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Patie Millen

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The Time to Sell and Buy is Now

by Patie Millen

With 2013 off to a start and interest rates as low as 3.5%, buyers are in the market. This is the busiest market I have seen since 2005. Inventory is down, with buyers having fewer choices in the market. The year ended with our Ashland market sales price increasing 5.82% over 2011. Our market is still down 32% or so from 2005 levels but the bleeding has stopped. There are many good solid deals and buyers are responding.

People need to be aware that the Quantatative Easing that began in September 2012 that started pumping $40 billion monthly into the economy is giving the feds some of what they want. The low rates are keeping the market moving in an upward direction. And with prices inching higher buyers want to buy now. This buyer demand could mean higher interest rates, still for now, they are at 60 year lows!

Spring is the time of year that most folks believe is the beginning of the real estate market. New inventory comes on the market, buyers come out to make their decisions and the weather is beautiful. However, this past fall and winter were very strong in our local market. During the fall of 2012 we began to see homes not only in the lower ranges sell quickly, but buyers moved into the mid range and we saw the beginning of renewed activity in the high-end market.

2013 should be a very strong market. The low rates allow more buying power for buyers and they will take advantage of that and the low prices. Buyers are aware that prices will go up with demand. Do not expect prices to shoot up, but we will see modest price increases. Sellers will be able to get more for their homes than they have been able to for years. But don't let greed creep in. That's what got us into this in the first place. For a home to sell it will still have to be in good condition and be priced for the market.

 

September 2012 vs. October 2012

The real estate market in Southern Oregon has continued to be very busy. In the lower price ranges under $200,000 buyers are competitive. If a home is well cared for, nice neighborhood and priced well it will in all probability have multiple offers. I tried to write two offers today for a client for homes that were new to the market. One already had 9 offers and the other had an accepted offer with 4 buyers in back up position. Buyers have to be preapproved for their loan and more importantly willing to act very fast. They need to be willing to sign on the dotted line and get their offer submitted. You always have time later to change your mind within the terms of the contract if written correctly, and retain your earnest money. If you find a home you love, do not think you have time to spend several days researching it and seeing how you feel about it. Tie it up first then see how you feel about it. You will have time to think as you move through the escrow process. It is essential that you have contingencies for approving of  all inspections,  the title report and the seller's property disclosure statement. The closing will also be contingent on the property appraising at or above the purchase price and funding of your loan. Working through the initial steps of this process will give you time to do your research. It is imperative that you stay strictly within the agreed to timelines outlined in your contract so that you keep your earnest money secure.

So here is what is happening in the Jackson County, Oregon market for the first 3 weeks of October vs. the first 3 weeks of September. We are in need of inventory. There were 99 new in-town homes added to the market as compared with 56 in the first 3 weeks of September. Even though that is an increase, we still need more inventory for all of the large pool of buyers that are in the market. 167 homes received pending sales for the first 3 weeks of October as compared with 98 in September. So even though we have more new listings they are selling at 170% faster than last month! 130 homes have sold as compared to 104 in September's first 3 weeks. Total sales volume for single family in-town residences to date in October are $29,000,000 vs. $24,000,000 for first 3 weeks in September. 50% of homes are selling in the first 30 days on the market for a sell to list price ratio of 98.66. Sellers are receiving 98.66% of their asking price if their home sells in the first 30 days. Finally, we have a total of 396 homes with some sort of real estate activity in October as compared to 258 homes in September, 153% more homes with activity.

So that tells a story we have seen over the past 4-5 months. An improving market on many levels, definitely strong activity. However pricing is slightly down by 3%. Septembers average selling price was $$230,573 vs. October's of $223,037. 80% of homes sold are priced below $300,000. A small smattering of homes in the higher ranges are selling, but it is not significant. Although the first two homes in 2012 priced over $1,000,000 sold in September and one for over $2,000,000 in October that market is slow, the good news is that we are seeing the first signs of life in a while.

Southern Oregon Real Estate is Selling!

by

More good news. Pending sales in Jackson County in Southern Oregon are up 42% from this time last year. Previously to August we were seeing fast activity on homes priced below $300,000 and especially for homes priced below $200,000. The middle price ranges in the $400,000 to $600,000 was moving slowly, very slowly. The high end was not moving at all. To date (August 21, 2012) there have been no home that have sold in Jackson County priced over $1,000,000. Two sold in the mid $900,000 range. That was it. Pretty astonishing. Well, in the past several weeks 9 homes priced above $900,000 are now pending! That is very significant. That is more activity in the past few weeks than we have seen all year.

So for now, the market is very good, interest rates are low, low low (under 4% and under 3% for a 15 year fixed loan). If you have been on the fence about buying a home or investment property, it is time to do something about it.

I have been very cautious about getting overly enthusiastic but I cannot deny that the good news just keeps on coming. At first our pending sales were up 25% over the same period last year, than that figure moved up to 32% and now we are at 42%. Several months ago the activity was only in the low ranges, now it has moved into the mid ranges and even into the over million mark. Stay tuned and get your check book.

THE BUST IS OVER!

by Patie Millen

 

July 15, 2012

Now I don't want the seller's in our local market to start getting giddy and giving each other the high five, that is hardly what this headline is about. I don't think it would be a wise strategy to wait for the market to come back before selling your home unless you were born after 1990 and have a good deal of time left. But the good news is that we have a changed market, a market with slightly more activity, a market where home prices have stopped dropping at a quickened rate and that is very good news. Across the country as well as here in Southern Oregon we are seeing multiple offers in the low price ranges, under $200,000, if the property is a deal. In the Rogue Valley the mid ranges are just beginning to show slight activity and the high end market, over $900,000 has recorded only 1 sale in the past six months. However, a number of my listings in the higher ranges have just started to have a number of showing requests over the past 3 weeks.

For a number of months in a row we have seen countywide pending sales exceed the 2011 numbers by 17% on the low side in March to as high as 40% in June. As inventories decline we are seeing the number of available properties per buyer shrink to 4. This is a great time for sellers to sell their homes and it is also an excellent time for buyers to buy, I think the best ever. So my message to sellers right now is this is not the time to play hard to get. Another way to say this is "make hay while the sun shines." It is important to keep in mind that we have a very, very long way to go to fully pull out of this and any number of local or world situations could cause the market to retreat once again.

More good news comes from HousingPredictor.com which forecasts that although housing prices in much of the country will continue to decline there are a few cities that are forecast to have housing price increases. Medford, Oregon and surrounding communities are forecast to have their housing prices increase 13.9% over the next 5 years. You can read the article here: http://www.nuwireinvestor.com/articles/five-best-real-estate-markets-for-2012-2017-59404.aspx

As reported by David Wessel of the Wall Street Journal in his article of July 11, 2012:

“Economists aren't always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don't.

Housing is still far from healthy despite the Federal Reserve's efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac's latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. Americans' equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction slowly.

Still, the upturn in housing is a milestone, a particularly welcome one amid a distressing dearth of jobs. For some time, housing has been one of the biggest causes of economic weakness. It has now—barely—moved to the plus side. "A little tail wind is a lot better than a headwind," says economist Chip Case, the "Case" in Case-Shiller.

From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. "Manufacturing had led growth and construction had lagged," JPMorgan Chase economists said last week."Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life."

Plenty could go wrong. The biggest threat is a large shadow inventory of unsold homes, homes which owners won't put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get worse. Or overly zealous regulators or a post-election change in government policy could unsettle mortgage lenders or home buyers.

But the housing bust is over.

Yes! You Should Buy Now!

by Patie Millen

I am not one of those Realtors that is always gung ho on the market telling you now is always the best time to buy regardless of what is going on. If I feel that pricing will continue to decline, I will tell you that.  I may encourage you to buy, but I will make sure that we negotiate your purchase price to where the market is going.

I now feel that today, right now, is the most perfect time to buy that I have seen in years. Here is why: For March 2012 (this was also true for February) we are seeing pending sales increase 17%, inventories decrease by 21%, the days on market time has decreased by 10%, the list vs. sales price has gone up 3%, the number of homes available to a buyer has declined by 29.8% (that is huge) and the months supply of homes for the lower end has decreased a whopping 42.8% from 7.6 month's supply to 3.6 month's supply (huge again). 

I am a numbers person and those numbers tell a story. So should you buy? In the words of Napoleon Dynamite " Heck, yeah!" The lower end market, under $250,000 is very fast right now. For the first time in years I am experiencing multiple offers, homes going quickly and buyers missing out that didn't position themselves correctly when writing an offer. Buyers and Sellers always seem to use laser like focus to hone in on that $2500 at the tail end of the purchase price. We have $250,000 or $200,000 that we are working with and they act like that last $2000 is what their offer is all about. It isn't. They really need to step back and see that as a buyer if they really like the property, it is in good condition, good location and that it will give them many years of enjoyment, why would you walk away from it when you can borrow that $2000 at under 4% and for $9 a month you can live where you want to live? I realize for investors and rental properties the numbers need to be where they need to be to fit your investment formula, but for an owner occupied home, take a wide perspective. 
You can't even buy a pizza for $9. Just saying. And for the sellers that refuse to come down that additional $2000 on their price to a qualified and willing buyer, what are you thinking? Even if you can make 6% return on that 2000, it would take you 25 years to make $3000 off it on straight interest. Never, ever, ever in this market or even in a great market leave several hundred thousand dollars sitting on the table in the hopes of making under $5,000. It is not smart and it is not worth it so that you can feel smug at dinner parties telling your friends how you squeezed that last $2000 out of someone. Instead tell the story of what a fair deal everyone got and how great you and the buyers felt and what a wonderful transaction it was. Oh, and how happy you are to move forward with your lives rather than being in the group of sellers that still have not got the memo and are lingering on the market year after year. It is a much more joyful story and people like joy.

Last few points on why this is a perfect time to buy. When the lower end starts moving like it is and we are seeing more investors and cash buyers coming into the market, which we are, we know that the middle range will follow this trend. So get going, call me, call your Realtor, get your check book and let's get into the real estate market.

 

Should I Buy a Home Now?

by Patie Millen

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

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