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Upward Market Trend Line for Mt Hood Real Estate Continues

If you characterize the Mt Hood real estate market of 2012 as crawling out of the big hole, then all indicators for 2013 is the upward trend in the Villages of Mt Hood continues. That is indeed welcome news.
I took a look again at 3 parameters: Sales Volume, Median Sale Price and the Number of Closed Sales. So now, what other insights can be drawn from these simple graphs on market trends when it comes to buying or selling “on the Mountain”?

03-13VolumeTrend_3

When it comes to volume, the Mt Hood real estate market is back to where sales volume was 10 years ago.

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2013 Median Sales Price is approaching 2005 and 2009 levels. In 2005 Sales Volume had peaked and in 2009 the real estate market on the mountain was still in “free-fall” and the median sale price had not yet bottomed out. That didn’t happen until 2011 when volume and medium sale price both tanked.

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It is pretty clear how flat the market was with respect to the number of sales from 2009 to 2011 which also coin sides with the march downward in the median sale price and annual sales volume.

So, what is the big takeaway for a buyer trying to make a good decision when it comes to making a purchase? Sitting on the fence appears to be costing you money if the upward market trend line continues and expands throughout more price points.

Equity is the difference in what your home is worth and what you owe

Equity is the difference in what your home is worth and what you owe. Ideally, as the value goes up and the unpaidEquityGraph balance goes down with each amortized payment made, the equity grows from two directions.

This dynamic leads to increasing a person’s net worth much faster than many other investments.

A homeowner has minimal control over value. It is necessary to maintain the property to avoid depreciation and make good decisions on capital improvements. After that, appreciation is generally controlled by supply and demand and the economy.

Mortgage management is something that the homeowner does have control. Making the decision to select a shorter term mortgage at a lower interest rate can have an impact on equity build-up. Lower interest rates amortize faster than higher interest rates which will also affect equity growth. Currently, it is possible to get a 1% lower rate on a 15 year mortgage than a 30 year mortgage.

Compare two alternatives of a 30-year and a 15-year mortgage. The payments will definitely be higher on the shorter term because it pays off quicker. However, if a person can afford the higher payments of $362.53 more per month in this example, the equity will be greater. Even after you take into consideration the higher payments, the increased equity is $17,236 at the end of the seven year holding period.

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Another decision that can affect equity build-up is making additional principal contributions along with the regular payments. Whether you’re making an occasional lump sum payment toward principal or regular monthly contributions, it will save interest, build equity and shorten the term on a fixed rate mortgage. Estimate your personal savings with this Equity Accelerator.

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By |October 12th, 2013|Categories: Buyers|Tags: |0 Comments

Should a Buyer make Repairs on the Property they want to Buy Prior to Closing?

This topic  was discussed in a Quick Topic from Kate Brooke’s Legal Newsletter that is an excellent resource for the Greater Portland Metro Area. My answer is as was in the newsletter,  NEVER.

I am often asked this question by purchasers and it has nothing to do with a buyer’s level of sophistication either. I have seen it from all sides of the spectrum. Usually, it has to do with expedience.

It is easiest for me to explain why it is not a good idea by simple Risk Management which spills over not only to the Seller but to all parties including contractors and vendors.  When there is good risk management in a transaction, that lowers the risk for all parties and saves a lot of potential grief!

What would happen if there is an accident while the work is being done?  The seller’s insurance company gets a call…. Yikes, I don’t want to think about that one. Or, the buyer is suddenly unemployed and does not qualify for the loan. Now who is going to pay for the repairs?

The simple answer is  do a “Worst Case Scenario” and you will reach a good answer.

By |August 3rd, 2013|Categories: Borrowers, Buyers|Tags: , |0 Comments

“Woulda, Coulda, Shoulda”

We’ve probably all said or at least thought “if I knew then, what I know now, I would have done things differently.” We should have stayed in school longer. We should have listened to our parents. We should have bought Apple stock in 2002 for $8.50 that sells for $400 today. Or we could have bought gold in 2000 for under $300 for a four-fold profit today.

If.jpgYears from now, if we look back at 2012, we may say that it was the best buyer’s market ever. Even now, in 2013, it’s apparent that both housing and mortgage prices are going up and they may never return to the record low levels.  The Mt Hood Area still has inventory and the towns of Brightwood, Welches, Rhododendron and Government Camp are just experiencing stabilization in prices vrs. price increases in 2013.

The housing affordability index, which is considered to be good at 100, had increased to over 200 this past December, January and February. Shrinking inventories and rising prices in most markets have caused the index to fall to 172.7 for May 2013.

This market applies equally to acquiring a home to live in or a home to use as a rental. It is estimated that about 30% of the property purchased last year was done by investors. It is understandable because the positive cash flows far exceed most other investment alternatives. HAIndex.png

Homeowners moving up in a rising market may sell their home for more by waiting but it will also cost them more for a new house. Typically, a person buys a 50% larger home when they move up. If they wait for prices to go up 10% on the $150,000 home they’re selling, they’ll realize $15,000 more but will pay $22,500 more for the new home purchase. They’ll actually net $7,500 less by waiting for prices to go up and may have to pay a higher mortgage rate too.

The question homebuyers and investors alike are faced with today is whether they will be saying years from now that they seized or missed an opportunity of a lifetime.

By |July 22nd, 2013|Categories: Borrowers, Buyers|Tags: |0 Comments

Oregon Buyer Advisory

A CONSUMER INFORMATION PUBLICATION  OF THE OREGON ASSOCIATION OF REALTORS®

A real estate licensee is vital to the home buying process and can provide a variety of services in locating property, negotiating the sale and advising the buyer.  A real estate agent is generally not qualified to discover defects or evaluate the physical condition of property; however, a real estate agent can assist a buyer in finding qualified inspectors and provide the buyer with documents and other resources containing vital information about a prospective new home.
This Advisory is designed to assist home buyers in meeting their obligation to satisfy themselves as to the condition and desirability of property they are interested in purchasing.  Common issues in real property transactions that home buyers often decide to investigate or verify are summarized in this Advisory.  In addition to investigating or verifying these common issues, the buyer should tell the licensee with whom they are working about any special concerns or issues the buyer may have regarding the condition of the property or surrounding area.  Such special concerns are not addressed in this Advisory.
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About the Summer Homes Program

The Summer Homes program was first implemented on the Zigzag Ranger District about 1914. At that time the Forest Service felt that recreation use on National Forest lands could be encouraged by laying out a number of 1/4 to 1/2 acre lots and offering the public the opportunity to build small cabins on these lots. People who wished to build were issued a Special-Use Permit and charged an annual fee. This program continued until the early 1960’s when concern began to develop that allowing individuals exclusive use of National Forest lands was not an appropriate use of public lands. As a result, a new policy was formulated which recognized that the existing Special-Use Permits could continue until there was a specific need to put that land to a better and higher use. Also from this time onward, no new permits for previously undeveloped lots were to be issued.

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By |April 30th, 2011|Categories: Buyers|2 Comments

Keeping Your House Hunting on Track

The process of buying a home can be overwhelming–from the growing paperwork to the house-hunting search for a home, buyers sometimes feel a little intimidated.

But today, searching for your perfect home is easier than ever. There are many real estate agents to choose from, a large inventory of homes in many areas, and technology that makes checking out a home as easy as clicking on a few Internet sites. Of course, that’s just for a quick look. Getting in the car with an agent and exploring the properties in person will give you better ideas of what you want and, perhaps more importantly, what you don’t want.

Now, there are even apps designed to help you keep track of the homes you visit. And there are many to choose from. Take for instance, CrumbTracks, a free app designed by a husband-wife team (Bobby and Eileen Beckmann). It’s an iPhone app aimed at helping you stay organized while viewing many different homes. The couple built the app based on their own need to keep information all in one place while house hunting.

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By |March 11th, 2011|Categories: Buyers|0 Comments

Are We Back In the Land of Affordable Housing?

I can hear the sound of gasps as those on bated breath begin to breathe again. This year may be “the end of the housing crash!”, according to The Wall Street Journal, (WSJ).

It seems that housing is again affordable and the bad news is, well, not so bad anymore. According to Simon Constable in the WSJ, the S&P/Case-Shiller home-price index, which tracks 20 markets, dropped 1% in December … and that is the fifth consecutive decline.

The drum is beating loudly and the tune is “houses are a good deal”. In fact, experts at Mood’s Analytic’s, where income and housing prices are studied, claim houses are more affordable than in decades.

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By |March 4th, 2011|Categories: Buyers|0 Comments

Housing Affordability Soars, Investors Move In

It’s a good time to buy a home or invest in a property.

With so many distressed properties on the market, housing affordability has jumped to levels not seen in 20 years.

The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) for the fourth quarter 2010, reveals that 73.9 percent of all new and existing homes sold were affordable to families earning the national median income of $64,400.

That record-setting level beat the last record high of 72.5 percent set during the first quarter of 2009. It was also the eighth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.

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By |March 3rd, 2011|Categories: Buyers|0 Comments

Real Estate Outlook: Existing-Home Sales Rise

The housing market continues to keep experts and analysts on their toes.

While existing-home sales rose again in January and are outpacing year-ago levels, we are still seeing a drop in home prices across much the country.

Existing-home sales increased 2.7 percent in January and are 5.3 percent above January of 2010.

Lawrence Yun, NAR chief economist, sees the rise as positive, but with room for improvement. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” Yun said. “The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”

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By |February 28th, 2011|Categories: Buyers|0 Comments