Everything you need to confidently make real estate part of your investing plan
Homeowner
GaSandra Carlson of Envoy Mortgage talks about the FHA 203 K Loan
GaSandra Carlson of Envoy Mortgage talks about the FHA 203 K Loan. This is a Rehab loan that allows buyers to buy a home that needs some work and borrow enough money to Rehab the home. This loan can also be used a tool to refinance and rehab your home/. After you watch this video. If you have any questions please feel free to contact GaSandra at (503) 967-5099
GaSandra Carlson
Sales Manager
NMLS # 487425
(503) 967-5099 Office
(503) 351-1802 Cell
www.GaSandraCarlson.com
Interview with Jake Planton of Rose City Mortgage
Jake Planton
Senior Loan Officer
Rose City Mortgage, NMLS 272695
503-475-3788
NMLS #209327
GaSandra Carlson Envoy Mortgage: Advice to Oregon Home Buyers
The Advantage of Property Management, By Troy Rappold
In business, the slogan “Just Do It!” rings true and will serve you well. In the world of Property Management this is applicable as well. After all, we are trying to grow our business and be successful when we manage your asset wisely and efficiently. However, more often than not our slogan is “Just Do the Right Thing!”
As property managers we work with many vendors who complete work on our properties. We want quick, quality repairs, and at a good price for our clients. Sometimes this requires tough conversations. Navigating this world is our expertise and it is part of why you rely on us. Our fiduciary responsibility is always you, the client.
The other piece of the puzzle we have to navigate is relations with tenants. Our job is to provide clean, safe, well-maintained housing. However, and this might come as a shock, sometimes tenants can have expectations that are out of line. Just because a kitchen counter has a scratch on it doesn’t mean we need to replace the entire counter top with new, beautiful granite from Brazil. Often times a property manager has to say “no” in the most professional and courteous way possible.
Real Estate management is an active, engaging industry. One cannot just buy an investment property and watch it appreciate or mature, like treasury bonds. Having the right management in place is just as important as buying the right property at the right price. We have the expertise and experience to navigate the difficulties and pitfalls for you. Here at Rappold Property Management we take our job very seriously and we manage your property as if it were our own.
Troy Rappold
Rappold Property Management, LLC
1125 SE Madison Street, suite #201
Portland, OR 97214
Phone: 503-232-5990
Fax: 503-232-1462
http://rappoldpropertymanagement.com
Landlords: Renters That Smoke, by Troy Rappold, Rappold Property Management, LLC
The ability to smoke in public and at apartment communities has been under attack for years. But what about rental homes? Often times an owner plans to rent their home for only a year or two. Certainly the owner does not want to receive the house back with the smell of cigarette smoke still lingering in the house. Even if the renter was a model tenant in all other respects, cigarette smoke can be very destructive. Smoking turns walls yellow (new paint job $1,200), it destroys carpets ($1,500), and it requires a deeper cleaning, perhaps with a deionizer ($500). The cost of all this stress…priceless.
The best approach? In all of our homes we have a no smoking policy. However, we do allow the renter to smoke outside, perhaps on the porch or deck. However, this issue can be a hard one to enforce. What if it’s cold outside? Who wants to stand outside when it’s only 35 degrees? The renter is easily tempted to stand inside the house or close to an open window and light up. Inevitably, smoke gets in the house and the home owner smells the evidence. A good suggestion is to do an inspection within the first month or two of a new lease if you know the renter smokes. Catch the problem early. Then do another inspection a few months later to make sure. If you detect smoke after the tenant moves out, a landlord can charge the tenant for the remediation of the smell. But this can be a tricky proposition. It is always best to be pro-active and keep this issue from becoming a possible expense. It is less ideal to react and pursue a vacating tenant for money.
You can always call Rappold Property Management with questions about your single family home investment.
Troy Rappold
Rappold Property Management, LLC
1125 SE Madison Street, suite #201
Portland, OR 97214
Phone: 503-232-5990
Fax: 503-232-1462
How To Interview An Architect When Building A New Home by Steph Noble, Northwest Mortgage Group
Making the decision to build a home might be one of the biggest you make in your life. You’ve found the perfect plot of land and have a vision of what type of home you want, but you need someone to bring your dream to life.
That means it’s time to start interviewing architects.
Hiring an architect isn’t as simple as just calling up a few and seeing who might have the time.
You’ll want to ensure you choose a professional that understands your design aesthetic, communicates well, can design on budget and has an upstanding reputation.
Below are a few key questions to ask when deciding whom to hire.
Do You Have A Specific Design Style?
When interviewing architects, be sure to ask each one if they have a specific aesthetic and if you can see a portfolio of his or her work. While most are adaptable, they usually all have design themes that recur in their projects.
Whether you want a minimalist structure or LEED certified construction, you’ll want to know they have the experience.
What Is Your Fee?
You’ll need to inquire whether they charge a flat fee for their designs or a percentage of the total building cost. Most architects charge a percentage of the overall cost of your home, usually ranging from 5-20 percent.
This is important to know because it means that for every floorboard installed, you’ll need to add on the architect’s additional percentage.
Do You Provide Project Management Services?
There are many services that architects should include within their contract, such as checking the contractor’s work, making adjustments as the construction moves forward and obtaining lien waivers.
Get a list of what each architect you interview includes in his or her fee. Additional charges can add up and might play a part in who you choose.
Interviewing architects and finding the right professional can make all the difference when it comes to building exactly what you want. One you work well with can make the construction experience extremely pleasant, while a negative relationship can leave you hating your new home.
Asking Prices and Inventory for Homes in Portland Oregon June 3rd 2013
As of June 03 2013 there were about 8,714 single family and condo homes listed for sale in Portland Oregon. The median asking price of these homes was approximately $285,077. Since this time last year, the inventory of homes for sale has decreased by 23.4% and the median price has increased by 10.1%.
| June 03, 2013 | Month/Month | Year/Year | |
|---|---|---|---|
| Median Asking Price | $285,077 | +1.8% | +10.1% |
| Home Listings/Inventory | 8,714 | +3.5% | -23.4% |
Recent Asking Price and Inventory History for Portland
| Date | Single Family & Condo Inventory |
25th Percentile Asking Price |
Median Asking Price |
75th Percentile Asking Price |
|---|---|---|---|---|
| 06/03/2013 | 8,714 | $199,000 | $285,077 | $449,900 |
| 05/27/2013 | 8,631 | $197,700 | $285,000 | $449,000 |
| 05/20/2013 | 8,597 | $195,000 | $282,500 | $441,100 |
| 05/13/2013 | 8,460 | $194,950 | $280,000 | $448,500 |
| 05/06/2013 | 8,420 | $191,900 | $279,900 | $449,000 |
Portland Asking Price History
The median asking price for homes in Portland peaked in April 2007 at $354,740 and is now $69,663 (19.6%) lower. From a low of $239,125 in February 2011, the median asking price in Portland has increased by $45,952 (19.2%).
25th, Median (50th) and 75th Percentile Asking Prices for Portland Oregon
Portland Housing Inventory History
Housing inventory in Portland, which is typically highest in the spring/summer and lowest in the fall/winter, peaked at 23,354 in July 2008. The lowest housing inventory level seen was 7,969 in March 2013.
Housing Inventory for Portland Oregon
Portland Asking Price and Inventory History
| Date | Single Family & Condo Inventory |
25th Percentile Asking Price |
Median Asking Price |
75th Percentile Asking Price |
|---|---|---|---|---|
| June 2013 | 8,714 | $199,000 | $285,077 | $449,900 |
| May 2013 | 8,527 | $194,888 | $281,850 | $446,900 |
| April 2013 | 8,075 | $186,800 | $274,540 | $439,060 |
| March 2013 | 7,969 | $182,923 | $267,425 | $427,213 |
| February 2013 | 7,981 | $179,900 | $262,450 | $419,731 |
| January 2013 | 8,250 | $179,075 | $259,217 | $404,725 |
| December 2012 | 8,627 | $178,900 | $259,720 | $405,750 |
| November 2012 | 9,408 | $179,675 | $260,950 | $408,963 |
| October 2012 | 10,259 | $179,900 | $267,160 | $418,600 |
| September 2012 | 10,828 | $179,900 | $268,975 | $418,450 |
| August 2012 | 11,102 | $179,675 | $268,725 | $418,500 |
| July 2012 | 11,140 | $177,600 | $266,598 | $411,651 |
| June 2012 | 11,362 | $174,825 | $259,675 | $399,950 |
| May 2012 | 11,227 | $169,713 | $252,463 | $399,450 |
| April 2012 | 10,820 | $169,160 | $249,910 | $397,940 |
| March 2012 | 9,683 | $174,450 | $259,450 | $406,225 |
| February 2012 | 10,549 | $169,225 | $248,250 | $388,025 |
| January 2012 | 10,833 | $169,080 | $246,960 | $381,960 |
| December 2011 | 11,461 | $169,925 | $248,375 | $385,675 |
| November 2011 | 12,018 | $174,750 | $250,972 | $397,425 |
| October 2011 | 12,846 | $179,530 | $258,720 | $399,900 |
| September 2011 | 13,509 | $179,939 | $259,900 | $399,900 |
| August 2011 | 14,672 | $179,360 | $256,590 | $395,540 |
| July 2011 | 14,772 | $178,150 | $253,188 | $389,225 |
| June 2011 | 14,762 | $176,475 | $250,970 | $386,970 |
| May 2011 | 14,582 | $173,184 | $249,160 | $375,780 |
| April 2011 | 14,748 | $169,950 | $242,400 | $364,975 |
| March 2011 | 15,458 | $169,800 | $239,675 | $359,575 |
| February 2011 | 15,531 | $169,675 | $239,125 | $354,725 |
| January 2011 | 15,001 | $170,760 | $239,158 | $356,380 |
| December 2010 | 16,118 | $176,200 | $242,700 | $363,363 |
| November 2010 | 17,018 | $180,160 | $249,330 | $373,780 |
| October 2010 | 17,614 | $184,975 | $253,375 | $381,975 |
| September 2010 | 18,282 | $189,100 | $258,925 | $390,950 |
| August 2010 | 18,579 | $190,940 | $261,150 | $397,160 |
| July 2010 | 18,160 | $195,163 | $267,475 | $399,000 |
| June 2010 | 17,488 | $196,853 | $268,875 | $399,800 |
| May 2010 | 17,035 | $198,880 | $269,620 | $399,818 |
| April 2010 | 17,279 | $198,000 | $266,750 | $392,500 |
| March 2010 | 16,495 | $195,600 | $264,460 | $393,960 |
| February 2010 | 15,382 | $194,938 | $264,450 | $395,198 |
| January 2010 | 14,895 | $197,819 | $267,425 | $399,225 |
| December 2009 | 15,329 | $199,897 | $272,038 | $402,212 |
| November 2009 | 15,902 | $202,750 | $277,760 | $417,780 |
| October 2009 | 16,573 | $209,675 | $283,646 | $428,225 |
| September 2009 | 17,165 | $210,000 | $289,475 | $436,100 |
| August 2009 | 17,595 | $211,760 | $292,880 | $444,320 |
| July 2009 | 17,819 | $212,950 | $294,950 | $449,000 |
| June 2009 | 17,870 | $213,460 | $294,920 | $449,100 |
| May 2009 | 17,713 | $211,475 | $293,291 | $445,250 |
| April 2009 | 17,978 | $212,525 | $289,925 | $444,725 |
| March 2009 | 18,506 | $214,153 | $289,930 | $443,360 |
| February 2009 | 18,449 | $216,014 | $293,968 | $448,125 |
| January 2009 | 18,872 | $219,952 | $297,855 | $452,809 |
| December 2008 | 19,842 | $223,220 | $302,773 | $458,508 |
| November 2008 | 20,983 | $226,382 | $307,532 | $464,024 |
| October 2008 | 22,086 | $229,650 | $312,450 | $469,724 |
| September 2008 | 22,973 | $233,730 | $319,580 | $474,990 |
| August 2008 | 23,314 | $235,200 | $322,000 | $475,725 |
| July 2008 | 23,354 | $236,074 | $324,550 | $475,000 |
| June 2008 | 22,657 | $239,150 | $324,920 | $479,459 |
| May 2008 | 21,505 | $239,900 | $325,000 | $480,947 |
| April 2008 | 20,669 | $239,900 | $324,937 | $479,912 |
| March 2008 | 19,381 | $241,300 | $324,860 | $485,960 |
| February 2008 | 18,409 | $240,485 | $324,925 | $479,912 |
| January 2008 | 17,659 | $243,500 | $324,962 | $481,765 |
| December 2007 | 18,584 | $245,120 | $327,975 | $489,355 |
| November 2007 | 19,926 | $248,665 | $330,475 | $486,425 |
| October 2007 | 20,762 | $249,950 | $337,260 | $493,980 |
| September 2007 | 20,656 | $253,425 | $339,900 | $497,749 |
| August 2007 | 19,837 | $257,712 | $342,975 | $499,124 |
| July 2007 | 18,710 | $261,120 | $349,120 | $499,930 |
| June 2007 | 17,670 | $264,282 | $349,950 | $507,949 |
| May 2007 | 16,386 | $264,900 | $350,975 | $512,662 |
| April 2007 | 15,059 | $264,900 | $354,740 | $517,740 |
| March 2007 | 13,897 | $264,450 | $353,850 | $523,425 |
| February 2007 | 13,814 | $258,517 | $349,800 | $516,750 |
| January 2007 | 13,726 | $255,810 | $349,637 | $507,441 |
| December 2006 | 14,746 | $257,149 | $348,246 | $499,949 |
| November 2006 | 15,671 | $258,837 | $348,750 | $499,900 |
| October 2006 | 16,027 | $259,640 | $348,834 | $499,900 |
| September 2006 | 15,239 | $261,098 | $349,675 | $499,937 |
| August 2006 | 14,029 | $264,925 | $350,737 | $518,587 |
| July 2006 | 12,864 | $264,920 | $350,470 | $525,980 |
| June 2006 | 11,261 | $264,925 | $349,975 | $530,937 |
| May 2006 | 9,804 | $262,340 | $350,940 | $532,360 |
| April 2006 | 8,701 | $256,433 | $346,433 | $526,224 |
Department of Numbers
The Department of Numbers contextualizes public data so that individuals can form independent opinions on everyday social and economic matters.
HERE’S WHERE YOU ARE
- Home
- / Asking Prices
- / Oregon
- / Portland
DATASETS & TOOLS
RECENT LINKS [ ARCHIVES ]
[QE] is definitely a pretty roundabout way of driving money into the real economy. Instead of putting the money directly to work, pay money to people who already have assets even more than their assets are currently trading for, in the hope that they’ll put at least some of the money to work.
In a sidenote he addresses “helicopter money” AKA “QE for the people.”
QE involves paying over a $ (or Pounds, or Yen) amount in return for an existing asset. This is a crucial feature, and accounts for many of the drawbacks — in particular that the policy benefits above all existing holders of assets. In theory, just handing money to everybody in the country is a more effective and equal way of acheiving its aims. But you don’t have to be a hard-money Bundesbanker to be at least a little uncomfortable with where this might end up
QE via asset purchases does strike me as a very roundabout way of addressing a demand shortfall in a substantially consumer driven economy. But as the above post suggests, nothing else may be politically viable.
…
Institutional home buying fatigue?
We just don’t see the returns there that are adequate to incentivize us to continue to invest, [Bruce] Rose, 55, chief executive officer of Carrington Holding Co. LLC, said in an interview at his Aliso Viejo, California office. There’s a lot of — bluntly — stupid money that jumped into the trade without any infrastructure, without any real capabilities and a kind of build-it-as-you-go mentality that we think is somewhat irresponsible.
#2013-05-29 [ via ]
…
You don’t see Housing inventory trajectory for 2013.
I forgot to point out this post by Calculated Risk earlier this week. He’s using my housing inventory data to chart the trajectory of listings coming online this year. Inventory has come way down over the past couple of years and the big question is whether this winter will mark a bottom. If a lot of homes go on the market this spring, it probably indicates a bottom.
…
Steve Randy Waldman: I think the behavior of real interest rates is the empirical fingerprint of the effect of inequality on demand.
Where the missing demand comes from:
Household borrowing represents, in a very direct sense, a redistribution of purchasing power from savers to borrowers. So if we worry that oversaving by the rich may lead to an insufficiency of purchases [by poorer households], household borrowing is a natural place to look for a remedy. Sure enough, we find that beginning in the early 1980s, household borrowing began a secular rise that continued until the financial crisis.
Why that’s a problem:
Suppose that the mechanism that reconciles inequality and adequate demand is household borrowing. Is that sustainable? After all, poorer households would have to borrow new purchasing power in every period in order to support demand for as long as inequality remains high.
How it messes with the role of banks in the economy:
We very explicitly ask banks to intermediate the deficit in demand, exhorting them to lend lend lend for macroeconomic reasons that are indifferent to microeconomic evaluations of solvency. We can have a banking system that performs the information work of credit analysis and lends appropriately, or we can have a banking system that overcomes deficiencies in demand. We cannot have both when great volumes of lending are continually required for structural reasons.
The elegance and insight density of this post is off the charts!
Data on deptofnumbers.com is for informational purposes only. No warranty or guarantee of accuracy is offered or implied. Contact ben@deptofnumbers.com (or @deptofnumbers on Twitter) if you have any questions, comments or suggestions.
Department of Numbers
http://www.deptofnumbers.com/
3 Common First Time Home Buyer Mistakes Can Cost Thousands, by Steph Noble
Buying real estate for the first time is a very exciting step in life.
It is likely to be one of the biggest financial commitments that you make, so it’s very important to navigate the purchasing process wisely.
Many first-time home buyers make rookie mistakes that bring on negative consequences and a lot of frustration.
Outlined below are common errors home buyers make, so you can learn from their missteps and avoid them yourself.
1. Buying More Than What You Can Truly Afford
Just because the bank says that you qualify a certain amount for a mortgage doesn’t mean that you have to choose a house at the very top of this price range.
Many people get carried away and buy the most expensive house that they qualify for.
If something unexpected happens, they may find it difficult to keep up with their monthly mortgage payments later on.
Remember that you will also have student loan payments, vehicle costs, credit card bills, health insurance, groceries, retirement savings and other expenses, so make sure that your mortgage payments will comfortably fit within your budget.
2. Failing To Get A Home Inspection
Before buying a house, you should always have a professional inspection done. Not doing so is a big mistake.
You don’t want to get stuck with hidden damage that could saddle you with the expense of ongoing repairs.
Hiring a professional to assess the home’s condition is absolutely essential before making your final decision.
3. Disregarding Your Future
When you are buying real estate, don’t just think about how the home will work for you in the immediate future.
Also consider what your needs will be five, ten or even 20 years from now.
Find out the development plans for the neighborhood.
Look for reputable schools if you intend to start a family.
And consider whether the street’s home values are likely to increase or decline in the future.
Your Next Steps
Don’t let the home-buying process overwhelm you!
Learn from these common first-time home buyers’ mistakes, so you can avoid them.
A great next step toward planning for your first home purchase is to consult with a trusted, licensed mortgage professional who is trained in providing the best advice on how a new home will affect your budget.
Steph Noble
http://stephnoblemortgageblog.com/
Great Staging Tips To Set A Buyer’s Mood At Your Home For Sale, by Steph Noble
Staging is the art of preparing your home for sale before showing it to prospective buyers.
The point of staging is to highlight the house’s strengths, downplay its weaknesses and make it more appealing.
With the right decorating techniques, you can win buyers over the moment they step through the door.
Below are a few staging tips to help make your house irresistible to potential buyers.
Put Everything Away
The first step is to put away anything that is not essential. This will open up the house so that it appears more spacious.
Even if you have to rent a storage unit, finding a new home for all of your family’s projects and collections should clear some space and help buyers imagine their own belongings in your home for sale.
Pay special attention to entryways and narrow hallways to improve your prospective buyer’s sense of spaciousness.
Get Rid Of Clutter
Be sure to clear off the things that gather on kitchen counters and surfaces, such as old magazines and stacks of mail.
Also, emptying out your closets of half of the things inside them will make them look much roomier.
Use this time as an opportunity to thin the number of largely unused items that your family has collected over the years.
And look on the bright side; moving into a new house will be much easier after you have donated your unneeded items to a charity.
Fresh Scents Make Sense
You would be surprised by how much the sense of smell comes into play when buyers are viewing a house.
To avoid turning buyers off with pet or smoke odors, make sure you give each room a deep clean, including the air vents and carpeting.
Just covering up stale odors with air fresheners won’t do the job.
Let In The Light
Buyers are looking for spacious rooms with a lot of natural light, so make sure you open the blinds and turn on all the lights.
If you have rooms that are a bit dark, you can add floor lamps to make them brighter or flowers to suggest sunlight.
Home staging can make a big difference in how potential buyers see your home for sale, so make sure you set the mood to make it as attractive as possible.
http://stephnoblemortgageblog.com
As Inventories Shrink, So Do Seller Concessions, by RisMedia
With inventories down and prices up, sellers are ending the costly incentives they have been forced to offer buyers during the six-year long buyers’ market. Concession-free transactions make deal-making simple on both sides of the table.
There’s no better gauge of the onset of a seller’s market than the demise of concessions that were considered essential to attract buyer interest just a few months ago. The National Association of REALTORS®’ December REALTOR® Confidence Outlook reported that the market has steadily moved towards a seller’s market with buyers more willing to bear closing costs, in some cases paying for half or more of the closing cost. Tight inventories of homes for sale are making markets increasingly competitive.
NAR reports that last year 60 percent of all sellers offered incentives to attract buyers. The most popular was a free home warranty policy, which costs about $500, offered by 22 percent of sellers, but 17 percent upped the ante by paying a portion of buyers’ closing costs and 7 percent contributed to remodeling or repairs.
Concessions linger where inventories are still adequate and sales slow, but in tight markets like Washington D.C., the times when buyers can expect concessions are already over.
“Buyers are discovering, to their dismay that homes they wanted to see or possibly buy have already been snatched up before they even get a chance to see or make an offer on the property. This area’s unprecedented low inventory levels are slowly driving up home prices and making sellers reluctant to cede little if any concessions to buyers. Realtors are warning (or should in some cases) buyers to be prepared to act that day if they are interested in a property,” reporters a local broker.
In Albuquerque, supply is dwindling and sales are moving to a more balanced market. “Buyers can expect sellers to offer less concessions and sales prices will be close to list price,” reports broker Archie Saiz.
In Seattle, not only are concessions a thing of the past, desperate buyers are even resorting to writing “love letters” to win over sellers in competitive situations. Lena Maul, a broker/owner in Lynnwood, reports a successful letter-writing effort last month by one of her office’s clients. Those buyers, who were using FHA financing, wrote a letter introducing themselves to the seller and explaining why they liked the home so much. After reviewing 13 offers, including one from an all-cash investor, the seller chose the letter-writer’s offer.
New regulations enacted last year by the Federal Housing Administration to limit its exposure to risk forced many sellers to cut back on the amount of assistance on buyers’ closing costs. Sellers are now limited to no more than six percent of the loan amount.
Underwriting standards on conventional mortgages also have the effect of limiting the amount sellers can contribute.
In recent years many lenders have disallowed seller paid closing costs on 100 percent financed home loans because of the high foreclosure rate.
However, seller paid closing costs are typically limited to 6 percent of the loan amount at 90 percent loan-to-value or lower, 3 percent between 90-95 percent, and then usually 3 percent for 100 percent loan-to-value.
Some sellers bump up the home sales price to pay for concessions. However the buyer will need to get the higher amount he will need to borrow covered by the appraisal and he will have to meet increased debt-to-income ratio in order to close his loan.
The demise of concessions will make buying and selling a little simpler and more rational. As one observed asked, “Why would anyone selling a home pay the home buyer to buy it?”
For more information, visit www.realestateeconomywatch.com
Nearly Half of U.S. Families Teetering on Edge of Ruin. by MANDI WOODRUFF, Business Insider
In the past few years, Americans have certainly learned a thing or two about how quickly disaster can strike.
And with each Hurricane Sandy, housing crisis, and stock market crash that rocks our world, we’re faced with the harsh realization that many of us simply aren’t prepared for the worst. A sobering new report by the Corporation for Enterprise Development shows nearly half of U.S. households (132.1 million people) don’t have enough savings to weather emergencies or finance long-term needs like college tuition, health care and housing.
According to the Assets & Opportunity Scorecard, these people wouldn’t last three months if their income was suddenly depleted. More than 30 percent don’t even have a savings account, and another 8 percent don’t bank at all.
We’re not just talking about people who living people the poverty line, either. Plenty of the middle class have joined the ranks of the “working poor,” struggling right alongside families scraping by on food stamps and other forms of public assistance.
More than one-quarter of households earning $55,465 to $90,000 annually have less than three months of savings. And another quarter of households are considered net worth asset poor, meaning “the few assets they have, such as a savings account or durable assets like a home, business or car, are overwhelmed by their debts,” the study says.
BASIC NECESSITIES
One of the prolonging reasons consumers have consistently struggled to make ends meet has more to do with larger economic issues than whether or not they can balance a checkbook. According to the report, household median net worth declined by over $27,000 from its peak in 2006 to $68,948 in 2010, and at the same time, the cost of basic necessities like housing, food, and education have soared.
It’s a dichotomy that is hammered home in a new book by finance expert Helaine Olen. In Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, Olen knocks down much of the commonly-spread advice that is sold by the personal finance industry –– the idea that if you’re not making ends meet in America, you’re doing something wrong.
“The problem was fixed cost, the things that are difficult to ‘cut back’ on. Housing, health care, and education cost the average family 75 percent of their discretionary income in the 2000s. The comparable figure in 1973: 50 percent,” Olen writes.
“And even as the cost of buying a house plunged in many areas of the country in the latter half of the 2000s (causing, needless to say, its own set of problems) the price of other necessary expenditures kept rising.”
And wherever consumers can’t cope with costs, they continue to rely on plastic. The average borrower carries more than $10,700 in credit card debt, one in five households still rely on high-risk financial services that target low-income and under-banked consumers.
Read more at http://www.thefiscaltimes.com/Articles/2013/02/04/Nearly-Half-of-US-Families-Teetering-on-Edge-of-Ruin.aspx#DVKZCYevJIMwCEyw.99
Declining Home Inventory Affecting Sales, by Mortgage Implode Blog
This past week, several reports were released, all of which showed that declining home inventory is affecting sales. This decline is creating a seller’s market in which multiple bids are being made to purchase homes. According to the National Association of Realtors, existing home sales fell 1% in December, but were still at the second highest level since November, 2009. Inventory of homes for sale fell 8.5 from November, the lowest level since January of 2001, and are down 21.6% from December of 2011.
Following that lead, pending home sales dropped 4.34% in December to 101.7 from 106.3 in November, yet was 6.9% higher than December, 2011, according to the National Association of Realtors. The Chief Economist at NAR stated that “supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first time buyers have fewer options”. Mortgage ratesare still low, affordability is still there, but the available homes are dwindling. In the meantime, home prices are increasing at a faster pace. According to the latest S&P/Case-Shiller index for November, property values rose 5.5% from November of 2011 which was the highest year over year increase since August of 2006.
The cause of the low inventory can be attributed to several factors. For the week ending January 18th, loan applications increased 7.0% on a seasonally adjusted basis, according to the Mortgage Banker’s Association. The Refinance Index rose 8% with refinances representing 82% of all applications. The seasonally adjusted Purchase Index rose 3%, the highest level since May, 2010. Many homeowners have chosen a mortgage refinance instead of moving to another home which is one reason that inventory is down. In addition, many underwater homeowners have refinanced through the HARP program which is available for loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. These homeowners may not yet be in a position to sell their homes until they have gained back enough equity. As home prices increase, this will eventually happen. The same can be said for those who refinanced through the FHA streamline program which is offering reduced fees for loans that were endorsed prior to June 1, 2009. Refinancing through these two government programs, both available until the end of 2013, hit all time highs in 2012.
Home builders are busy, but not currently building new homes at the rate that was seen during the housing boom. According to the Census Bureau and the Department of Housing and Urban Development, total new homes sales in 2012 hit the highest level seen since 2009 and were up 19.9% from 2011. There was much progress made in 2012, but sales for new homes fell 7.3% in December.
On the down side, the Census Bureau reported that homeownership fell 0.6% to 65.4% during December, down from 65.5% at the end of October and 66% at the end of 2011. Homeownership reached a peak of 69.2% in 2004 and has been falling since that time. The latest Consumer Confidence index dropped to 58.6 which is the weakest since November of 2011. It was previously at a revised 66.7 in December. This fell more than expected and is due to the higher payroll tax that is taking more out of the pockets of consumers.
The housing market, which is still in recovery, remains fragile. The lack of inventory and the rise of home prices may affect its progress this year. As home prices increase, fewer consumers will be able to qualify for a home loan. Existing homeowners may choose to refinance remain where they are instead of purchasing another home. While jobless claims have fallen, there are still many consumers who are out of work or are working lower paid jobs. The housing market is dependent on jobs, not just for salaries, but for consumer movement from one area to another.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.
http://ml-implode.com/viewnews/2013-01-30_DecliningHomeInventoryAffectingSales.html
Portland real estate prices JUMP 7%, and more FHA changes coming!
RMLS released a report on Friday that showed over 7% gain on sold home prices from May 2011 to May 2012 … proving the Portland real estate market is heating up! Also, there are more FHA loan changes coming this week – watch for details.
The Greek Impact on U.S. Housing Market
BIG NEWS coming out of Greece this weekend, as its citizens vote on whether to exit the European Union. The outcome could have a major impact on U.S. borrowing rates for mortgages and other credit. Watch this video for details!