company.
They also came up with a "Gen Y commonness score," measuring the likelihood that an employee from each metro area was a member of the millennial generation compared to the rest of the country. PayScale also considered which areas offered popular millennial job perks including flexible work hours, a casual dress code, extra learning opportunities, the option to work from home, pets at work, free snacks, and a gym in the building.
The big missing piece of this study: affordability. Many cities named in this survey as the top places for millennials are also among the most expensive for those starting out in their career, often with rising rents and stagnant wage growth.
These are the top 10 places for millennials and the median Gen Y salary:
  1. Seattle-Bellevue-Everett, Wash (Median Gen Y pay: $55,500)
  2. San Francisco-San Mateo-Redwood City, Calif. ($69,700)
  3. San Jose-Sunnyvale-Santa Clara, Calif. ($77,500)
  4. Austin-Round Rock, Texas ($48,400)
  5. Provo-Orem, Utah ($43,100)
  6. Cambridge-Newton-Framingham, Mass. ($55,600)
  7. San Diego-Carlsbad-San Marcos, Calif. ($49,300)
  8. Madison, Wis. ($46,100)
  9. Boston-Quincy, Mass. ($56,300)
  10. Salt Lake City, UT ($47,000)
For a closer look at the survey results, be sure to check out PayScale's infographic.
Source: "The Best Cities For Jobs For Millennials," Forbes (Aug. 26, 2015) and PayScale

Sellers Remain Hesitant to List Homes

Consumers remain optimistic about the long-term prospects of the housing market, but home owners say they're hesitant to list their home for-sale, according to Berkshire Hathaway HomeServices' Homeowner Sentiment Survey.
The most common obstacles cited by home owners for not yet listing their home are due to inventory concerns, including "waiting for the right opportunity" and "haven't found my ideal home yet."
What's more, of consumers considering selling their home but who have not yet listed, 73 percent say that home prices have not recovered from pre-recession levels enough for them to sell. Sixty-eight percent of current home owners surveyed said underwater mortgages remain a big barrier to them. Sixty-one percent say they're uneasy about the economy, which has kept them from selling.
"Though home prices around the country have recovered much of the ground lost during the downturn, contemplators are telling us they want more confidence in the decision to list," says Gino Blefari, CEO of HSF Affiliates. "They're also telling us they need more information about their markets, pricing, and specific home improvement in order to list."
Indeed, 55 percent of home owners contemplating selling said they'd be more likely to do so if they had additional information on the home selling process.
"The stage is set for real estate professionals to connect with consumers, learn their needs and concerns, and determine the best way for sellers and buyers to capitalize on the opportunities that exist today," Blefari says.
Overall, 71 percent of the more than 2,500 current home owners and prospective home owners surveyed said they were confident the housing market was heading in the right direction. However, respondents cited concerns over their credit score, stringent lending guidelines, and the competitive landscape for homes as the top barriers facing the housing market today.
Source: Berkshire Hathaway HomeServices

Your Need to Know Guide to Buying a New Home

If you’ve been following along, you know that last time around we covered a lot of the important things you should be thinking about when b...