In case you haven’t noticed, Portland is changing fast!

Fascinating article in Portland Monthly about the changes coming to Portland – enjoy! 

Portland is Changing Faster Than You Can Believe

Here are five big game changers already in the works.

 

 

 

Image: Amy Martin

 

 

 

1) Our River Is About to Get the Most Extreme Makeover Ever.

By the end of 2016, after decades of discussion, plans will take shape for a massive, federally mandated cleanup of the Willamette River. Portland’s waterway is currently awash with industrial PCBs, heavy metals, dioxin, and other contaminants. It’s likely the cleanup (shorthand: Superfund) will take decades, with cost estimates running as high as $2.5 billion. (Figuring out which of about 150 companies and government entities historically responsible for the pollution still exist, and who will pay what to fund the cleanup, is a major challenge.) The mandatory monitoring will continue for … oh, 100 years. At stake in a process that will run beyond 2116? “The river is a major economic engine,” says Michael Jordan (not that one), director of the city’s Bureau of Environmental Services. “To meet our population and employment projections, thousands of jobs need to be produced around the river. Add in risks to the environment and human health, and this is significant.” 

2) Portland Is About to Rewrite Its Own Blueprint.

As the Portland City Council readies to vote on a new “Comprehensive Plan” to guide development of the entire city, relish the differences, in specifics and zeitgeist, between the new plan and its predecessor, adopted 36 years ago.

 

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  • Pages Then: 34
  • Pages Now: (draft) 270

Vision Statement

  • Then: “Portland is more than a geographic area—it is a way of life.”
  • Now: Portland is a prosperous, healthy, equitable and resilient city where everyone has access to opportunity and is engaged in shaping decisions that affect their lives.” (Subtext: Portlandia: it’s really a sequel.)

Projected Growth

  • Then: Population: 368,148  Projected – 20-year growth: 45,000 (Actual 20-year growth: 54,000—or 160,973 counting annexations)
  • Now: Population: About 610,000  Projected 20-year growth: 260,000 (Subtext: Squeeze in. The elevator’s going up!)

The Glossary

  • Then: What glossary?
  • Now: 152 words or phrases defined, from “mode split” to “Portlander” (Sample: “Continue—Persist in an activity or process.”)

Neighborhood Involvement

  • Then: 162 words. Sample: “Encourage citizen involvement in land use planning projects by actively coordinating the planning process with relevant community organizations.”
  • Now: 2,554 words Sample: “Maintain partnerships and coordinate land use engagement with: individual community members; communities of color, low income populations, Limited English Proficient (LEP) communities, Native American communities, and other under-served and under-represented communities … ” (It keeps going. And going.)

Geeky Lingo

  • Then: “Nodes and Noodles”
  • Now: “Centers and Corridors” (Our old plans were funnier.)

3) Affordable Housing’s secret? Trust.

Searing-hot home and rental markets can look pretty doomy to housing advocates, not to mention low-income Portlanders looking for places to, y’know, live. But some strategies have already proven themselves.

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Image: kropic1 and Michael Rosskothen

 

 

 

The nonprofit Proud Ground, for example, has used a property structure called a community land trust to make about 260 metro-area homes “permanently affordable.” Typically, the organization—in partnership with governments, other nonprofits, or both—buys an existing home as it comes on the market. After any necessary repairs, the home is sold to a low-income buyer, with as little as $500 down and a fixed mortgage. (Median monthly payment: $1,037.) The trust structure allows the buyer to build equity—$60,000 over 10 years on average, the organization estimates. But Proud Ground also shares the equity, an arrangement which allows the home to be sold at below market rates when the original owner is ready to move on.

“The housing stock is out there,” says Diane Linn, Proud Ground’s executive director. “We’re going to advocate at every level of government and use every tool we can to add properties to our portfolio.” The aspirational goal: 400 homes by 2020.

4) The Edge Will Be the Center.

In Portland’s development boom, former fringe zones will become hotbeds of action.

Lents

THE WAY IT WAS The Southeast neighborhood oft derided as “Felony Flats,” long a go-to example of revitalization dreams deferred

CHANGE AGENTS In 2014, the Portland Development Commission jump-started lumbering renewal with a capital-letter-optimized “Five-Year Action Plan.”

THE VISION “I think we’re cementing this as a vibrant neighborhood,” says outgoing PDC director Patrick Quinton. “Now we need to think about how to execute our plans while maintaining the character of the community.

BIG MOVES Coming to SE 91st and Foster: the 34,200-square-foot Asian Health and Service Center, with design by Holst Architecture; a trio of mixed residential and commercial buildings involving veteran developers Williams/Dame and Palindrome and respected architecture firms Hacker and Ankrom-Moison.

0416 edgecenter flat cwyc11

 

 

Downtown’s Southern Edge

THE WAY IT WAS A sleepy village around Portland State, girdled by a highway, enlivened only by a Cheerful Tortoise (the 64-year-old, just-off-campus sports bar)

CHANGE AGENTS PSU is renovating and building like mad, and MAX, streetcar, and bus lines have made this the city’s busiest transit hub.

THE VISION “Ten years from now,” says Portland State spokesman Scott Gallagher, “it will be hard to distinguish between the core of downtown and the south end.”

BIG MOVES The $60 million renovation of PSU’s business school will turn a bunker-like building into an airy sustainability showcase by 2017. That same fall, the retrofitted Viking Pavilion will reopen as a 5,500-max-capacity arts and sports venue. Buildable lots at PSU’s eastern edge—like SW Fourth and Harrison—will sprout mixed-use density.

The Broadway Corridor

THE WAY IT WAS The Northwest Portland seam between the Pearl District and Old Town, rendered comatose by the hulking, 14-plus-acre US Postal Service headquarters complex

CHANGE AGENTS After years of trying, PDC is finalizing an $88 million deal for the Postal Service site.

THE VISION A dense neighborhood that knits the Pearl to the Rose Quarter. “You can reweave sites that have been islands in the city,” Quinton says.

BIG MOVES  While design details are very much TBD, the agency envisions the USPS land as high-rise developments, extended North Park Blocks, and a huge batch of new housing, designed to complement Union Station and kick-start vacant lots on either side of Broadway. 

5) One  Temple’s Doom Signals a Battle Over History.

Late last year, the circa-1892 Ancient Order of United Workmen Temple—an imposing brick hulk in the Richardsonian Romanesque style at SW Third and Taylor—became the latest in a string of historic local icons (including Centennial Mills, the Portland Building, and Veterans Memorial Coliseum) threatened with demolition. The tipoff came when the temple’s new owner, development firm T&T, had the building removed from the city’s Historic Resource Inventory—a list of buildings that, in theory, can’t be demolished until after a stipulated 120-day waiting period.

0416 whathappensnext v589op

 

 

Image: Delicate and Targn Pleiades

 

 

After an appeal by the preservationist group Restore Oregon, developers agreed to wait out the 120 days before dismantling the building to clear the way for a hotel and offices. According to T&T’s Jeff Arthur, salvation just won’t pencil out. “It’s one of the tallest unreinforced masonry buildings in the city. ‘Seismic’ wasn’t a word when they built this,” Arthur says. “We’re still continuing to evaluate, but we’re definitely leaning at this point toward taking it down.”

For preservationists, Workmen Temple’s demolition may be a call to action. Jillian Detweiler, a spokeswoman for Mayor Charlie Hales, says the city intends to close the loophole that allows owners to remove buildings from the Historic Resource Inventory. And Restore Oregon’s Peggy Moretti argues the state needs “more carrots and more sticks” to make historic preservation feasible. “In every other state, local jurisdictions have a say in designating what’s historic,” she says. “And other states would have more financial incentives at their disposal.” But moves to constrain developers could be a tough sell: legislation backed by Restore Oregon, which would have provided incentives to renovate historic commercial buildings, failed last year. Meanwhile, it’s likely that by this summer, the onetime fraternal clubhouse will literally become history.

 

 

This article appeared in the April 2016 issue of Portland Monthly.
 
Thanks, Portland Monthly!

 

 

 

 

http://www.pdxmonthly.com/articles/2016/3/25/portland-is-changing-faster-than-you-can-believe

Posted on March 25, 2016 at 8:25 pm
Cary Perkins | Category: Portland Oregon, Portland Oregon Real Estate, Portland Real Estate Data | Tagged ,

Spotlight on 97229 zip code

 

 

Statistics for the 97229 Zip Code through February 15, 2016

 

  • Properties for sale: 108
  • New Listings:  110
  • Sold Properties: 89
  • Pending:  97
  • Months of Inventory based on closed sales:112
  • Months of Inventory based on pending sales:  1.1
  • Absorption Rate (Closed Sales) %:  82.4
  • Absorption Rate (Pending Sales) %: 89.8
  • Average Active Listing Price:  $818,000
  • Average Sold Price:  $479,000
  • Average Price/Square Foot (Sold Listings): $211
  • Sold Price/List Price Diffential:  100%
  • Sold Price / Original List Price Diffential:  98%
  • Days on Market:  39
  • Medial Sale Price $475,000

New homes for sale are down 29% current -vs- same quarter 1 year ago and up 11.2% in the last month

Sold homes are up 36% current -vs- same quarter 1 year ago and down 25.7% in the last month

Pending sales are down .7% current -vs- same quarter 1 year ago, and up 4.8% in the last month

 

It's a great time to sell in 97229!

 

Cary Perkins,
Windermere Top Producer
Fun With Real Estate
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by Cary Perkins

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Windermere Top Producer Cary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Posted on March 14, 2016 at 11:14 pm
Cary Perkins | Category: Current Portland Real Estate Market Information, Moving, Portland Oregon Real Estate, Portland Oregon Realtors, Portland Real Estate Data, Portland Real Estate Statistics | Tagged , , , , , ,

How is my home sale taxed? What about capital gains?

 

 

When it's time to sell your home, I start by preparing a seller's "net sheet," which outlines the sale price less your outstanding mortgage, pro-rated property taxes, etc.  Often people are worried about how much tax they're going to have to pay on that big (hopefully) number on the bottom line that says "Net to Seller."

 Most times the answer is ZERO taxes!  When you sell your principal residence and make a profit, you get to exclude $250,000 of that profit from your taxable income. And that's just the exclusion for single owners. Married couples can exclude up to $500,000 (if both spouses each meet the ownership and use tests below). So, depending on how much of a profit you make on the sale, you and your partner could potentially have no capital gains tax bill at all.

Here's the fine print:  in order to claim the maximum exclusion, you have to pass the IRS ownership and use tests. The test questions are:

  • Have you owned the house for two years?
  • Have you lived in the house as your principal residence for two out of the last five years, ending on the date of the sale?

There are a few exceptions to these rules–for example, if you had to move before owning the home for two years because of a job change or due to "unforeseen circumstance," such as a divorce or natural disaster. In these situations the IRS may allow you to prorate the exclusion.

And here's more fine print that is ususally helpful:   the two years residency doesn't have to be consecutive–you just have to have lived in your home for a total of 24 months out of the five years prior to the sale.

How to Calculate your cost basis

To determine capital gains on the sale of your home, you subtract your 'cost basis' from the selling price. Your cost basis is not just the purchase price. It also includes some settlement fees, closing costs and commissions paid with the purchase and the sale.  Add to this the cost of significant capital improvements (not repairs) you've made  for renovations, additions, roofing, landscaping, and other upgrades. All of these improvements increase your cost basis, and will lower your potential tax liability. (Another good reason to keep records of all your home improvements)

You can also reduce your tax basis (and owe more taxes) for a few reasons –  if you have a home office and have claimed depreciation over time, you now have to subtract those deductions from your cost basis. Or any tax credits for energy-related improvements have to be subtracted as well.  

Estimate sale price and capital gains

Now estimate your sale price and subtract your cost basis. If you bought your house for $350,000, did  $50,000 worth of improvements and had other closing fees and costs of $15,000, your cost basis is $415,000. Now let's say you expect to sell the house for $850,000. Your potential capital gain would be $435,000.

Factor in exclusion

In the above example, if you and your married partner met the ownership and use tests, you could exclude the entire gain from your taxable income. You wouldn't even have to report the sale on your tax return. However,if your capital gain turned out to be $525,000, you'd have to report the sale and pay long-term capital gains on $25,000.

As always, I recommend you speak with your accountant for the rules that apply to your personal tax situation.  But if you want to talk about selling your home, please call.

 

 

Click here for the full article.

 

 

Cary Perkins,
Windermere Top Producer
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by Cary Perkins

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Windermere Top Producer Cary Perkin

Posted on July 8, 2015 at 9:29 pm
Cary Perkins | Category: Moving, Portland Oregon Real Estate, Portland Real Estate Data, Selling Your home | Tagged , , , , ,

How much is your new kitchen worth? Cost -vs- Value Report

 

It's finally here – the day I can share pictures of our new kitchen.  We've been working on it since October, and the lights finally went in yesterday, so I can post a pic! 

 

I'm happy to talk about kitchens with you all day long!  We're in love with it, and are so glad we finally pulled the trigger.  Problem is, kitchens are expensive, and it's hard to dump money into your house unless you know you're either going to live there a long time and enjoy it, OR you can count on recovering your expenses. 

 

In comes the Cost-vs-Value Report to help you decide how much to spend, and how much you'll recover.

Our kitchen remodel was mid-range, so it looks like we should recover 81.1% (if we were to sell now)  and I've already enjoyed 19% worth, so I could sell now without wringing my hands.

 

Please enjoy my photos and call me any time to talk about your future remodeling plans, and how they will impact the sale of your home.  (Sometimes it's just to talk color, finishes, or what's new in the marketplace)   I can't wait to talk kitchens with you!

 

 

 

 

Cary Perkins,
Windermere Top Producer
Fun With Real Estate
Current Portland Oregon Real Estate Information,
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Portland Oregon Homes

by Cary Perkins

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Windermere Top Producer Cary Perkins

 

Posted on January 29, 2015 at 7:19 pm
Cary Perkins | Category: Beautiful Houses, cary perkins, Color in home decor, Decorating Ideas, Portland Real Estate Data | Tagged , , , , , ,

Portland Real Estate Market Now, and What’s to Come

 

 

I've observed that there are a lot fewer agents in the office this month, as a lot of clients and their real estate brokers are on vacation.  Houses in certain price points are still flying off the market with multiple offers.  Homes over $1,000,000 are slower than they were in the spring.  I'm preparing for new listings that will hit after labor day, or early in 2015. What does this mean for you, buyers and sellers?

An easy explanation as to what's really happening is posted below.  It was written by one of my favorite mentors, Denise Lones. 

The spring and early summer brought a very robust real estate market in many areas and many price points. Multiple offers became the norm in many markets and agents found themselves busier than they had been in years. The market was moving, buyers were out looking and sellers who previously couldn’t sell were finally getting the offers they needed to make a move possible. Pending home sales rose consistently and real estate was back in the media in a positive way.

However, agents in many areas may have noticed a slight slowdown in August prompting concern about whether the market was taking a turn downward. To answer this question I want to address some key things that we need to look at to answer that question.

HOUSING AFFORDABILITY INDEX
The housing affordability index is measured looking at median home prices, median family incomes and the mortgage interest rate. The higher the index, the more buying power a buyer has. As the index reduces, so does the buyer’s buying power. The recent increase in home sale prices nationally and regionally has caused the Housing Affordability Index to decline from 196.5 in 2012 to 175.8 in 2013. It is going down even further in many areas. The West Coast has been particularly affected because of the high price gains in the past 18 months.

NEW CONSTRUCTION
Even though the market has picked up, we still have not seen enough new construction development to keep up with the demand. It is still difficult for builders to get financing and although it is better than it was, it is still not where it needs to be. That is why some areas are having such dramatic price gains; there just isn’t enough inventory. In many areas we are seeing a shortage of new construction which means that prices will continue to be pushed upward if this shortage is not filled with new homes. Our new home product is built by two different types of builders: the production volume builder and the small builder. The small builder still struggles to get financing because they have not yet made up for their losses from the past economic challenges.

CONSUMER CONCERN
We have also seen recent dips in the stock market which always brings up questions and concerns for consumers, when consumers are concerned they stop buying. When consumers stop buying it creates a domino effect. As weather begins to change and kids return to school I am fully confident that the real estate market will continue to move along at a very healthy pace. Consumers will soon forget about the stock market declines and the change in the weather and they will once again settle in and put their attention back to buying or selling real estate.

WHAT THIS MEANS FOR BUYERS
Buyers who buy right now will benefit from the temporary slowdown in the market because they won’t be competing with as many other buyers. Buyers who are serious need to take advantage of this temporary distraction in the market.

WHAT THIS MEANS FOR SELLERS
Sellers who need to sell right now need to get serious about their price. “Market” priced homes ARE selling and if sellers want to sell there are plenty of serious buyers out there right now taking advantage of the timing in the market.

The real estate industry is a moving market. It expands contracts, corrects and grows. Trust that any slowdown you may be experiencing is only a very temporary “breather” that is healthy for the market to take.

by on August 14th, 2014

 

Cary Perkins,
Windermere Top Producer
Fun With Real Estate
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Portland Oregon Homes

 

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Posted on August 15, 2014 at 8:08 pm
Cary Perkins | Category: Current Portland Real Estate Market Information, Portland Oregon Real Estate, Portland Oregon Realtors, Portland Real Estate Data | Tagged , , , ,

Finding a vacant lot to build a house in Portland OR

Update:  4/7/14

 

About two weeks after my blog post shown below, Brian Allen, owner of Windermere also addressed this issue in an interview with Portland Business Journal.  Please click through to the article. 

 

 

3/24/14

Portland is running out of usable land for homebuilders.  You probably already knew that. 

Our urban grown boundary is a wonderful thing!  It keeps Portland's downtown and close-in neighborhoods vibrant.  No sprawl here, or 60 minute commutes to get to your new home – we love infill, and are putting new construction on every available lot. 

But lately, if you've tried to buy a house that comes with a double lot or sits on a nice sized piece of property, you'll find you're up against local builders with deep pockets, and cash.  It's hard to be a small player who requires a mortgage against these aggressive cash buyers. 

 

Just recently, this gorgeous brick home on a large lot in a premium neighborhood was purchased as a tear-down.  Heartbreaking.

 

Portland Business Journal has written an interesting story on the lack of property for new construction, and the fact that we're unable to keep up with the demand for homebuyers moving into the Portland area.  It's a tough call.  Spread the urban growth boundary to keep prices on homes from rising too high and giving builders a place to add necessary inventory, or preserve our farmland and keep our city vibrant and full? 

 

Land Squeeze Stalls Portland Homebuilders 

Staff Reporter- Portland Business Journal
 
 
 
Cary Perkins,
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Fun With Real Estate
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by Cary Perkins

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Posted on March 24, 2014 at 11:49 pm
Cary Perkins | Category: cary perkins, Current Portland Real Estate Market Information, Moving to Portland, Portland Oregon Real Estate, Portland Real Estate Data | Tagged , , , ,

Is there a new real estate bubble?

 

 

Portland is currently a very hot area for real estate. In fact, it is not unusual in several neighborhoods for there to be more than 5-10 or more offers for the same property, driving the price up 10% or more above asking price.

People have asked whether this is an indicator of another bubble waiting to explode all over the area’s real estate market. The last time home prices ticked up like this was just before the market correction.  So is this an inflated market or just the sign of a market continuing to find its new normal?

 

According to the Case Shiller Home Price Index released last month (February 25) showed that through the end of December, in the United States, home prices were up 11.3% overall which was the best year since 2005 according to the Chairman of the S&P Dow Jones Index Committee, David M. Blitzer. Some standout markets in 2013 included:

Several of those markets were hit very hard in the downturn and the numbers listed above reflect a rebound (such as Detroit, Las Vegas, Miami, Phoenix, and Tampa), but what about Atlanta, Los Angeles, Portland, San Diego, San Francisco and Seattle?

Several of these markets are driven by pent-up demand and the loosening of credit. However, it is important to take a closer look at these markets, and any other market that is seeing high demand, to determine where the demand is coming from and if that demand is sustainable.

For example, in looking at Portland, there are several factors at work:

  • Migration to Oregon from other states is very high. In fact, Portland has one of the highest migration totals in the country in 2013.
  • Foreign and domestic investors are investing in the Portland housing market and the surrounding areas due to the potential for higher rents in these areas.

When demand occurs for more than one reason, it is a sign that a market is healthy, not spiraling out of control.

We must also take into account that credit is loosening up from recent years, but it is nowhere near as loose as it was in the years leading up to the market correction. New guidelines have been set in motion to prevent the kind of collapse we have had in the past. Credit score requirements are on the way down for loans. In fact, as reported by the LA Times last week, lenders are reducing the required credit scores for FHA loans and are allowing some with credit scores of 600 to receive mortgage funding. Lenders are also raising the debt-to-income ratio limit.

I don't believe this is a bubble. This is a direct result of pent-up demand from buyers who have been waiting almost three years to buy. Buyers who were getting ready to buy a year ago chose to wait because of issues the country was having with the debt ceiling and there was a lack of confidence in the market. Consumers are feeling more confident now and they show that confidence in buying real estate. In some markets there just isn’t enough inventory to go around. The increased consumer confidence along with the lack of new construction inventory has created a storm of demand. 

by Cary Perkins

Posted on March 18, 2014 at 12:26 am
Cary Perkins | Category: Current Portland Real Estate Market Information, Moving to Portland, Portland Oregon Real Estate, Portland Real Estate Data, Portland Real Estate Statistics | Tagged , , ,

Until Mortgage Rates Reach 10.5%, Buying Will Still Be Cheaper Than Renting

The recent rise in mortgage rates has made buying a house a little more expensive: the increase in the 30-year fixed rate over the past month from 3.4% to 3.9% (Freddie Mac) raised the monthly payment on a $200,000 mortgage by $56, or 6%. However, because mortgage rates are still near long-term lows, and because prices fell so much after the housing bubble burst and remain low relative to rents even after recent price increases, buying is still much cheaper than renting. That means that the recent jump in rates doesn’t change the rent-versus-buy math much.

Rates are likely to keep rising, but how far must rates rise before buying a home starts to look expensive relative to renting? To answer this, we updated our Rent vs. Buy analysis with the latest asking prices and rents from March, April, and May 2013. Following our standard approach, we calculated the cost of buying and renting for identical sets of properties, including maintenance, insurance, taxes, closing costs, down payment, sales proceeds, and, of course, the monthly mortgage payment on a 30-year fixed-rate loan with 20% down and monthly rent. We assume people will stay in their homes for 7 years, deduct their mortgage interest and property tax payments at the 25% tax bracket, and get modest home price appreciation (see the detailed methodology and example here). Here’s what we found:

Buying remains cheaper than renting so long as mortgage rates are below 10.5%. At 3.9%, the current 30-year fixed rate according to Freddie Mac, buying is 41% cheaper than renting nationally. With a 5% mortgage rate, buying is still 34% cheaper than renting nationally. Mortgage rates would have to rise a huge amount – to 10.5% – to tip the math in favor of renting, which isn’t impossible. Rates were that high throughout the 1980s, but have been consistently below 10.5% since May 1990.

Each local market, of course, has its own mortgage rate “tipping point” when renting becomes cheaper than buying a home. At 3.9%, buying is cheaper than renting in all of the 100 largest metros, which means the tipping point is above 3.9% everywhere. The tipping point is lowest in San Jose, which would tip in favor of renting if rates reach 5.2%. It’s between 5% and 6% in San Francisco and Honolulu, and between 6% and 7% in New York and Orange County, CA.

Of course, the tipping point also depends on how long you plan to stay in your next home (we assume 7 years) and whether you itemize your deductions (we assume you do). For instance, if you don’t itemize, or if the mortgage interest and property tax deductions were eliminated entirely, buying would still be 29% cheaper than renting at a mortgage rate of 3.9%, and the tipping point when renting becomes cheaper than buying would be 7.5%.

But just because buying is cheaper than renting, it doesn’t mean you can buy. Lots of people who want to buy don’t have the downpayment or can’t get a mortgage. Even people who can swing it financially might not be able to buy right away, before rates rise further, because they might not find the home they want quickly with inventory still so tight.

So if the recent increase in mortgage rates doesn’t change the rent-versus-buy equation substantially, why does it matter? The main effect is to reduce the demand for refinancing. Unlike homebuying, refinancing is a relatively straightforward financial decision: although refinancing has upfront costs, refinancing doesn’t require finding a home, thinking hard about your lifestyle, or moving. Since rates have been low for so long, many people who were able to refinance, already have. As a result, the demand for refinancing is now dropping.

For people who haven’t yet refinanced – and for people looking to buy – rising rates do make housing more expensive. Rates are now on the rise and are likely to keep rising, thanks to the strengthening economy and the Fed eventually trying less hard to keep rates low. But it will take big rate increases to turn off prospective homebuyers. At today’s prices and rents, rates would have to rise to levels we haven’t seen in 20 years before renting is cheaper than buying a home on average across the country.

 

Read original article here.

 

Courtesy of Forbes and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Caryperkins.com
Posted on June 24, 2013 at 6:01 pm
Cary Perkins | Category: Current Portland Real Estate Market Information, Portland Oregon Real Estate, Portland Real Estate Data | Tagged , ,

What’s Happening in Real Estate?

 

NOW is a wonderful time to sell your house! 

 

 

 

 

Portland Oregon Real Estate Information,
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Caryperkins.com
Posted on February 22, 2013 at 3:19 pm
Cary Perkins | Category: cary perkins, Current Portland Real Estate Market Information, Portland Real Estate Data, Portland Real Estate Statistics | Tagged , , ,

Time to Reality Check the Real Estate Market

Time to Reality Check the Real Estate Market

 by OB Jacobi
 

Rarely does a day go by that I don’t get asked if this is a good time to buy and/or sell a home. Some people might think that my response is always an emphatic “YES!” because I work in real estate. But in truth, there is no right or wrong answer. Every person’s circumstances are unique, so in some cases the answer might be yes, but for others it might make more sense to wait. Allow me to explain.

The good news is that we’re finally coming out of the housing slump of the past five-plus years. Housing is a major driving factor of the U.S. economy, so regardless of whether or not one owns a home, a stronger housing market is good for everyone. For some would-be home sellers, this positive momentum, combined with a rise in home prices and buyer activity, is enough to compel them to list their home. And right now the statistics appear to be on their side.

According to the most recent findings from the National Association of REALTORS®, total housing inventory has fallen for the past several months, settling at just under two million existing homes on the market that are available to buyers. This represents about a four-month-supply of homes throughout the U.S. This is the lowest housing supply the nation has seen since May of 2005 – during the peak of the housing boom.

“Months supply” basically means that if existing homes were to continue selling at the current rate, the inventory of homes would be sold by that many months. A “normal” market usually has around six months of supply; therefore lower numbers mean a shortage of inventory. If demand is greater than supply, this often leads to competition amongst buyers – and rising prices – as we’ve seen in many markets throughout the Western U.S.

Here are the current inventory levels in key markets along the West Coast, all of which fall below six months of supply and report strong competition among buyers.

 

·       Seattle: 1.4 months

·       Portland: 4.2 months

·       San Francisco: 1.8 months

·       Las Vegas: 3.8 months

·       Palm Springs: 2.5 months

 

The following graph demonstrates the downward trend in the overall U.S. month’s supply of homes which is currently at about 4.4 months:

So what does this mean for buyers and sellers? It means as long as inventory levels remain low, competition amongst buyers will remain high, and home prices should continue to steadily rise – albeit at a healthy rate – not like what we saw during the housing boom. As evidence of this, in the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1 percent increase in home values by the end of 2013. And in a recent report by the National Association of REALTORS®, median home prices last quarter showed the strongest year-over-year increase in seven years.

Another thing that buyers and sellers need to keep their eye on is interest rates and their impact on affordability. Interest rates have been at such historical lows for so long that it’s easy to take them for granted. But the truth is that several lending institutions, including Freddie Mac and the Mortgage Bankers Association, project that interest rates will rise from 3.4 to 4.4 percent by the end of 2013. A full point increase can have a significant impact on the amount of your mortgage over the long term.

I’ll explain:

Assuming a 30-year-mortgage at a 3.4 percent interest rate, a home valued at $360,000 in today’s market would have a monthly payment of $1,596.53. If prices rise by 3.1 percent and interest rates rise to 4.4 percent, as both have been predicted to do in the coming year, that same home would be worth $371,160 and have a monthly payment of $1,858.62 (see chart below). This is a difference of $262.09 per month – $3,145.08 annually – and $94,352.40 over the life of the loan. That’s not chump change.

With these types of projections, one might wonder why there isn’t a flood of homes coming on the market. The biggest concern I hear from many would-be sellers is that they’re going to lose money because their home is worth less today than when they bought it. A valid concern, to be sure, but not necessarily the case for many folks. Remember, you’re buying and selling in the same market conditions, so if your home has lost value in recent years, it is highly likely that the next home you buy has as well.

I recently spoke to a friend of mine who wanted to sell but was afraid of losing money. He bought his Seattle-area home back in 2002 for $275,000. Over the next five years the market boomed and by 2007 his home was worth about $430,000. During that time, homes in many areas around Seattle appreciated by over 55 percent. Then the housing market crashed – and with it so did home prices. In my friend’s mind he lost $155,000 and now he thinks he should wait to sell until he can gain all that loss back.

Today, my friend’s home is worth about $327,000 – a gain of $52,000 over what he paid in 2002. If experts are right about an annual gain of three percent in the coming years, he will have to wait 10 years before his home is worth what it was during the peak of the market in 2007. My advice to him? If it’s the right time to move and you can afford to do it, go for it, but don’t base your decision on numbers that were the result of an artificially inflated market.

It goes without saying that nobody wants to sell at the bottom of the market, yet at the same time, everybody wants to buy at the bottom. Obviously these two scenarios can’t exist at the same time, but I hope the information in this blog shows there are definitely opportunities to be had by both buyers and sellers that are worth considering.

 

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Posted on February 20, 2013 at 5:28 pm
Cary Perkins | Category: Current Portland Real Estate Market Information, Portland Oregon Real Estate, Portland Real Estate Data, Portland Real Estate Statistics | Tagged , ,