3 Reasons Housing Market Is Not A Bubble

3 Reasons the Housing Market is NOT in a Bubble

With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago.

Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to attain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many markets to overbuild.

Eventually, the excess in new construction and the flooding of the market with distressed properties (foreclosures & short sales), caused by the lack of appropriate lending standards, led to the housing crash.

Where we are today…

1. If we look at lending standards based on the Mortgage Credit Availability Index released monthly by the Mortgage Bankers Association, we can see that, though standards have become more reasonable over the last few years, they are nowhere near where they were in the early 2000s.

 

With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago.

Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to attain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many markets to overbuild.

Eventually, the excess in new construction and the flooding of the market with distressed properties (foreclosures & short sales), caused by the lack of appropriate lending standards, led to the housing crash.

 

Where we are today…

1. If we look at lending standards based on the Mortgage Credit Availability Index released monthly by the Mortgage Bankers Association, we can see that, though standards have become more reasonable over the last few years, they are nowhere near where they were in the early 2000s.

2. If we look at new construction, we can see that builders are not “over building.” Average annual housing starts in the first quarter of this year were not just below numbers recorded in 2002-2006, they are below starts going all the way back to 1980.

3. If we look at home prices, most homes haven’t even returned to prices seen a decade ago. Trulia just released a report that explained:

“When it comes to the value of individual homes, the U.S. housing market has yet to recover. In fact, just 34.2% of homes nationally have seen their value surpass their pre-recession peak.”

Bottom Line

Mortgage lending standards are appropriate, new construction is below what is necessary and home prices haven’t even recovered. It appears fears of a housing bubble are over-exaggerated.

Posted on May 11, 2017 at 8:01 pm
Denice Neddo | Category: Buying, The Market Stats

What You Need To Know About Easements

What You Need To Know About Easements 

In some real estate transactions, it’s not until the middle of the deal that a home buyer realize that the land they thought they were purchasing with their home is not 100 percent theirs. Most are shocked to discover that they are obligated to allow the neighbors to “share” part of their land, or that the local utility company has a right to access a pipe buried in their back yard.

How can this be? In both examples, the properties have what’s known as an “easement,” otherwise known as a “right-of-way.” This easement grants other designated people the right to specific types of access. Easements can be granted to another person, such as a neighbor, or to an entity, such as an electric and gas utility.

A property easement is generally written and recorded with the local assessor’s office. The documented easement will show up when a title search is conducted and it stays there indefinitely, unless both parties agree to remove it.

Without getting too deep into legal details, here are the types of easements worth knowing about.

1. Right-of-way through your property

As a homeowner, you would probably assume that you’re purchasing the land around your home, front yard, back yard and driveway. But that’s not always the case. Often, when you review the preliminary title report, you may discover that someone actually has a right-of-way through your property.

This is common in the case of a long driveway or a home that may be set back from the street. It could have been that in order for a neighboring home to have been built, that property’s owner negotiated with a previous owner to gain a right-of-way through the front of the parcel or driveway for the home you are buying.

In this scenario, you own the land, but the owner of the neighboring property has been granted right to pass through your property. In some instances, the previous owner might have been compensated for granting this access. The important thing to know is that easement carries over when a new owner assumes the property.

2. Right-of-way grant

If you’re the homeowner who needs access to a neighboring property, or you discover that the driveway or walkway to your home is actually not 100 percent yours, there’s usually nothing you need to do. It’s just important to be aware of these conditions, and that this is not entirely your land.

Depending on the size of the easement and the type of land it covers, there may be some issues regarding maintenance. For example, it may be your responsibility to keep up the land: Mowing the lawn, shoveling the pathway or maintaining a fence. If there’s a maintenance ambiguity, check with the current seller to understand how she and the other owner worked this out in the past. Many times an easement like this, known as a “Right-of-Way Grant,” has been on title through the course of three or four owners, making the original intentions or understandings not explicit. Understanding how the easement has worked in most recent practice is your best course of action.

3. Other types of easements

Anyone who lives in a condominium or some type of planned development likely spends many hours working on property they don’t own outright but have access to. Most likely, the condo or planned development’s homeowners association (HOA) actually owns those areas, but each resident or owner has a right to pass through, which is one obvious type of easement.

But some easements aren’t so obvious and take buyers and homeowners by surprise. A classic example is one in which a utility company, such as an electric and power company or a telephone company, has an easement through your land for the purpose of maintaining the utility.

There was a situation near San Jose, CA, in which the electric and gas utility had an easement through someone’s backyard. It had been on title for many years, but the existing owners didn’t know about it. One day, the electric company showed up with digging machines and materials and made a mess of the yard digging to fix a faulty line. Though the owners were shocked, there was nothing they could do.

Situations like these show why it pays to be cautious if an easement shows up in a property title search. Ask the title company, attorney or your REALTOR to retain all documents pertaining to the original easement in order to review the details. That way, you will know the exact location of the easement, its size and scope and how it’s to be utilized.

Often, there’s not a problem with easements, but it’s still important to check. Any potential red flags might wind up affecting the value of your home.

In the case of the house in San Jose, for instance, what if the utility company had done permanent damage? What would be the homeowner’s recourse, if any? It’s best to vet these things before closing, rather than facing a serious real estate dilemma down the road.

Make sure you are working with an agent or broker that understands easements and right of ways, you will be glad you made a good decision to have great representation.  

Contact Denice at 360-607-4226

 

Information from Brendon desimone, posted on zillow 3/2012 

Posted on July 23, 2015 at 5:58 pm
Denice Neddo | Category: Buying, Selling | Tagged , , , , , , ,

I Hate Bidding Wars

I Hate Bidding Wars 

 

I hate bidding wars, how to make an offer and avoid paying too much

 

The inventory is still LOW!  How are you going to position yourself in today's competitive market and buy house without feeling like you paid too much?  

Here are some strategies:

 

1. Write your offer quick. When you find the home that fits all your requirements, write an offer quickly and make it attractive to the seller. Avoid a bidding war at the onset by making your purchase contract a convincing one.

 

2. Do your research ahead of time.  Don’t play around with the asking price of the home. Do your research and if the house warrants full price, offer full price.

 

3. Proof of funds. Include bank statements proving the availability of a substantial down payment. The lower your down payment, the more questionable your offer is to a seller. Sellers look for strong buyers who aren’t at the mercy of mortgage lenders or appraisers. Showing that you have funds available can give  the seller confidence that you can make up the difference if the home doesn’t appraise up to the mortgage amount.  Also include strong amount of earnest money with your offer to show the seller that you’re a serious buyer. 

 

4. Don't include a bunch of contingencies.  Go ahead and include a home inspection and financing contingency,  but don’t ask the seller to take care of or reduce the price based on small problems your inspector finds.  Get that inspection done immediately!  The sooner the better.  Submit your mortgage pre-approval with the purchase contract. The more cash you have available to put into the transaction the more attractive your offer. Remember that other offers will come in and you want yours to STAND OUT…. eliminate other minor contingencies and make your offer as clean as possible. Know your limit if a bidding war ensues and don’t get caught up in the "eBay Effect" and the emotions of "I am not letting someone else take this away from me”. 

 

Move on to another property if the bidding goes beyond what is reasonable for the market.

 

5. Be flexible when it comes to closing.  Find out when the seller wants to close and write your offer to coincide with his plans. Freeing the seller of pressure to move makes your offer more attractive, especially if there are children and school terms involved. Offer to close and rent the house back to the seller if necessary. Involve the seller’s emotions and include a letter with your offer that indicates your appreciation of the property and how you and your family look forward to living in the seller’s lovely home.

 

 

Posted on April 10, 2015 at 9:19 am
Denice Neddo | Category: Buying | Tagged , , , , , ,

The $25,000 Mortgage Mistake You Could Be Making

You Don't Have to Make the $25,000 Mortgage Mistake 



Could you pay too much for your mortgage? If you’re like millions of Americans, the answer is probably, "YES" — and that means you may be throwing tens of thousands of dollars of your hard-earned money at the bank, when you don't need to.

A recent report written by the Consumer Financial Protection Bureau said that almost half (47%) of Americans don’t shop around for a mortgage when they purchase a home. WHAT? 47% ? ?   


Why is it that buyers put so much thought and effort into looking for the right home, and so little into how to finance it?  

Number of lenders Americans seriously consider before applying for a mortgage

CFPB

 

 

 

 

 

 

Source: Consumer Financial Protection Bureau  

You need to shop around for a mortgage, if not, you’re probably leaving a ton of  free money on the table. “Interest rates can span more than half a percent for a conventional mortgage for borrowers with a good credit rating and a 20% down payment,” says Sam Gilford, a spokesperson for the CFPB.


Hire a buyer's agent (like me!!!) that knows how to help you in the process.  Ask your agent if they know how to help you get the seller to buy your mortgage interest rate down.  How much money could you save over 30 years if the interest rate was even a quarter percent lower?


A half a percent could be more than $25,000 mistake for the average home buyer (if you consider the average home sold in the U.S was around $322,000).  What if you shopped around? Found a lower rate, and then had that rate lowered even more?  What type of costs are associtated with your loan? Are they negotiable?  Will another lender be able offer lower costs, like the orignation fee, doc fee, processing fee?

Say a borrower accepts a 4.5% interest rate instead of a 4% interest rate on the average home (a sale price of $322,000 with a 20% down payment that means he needs to get a loan for $257,600).  If you are looking at a 30-year fixed rate loan at 4.5%, you will pay a total of $212,250 in interest; for a 4% interest rate, he will pay just $185,100 — a difference of more than $27,000!! 


That's a lot of money! 

If you buy a house that costs more than average — or if you have a smaller down payment than 20% even on an average home — the results may be even more grim. For example, a person who gets a $500,000 mortgage would pay more than $412,000 in interest over the life of his 4.5% 30-year fixed rate loan, which is roughly $53,000 more than with a 4% rate.

I know, I know, many people who don’t shop around may get the best rate anyway — or at least close to it. And, some even get a mortgage that may be a little too costly, but refinance later and save money. Then there are others that will sell their houses well before the 30-year loan period is up, so they end up paying less in interest. But, for the time they do own the house, they still are paying more than they may have had to. 

That is why experts say it’s worth shopping around, as even 1/10th of a percentage point can mean thousands of dollars in extra payments to the mortgage company over the life of a loan. 


Luckily, shopping around for a loan is pretty easy, first, consider what type of loan makes the most sense for you and figure out how large of a loan you can afford.  Keep in mind the amount that a lender qualifies you for, may be way higher than what you feel comfortable with (there are dozens of online calculators that can calculate your monthly payments and more), set the number yourself, and know what that number is ahead of time.

Once you’ve done that, get quotes from your credit union and a local community bank.  Then you can check online and apply with up to three lenders on the same day. Finally, don't forget that you can negotiate with lender.  Check online to know what the best rates are, and negotiate to get it! 



If you are ready to buy in the Portland/Vancouver metro market, contact us today, we will show you how to save even more on your mortgage!  


Denice Neddo, Broker and Real Estate Coach

Windermere 


360-607-4226 Mobile TEXT

503-756-9759 Office 

Denice@DeniceNeddo.com


http://www.PortlandVancouverHomes.com  

http://www.DeniceNeddo.com



?INFO FROM MARKETWATCH.COM

Posted on February 9, 2015 at 12:07 pm
Denice Neddo | Category: Buying, Uncategorized | Tagged , , ,

5 Winter Selling Mistakes You Don’t Want to Make

5 Winter Selling Mistakes You Don't Want to Make!



Selling your Portland Vancouver home in the winter has it's challenges and benefits. Here are a couple of things you want to make sure you DON'T do.  You need to make sure your home shows in it's best light, highlight it's attributes, not the negative aspects!  It's cold, it's rainy, and it's wet.  Make your house inviting! 



The fewer the mistakes a seller makes, the sooner  the home will sell.  After all, it's everyone's goal to get the house sold at the highest price in least amount of time!   Mistakes can hurt your bottom line.  Selling your home in the winter can be a little more challenging, especially when it is rainy and wet out.  Winter home sales are typically slower than the spring and summer months, many homeowners and buyers simply want to wait until the end of the school year, they want to wait until the weather gets warmer and drier.  



Some homes tend to show better when the sun is shining, there is no mud in sight and the rhododendrons are in full bloom, but that doesnt have to be the case.  Your home can sell fast and for a great price, after all, if there is little or no competition for your buyer, your home will be at the top of their list if you remember not to make these easy to avoid mistakes.    

Don't  put up a big sign pointing out any issues or problems.  First off, try to identify them and address them before a buyer can point them out to you.  If you know of something, for heaven's sake, don't highlight or advertise the issue.  Most of these issues below fall in this category. 

 

1.)  PUTTING PLASTIC ON THE WINDOWS to keep out the cold.   If you have poor drafty windows and you usually put plastic on the windows to keep the cold out and the heat in, DON'T do it when you are showing your house to potential buyers. Take the plastic down.

 

2.)  BLOCKING THE DRAFT FROM THE CHIMNEY.  If you are not using the fireplace and have something in front of it blocking a draft, TAKE IT DOWN. The fireplace is a great selling point, that huge piece of plywood is not as attractive as a few candles placed in sparkling clean fireplace.  Just because you don't use it, doesn't mean a potential buyer won't. 

3.)  SAVING MONEY BY SETTING THE THERMOSTAT LOW.      Your home needs to be comfortable not cold.  Buyers might get the idea that your home is very  hard to heat or that the utility bills are way too high.  You may just be frugal and have the temperature turned down, but that may not be the message received.  Buyers will want to get out the house as fast as they can if the temperature is too low, you want them to stay and fall in love.  Warm things up a bit! 

3.)  DOOR DRAFT STOPPERS. I know that Aunt Margie knitted them just for you, and that they do keep the cold out, but again: Put them away.  If you have door draft stoppers by your front door or by any room the buyer may think you have a drafty house.  Our goal is to show your home in the best possible light and not to sell the next house they look at because it is "less drafty".  We want your house to show that it is well taken care of. 

4.)  SPACE HEATERS.  Again, turn up the heat. Opening all of the interior doors and making sure that the air flows will help.   A space heater screams that there is something wrong with your heating system and duct system, and you may only have it on because you like a bit more heat in the room you use most often.  

5.)  NOT HEATING UNUSED ROOMS.  If you have a bonus room, bedroom you don't use or a space that you never go in to,  keep them warm anyway.  Cold rooms, even if you don't use them, can be a huge turnoff.  You never know who your buyer is, or what they would use each room for.  Make the entire house warm and inviting.

 

Anytime of the year it is important to fix all of the items that you can afford to address and have your house in tip top shape for showing, in the winter, we just need to notice these other things that will make your house the number one prospect on the potential buyers list.   Today's buyer is looking for a home that is "Move In Ready".  Unless you house is truly a "fixer-upper" and is priced with all of the repairs considered, make sure the buyer doesn't think your house falls into that category.  Many times a fix can cost very little and a small amount of time to gain a large return.    

Yes, your home may have draft issues or minor problems.  You just don't need to highlight and advertise them.  



For a complimentary walk through and assessment of what "FIXES" your home may need to sell fast and for the most money, call us today! 



Portland Vancouver Home Team



Denice Neddo, Broker / Real Estate Coach

360-607-4226 TEXT Cell

503-756-9759 Office


 

 

Posted on February 5, 2015 at 7:39 pm
Denice Neddo | Category: Buying, Selling | Tagged , , , , ,