RMLS Market Action for July 2014 was released on Friday and our custom info graphic distilling the information from the report is hot off the presses today. Available listings in the Portland Metro area remains under three months for the 4th month in a row. Inventory, the ratio of active listings to closed sales shows how long it would take for the existing inventory to sell if no new listings were added. Six months was the typical length of time assigned to indicate the equilibrium between a buyer and seller market but I think in our post-bubble era, that number is closer to 4.5 – 5 months. Buyers are more likely to walk away from a transaction if they feel something is “off.”

Low inventory and a seller’s market continues to drive prices up. The average sales price is $344,700. That’s only about $10,000 less than the August 2007 peak! That’s a 7.9% increase over this time last year. We probably don’t want to continue at that pace but it’s a lot healthier than the 12% increase we saw in 2013. 5% is probably healthy and sustainable and historically the national housing market has seen a long-term return of about 4%.

July 2014 RMLS Market Action Infographic


We’re often asked for walkable neighborhoods.  We’ve got the ability to search by Walk Score right here.  Scroll down below text here to see the homes and condos that rate 95 and higher.  You can adjust the search to your needs.  Walk Score says:

Walk Score Methodology

Walk Score measures the walkability of any address, Transit Score measures access to public transit, and Bike Score measures whether a location is good for biking.

The Walk Score methodology was developed with the Walk Score advisory board and has been validated by leading academic researchers.

Planners and Analysts: Learn about using Walk Score data in your research.

Walk Score

Walk Score

Walk Score measures the walkability of any address using a patented system. For each address, Walk Score analyzes hundreds of walking routes to nearby amenities. Points are awarded based on the distance to amenities in each category. Amenities within a 5 minute walk (.25 miles) are given maximum points. A decay function is used to give points to more distant amenities, with no points given after a 30 minute walk.

Walk Score also measures pedestrian friendliness by analyzing population density and road metrics such as block length and intersection density. Data sources include Google, Education.com, Open Street Map, the U.S. Census, Localeze, and places added by the Walk Score user community.

Walk Score®

Description

90–100

Walker’s Paradise Daily errands do not require a car.

70–89

Very Walkable Most errands can be accomplished on foot.

50–69

Somewhat WalkableSome errands can be accomplished on foot.

25–49

Car-DependentMost errands require a car.

0–24

Car-DependentAlmost all errands require a car.


Is it better to rent or buy in Portland?  We see lots of static graphics with various scenarios that try to answer the question.  This morning, I posted a link to the New York Times’ interactive rent versus buy calculator on our Facebook Page but decided that it would make a good post here too.  Obviously the graphic below is static but clicking on the image (or here) will launch the calculator.  There are more sliders that you can adjust on the site than are shown here.

Rent versus buy


Beaverton zip codes are bursting at the seams.  Beginning July 1st, two new zip codes will be instigated.  According to KOIN 6, the streets listed below will retain their zip codes.

How will this impact real estate searches? We’ve seen changes in street names (Portland BLVD to Rosa Parks and 39th Ave. to Caesar Chavez) but never the addition of new zip codes.  It will probably take a few days and some research to get a clearer picture.  Zip codes are a popular way to define searches so we’re going to have to figure out if client searches are affected.

Description of boundaries for new zip code 97003:

Northern Boundary: SW Jenkins Road running east to west from SW Murray Boulevard, converges into west Baseline Road and ending at SW Cornelius Pass Road.

Western Boundary: SW Cornelius Pass Road from west Baseline Road to SW Tualatin Valley Highway.

Southern Boundary: SW Tualatin Valley Highway running west to east from SW Cornelius Pass Boulevard to SW Murray Boulevard.

Eastern Boundary: SW Murray Boulevard from SW Tualatin Valley Highway to SW Jenkins Road.

Description of boundaries for new ZIP Code 97078:

Northern Boundary: SW Tualatin Valley Highway running east to west from SW Murray Boulevard to SW 229th Avenue.

Western Boundary: SW 229th Ave. from SW Tualatin Valley Highway to SW Rosedale Road then west to SW River Road then south to SW Farmington Road.

Southern Boundary: SW Farmington Road running west to east from SW River Road to SW Murray Boulevard.

Eastern Boundary: SW Murray Boulevard from SW Farmington Road to SW Tualatin Valley Highway.

 


Toilet in living roomThere is often confusion about counting bathrooms in RMLS.  Standard convention says that two full and one half bath would be 2.5 baths.  That’s pretty clear until you have two full and two half baths.  Now we have a problem.  .5 + .5 = 1 added two two full equals 3 baths.  But we just established there are two full baths and two half baths, not three full.  What now?

Realtor-speak says we have 2.2 baths.  The number before the decimal is the number of full baths and the number after is the number of half baths.  When you’re looking at RMLS listings, the vast majority will follow this system.  Some agents will still call 2 and a half baths 2.5 but it’s usually pretty easy to pick up on since we don’t see five half baths very often if there are only two full.

I know at least one of you out there is thinking, “what about the house with 11 half baths?”  I have no idea whether RMLS will let us go to .11 but it’s a problem I’ll be more than happy to report back on when I have first hand experience taking that listing!


March 2013′s 3.1 months of housing inventory ties the lowest levels we’ve seen in the last two years according to the latest RMLS Market Action report.  We saw the same level in April and August last year.  Actual closed sales are down slightly compared to March of 2013 but the drop in listings is what is really driving the low inventory levels.  Inventory is the ration of active listings to closed sales.

RMLS March Listings

3.1 months represents the five county area that defines “Portland Metro” for RMLS.  If you dig a little further, North Portland has a 1.7 month inventory!  NE Portland has 2.0 months of inventory, 2.4 months in Southeast and 2.6 months.

Here’s our monthly info graphic compiling the RMLS Market Action report:

Mar_Portland_RMLS_Infographic_print_small


The national Case Shiller report for December 2013 was released this morning. Portland remained flat in December at 159.84.  During the traditional “slowdown season” of real estate, the Portland market has hovered at this level since August.  The Case Shiller Index report has a two month lag and reports on the Portland Metro MSA.  This is a seven county area compared to RMLS Market Action’s five county report.  RMLS data is only 15 or so days old when it is released.  The current market is good for both sellers and buyers.  Low inventory means buyers are competing for property.  Low interest rates and prices that have yet to recover to normal appreciation rates still makes property based on past history a good value when looking at the macro market.  Real estate is local so both reports need to be used as a guide, not an absolute.  RMLS breaks down into smaller areas but must requires additional math to get localized inventory levels.

Case Shiller Portland Dec 2013

—Chart from http://us.spindices.com/indices/real-estate/sp-case-shiller-or-portland-home-price-index


Our house was pretty much a gut remodel. All the systems were new-to-the-curb and I was never happy with the HVAC system. We’ve got a high end variable speed furnace with AC but in reality we would have been better off with two separate systems to heat and cool the four floors. One system can’t deal with pumping air evenly. The basement was usually 20 degrees colder than the top floor. I looked into Home Comfort Systems years ago. The cost of the install was about the same as the new furnace and AC we had just paid a boatload of money for.

Fast forward to this year and Home Comfort is now owned by emme. An improved system costs less than half of the original bid. The premiss is that a computer controls bladders in all the ducts and the wireless thermostat in every room tells the system where it needs to heat or cool. Using the fan, it can circulate air from floor to floor to adjust the temperature. The video here is sped up by a factor of 4:

There are three levels of programming available and to be totally honest, we’re using the basic mode as I haven’t taken the time to program the more complicated programs. The thermostat is disappointingly slow in its response time, even after two software updates. It’s on WiFi so at least I could sit at a computer to program. We used to use space heaters in both the home office and our son’s room and those are no longer required. The basement still runs warmer than any of the other floors when the furnace is running but the temp difference is small compared to before. The in-room controllers allow a temporary setting to be held for two hours or to send that room into “saver” mode which lowers the heat/cool for that room until it is turned off.

emme thermostat

The control system attached to the furnace. There are also two wireless access points boosting the signal from the room controllers.

emme control boxes


House in HandsWe work with some great lenders.  Every lender out there offers the standard 20% down, good credit, conventional loan but each lender also has unique or favorite products that they can offer.  I asked our lenders what loan products they like best.  ***Disclaimer: every loan is unique and not everybody will  qualify for a given product or interest rate.  These are examples only start to show the myriad of loan products that are available.

Shane Musselwhite – Mortgage Professional, Northwest Mortgage Group,Inc.,  , 503-908-7116, NMLS # 249862 / MLO249862 |  Corp. #40562 / CL 40562

Condominium Financing is very complex, and can be a source of great frustration when dealing with a lender unfamiliar with intricate agency guidelines.  Not only does Northwest Mortgage Group, Inc. have extensive experience in knowing what to look for up front, we also have the ability to perform full condominium project review “in house” from our corporate office in Portland and grant approval for  many of those condominium projects that don’t meet agency limited review guidelines.  Full project review at large banks can take weeks, or even months to complete, and can be a faceless process where reaching someone capable of answering a question or making a decision is virtually impossible.  This is just one more example of why trusting your transaction to a proven, local professional can be one of the most important choices you make when purchasing a home.

Liz Marre NMLS 118575 & Amanda Good NMLS 298019—Green Mortgage Northwest MLO 106–1739—503-568-1285

Our favorite loan product is our Agency Direct product. Because of the size of our company, we have the ability to sell our conforming loans directly to Fannie Mae and Freddie Mac. Mortgage lending has become a pretty rigid system, but our in-depth knowledge of guidelines help us create flexibility for those borrower’s that may not otherwise be approved. The below list is an example of how a Fannie/Freddie direct loan helps us approve more home buyers:

-The ability to finance up to 10 properties with conforming loans (most lenders only allow 4 financed properties).
-No occupancy restrictions for condominiums in an established project when the client is obtaining a loan for an owner occupied or second home (a lot of lenders require the project be at least 51% owner occupied).
-No minimum borrower contribution when using gifted funds on a 95% conforming loan (most lenders require the borrower be liquid for 5% of sales price before receiving a gift of less than 20%).
-The ability to use business funds for down payment or reserves (some lenders may allow this, but always with a lot of red-tape).
-Higher than 45% debt to income ratio allowed with an ‘accept’ on Freddie Mac’s underwriting software (many lenders will not go above a 45% debt ratio).
-1 year’s tax returns only for self-employed borrower’s when we receive an ‘accept’ through Freddie Mac (most lender’s require 2 years tax returns for self-employed borrowers with no exceptions).

Drew Lovern, Mortgage Loan Officer, Umpqua Bank,  503-219-6174, NMLS # 650099

One of my favorite programs would have to be the Mortgage Credit Certificate (MCC). A homeowner is able to get 20% of their interest paid on their mortgage loan back as a tax credit at the end of the year. What is even better, we can take that 20% you will get back and add it to your income, thus increasing the amount of home you can afford. Unlike most programs that have very low income limits and restrictive qualifications, MCC allows solutions for a wide range of buyers. It was just announced that the new annual income limit is $69,400 for 1-2 person households, or $79,810 for 3 or more person households. MCC can be paired with a purchase using a Conventional, FHA, or VA Loan. With just a little extra paperwork, you save a lot of money, and could afford a better home.

Thanks to these great lenders for taking the time to write these up.


Case Shiller nov2013The November 2013 Case Shiller report was released yesterday.  There was a slight dip in the Portland index but a drop of less than a point at this time of the year shows the market remains strong.

Historically real estate has seen about 4% appreciation.  If we apply that to the Portland real estate market since 2000 when the Index was set to 100, we can see that the market is still below the line.

As the market climbs, the number of properties with negative equity decreases.  We’re looking at a window of roughly October 2005 to November 20008 where the market was above where it is now.   If we had 4% appreciation from here on out, it would be July 2015 when we matched July 2008′s 180.6, thus wiping out all underwater purchases statistically.

The crystal ball doesn’t expect 2014 to repeat 2013′s 13% year-over-year increase but we can see that there is some room to beat the market average.