Here is the latest data for you on the overall Portland area, as well as specific Lake Oswego/West Linn (RMLS lumps them together) activity:
June numbers were very good, as we’d expect given the trends lately. That said, the trend upward in all numbers cooled just a bit. Most believe this was due to some fluctuation in mortgage rates in June that had some people re-figuring their numbers. I’ve also seen quite a few people trying to grab houses before they go to someone else, and then changing their mind about that particular home. Bottom line, the market is hot, AND, think before you offer. Make sure you Love it : )
According to the RMLS Market Action Report for the Portland Metro Area June, 2013:
At 2,511, Closed Sales were a 6.4% decrease from May, and a 11.9% increase over June of 2012.
There were 3,751 New Listings in June. This was a drop of 2.1% from May, and an increase of 16.9% over June of 2012.
The Average Sale Price in May was $313,900, down $3,000. from $316,600 in May 2013. …Average Sale Price in June 2012 was $284,100.
Pending Sales (accepted offers) also decreased a bit from May 2013, from 2978 to 2804 in June.
For our Property Blotter readers, the combined area of Lake Oswego and West Linn reported a mixed bag of up in some categories and slightly down in others:
Your home is likely the single biggest purchase you will ever make. You want to do it right. You want to find the right house, at the right price, and experience the best deal possible. Of course as a Realtor I am going to suggest that you use a Realtor, but I actually have thoughts beyond that that I thought I would share with you.
Get Pre-Qualified
Use a good reputable lender who will tell you what you can afford. This accomplishes two things: you know you are looking at houses that you can actually buy, and it gives you strength in negotiating. With out a letter stating that you are pre-qualified, a person selling real estate will not take you seriously.
Check your thinking
Buying a home is a pretty personal experience. You end up sharing extremely personal information with your lender and your Realtor. It takes a good deal of your time, which makes the rest of your life more stressful. Knowing this, here are my pearls of wisdom:
1. Be honest with everyone up front. If you have credit problems, tell your lender and let him/her help you to fix them. If you hate day-light basement homes, tell your Realtor so that he/she doesn’t waste your time showing them to you. Communication is king!
2. Be prepared to jump quickly when a good house comes onto the market. If it’s a nice house that is well priced, you won’t be the only person who wants it. These nice houses are currently selling fast. Your Realtor is not trying to pressure you when they tell you there are other offers or that they are of the opinion that there will be other offers. This is the current market. So be prepared to make decisions quickly.
3. Do a thorough home inspection. Today it is common to video scope the sewer line and test for radon, along with the standard full-house inspection. If it’s an older home, ask about previous in-ground oil tanks. If the seller has no knowledge, have the yard scanned for a tank. Know your options about inspections by visiting http://www.oregonfirst.com/buyer_advisory
4. Be patient with your loan officer. A good loan officer is much like a coach. They collect all of the information from you that they anticipate you needing to be approved by the bank’s underwriter, then they throw you into the game. Sometimes, well, actually lots of times, the underwriter throws your file back to the loan officer and asks for more data. It is aggravating as all get out, but all of the banks are doing it. It is not your loan officer picking on you. They are working very hard to get you your loan.
5. Don’t make any purchases on credit while in escrow. Your credit and employment will both be checked again just before closing. Any major changes could put everything on the skids. I had a sale get delayed by 3 weeks because the buyer went to a large retail store and maxed out a credit card on new stuff for the house. It took 3 weeks to pay off the new balance and get the credit score back up to a number that final underwriting would approve.
6. Be flexible with the closing date. Everyone is working towards the same goal of completing the purchase, but everything is just taking longer. It feels to me like lenders are working right up until the target closing date and then not giving title companies enough time to get everyone signed. Most transactions are closing 1-7 days late. So if you have lined up your moving truck and have all your stuff in the driveway, it’s going to be stressful. Build in a buffer, if you can. Arrange to stay in your current housing for about a week following the target closing date. This will save you lots of stress and, if it closes right on time, give you time for a leisurely move.
I hope you find this helpful. Don’t hesitate to contact Linda or myself if you have questions. As always, we love what we do and we are here to help.
Dianne
We’ve talked with you in the past about distressed property sales, and given you some tips on buying these unique homes; the difference between short sales and foreclosures, what to look out for etc. Today I want to talk with you a bit about HUD properties.
HUD stands for “Housing and Urban Development”, as most of you know. You will sometimes see a foreclosure referred to as a “HUD Property”. What this means is that, unlike a run-of-the-mill REO (bank-owned) property, in this instance, the home had an FHA loan that was defaulted upon. When this happens, a bank carrying the loan would file a claim with HUD. Then HUD ends up with the property.
When you decide that you want to make an offer on a HUD property, it is wise to go in armed with some basic information.
First of all, your Realtor will want to check to see how long the property has been on the market. If it has just gone on the market, you should know that the first 30 days of “bidding” are limited to Buyers who plan to live in the home, i.e. “Owner-Occupied”. After that time elapses, if it is still on the market, it will open up for bids from “Investors” (anyone besides someone who plans to live in it falls into this category).
The second thing you want to do is decide whether you really want the property. If you do, then some number-crunching is in order, especially if the property has just recently gone on the market. Basically, HUD will start looking at “bids” after day 10, and these days, with the market getting more competitive, Buyers are often offering above asking price in order to compete. Considering that the price on a HUD home is always determined by an FHA Appraisal that HUD has completed prior to listing, it might be wise to offer at least this price if the house is newly on the market, and more if you suspect there will be multiple offers. As always, discuss your options with your Realtor.
Speaking of this FHA Appraisal, there are significant benefits to a Buyer who secures FHA financing. One being that the appraisal already paid for by HUD can be used, saving a Buyer $450.-$500. or more.
HUD homes are sold “As-Is”. Really. BUT, If you are getting an FHA loan, there are some interesting options here. If there are basic repairs they are typically noted in the FHA Appraisal, and the appraiser has already assigned a dollar-amount to each item (i.e., “needs stove”, “strap-in water heater” etc). Taking a cap of $5,000. into consideration, these repairs can be added on to the sale price and rolled into the financing by the lender, for repairs to be completed after sale.
If a HUD home was built prior to 1978, and potentially has lead-based-paint, FHA will pay for a “Lead-Based Paint Stabilization Report”. If it is determined to have lead-based paint, however, my understanding is that the Buyer will need to do a “203-k” or “rehab” loan in order to have the condition remediated. Additionally, the transaction cannot “close” until the remediation paint job is approved by HUD. Discuss these potentialities with your lender rep prior to embarking down the path, so that you are prepared with “Plan B” should you end up in this situation.
When you have your Realtor check on status/how long the home has been on the market, etc., also make sure to ask about whether the subject property is designated as eligible for the “Good Neighbor Next Door” program. If you are employed as a teacher, EMT, police officer or fire fighter AND the HUD home is one that is eligible, you may be able to end up purchasing it for 50% of what you offer.
Escrow rules have changed as of January 2013. The Buyer now selects the Escrow office/company that will be handling he transaction. This is good if you or your Realtor have an escrow officer or company that you prefer, however, please note that the Buyer also has to pay ALL escrow fees, even those traditionally paid by the Seller. Talk to your Realtor about the possibility of asking for your closing costs to be paid, and whether or not this might be a good solution for you.
As always, you’ll want to choose a Realtor who understands the ins & outs, helps you determine if a HUD property is right for you, and if so, helps you navigate gracefully around potential pitfalls.
I hope that this information has been helpful. Granted, I just touched on an overview of things you might want to take into consideration. For more information on HUD Properties, visit: www.HudHomeStore.com . There is an FAQ section there that will answer many of your questions.
Home Owner’s Associations are extremely common. They occur in condominium developments, townhouse developments, and even neighborhoods of single family homes. Basicly they are a set of rules that are recorded with the title to the property and that transfer when the property is sold. So when you buy a property that has a Home Owners Association, you are not just buying the property, you are also buying membership in the HOA.
Being of a positive nature, I want to start with the good aspects of belong to a HOA (Home Owner’s Associaiotn).
HOAs are ideal for the person who wants someone else to do exterior yardwork and maintenance, who likes the ammenities that often come with the HOA, and also someone who likes the idea that they can close the door, lock it, and go away knowing that the property will be cared for while he or she is gone.
My Mother is a perfect example. She’s in her 80’s and can not physically maintain a house. But she’s still capable and independent, so not ready for assisted living. She lives in a condominium complex here in Lake Oswego. I like the idea that she has neighbors close by who know and care about her. The lady across the hall happens to also be a nurse and she has a key to my Mom’s front door. It is a great comfort to me to know that my Mom has help 6 feet across the hall.
Now the downside to HOAs.
When you buy a property that has an HOA, your home inspection should not just be for the physical dwelling, it should also include the fitness of the HOA. Condition your purchase on reveiw of the Conditions, Covenants and Restrictions, reading the last 2 years notes from HOA meetings, a copy of the financil status of the HOA including review of the long-term reserve studies, a copy of the rules and regualtions, and any and all pertinent information.
The normal thought process when buying into an HOA is that you want to keep the cost down and so tend to be attracted to HOAs that have low monthly fees. This may be incorrect thinking. The HOA is likely responsible for long-term maintenance of some very expensive items such as roofs, decks, and swimming pools. If they are not collecting money to build up a savings account for these expensive items, then the HOA will have to cover these expenses with a special assessment. This is all too common!
In addition, HOAs often have expenses that a single family residence does not. Think about the parking lot through a normal condominium development. It will need to be re-paved, re-striped, and get annual snow and leaf removal.
You want to belong to an HOA with solid financial management that has performed a full study that projects for these future expenses and then collects money in the monthly HOA fees to build up the necessary reserves to meet these expenses.
If a large expense arrises that the HOA does not have money to do, those famous special assessments happen. I am aware of an HOA here in Lake Oswego that had a special assessment about 15 years ago that average $10,000 per unit. That same HOA, just last week, had a meeting of the unit owners and announced that a similar special assessment will be happening this year as well.
Be aware that there are actually insurance policies you can purchase to protect you from special assessments. I have a personal friend who owns such a policy. It costs her $10 per month for coverage up to $10,000. Seems like a good investment that is pretty cheap.
The other concern with HOAs is the possibility of lawsuit. There is a condominium complex here in Lake Oswego that was a 1950’s apartment building that was converted to condos in 2006. Since the conversion the complex has experienced extensive water problems. The HOA is now suing the developer who did the condo conversion. Banks will not lend on units in the complex until the lawsuit is settled. This means that condos can only be sold on private contract or with all cash. This severely limits the pool of capable buyers and is consequently suppressing the re-sale value for those trying to sell now.
The bottom line is that you need to know what you are doing if you want to buy a property that has an HOA. It really is the reason you should be working with a good Realtor.
Here is the “just-released” data for you on the overall Portland area, as well as specific Lake Oswego/West Linn (RMLS lumps them together) activity:
Well, Folks… The market is definitely picking up. Just take a look at how the numbers break out below. According to the RMLS Market Action Report for the Portland Metro Area March, 2013.
At 1,935, Closed Sales were the best since 2007, and a 40.6% increase over Feb. 2013!
There were 3,002 New Listings, which is an increase of 22.4% over Feb. 2013!
The Average Sale Price in March was $299,000, up from $282,000 in Feb. 2013.
Pending Sales increased from Feb. 2013 by 23.4% to 2,628.
For our Property Blotter readers, the combined area of Lake Oswego and West Linn also reported every sales aspect improving compared to last month:
As Realtors, we always encourage our Buyer clients to get information “direct from the horse’s mouth”, or more accurately, to call or visit the city where one is purchasing, and talk directly to the Planning or other related department about records for the home. You can ask any number of questions and talk directly to those “in the know”. We do conduct our own research, and do get involved and assist, but I still believe the best practice is for the Buyer to get their information “direct”. That way there’s no translating involved, and nothing that gets left “un-asked” that a client might wish they had asked their Realtor to find out later on. The people at the City are really nice folks, and are there to help. If you’re looking for a home in Lake Oswego, give them a call or pay them a visit! Here’s the link: City of Lake Oswego/Planning.
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Similarly, the Internet is a fantastic source for much of the information you want to find out regarding a home’s background, development potential, easements, past permits, lot lines, etc etc etc. There is a site called Portland Maps that can be accessed for information on Lake Oswego properties as well. This link is easy to use. Just type in the address, and voila, the aforementioned, along with demographics, crime statistics, and more is at your fingertips. Here’s the link to Portland Maps.
When buying a home in Lake Oswego, you’ll often see mention of easements as a feature of the property. Just what is an easement? Don’t all of the houses in Lake Oswego have easements?
The history of the lake easements go back many years. There was a time, in the early development of neighborhoods in Lake Oswego, when vacant lots were available for purchase on the lake. Developers of neighborhoods would buy a lot and deed it to the entire neighborhood. These “easements” are part of the recorded deeds for these homes and primarily consist of homes built between 1920 and 1970. By the time that the newer neighborhoods were being developed, houses from about 1970 and newer, there were no longer vacant lots on the lake and so easements were no longer being created. So, no, not all houses in Lake Oswego have easements. Having an easement is a special feature of the home that does enhance its desirability to buyers.
What I am discussing here are lake easements, and not the swim parks. Lake Oswego has two swim parks. One on Lakeview Blvd that is operated by the school district, and one on Ridgeway that is operated by Lake Oswego Parks and Recreation.
The lake easements have a variety of amenities. Most have a lawn area with tables for picnics. Some have boat slips and canoe racks. One has a huge enclosure in the middle of which is water trampoline. There is a good deal of variety.
There is usually a waiting list for a boat slip. Space on canoe racks is usually available at the start of the summer season.
Some homes have deeded easements privileges at more than one easement. If you are considering buying a house that has an easement, visit all of them that you may have access to and find the one you like best.
Each easement is managed by its own by laws and a volunteer board of directors. There is a designated person on the board who manages the access. If you have easement rights, contact the appropriate person on the board, pay the annual fee, and obtain a key to the entry of the easement.
If you would like to find out of a particular property has easement privileges, call the Lake Corporation at 503-636-1422.
For specific information about the easements and who to contact to activate use of an easement click here.
It may still be February, but sun and enjoyment of the lake is just around the corner.
Dianne
Every winter the various title companies bring in economists to forecast what the coming year is going to look like, and every year I make it a point to attend at least one of these presentations. I gotta tell you, for the last 5 years, it’s been painful. Doom and gloom and hang onto your coat tails cause it’s gonna be a wild ride. What a breath of fresh air it was two weeks ago to go to the economic outlook program put on by WFG National Title.
The guest speaker was Patrick Stone, the President and CEO of Williston Financial Group. I am not going to quote Mr. Stone directly as my note taking was not done verbatim. I am going to instead share with you the general idea of what I took away.
First, after the recession, as a country and as individuals, we are well positioned for economic growth. This is because the recession allowed us to restructure out debt to get rid of it and to refinance it at a lower cost. This has created more liquid assets for both consumption and savings.
Second, as a state, Oregon is uniquely positioned to do even better than the national average.
GDP for the state of Oregon was second only to North Dakota, growing at 4.7%. This was attributed to Oregon’s manufacturing sector which is quite a bit stronger than the National average.
The prediction was made that we should see continued economic growth this year and into the next few years. Bear in mind that this could change if something horrible happens such as a terrorist attack or a huge natural disaster.
Mr. Stone went so far as to suggest that our housing recovery will likely recoup the house values lost to the recession by 2016. That would mean a 20% growth in house values in the next 3 years. Personally, I feel that momentum is happening. Will it sustain? I hope so.
Mr. Stone also talked about a future housing shortage. This would happen because of our strict land use laws that make the development of new land for new construction a slow process. To have lots for new homes in 2015, that land needs to be in the development process now. And not much bare land is currently in that process. Builders suffered in the recession and just have not been positioned to have the resources to invest in land development. That is changing. New housing starts are on the rise and the builders are beginning to prosper.
The long and short of it is that with a low supply of land and a growing economy, there will likely be a housing shortage in the future. Economics 101 is about supply and demand. Low supply combined with high demand is what causes prices to go up.
No, I don’t have a crystal ball. Yes, I may be entirely wrong. But based upon what I heard at this year’s economic forecast session, 2013 should be a good year for the real estate market and that positive growth is likely to continue into the years ahead.
I sure hope so. We all deserve some good news.
Dianne
* When pricing your home, please take all that your Realtor has shown you in the way of comps, and let yourself have some time to consider your options. There are various pricing strategies, but the most common one favored by Sellers is over-pricing. That is just a well-known fact to anyone in this business. It’s why, when a Realtor sells their own home, they usually ask for a reality-check from their peers : ) It’s natural, if you love your home, to believe it will fetch more than, perhaps, what your Realtor is telling you it will. It’s also natural, as the Seller, to be concerned about offers coming in below your “fair” price and therefore lowering that price… Much to your chagrin. I get it. I’ve sold my own homes too. BUT, I will tell you that, if you overprice your home, it will likely cost you money by:
– Sitting on the market too long, and giving the impression that “something must be wrong with this one”,
– Causing you to eventually have to lower the price anyway… probably lower than what you would have priced it at originally given these other factors, and the factor of time, and
– Keep Buyers away who are only searching in price ranges below your higher number.
* In a transaction where you are the Buyer, and “lender issues” are causing you to bump up uncomfortably close to your “on or before” closing date, your Realtor will most likely talk with you about writing up an addendum to “extend the closing date” to accommodate your lending timeline. You need to know though, that this is not a sure deal, and the Seller can say no. If your Seller says no, then you need to think seriously about terminating the transaction in writing before that date if you cannot “perform” (i.e., can’t get a loan).
– If your lending issues are related to you trying to get a better rate (as in… you qualified and would have closed on time, but you decided to try for a different loan package in the middle of the transaction), and your Seller does not agree to extend the date, you need to know that you may lose your Eanest Money. The contract states that you need to be able to secure a loan, so Buyers are generally protected if they can’t… BUT, not closing on time for this reason would not be related to that provision. You could secure a loan, but chose to try for a “better” one. Many Seller’s Agents will ask to see a statement from the Underwriter in these kinds of instances to check on just this kind of sticking point.
– If your loan problems are our of your hands, and you think you have good communication with the other parties, so decide not to bother creating an addendum extending the closing date (your lender could be slow, or you could really be having problems getting a loan), you could, again, potentially lose your Earnest Money, as the contract states “time is of the essence”, and in fact, that is a legal term that means that deadlines in the contract trump all other provisions. It has happened that a Buyer could not obtain a loan, had passed the closing date, and didn’t bother to get an extension addendum signed as they were still trying to make it happen & thought the Sellers were on the same page with them….. Later on, even though they really could not get funding, it was decided that the Sellers could keep the Earnest Money because there had been neither an addendum nor termination completed.
As always, Dianne and I are here for you, and would be happy to assist you in your home-buying or -selling adventure if you are not already working with another Realtor. We encourage you to listen to your Realtor. They are here to help you.
Enjoy the Oregon sunshine!
United Van Lines, the nation’s largest household goods mover, has just come out with their annual study of migration within the United States. This study is not based on total moves. It is based upon percentages. They have been doing this study since 1977.
So what happened in 2012? Oregon is the leading state for in-migration in the country. The only part of the country with a greater percentage of moves into their area was the District of Columbia. Oregon made this list with 61% of Oregon-involved moves being people moving into the state and just 39% of moves from people moving out of the state. Here are the top 5:
1. District of Columbia
2. Oregon
3. Nevada
4. North Carolina
5. South Carolina
Michael Stoll, an economics professor at UCLA, sights factors such as lower housing costs, temperate climate, diversified economies, and high-tech clusters as reasons that people choose to move to the leading states.
My opinion? I think it can be attributed to Microbreweries, Food Carts, easy access to snow boarding, hiking, camping, the beach, and Oregon wine country. And then there is the cult-hit, Portlandia. Portland, and the Portland food scene, have been written up several times in the New York Times with glowing reviews. This is a wonderful place to live, and it’s getting discovered.
In this past year I have personally helped two families make the move to Portland from out of the state. In both cases, they did some research and chose Lake Oswego because of the schools.
I think all of this is good news for our real estate market. It’s pretty basic economics of supply and demand. High demand supports high property values, and after the recent recession it feels good to hear some encouraging news.
If you are considering a move to Oregon, take a look at Lake Oswego. I think you’ll like what you learn. And if you need a great Realtor to help you with the move, please give Linda or myself a call. We would love to hear from you.
