Is owning a home a good Investment? Many think so...

Americans Rank Real Estate Best Investment for 5 Years Running! [INFOGRAPHIC]

 From Keeping Current Matters: Friday July 27th, 2018  Baby Boomers, First Time Home Buyers, For Buyers, Generation X,Infographics, Millennials, Move-Up Buyers, Rent vs. Buy

Some Highlights:

• Real estate has outranked stocks/mutual funds, gold, savings accounts/CDs, and bonds as the best long-term investment among Americans for the last 5 years!
• The generations agree! Real estate is the best investment!
• Generation X leads the way with 37% believing in real estate as the top investment.

Starter homes have been appreciating in price very quickly. Is this a good time to move up?

Have You Outgrown Your Starter Home?

 Tuesday August 14th, 2018  For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers

For many Americans, buying their first home is their first taste of achieving part of the American Dream. There is a sense of pride that comes along with owning your own home and building your family’s wealth through your monthly mortgage payment.

It may seem hard to imagine that the first home you purchased (which made your dreams come true) might not be the home that will allow you to achieve the rest of your dreams. The good news is that it’s ok to admit that your home no longer fits your needs!

According to CoreLogic’s latest Home Price Index, prices in the starter home market have appreciated faster than any other category over the last year, at 9.4%. At the same time, inventory in this category has dropped 14.2%.

These two stats are directly related to one another. As inventory has decreased and demand has increased, prices have been driven up.

This is great news if you own a starter home and are looking to move up to a larger home as the equity in your home has risen as prices have gone up. Even better is the fact that there is a large pool of buyers out there searching for your starter home to help them achieve their American Dream!

Bottom Line

If you have outgrown your starter home, contact a local real estate professional who can explain the market conditions in your area and help you find your next home!

Looks like the number of building permits issued nationally has been trickling upwards...

Are You Thinking of Selling Your Home? Competition Is Coming!

 From Keeping Current Matters: Monday August 13th, 2018  For Buyers, For Sellers, Move-Up Buyers

The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of building permits issued in June was 850,000, a 0.8% increase from May.

How will this impact buyers?

More inventory means more options. Mark Fleming, First American’s Chief Economist, explained that this is good news for the housing market – especially for those looking to buy:

“The continued year-over-year growth in completions means more homes on the market in the short-term, offering some immediate relief in alleviating housing supply shortages.”

How will this impact sellers?

More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:

1. A great price on their home as buyers outbid each other for it.
2. A quick sale as buyers have such little inventory to choose from.
3. Fewer hassles as buyers don’t want to “rock the boat” on the deal.

Bottom Line

If you are considering selling your house, you’ll want to beat this new competition to market to ensure that you get the most attention on your listing and the best price for your house.

Only three weeks to college football season.....

Yesterday was "family fun day" at Reser Stadium for the Oregon State football program... Games for the kiddos, a two hour practice and scrimage and an autograph session afterwards.

Plenty of fans were watching the practice from the side of the stadium seating they opened up for the day.

Here's some recent national existing home sales statistics....

A visit to Starker Arts Park in Corvallis...

Tonight we're at the Starker  Arts Park for one of the SAGE Summer Concert Series performances.  They have bands from Seattle and Portland playing tonight.

Here's some thoughts on future home values courtesy of Keeping Current Matters....

Supply & Demand Will Determine Future Home Values

 Thursday August 9th, 2018  For Buyers, For Sellers, Housing Market Updates, Pricing

Will home values continue to appreciate throughout 2018? The answer is simple: YES! – as long as there are more purchasers in the market than there are available homes for them to buy. This is known as the theory of “supply and demand,” which is defined as:

“The amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.”

When demand exceeds supply, prices go up. Every month this year, demand (buyer traffic) has increased as compared to last year and for the first five months of 2018, supply (the number of available listings) had decreased as compared to last year. However, a recent report by the National Association of Realtors (NAR) revealed the first year-over-year increase in supply in three years.

Here are the numbers for supply and demand as compared to last year since the beginning of 2018:

The increase in the June numbers doesn’t mean that prices won’t continue to appreciate. In that same report, Lawrence Yun, NAR’s Chief Economist, explained:

“It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels.

Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”

Bottom Line

The reason home prices are still rising is that there are many purchasers looking to buy but very few homeowners ready to sell. This imbalance is the reason prices will remain on the uptick.

Getting ready for the Corvallis Knights baseball game....

The Corvallis Knights are a part of a college summer development league and play in OSU'S  Goss Stadium during the summer.

Tonight is their last regular season home game. It's a fireworks night after the game... looking forward to that... we live in north Corvallis and can hear them on the nights they do fireworks.

Are we headed into another housing bubble?

4 Reasons Why We Are Not Heading Toward Another Housing Bubble

Thursday July 26th, 2018  For Buyers, For Sellers, Housing Market Updates

With home prices continuing to appreciate above historic levels, some are concerned that we may be heading for another housing ‘boom & bust.’ It is important to remember, however, that today’s market is quite different than the bubble market of twelve years ago.

Here are four key metrics that will explain why:

1. Home Prices
2. Mortgage Standards
3. Foreclosure Rates
4. Housing Affordability

1. HOME PRICES

There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone.

Last week, CoreLogic reported that,

“The inflation-adjusted U.S. median sale price in June 2006 was $247,110 (or $199,899 in 2006 dollars), compared with $213,400 in March 2018.” (This is the latest data available.)

2. MORTGAGE STANDARDS

Many are concerned that lending institutions are again easing standards to a level that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.

The Urban Institute’s Housing Finance Policy Center issues a monthly index which,

“…measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

Their July Housing Credit Availability Index revealed:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market.”

3. FORECLOSURE RATES

A major cause of the housing crash last decade was the number of foreclosures that hit the market. They not only increased the supply of homes for sale but were also being sold at 20-50% discounts. Foreclosures helped drive down all home values.

Today, foreclosure numbers are lower than they were before the housing boom. Here are the number of consumers with new foreclosures according to the Federal Reserve’s most recent Household Debt and Credit Report:

• 2003: 203,320 (earliest reported numbers)
• 2009: 566,180 (at the valley of the crash)
• Today: 76,480

Foreclosures today are less than 40% of what they were in 2003.

4. HOUSING AFFORDABILITY

Contrary to many headlines, home affordability is better now than it was prior to the last housing boom. In the same article referenced in #1, CoreLogic revealed that in the vast majority of markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain much lower than their pre-crisis peaks.”

They went on to explain:

“The main reason the typical mortgage payment remains well below record levels in most of the country is that the average mortgage rate back in June 2006, when the U.S. typical mortgage payment peaked, was about 6.7 percent, compared with an average mortgage rate of about 4.4 percent in March 2018.”

The “price” of a home may be higher, but the “cost” is still below historic norms.

Bottom Line

After using these four key housing metrics to compare today to last decade, we can see that the current market is not anything like that bubble market.

Corvallis has a farmer's market on Wednesday and Saturday....

 I went down to the Corvallis Wednesday Market this morning to nab some Italian sweet peppers for a dinner idea I have for later.

 Corvallis has their local market downtown twice a week through much of the spring, summer and fall.  Saturday seems to be the bigger of the two days as far as how many vendors are there.

All sorts of locally produced items can be found there... produce, breads, meats, and much more. It's worth a visit.

Music in the park....

Tonight I'm hanging out at Corvallis' Central Park listening to the Corvallis Community Band  play one of their summer concert series performances. 

In a recent study, buying can be cheaper than renting in much of the United States...

Buying Is Now 26.3% Cheaper Than Renting in the US

From Keeping Current Matters:

Buying Myths, First Time Home Buyers, For Buyers, Housing Market Updates, Move-Up Buyers, Rent vs. Buy

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage, in 98 of the 100 largest metro areas in the United States.

In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in any of the metropolitan areas.

It’s no surprise, however, that those two metros are San Jose and San Francisco, CA, where median home prices have jumped to over $1 million dollars this year. Home values in San Jose have risen 29% in the last year, while rents have remained relatively unchanged.

For the 98 metros where homeownership wins out, 97 of them show a double-digit advantage when buying. The range is an average of 2.0% less expensive in Honolulu (HI), all the way up to 48.9% in Detroit (MI), and 26.3% nationwide!

Below is a map of the 100 metros that were studied. The darker the blue dot on the metro, the cheaper it is to buy there.

In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here.

Below is a chart created with the data from the last six years of the study, showing the impact of the median home price, rental price, and 30-year fixed rate interest rate used to calculate the ‘cheaper to buy’ metric.

In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

Cheryl Young, Trulia’s Chief Economist, had this to say,

“One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

Bottom Line

Homeownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home.