Real Estate Information

The construction of larger sized houses is once again on the rise.  The average size of a newly constructed single-family home was just over 2,500 square feet in 2012. This can indicate that the housing market is showing strong signs of recovery.

The Census Bureau has been collecting information about new home builds since 1973. Since that time, the average size of a new home has steadily increased despite the fact that American families have actually gotten smaller. The exception was from 2007 to 2010, when economic concerns made buyers reconsider whether building a larger home was truly necessary.

After the housing market crash, the size of newly constructed homes dropped somewhat.  In 2007, the average home was 2,521 square feet, but it was 2,392 square feet in 2010. That’s because many people were leery of losing their homes to foreclosure if they purchased a larger property than their budget would allow. It seems this concern has subsided somewhat, and consumers are once again willing to consider purchasing a sizeable home.

 Last year's data showed not only an increase in square footage, but in other features as well - approximately 41 percent of new homes contained four bedrooms, 19 percent featured three-car garages, and 43 percent contained fireplaces. In fact, the construction of four bedroom homes was at all all-time high during 2012.

The fact that larger homes are being built once again may eventually cause a surge in mid-sized and starter homes as well, and new home construction is one of the biggest indicators of a recovering economy.

The U.S. Census Bureau estimates that the population of Portland and its surrounding metro area suburbs in July 2012 was 2,289,800, a 1.3 percent increase from 2011 and nearly a 3 percent rise from the census in 2010.

This upwardly mobile trend found its way into several larger Oregon counties, with Clackamas, Deschutes, Multnomah, Wasco and Washington counties all recording a population jump of 1 percent or more over the past year. With the lone exception of Deschutes County, all of these counties are in or very near the Portland metro area.

These are particularly telling statistics in and of themselves; however, they take on even more significance when we leave the bright lights and varied amenities of the big city and venture out to the hinterlands to the eastern and southern areas of Oregon.

Curry, Lake, Grant, Wallowa and Harney counties all posted a population decrease of more than 1 percent over the past year - the state's largest population losers, so to speak. More people left those counties - either by passing away or moving away - than those born or moving into the counties.

Curry County is located in the extreme southwestern corner of the state, with its southern border separating Oregon from California. Wallowa County sits exactly opposite of Curry County - in the extreme northeastern corner of the state, with its eastern border separating Oregon from Idaho, and sharing its northern border with southern Washington.

When we broaden our horizons to include the entire state of Oregon as a whole, we are informed by the census bureau that as of July 1, 2012, there were 3,899,353 permanent residents (officially) of the entire state.

Risa Proehl, a research associate at the Population Research Center at Portland State University, told the Oregonian in March that the drop in population in the state's outlying counties was due primarily to young adults vacating these rural areas where job opportunities are relatively scarce.

So, taking all of its counties and the Portland metro area into consideration, Oregon has enjoyed a population increase each year since 2010. There was a 0.8 percent rise last year, which was a 1.8 percent leap from 2010.

There are three main areas where you should focus the majority of your time and energy when preparing your home for sale: its interior, its exterior and your budget - the amount of money you should spend, based on your anticipated selling price.

Inside the Interior

Perception is reality. This old axiom is especially true in the realm of buying and selling real estate. People who come to check out your home and consider making it their own will base much of their decision on how the home looks to the naked eye. Potential buyers are more at ease when purchasing a home that appears well-maintained, because if these areas are well-cared for, it stands to reason that the areas they are unable to see are in the same or better condition.

Here are some simple tips to make your home as aesthetically pleasing as possible:

• Clean each and every room from floor to ceiling, clearing away all clutter.
• Remove as many items as possible from countertops, closets and the attic.
• Check the basement and attic for leaks, dampness and cracks, repairing as necessary.
• Check for damage to windowpanes, walls, wallpaper, plaster, paint moldings, tiles and woodwork, and repair where needed.
• Inspect plumbing, heating and cooling systems, repairing dripping faucets and showerheads along the way.

Exterior

The positive or negative perception people have of your home's exterior, which generally includes things like landscaping, patios and gardens, along with the actual exterior "skin" of the house, is often referred to as its ‘curb appeal’. It's what makes the all-important first impression on potential buyers, so follow these helpful hints to exterior excellence:

• Mow, water and edge your yard on a regular basis.
• The same thing goes for your hedges, flowerbeds and trees.
• Inspect your home's exterior for obvious flaws in the paint, siding, foundation, doors and windows.
• Align and clear gutters.
• Repair and replace loose or damaged roof shingles, siding and caulking.
• Store RVs or old vehicles somewhere out of your home's ‘curb appeal’ zone.

Budget

Last, but certainly not least, is deciding how much to spend on polishing up your home for its time in the spotlight. It's an unfortunate that it's nearly impossible to predict whether the money spent will increase the value and subsequent selling price of your home, or decrease your profit margin at closing time because you didn't get the value you expected out of the expenditure.

The prudent thing to do here is talk to your real estate agent. They can help you determine how to make your home as irresistible as possible for as little out-of-pocket costs as possible. Market conditions are currently changing monthly, and they will know just how to get the biggest ‘bang for your buck’.

Being an attractive home buyer is especially important in the seller’s market we have today. Many sellers receive multiple bids for a property, and when those bids are extremely competitive, they may have to choose a buyer based upon criteria other than price. Before hitting the streets with a real estate agent, consumers should take a few practical steps that will pay off by helping others see them in a more positive light.

The first step toward being an attractive home buyer is to check one’s credit report in order to find out just how healthy it really is. Checking the report four to six months before buying will allow consumers time to clean up any negative data or clear up discrepancies that could affect their ability to obtain a mortgage.

Individuals should also begin doing diligent research on local housing markets, mortgage interest rates and the types of loans that are available. That way, they will have a better idea of what might be required in the way of closing costs and loan requirements before making an application with a lender. It will also give buyers a better idea of the fair market value of property so they will be in a better position to make a respectable offer once they locate the home they’re looking for.

Many real estate agents recommend that buyers obtain pre-approval for a mortgage before they begin viewing properties. This has numerous benefits for everyone: buyer, seller and real estate agent. Buyers will not be tempted to look at properties they cannot afford, and real estate agents can be sure they aren’t wasting anybody’s time showing homes to clients who are unable to obtain a mortgage for that property. During the bidding process, sellers can take comfort in knowing that the likelihood of bank approval is high. This relieves the anxiety of wondering whether banks will reject a buyer’s application, thereby requiring them to place the property up for open bid again.

Part of being an attractive home buyer involves knowing what type of property is attractive in the current market. Some considerations for buying should include location, size, and type of structure. Buyers who determine their wants ahead of time can better spot the home that’s best for them right away. Buyers will also be able to realize when they have found that special piece of real estate and won’t make untimely delays in placing an offer.

Being an attractive home buyer doesn’t mean failing to stand up for one’s rights, however. A home is a major investment, which means consumers should be prepared to pay for a home inspection and title search in order to make sure everything is in order. Taking the time to carefully check all these details can often mean the difference between realizing a dream and buyer’s remorse.

On April 1st, the Federal Housing Administration (FHA) raised the annual mortgage insurance premium rates, with its primary goal being to bolster the Mutual Mortgage Insurance Fund (MMI Fund). And there are more substantial changes coming our way this summer, starting June 3rd when the administration increases the required duration time for the entire life of its mortgage insurance.

The yearly premium on the majority of the FHA mortgage loans impacted by the April Fool's Day changes jumped up about 0.10 of a percentage point, which translates into an approximately $100 annual increase for every $100,000 in the amount of the loan.

If the loan is $625,000 or more, and has a term length of 15 years or more, the amount of the loan will increase by only 0.05 of a percentage point, or $50 annually for each $100,000. The premium varies for each loan, depending on the loan's overall amount, length of term and loan-to-value ratio.

FHA-backed mortgage loans have been a popular financing option, especially for folks with relatively low credit scores, and lower down payment amounts.

Beginning on June 3rd, borrowers with a 78 percent loan-to-value ratio will no longer be able to terminate their mortgage insurance payments, leaving open a small window of opportunity for those with a 20 percent or less down payment to take advantage of FHA's current policy.

What this new policy essentially means for borrowers who take out a loan after June 3rd, is that their mortgage insurance will run all the way to the end of the loan's term. Even those who take out a 15-year loan carrying a starting loan-to-value ratio of 78 percent or more can expect to pay mortgage insurance for at least 11 years.

Home buyers planning on living in their new residence for less than 10 years may not feel much of a financial impact from these new mortgage loan changes. Those expecting to plant their family roots at their recently purchased property can consider refinancing options, such as a conventional, mortgage-insurance-free loan, when the equity has risen because of appreciation and amortization.

For all of the details straight from the horses mouth, so to speak, go to HUD.gov, the U.S. Department of Housing and Urban Development's (HUD's) website.

What a difference a year makes! Housing prices in the Rose City are on the rise according to a major housing industry data source.

Portland – like a number of other major U.S. cities – saw home prices rise in February according to the Standard & Poor's/Case-Shiller home price index. In fact, the home-price index witnessed its biggest annual gain since 2006, recording a boost of 9.3 percent in February in the 20 major U.S. metro areas that were surveyed. This is the largest yearly change rate since May 2006.

From 2012 to 2013, Portland prices increased 9.4 percent, and from January to February of this year, home prices in Portland measured an increase of 0.7 percent.

David M. Blitzer, chairman of S&P's index committee noted that, "Home prices continue to show solid increases across all 20 cities."  The fastest home price growth rate occurred in Phoenix where home prices rose 23 percent from 2012 to 2013. San Francisco had an 18.9 percent gain, while Las Vegas registered a rise of 17.6 percent during the same time period. Ten of the 20 cities showed double-digit increases compared to last year.

Back in February 2012, Case-Shiller reported an overall post-recession low, with home prices down at that point just over 35 percent from their high mark. Locally, Portland’s low-price moment came in March of 2012, with home prices down 28.7 percent from their peak.

Now, just over a year later, home prices have recovered at an impressive rate, in part because home inventories are low. The inventory situation stems from the fact that many homeowners are still carrying mortgage debt that prevents them from selling; at the same time, new construction has slowed significantly. A goodly number of homes continue to work their way through the foreclosure process, or are simply sitting in lenders' portfolios.

What is the impact of small home inventories? Well, for one thing, limited inventories have propelled buyers who want to take advantage of low interest rates and prices into bidding wars – and this in turn has pushed prices upwards. As traditional home sales have increased, the percentage of foreclosures in terms of overall transaction volume has declined, and this also plays a role in rising home prices.

Of course, talking about “the housing market in Portland” is too broad, and like all larger cities, the market is comprised of sub-markets. Homes in the lowest price ranges have recorded the biggest gains. The Rose City’s least expensive one-third of residential properties have gained 15 percent in price over 2012. Homes in the middle price range have risen by 11 percent, and the most expensive one-third of homes have increased by only 7 percent. Homes in the highest-priced segment really struggled through the recession and failed to recover as much ground compared with other segments.

A recent article in the Oregonian turned to Portland real estate veteran Rob Levy for insight. "The exciting thing we're seeing is that some of the most expensive homes are starting to sell. The starter homes are selling, and the homeowners are buying the middle homes, and they're buying the luxury homes. That's the piece that was missing until now."

The rapid rate of home price increases have left certain economists and real estate professionals concerned that bubble conditions could be starting again. However, there are conditions that may keep home prices from increasing too quickly. For instance, the Federal Reserve is expected to keep interest rates low until the national employment numbers improve measurably – but when rates rise, demand is likely to decrease. Also, as prices rise, more homeowners will realize equity gains that will allow them to sell, so homebuilding activity should gather steam.

Many housing economists anticipate that home-price gains will begin to cool in coming months. The Oregonian article once again turned to Rob Levy, who said appreciation settled at an annual rate of 4 percent would be a welcome change. "Four percent is a good number, a good, steady, stable number," he said. That's always been the safe number. It's not nuts."

All in all, the news is good for the Portland home market. Fears of a new bubble appear unfounded, and a reasonable rate of increase in home prices indicates, hopefully, a fairly healthy housing market overall for Portland.

Real estate is BACK and nothing says it better than this graphic!

Data provided by

When you are considering buying a home, a huge factor you need to consider is the down payment. The times of no down payment loans are long gone, and when you put hard money on a loan, it is very important to know what it means for you. Our friends at the lending tree conducted a study (map below), and they calculated the average down payment of each state. As you can see, average rates are very close together, Oregon being the lowest in the entire region!

What that means for the buyer, is that lending standards are becoming more tight. Which in turn enables the buyer to be in more commited discussions when they are pushing out the details of the loan, because banks have a much smaller risk of "losing the farm" in case of foreclosure.

Overall, this is great news for the real estate economy as a whole. The great thing about this, coupled with the trend of the real estate market (see 2012, a year in review here), all systems are go, and we are ready to hit the new year along side you with force! If we can help in any way, please don't hesitate to give us a call and we will help you any way we can! 

(to keep up with all market updates and what may be coming available in your area, go to Roblevy.com and click on the gray button titled 'newsletter'. Also, don't forget to 'like' our Facebook page at www.facebook.com/theroblevyteam)!

In light of the market heating up, I just wanted to take a moment and review the year that was 2012, and how it may or may not impact you in 2013....

Another year has went by, and what a year it was! There were 32,000 new listings in 2012, a number that actually dropped by 5% from the 2011 number. Despite what you may have heard, the sales actually closed in 2012 went UP 19.1%, from 19,682 sales to 23,438. That spike in closed sales lead to a 16.2% increase in pending sales as well. In a market that is said to "not do well" the average sale price most likely will drop, which may, bring the pending and closed sales up for the year. What is great about the market in 2012, is not only did the amount of sales increase, but the PRICE of the average listing increased by 4.4%. Going from $221,000 to $235,000!! That is a great sign for things to come. In fact, there were increases across the board. Median sales price went up (6.3% increase), as well as time on the market, dropping a staggering 21.5%, from 143 days last year to 112 days in 2012! So not only are more homes selling for a higher amount, but they are selling even FASTER! This set up for a very nice increase in the total volume of sales. Which increased to $6.45 billion, from the $5.2 billion in 2011.  If you need any help interpreting this data, or what this data means for you or your family, please don't hesitate to call us and we will be more than happy to help. 2013 is setting up to be a fantastic year, and we at the Rob Levy team are VERY excited to share it with you! 

(to keep up with all market updates and what may be coming available in your area, go to Roblevy.com and click on the gray button titled 'newsletter'. Also, don't forget to 'like' our Facebook page at www.facebook.com/theroblevyteam)!

Here is a nice article on Portland and Oregon from the Guardian Newspaper in the UK.  Its a good read!  http://www.guardian.co.uk/travel/2012/sep/14/portland-oregon-pacific-coast-road-trip