Friday, June 30, 2023
Friday, June 16, 2023
According to Zillow the hottest residential real estate markets in 2023 are expected to be as follows:
- Charlotte, NC
- Cleveland, OH
- Pittsburgh, PA
- Dallas, TX
- Nashville, TN
- Jacksonville, FL
- Kansas City, MO
- Miami, FL
- Atlanta, GA
- Philadephia, PA
Friday, June 9, 2023
I haven't heard this much chatter on assumable loans in my whole 24 year career :) But people sitting on an FHA or VA loan under 4% have an opportunity to sell their home at a bit of a premium. A $300,000 mortgage at 7.5% is about $2100 a month whereas the same loan at 4% is about $1500. That's a $600 savings per month. A buyer can overpay $10-$20,000 and still qualify if they are assuming a low interest note where they may not qualify at the higher rate.
I have a listing right now with a nice low interest FHA assumable loan on it. The problem however for assuming the loan is that it has a very low balance, well under $100k so most buyers will not have enough downpayment to make up the difference. But people sitting on a home they bought more recently say two years ago when rates were low, have a golden opportunity to cash in big now.
Generally FHA, USDA, and VA loans are assumable. Typically conventional loans are not. So a potential seller sitting on an assumable mortgage with a low rate under 4% might want to make a move up but is offset by the higher rates we have now. But if the loan they have is at 90% LTV or higher there is a good chance they can get an extra 10-20k over the value by finding a buyer interested in assuming their loan. That extra cash can be used to buy down the rate on their new loan for the next house. This is a good strategy but it should be noted that there is a limit to how much investors will let a borrower "buy down" on the rate. If they are a strong borrower with solid reserves and a high credit score maybe they get a rate at 6.50% and buy it down to 5.875%.
Potential sellers should reach out to their favorite mortgage professional and discuss options like this to see if their scenario fits the model. It could be a great opportunity for both eh seller and the future buyer of their property.
Friday, June 2, 2023
|The Ritz Carlton, Portland
Although I do focus on urban condos, I tend to stay north of the Columbia River. But this project is offering new condos and as a licensed broker and can participate in sales. I have been very interested in this project as I feel it will be good not only for Portland but also Vancouver as well. Portland needs a shot in the arm to help boost its sagging reputation. It was not that long ago our southern neighbor was the national favorite for coolest city. But my things have changed haven't they?
Vancouver has definitely done the opposite lately, with our previous reputation for a dingy Downtown, we have come screaming back with a vengeance and are actually the cool kid in the metro area right now. Although Portland's recent woes have translated into positive growth in Vancouver, its woes still affect all of us in negative ways and we all benefit from a better Portland. The Ritz-Carlton could ignite a new wave of positive change in Portland and that will radiate out to other areas in the region including us. This is an extremely high end real estate development with an estimated build cost of more than $600 million. The 138 condominiums will be priced well above the reach of even some affluent buyers, with prices starting at $1.6m and making their way towards $10m. The hotel however, will draw affluent guests to the region and some of the amenities in the tower, like the bar and restaurants will be open to the public. This is the second lifestyle condominium tower in the region, after the first, our own Kirkland Tower.
Comparisons to Kirkland are inevitable but the two are as different as they are similar. The Ritz-Carlton hotel is about as good as it gets for luxury lodging. The Indigo Hotel attached to Kirkland is quite nice and the open atrium interior design is spectacular, but the Ritz-Carlton is top drawer. I'd give the hotel portion edge to the Ritz-Carlton. The overall owners amenities at the Ritz-Carlton are impressive edging out Kirkland but only just so. Kirkland's rooftop community penthouse, and patio area sits on the defacto 13th floor and is higher than the 8th floor "owners lounge" and patio at the Ritz Carlton.
The developer doing the Ritz-Carlton had one fully complete and furnished unit to show us along with several others in varying states of completion. The completed model was a two bed 1600 SF unit on the 21st floor. The unit was very nice and frankly I felt it was on par with Kirkland in terms of decor and quality, but not better. Quality of build is a tie between the two. One note however in favor of the Ritz Carlton is that the penthouses on the upper two floors are owner customizable. That is pretty cool.
|View looking north towards Vancouver from 34th floor at Ritz Carlton, 5/31/23
The higher floors at the Ritz Carlton soar above the city. Comparatively, Kirkland's units are effectively on floors 3-12. Now officially it's 2-11 but the first floor is a double height floor with a full mezzanine. Semantics, right? Kirkland units on the top four floors all sit high enough to see over neighboring buildings. It should be noted that Block 5 is not built out yet and a future tower there could potentially be as tall as Kirkland. All of the units facing the Columbia River regardless of floor have a view since the building sits on the Waterfront. But north facing units on the lower floors will have a classic urban view of the building(s) across the street.
Kirkland in my opinion has the better location. This isn't a Vancouver vs. Portland thing, but just the fact the Kirkland sits on the Waterfront right in the middle of the hottest neighborhood in the metro area. Although the Ritz-Carlton is in a nice location in the West End neighborhood, it is not on the waterfront. Advantage Kirkland. Both locations offer connectivity to exciting attractions and things to do. Portland holds an advantage on music venues, sports franchises and such, but Vancouver's Waterfront is more walkable and park-like.
|View from Kirkland Tower roof north towards Downtown Vancouver, 2021
Studies on the subject have shown that the best floors to live on are between 5-10. Why? Well the higher you go the less noise you have to deal with. The less pests (rodents, insects) and the more security and privacy. Let's not forget those views also. But above the 10th floor you are typically out of reach of local hook and ladder trucks so emergencies like fire, earthquake etc will require a manual descent. Also some people are height adverse so above the tenth floor can be uncomfortable for them.
So overall the metro area now has two premier lifestyle high-rise condominium developments to choose from. Kirkland has fewer than a dozen units remaining and I have little doubt the the Ritz Carlton will be successful as well. If I had to choose, I would of course stay here in Vancouver and go with the Kirkland Tower, but for the Portland fans, the Ritz Carlton is your new flagship residential high-rise tower.