Friday, July 31, 2020

Home Owners not Selling, Buyers want to Buy!

This whole COVID 19 debacle has left the real estate market surprisingly hot. It's not that there are lots of sales, because there isn't. It is simply that the typical number of summertime sellers didn't materialize this year. Many homeowners are not selling right now whether due to Corona fear or something else altogether.

Meanwhile the downturn in jobs we see as a result of the COVID pandemic has slowed the demand a little, but the supply took a bigger hit. Last summer things were cooling off leaning towards a neutral market. This summer sellers are once again in the driver's seat in top down price ranges from 150% of median to the sub-median market.

This tight resale inventory has the local builders in solid spot as many would be resale buyers are looking at new construction to meet the demand. The local builders have their own issues related to COVID and other market forces like a supply of sub contractors and potential work shut downs every time the case load pops up and the Governor gets the itch.

What a strange and wild year 2020 has been. But at least the local real estate market can benefit from a very respectable demand against a tight supply. The mortgage rates are are helping the fuel the demand as well with buyers seeing rates the likes of which have never been seen before. 

Friday, July 24, 2020

Buyer's Just Got a Big Fat Raise... sort of.

Throughout most of this crazy year we call 2020 mortgage rates have been very low, not the lowest ever, but very, very low. Well now they are the LOWEST EVER. For buyers you just got an effective raise with regards to your home buying power. I have mentioned this in previous posts over the years but a 1/2 point difference in mortgage interest rate can add up to a tremendous amount of buying power.

A $300k mortgage at 3.5% will have a principle and interest payment of $1347 per month. That same loan at 3.0% has a PI payment of just $1265. A buyer is qualified based mostly on the amount of the payment relative to income and other payments. At 3.0% interest that $1347 payment gets a loan of $319,500. That is nearly $20,000 MORE buying power. It's like you just got a big fat raise from your boss.

I have many buyers that are looking about, and now is the time to pull the trigger on these crazy low rates. I have seen well qualified borrowers getting rates on 30 year fixed mortgages in the middle twos!

Buyer's this is your moment. Go out and lock down that dream house with a historic low mortgage.


Friday, July 17, 2020

Buyer's Should Consider a Light Fixer

Finance able fixer home sold last year
This real estate market is pretty robust, but buyers are still more interested in move-in ready properties. That leaves fixers as a value proposition especially in the entry level price range under the county-wide median price.

Not all fixers are problems. Buyers using a conventional style loan can by a cosmetically rough house for tens of thousands less than the future market value when fixed up. A little do it yourself action can go a long ways.

FHA and VA buyers are in a little tougher spot when looking at fixers. These are government backed loans and as such the property is scrutinized by the lender a bit more. That doesn't mean a light cosmetic fixer won't fly, it very well may be fine. I have helped buyers on a budget using VA and FHA loans to get into a light to medium fixer. Choosing an experienced local agent that understands the nuances of the various loan programs can go a long way towards getting a home under market that needs a little TLC.

The combination of a cosmetic discount and the ridiculously low rates for a mortgage right now, could lead a savvy buyer to a huge equity gain in the short term. Buyers seeking that perfect move in house may have to fight off some competitors but with loan rates dipping into the 2's for well qualified borrowers, now is definitely a good time to buy a house.

Sellers with a home to sell that is tidy and ready for the market, you are in the proverbial 'catbird seat' with swarms of eager buyers waiting to snatch up you home.

Friday, July 10, 2020

Buyers are Crawling Out of the Woodwork

RMLS graphic
Things are getting rather busy in the local real estate market. I'm not sure if this is COVID-19 pent up demand or just these crazy low rates that have populated all the mortgage ads. In any case I have been rather busy running about showing homes to a frenzied crowd of buyers as well as taking offers on my listings.

Locally we are on the cusp of entering Phase 3. The local government applied for it two weeks ago but a recent mini-spike of cases has them in a holding pattern at Phase 2. What ever the reason be it cabin fever, low interest rates, or optimism about the future end of this pandemic, buyers are out in force writing offers and buying houses. If seller don't start listing more houses we could see a return to rising values. Right now it seems that prices are basically steady.

The local MLS is showing a tightening inventory but prices year over year for June in the Portland-Vancouver Metro Area were up a a few ticks at 2.7%.

As crazy as this year has been, real estate has weathered the storm pretty well, I am certainly thankful for that.

Friday, July 3, 2020

Mortgage Rates Dip to Lowest Ever!

The Associated Press released an article I found in the Columbian yesterday indicating that America's major mortgage indices had bottomed out to the lowest levels in history. 30 year fixed rates in the very low 3s and even some high 2s are available to highly qualified borrowers. This is a great time for even those with weaker credit profiles to jump in, as rates across the board should be lower. Rates that were reserved for the 750+ FICO crowd a few months ago are now garden variety rates available to average credit score individuals.

A rate change from 4% yields a principle and interest payment on a $300,000 mortgage of $1,432 versus a 3% payment on the same mortgage of $1,265 a $167 per month savings and a savings of more than $60,000 over the life of the loan! Another way to look at these low rates is the buying power. A borrower limited to a principle and interest payment of $1,432 per month can borrow $300,000 at 4% but at 3% they can borrow $339,750! Nearly $40,000 MORE house for the same payment! 

Buyers be aware that rates vary around the country and a borrowers credit and financial profile can lead to a wide range of rates spanning at least a 1/2 percent for a borrower with an average to below average score and other loan related financials. Where a "golden" borrower might get a rate at 2.875% someone with a more typical 680 score and tighter monthly budget might be at 3.375%. Always check with your trusted loan professional before making any decisions but remember even if you can't get the LOWEST rate out there the rate you CAN get now will be the best it could possibly be since rates are lower than ever before, right now!  

Buyers that have recently felt priced out of the market, may have just been priced back in. Mortgage raters can be fickle and that means buyer on the pricing bubble need to act quickly. Even a 1/4 point rate bump might price some buyers out again.