Southern Oregon Real Estate News

July 11, 2019

Homeownership- A Good Investment

Americans’ Powerful Belief in Homeownership as an Investment

Americans' Powerful Belief in Homeownership as an Investment | MyKCM

The Federal Reserve Bank (The Fed) recently released their 2019  Survey of Consumer Expectations Housing Survey. The survey reported that 65% of Americans believe homeownership is a good financial investment. Since 2014, the percentage has increased by over nine percent.Americans' Powerful Belief in Homeownership as an Investment | MyKCMThe Fed’s survey also showed that when the results are broken down by age, education, income, or region of the country, more than 55% of Americans in each category see homeownership as a good investment.

This coincides with a recent Gallup survey of Americans which revealed that real estate was their number one choice for the best long-term investment when compared to stocks, savings accounts or gold.

Bottom Line

Americans' belief in residential real estate as a good financial investment continues to grow as the housing market returns to normalcy.

Posted in Home Ownership
May 9, 2019

The Benefits of a 20% Down Payment

The Benefits of a 20% Down Payment

The Benefits of a 20% Down Payment | MyKCM

If you are in the market to buy a home this year, you may be confused about how much money you need to come up with for your down payment. Many people you talk to will tell you that you need to save 20% or you won’t be able to secure a mortgage.

The truth is that there are many programs available that let you put down as little as 3%. Those who have served our country could qualify for a Veterans Affairs Home Loan (VA) without needing a down payment.

These programs have cut the savings time that many families would need to compile a large down payment from five or more years down to a year or two. This allows them to start building family wealth sooner.

So then, why do so many people believe that they need a 20% down payment to buy a home? There has to be a reason! Today, we want to talk about four reasons why putting 20% down is a good plan, if you can afford it.

1. Your interest rate will be lower.

Putting down a 20% down payment vs. a 3-5% down payment shows your lender/bank that you are more financially stable, thus a good credit risk. The more confident your bank is in your credit score and your ability to pay your loan, the lower the rate they will be willing to give you.

2. You’ll end up paying less for your home.

The bigger your down payment, the lower your loan amount will be for your mortgage. If you are able to pay 20% of the cost of your new home at the start of the transaction, you will only pay interest on the remaining 80%. If you put down a 5% down payment, the extra 15% on your loan will accrue interest and end up costing you more in the long run!

3. Your offer will stand out in a competitive market!

In a market where many buyers are competing for the same home, sellers like to see offers come in with 20% or larger down payments. The seller gains the same confidence that the bank did above. You are seen as a stronger buyer whose financing is more likely to be approved. Therefore, the deal will be more likely to go through!

4. You won’t have to pay Private Mortgage Insurance (PMI)

Simply put, PMI is “an insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.”

As we mentioned earlier, when you put down less than 20% to buy a home, your lender/bank will see your loan as having more risk. PMI helps them recover their investment in you if you are unable to pay your loan. This insurance is not required if you are able to put down 20% or more.

Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity they earn from the sale of their house to put down 20% on their next home.

If you are looking to buy your first home, you will have to weigh the benefits of saving a 20% down payment vs. the time and cost of continuing to rent while you save that amount.

Bottom Line

If your plan for your future includes buying a home and you’re already saving for your down payment, let’s get together to help you decide what down payment size best fits with your long-term plan!

 

Posted in Home Ownership
April 15, 2019

Buying a HOME?

3 Questions You Need To Ask Before Buying A Home



If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following three questions to help determine if now is a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a study by realtor.com found that “73% said buying in a good school district was “important” in their search.

This report supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. The actual reasons are:

  • A good place to raise children and provide them with a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in February (the latest data available) was $249,500. This is up 3.6% from last year. The increase also marks the 84th consecutive month with year-over-year gains.

Looking at home prices year over year, CoreLogic is forecasting an increase of 4.6%. In other words, a home that costs you $250,000 today will cost you an additional $11,500 if you wait until next year to buy it.

What does that mean to you?

Simply put, with prices increasing, it may cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

Freddie MacFannie Maethe Mortgage Bankers Association and NAR have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:

3 Questions You Need To Ask Before Buying A Home | MyKCM

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

Posted in Home Ownership
March 28, 2019

Building Wealth with Real Estate

How to Put Your Housing Cost to Work for You

How to Put Your Housing Cost to Work for You | MyKCM

There has been a lot written about the benefits of homeownership. One benefit that continues to rise to the top is the added wealth homeowners gain simply by paying their mortgage while their home increases in value over time.

The National Association of Realtors (NAR) recently broke down the equity gained from price appreciation and principal payments in their Economists Outlook Blog. Homeowners who purchased their homes five years ago have already gained almost $80,000 in equity over that time with 80% of the gains coming from price appreciation.

For a homeowner who purchased their home 30 years ago, they have gained nearly $250,000 in equity with 70% coming from price increases. The full results can be seen in the chart below.

How to Put Your Housing Cost to Work for You | MyKCM

According to the Home Price Expectation Survey, a family who purchased a median priced home this January can expect to gain more than $42,000 over the next five years simply from price appreciation alone.

Bottom Line

Your home is one of the only investments you can live inside as you pay it off over time. If you are ready to use your housing costs to build wealth, let’s get together to discuss how to make your dream a reality.

Posted in Home Ownership
March 7, 2019

Interest Rates Hit New 12 Month Low!

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at their lowest for 2019. Rates like these haven’t been seen since February 2018!

 

Last week’s survey results reported an interest rate of 4.35%. This is a welcome change from the near 5% rates seen in mid-November. At 4.32%, the second week of February 2018 was the last time rates were this low. This can be seen in the chart below.

Interest Rates Hit New 12 Month Low! | Simplifying The Market

Freddie Mac’s Chief Economist, Sam Khater, had this to say:

“Mortgage rates fell for the third consecutive week, continuing the general downward trend that began late last year.

Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months.”

Bottom Line

If you plan on buying a home this spring, let’s get together to prepare you to take advantage of today’s market before rates increase!

Posted in Home Ownership
Feb. 14, 2019

The perfect time to SELL

Thinking of Selling Your House? This is a Perfect Time!

It is common knowledge that a great number of homes sell during the spring buying season. For that reason, many homeowners hold off putting their homes on the market until then. The question is whether or not that is a good strategy this year.

The other listings that come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market during this season in comparison to the rest of the year? The National Association of Realtors (NAR) recently revealed the months during which most people listed their homes for sale in 2018. This graphic shows the results:

Thinking of Selling Your House? This is a Perfect Time! | MyKCM

The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,520,000.

That number spiked to 1,870,000 by May!

What does this mean to you?

With the national job situation improving and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for homes right now.

Bottom Line

If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition amongst buyers. Beat the rush of housing inventory that will enter the market and list your home today!

Posted in Home Ownership
Jan. 17, 2019

Historic Low Rates

Last Chance! Homes are a Bargain Compared to Historic Norms

Last Chance! Homes are a Bargain Compared to Historic Norms | MyKCM

A loaf of bread used to be a nickel. A movie ticket was a dime.  Not anymore. Houses were also much less expensive than they are now. Inflation raised the price of all three of those items, along with the price of almost every other item we purchase.

The reason we can still afford to consume is that our wages have also risen over time. The better measure of whether an item is more expensive than it was before is what percentage of our income it takes to purchase that item today compared to earlier. Let’s look at purchasing a home.

The COST of a home is determined by three major components: price, mortgage interest rate, and wages. The big question? Are we paying a greater percentage of our income toward our monthly mortgage payment today than previous generations? Surprisingly, the answer is no.

Historically, Americans have paid just over 21% of their income toward their monthly mortgage payment.

Though home prices are higher than before, wages have risen as well. And, the most important component in the cost equation - the mortgage rate - is dramatically lower than it was in the 1970s, 1980s, 1990s, and 2000s.

Today, according to the latest Home Affordability Index just released by the National Association of Realtors, Americans are paying 17.4% of their income toward their mortgage payment. That is much lower than the 21% average previous generations have paid.

Last Chance! Homes are a Bargain Compared to Historic Norms | MyKCM

Bottom Line

The cost of purchasing a home today is a bargain compared to previous generations when we look at it from a percentage of income basis. However, with mortgage rates expected to increase and home prices continuing to appreciate, that will not always be the case. Whether you are buying your first home or looking to move-up to a more expensive home, purchasing sooner rather than later probably makes sense.

Posted in Home Ownership
Dec. 7, 2018

A Tale of Two Markets

Some Highlights:

  • An emerging trend for some time now has been the difference between available inventory and demand in the premium and luxury markets and that in the starter and trade-up markets and what those differences are doing to prices!
  • Inventory continues to rise in the luxury and premium home markets which is causing prices to cool.
  • Demand continues to rise with lower-than-normal inventory levels in the starter and trade-up home markets, causing prices to rise on a year-over-year basis for 80 consecutive months.

 

Posted in Home Ownership
Nov. 26, 2018

Are We Headed For Another Housing Bubble

One of the causes of the housing bubble 10 years ago was the increase of housing inventory to a 10-12 month supply. This over supply caused prices to fall. Today we have a 4.4 month supply of homes for sale, nowhere near the amount we had pre-bubble! Let's chat about what that means in our market!

With home prices continuing to appreciate above historic levels, some are concerned that we may be heading for another housing ‘boom & bust.’ It is important to remember, however, that today’s market is quite different than the bubble market of twelve years ago.

Here are four key metrics that will explain why:

    1. Home Prices
    2. Mortgage Standards
    3. Foreclosure Rates
    4. Housing Affordability

1. HOME PRICES

There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone.

Last week, CoreLogic reported that,

“The inflation-adjusted U.S. median sale price in June 2006 was $247,110 (or $199,899 in 2006 dollars), compared with $213,400 in March 2018.” (This is the latest data available.)

2. MORTGAGE STANDARDS

Many are concerned that lending institutions are again easing standards to a level that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.

The Urban Institute’s Housing Finance Policy Center issues a monthly index which,

“…measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

Their July Housing Credit Availability Index revealed:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market.”

3. FORECLOSURE RATES

A major cause of the housing crash last decade was the number of foreclosures that hit the market. They not only increased the supply of homes for sale but were also being sold at 20-50% discounts. Foreclosures helped drive down all home values.

Today, foreclosure numbers are lower than they were before the housing boom. Here are the number of consumers with new foreclosures according to the Federal Reserve’s most recent Household Debt and Credit Report:

  • 2003: 203,320 (earliest reported numbers)
  • 2009: 566,180 (at the valley of the crash)
  • Today: 76,480

Foreclosures today are less than 40% of what they were in 2003.

4. HOUSING AFFORDABILITY

Contrary to many headlines, home affordability is better now than it was prior to the last housing boom. In the same article referenced in #1, CoreLogic revealed that in the vast majority of markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain much lower than their pre-crisis peaks.”

They went on to explain:

“The main reason the typical mortgage payment remains well below record levels in most of the country is that the average mortgage rate back in June 2006, when the U.S. typical mortgage payment peaked, was about 6.7 percent, compared with an average mortgage rate of about 4.4 percent in March 2018.”

The “price” of a home may be higher, but the “cost” is still below historic norms.

https://u.realgeeks.media/rockwellrealestate/InterestRates-2-1024x768.jpeg

Bottom Line

After using these four key housing metrics to compare today to last decade, we can see that the current market is not anything like that bubble market.

 

Posted in News
Oct. 31, 2018

Helpful Tips for Oregon in the Fall

Looking to do a little home improvement... make sure you get the most for your money!

How to Buy Antique Furniture 

Perhaps you just bought your first home and you want to fill it with one-of-a-kind furniture that will be loved and admired for years to come. Many people turn to antiques because they love the idea of including pieces of furniture with history or an interesting story behind it in their home. However, do you know the right way to buy antiques? There are some things you should keep in mind when antique shopping to ensure that you purchase quality pieces at a good price. Here are our best tips for buying antique furniture.

Frequent local antique shops, vintage stores and markets

The best way to educate yourself about antiques and find deals is to talk to the experts. Find local antique and vintage shops, or even flea markets, and learn about the items they carry. Even if you're not there to buy quite yet, most shop owners and vendors will be open to telling you about their pieces because you could be a customer at a later date. 

Starting up a rapport with antique experts in your area is also a good way to find a deal on antiques. If the shop owner of an antique store gets an item in that they know you'll love, they might call you and let you know before anyone else; and if they really like you, they might just give you a discount. 

Look for markers of good craftsmanship

At some point, you will want to do some in-depth research if you're interested in buying antiques from certain eras. For instance, dovetails on a piece of furniture is a sign that it was made in the 17th or 18th century. Long dovetails indicate even better craftsmanship. No dovetails means that it was probably made in a factory. 

Another important factor to look at as a marker of quality is the hardware. Is the hardware on drawers and doors original? Also, check whether the drawers slide out well. All of these small details are indicators of good craftsmanship and quality. 

Is there a manufacturer's stamp?

Many antiques have a stamp, usually on the bottom, from the manufacturer. Or it might include the signature of the craftsman. These markers can give you lots of information about where the piece was made and how old it is. 

Only buy pieces in good condition

Even though these pieces of furniture are old, they should still be in good, working condition. Scratch marks and other scuffs are fine and unavoidable in most cases, but you should never buy a piece that is damaged. If the overall frame is not in good condition, it will be very expensive to repair. Or if you find a chair or sofa with good bones but torn or dirty upholstering, think twice before you buy it. Reupholstering is difficult to do on your own and expensive to hire someone else to do. Always keep your eye out for pieces that are structurally sound and in overall good condition.  

Know what you're looking for if you buy online

It's become increasingly popular to buy antiques online. Many people use eBay or Etsy. However, you definitely need to know what you're looking for if you choose to buy online. You should be a little more educated than the average person about antiques because you won't get a chance to see or touch these pieces in person. Look for online shops with stellar reviews, and don't be afraid to strike up a conversation with the seller. Ask questions about the pieces you're interested in and get to know the seller a bit. Keep in mind that buying online usually comes with hefty shipping costs. So make sure it's worth it to make an online purchase rather than going to a store. 

Do you have any advice or stories about shopping for antiques? We'd love to hear from you!

 

Make a Pet-Friendly Space

 

Hazard-proofing

Take a look around your house with fresh eyes to reveal a myriad of dangers to animals. The most common to watch out for are:

  • Anything that could choke or electrocute. Tuck away wires and looped cords, and keep pulls for window blinds short.
  • Food and medications should be sealed away and out of reach, even from determined cats, which can climb up high.
  • Trash cans are a huge temptation for curious pets! Be sure yours closes with a tight lid.
  • Monitor your greenery, as some plants, including lilies, mums and aloe vera, are toxic to pets. Check inside and out for these plants, and research a new plant before you buy it.
  • Household cleaning products, fertilizers, pesticides and antifreeze all are toxic to humans, let alone your pets. Keep them in a secure place away from sniffing noses.
  • Be sure window screens are sturdy and correctly installed to stop falling felines.

Inside the home

Fido and Tabitha have needs of their own just as you do, and they probably need a bit of space designated just for them.

  • Give your pets a bed, a water source and some toys to create their own area.
  • Consider giving them access to the door so they can run outside at their leisure; a well-exercised pet doesn't get into trouble or bug you all night.
  • Put the litter box in an area that has some but not too much privacy so your pet feels comfortable using it.
  • Decorate inside with sturdy furniture fabrics and hardwood floors that will withstand wear and tear. Carpet can trap germs your pet brings in, so vacuum it twice a week. Stains are always easiest to remove fresh, so get on them quickly!

Careful eats

The Food and Drug Administration has your furry friend at heart; it's best to follow its suggestions for storing and serving pet food:

  • Dry food should be stored in its original bag and then placed inside a food-grade plastic container to keep away pests. Don't use a trash can, which can leach chemicals into food over time.
  • Use a small cup to scoop the food out of the bag; do not use the food bowl.
  • Store wet food in the refrigerator.

Special care for pets

Some animals require more special care than cats and dogs do. Small animals are deceptively high maintenance and often are given to children as "starter" pets. But they need the most specialized care and demand the same amount of attention as dogs and cats. Always do your own research on any animal you adopt for your home.

The best thing you can do for your pet is provide a comfortable home with loving company. Attend to their needs and they are sure to stay happy and healthy and live a long time. Enjoy the love!

 
 

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Posted in News