Friday, November 28, 2014

Thanksgiving Holiday Hiatus

image source here.
I will be taking a family Thanksgiving Holiday Hiatus this week. I'll be back next Friday :)

Friday, November 21, 2014

Higher Prices Push Houses Out of Reach

Home affordability is a big issue in many markets around the country, including ours here in the Portland/Vancouver Metro Area. I have posted an interesting article I found. Our local market is well above average in price and one of the less affordable when compared to the nation at large. We sit ranked at 192nd of 225 in affordability with 53% of homes within reach of the median income. But compared to cities like San Francisco, Los Angeles, New York and even Seattle; we are a relative bargain. Please enjoy the article and check out the link to visit their website.

This article has been excerpted from CNN/Money in its entirety

By Les Christie @CNNMoney November 14, 2014: 3:42 PM ET

Affording a home is getting more difficult these days.

According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), nearly 62% of all homes sold nationwide last quarter could be afforded by a family earning the national median income. Two years ago -- when affordability peaked -- 78% of people could afford homes.

Of course, where you buy makes all the difference.While mortgage rates are near record lows, home prices are on the rise -- and incomes aren't keeping up.

Related: Best cities for Millennial home buyers

Short on cash? Steer clear of California, especially the Bay Area where tech money has sent home prices skyrocketing.

In San Francisco, the median home price is $875,000, making it the least affordable major U.S. city. Only 11.4% of homes sold in San Francisco during the third quarter were reasonably priced enough for the average family to buy, the index found.

Other major cities where home prices were out of reach included Los Angeles, Santa Ana, Calif., San Jose and New York.

Where home prices were most affordable was predominantly in cities that were hard hit during the recession.

Related: Mansions for under a million

In Youngstown, Ohio, for example, nearly 90% of all homes sold last quarter could be comfortably purchased by families earning the local median wage.

Syracuse, N.Y., Indianapolis, Ind., Harrisburg, Pa., and Dayton, Ohio, all recorded affordability rates of 84.9% or higher.

Despite the growing affordability gap, most buyers are still in a favorable position, said David Crowe, NAHB's chief economist. "Even with nationwide home prices reaching their highest level since the end of 2007, affordability still remains fairly high by historical standards," he said.

Related: Most Stressed Out Cities

Rose Quint, a vice president for survey research with NAHB, said conditions should remain favorable through at least next year. She believes home prices growth should slow while an improving economy should help people find jobs and boost their incomes.

One headwind could be rising mortgage rates, which could climb in the next year or so, said Tom Wind, executive vice president of home lending for EverBank.

Friday, November 14, 2014

Real Estate Trends Well in Clark County

I have been perusing through the copious sums of real estate data provided by our local MLS. Overall the market trends are looking solid. I took a look at the last three months, August through October in Clark County. The median price for a home sold excluding bank owned and short sales, was $254,000. This 3 month period produced 1875 sales. This compares to 1475 sales with a median price of $240,000 over the same period last year.

I took short sales and bank owned out because these properties can skew the figures. Often bank owned properties are trashed and snatched up by investors with all cash at prices well below market for a move-in ready home. Short sales dramatically skew the marketing time because they take months to complete. Both bank owned and short sale categories are decidedly shrinking as a percentage of the market.

Investors are finding it increasingly difficult to find homes they can either fix up and resell or purchase for rental. That market is very tight right now.

The data shows a few hidden gems. First the average price is 290k which is roughly 15% higher than the median. This indicates that the activity below the median is closer to the median, clumped up tight against the middle. The activity above the median stretches well beyond the middle into the upper end. Median means half cost more, half cost less. The idea is to eliminate skewed results from a large number of sales at the extremes. But the average is still important because it shows us where the market trend is; high, low or middle. If the average is higher than the median, like it is here; the activity in the half of sales above the median tended to be well above and/or the sales under the median were close to the median. If the average is lower than the median (this is unusual in large markets), that indicates that sales below the median often fell well below and the homes in the top half were likely clumped close to the median. When the median and average are very close it means that the bulk of sales were very clustered around the median with few extremes or there was a very even disbursement across the full range of values.

The trend now, is in the high side of the median. The bottom of the market has become so tight that most of those properties are selling in the $200-250k range. The top of the median is showing broad activity well above $500,000. This is driving the average up. This can mean many things economically. Perhaps this is indicating a vote of confidence in the local economy or real estate market as people return to upgrading their property. It could also indicate an urgency at the top of the market as loan rates remain low but prices are heading north.

Sellers with homes that are above median have an opportunity to list and get solid activity and a good offer. There is strong movement towards the middle upper price range and that was absent just a couple of years ago. 2015 has strong potential to be a great year in real estate.

Friday, November 7, 2014

Veterans Should Take Advantage of GI Benefits

I posted this last year on this blog. It has been slightly updated this time. The author is not affiliated with any government agency and is providing general information about available products in the real estate marketplace. 

Vets can check the VA website here
Are you a veteran? If you served honorably in the armed forces there is a good chance you qualify for a VA loan. The VA loan is probably the best mortgage loan product available. And it is for our veterans only.

What makes the VA loan so good? It is not any one thing but rather the whole package. The VA loan is a ZERO down program. The veteran does not need to save up a down payment for the house. VA loans are typically priced with the some of the lowest interest rates in the market. The VA loan does not have monthly mortgage insurance. These are strong features that make a VA loan hard to beat.

The VA loan does have a few minor drawbacks. It has a "funding fee" that runs around 2.25%. (funding fee may be waived for qualifying disabled vets) The veteran may finance that fee so the loan remains a truly no down product. The Veterans Administration requires that the property pass not just a standard appraisal, but a special VA appraisal that looks more closely at the quality of the property being financed. This can lead to the veteran having to be a little more selective with offers.

In the current low interest climate, the VA loan has another great feature. VA loans are assumable. A veteran buying a home now will likely have a great low interest rate. In the future when the vet wishes to sell, rates may not be so low. The veteran's ability to allow another veteran to "assume" his loan may make his property more marketable in the future.

Loan products have many variables. If you are a veteran of the US Armed forces I would strongly encourage you to talk to a lender and find out what is available for you. A qualified loan officer can give you all the details about what is required and how the program works. Our veterans have served this country with honor and they deserve an opportunity to own a home without excessive burden. The VA loan is a big step to making that a reality.

Disabled veterans often qualify for additional benefits. I run in to many people some veterans and some not who don't think they can buy a home. All to often they in fact can and many times for a savings over comparable rent.

If you are veteran look into the VA benefits and the VA Home Loan today. It may be the best thing you ever do.