Uncategorized • March 18, 2021

To Renovate or Not To Renovate Before You Sell

by Bene Foley

When thinking about selling, homeowners often feel they need to get their house ready with some remodeling to make it more appealing to buyers. However, with so many buyers competing for available homes right now, renovations may not be as vital as they would be in a more normal market. Here are two things to keep in mind if you’re thinking of selling this season.

1. There aren’t enough homes for sale right now.

A normal market has a 6-month supply of houses for sale, but today’s housing inventory sits far below that benchmark. According to the National Association of Realtors (NAR), there’s only a 1.9-month supply of homes available today (in Portland it is even lower–0.9 month in some neighborhoods). As a result, buyer competition is high and homes are only on the market for about 21 days, during which time many receive multiple offers from hopeful buyers.

In a competitive market that’s moving so quickly, it makes sense to sell your house when buyers are scooping homes up as fast as they’re being listed. Spending costly time and money on renovations before you sell might just mean you’ll miss your key window of opportunity. While certain repairs on your house may be important, your best move right now is to work with a real estate advisor to determine which improvements are truly necessary, and which ones are not likely to be deal-breakers for buyers.

Today, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after, even if it means putting in a little extra work. Home Advisor explains:

“When it comes to the number of home improvement projects completed, Gen Z homeowners are leading the pack, completing an average of 3.5 projects. Millennials closely follow Gen Z, taking on an average of 3.3 projects, followed by Gen X at 2.8 projects. Boomers completed an average of 2 projects, and the Silent Generation completed the fewest projects, on average, at 1.8 per household. Compared to 2019, millennials are spending 60% more on home improvement and doing on average 30% more projects.”

In this market, it may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.

2. Focus on getting a good return on your investment.

When planning any bigger projects to tackle, you and your real estate agent will want to discuss the potential return on your investment and if those projects are worth the cost. Some homes do need a kitchen or bathroom renovation, roof repairs, or other major work, but definitely not all of them. You might be surprised by how well your house could fair in today’s sellers’ market. Hanley Wood states:

“The 2020 Cost vs. Value report shows a predictable increase in costs for all 22 remodeling projects but a consistent dip in the perceived value of those projects at the time of home sale, as estimated by real-estate professionals in more than 100 metro areas across the U.S. This results in a slight downturn on the return on investment for nearly all projects relative to the trends we saw in last year’s report.”

Ideally, homeowners getting ready to move should try to avoid over-investing in big renovations if they won’t make that money back when they sell their house. According to the 2020 State of Home Spending report from Home Advisor:

“The average household spending on home services rose to $13,138, an increase over last year’s survey results, where homeowners who did projects spent $9,081 on average in 2019.”

Before you renovate, contact a local real estate professional to see if it’s the best course of action. You may find out that putting your house on the market as-is will help you sell quickly, and it may result in the best return on your investment. Every home is different, but a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

The Portland Metro area is in a strong sellers’ market, and that means you have the leverage to sell your house on your terms. Feel free to call me today to determine if renovating is really the best way to spend your time and money before you sell.

buyers • market news • March 10, 2021

How Upset Should You Be about 3% Mortgage Rates?

by Bene Foley

Last Thursday, Freddie Mac announced that their 30-year fixed mortgage rate was over 3% (3.02%) for the first time since last July. That news dominated real estate headlines that day and the next. Articles talked about the “negative impact” it may have on the housing market. However, we should realize two things:

1. The bump-up in rate should not have surprised anyone. Many had already projected that rates would rise slightly as we proceeded through the year.

2. Freddie Mac’s comments about the rate increase were not alarming:

“The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”

A “muted” rise in rates will not sink the real estate market, and most experts agree that it will be “a strong spring sales season.”

What does this mean for you?

Obviously, any buyer would rather mortgage rates not rise at all, as any upward movement increases their monthly mortgage payment. However, let’s put a 3.02% rate into perspective. Here are the Freddie Mac annual mortgage rates for the last five years:

2016: 3.65%
2017: 3.99%
2018: 4.54%
2019: 3.94%
2020: 3.11%

Though 3.02% is not as great as the sub-3% rates we saw over the previous seven weeks, it’s still very close to the all-time low (2.66% in December 2020).

And, if we expand our look at mortgage rates to consider the last 50 years, we can see that today’s rate is truly outstanding. Here are the rates over the last five decades:

1970s: 8.86%
1980s: 12.7%
1990s: 8.12%
2000s: 6.29%
2010s: 4.09%

Being upset that you missed the “best mortgage rate ever” is understandable. However, don’t throw the baby out with the bathwater. Buying now still makes more sense than waiting, especially if rates continue to bump up this year.

Bottom Line

It’s true that you may not get the same rate you would have five weeks ago. However, you will get a better rate than what was possible at almost any other point in history. Let’s connect today so you can lock in a great rate while they stay this low.

Bene's Blog • Sellers • March 4, 2021

Is It a Good Time to Sell My House?

by Bene Foley

Last year, many homeowners thought twice about selling their houses due to the onset of the health crisis. This year, however, homeowners are beginning to regain their confidence when it comes to selling safely. The latest Home Purchase Sentiment Index (HPSI) by Fannie Mae shows that 57% of consumers believe now is a good time to sell.

Doug Duncan, Vice President and Chief Economist at Fannie Mae, explains:

“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale.”

Normally, spring is the busiest season in the housing market – the time when many homeowners decide to list their houses. While this is obviously not a normal year since the pandemic is still very much upon us, experts are optimistic that consumer positivity around selling will lead to more homeowners making moves this year. Duncan continues to say:

“We will pay close attention to see if this newfound optimism develops into a trend.”

What does this mean if you’re thinking of selling your house?

The fact that there are so few houses available for sale today is one driver that’s encouraging consumers to think more positively about selling. The National Association of Realtors (NAR) states:

“Total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million).”

With so few homes available to buy, your house will be more likely to rise to the top of an eager purchaser’s wish list in this competitive market. Today’s high buyer activity is creating upward pressure on home prices and more multiple-offer scenarios. According to the Realtors Confidence Index Survey from NAR, the average home for sale is receiving 3.7 offers today, up from 2.3 offers just one year ago. This makes selling even more enticing.

In this kind of sellers’ market, you have a huge advantage in the process. And here’s another win – you can also use your equity toward a down payment on a new home when you move.

Wondering where you’ll go if you try to move while it’s so challenging to find a home to buy? Well, in many areas, there are more homes available at the higher end of the market, so finding a move-up home may be less of an issue if you’re ready to search for your dream home this spring.

Bottom Line

If you pressed pause on selling your house last year, now may be the best time to put your plans back into motion while inventory is so low. Most neighborhoods in the Portland Metro area are in high demand–regardless of price range! Let’s connect today to get the process started.

market news • February 18, 2021

Will Low Mortgage Rates Continue through 2021?

by Bene Foley

With mortgage interest rates hitting record lows so many times recently, some are wondering if we’ll see low rates continue throughout 2021, or if they’ll start to rise. Recently, Freddie Mac released their quarterly forecast, noting:

“The average 30-year fixed-rate mortgage hit a record low over a dozen times in 2020 and the low interest rate environment is projected to continue through this year. We expect interest rates to average below 3% through the end of 2021. While this is a modest rise from 2020 averages, the recent vote by the Federal Reserve to keep interest rates anchored near zero should keep rates low.”

As shown in the graph below, Freddie Mac is projecting low rates going forward with a modest rise that’s expected to continue through 2022.Freddie Mac isn’t the only authority forecasting low rates with a slight rise. Fannie Mae, The Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR) also anticipate low rates with a small increase as 2021 continues on. Here’s the quarterly breakdown of their projections and how they’re expected to play out over the next year:It’s important to note that, while a small change in interest rates can have a substantial impact on monthly mortgage payments, these rates are still incredibly low compared to where they were just a couple of years ago.

What does this mean for buyers?

Low mortgage rates are creating an outstanding opportunity for current homebuyers to get more for their money while staying within their budget. As the economy gets stronger and we recover from the challenges of 2020, it’s natural for rates to potentially rise in response to a healthier economy. Mark Fleming, Chief Economist at First American, reminds us:

“Rising interest rates reduce house-buying power and affordability, but are often a sign of a strong economy, which increases home buyer demand. By any historic standard, today’s mortgage rates remain historically low and will continue to boost house-buying power and keep purchase demand robust.”

With low rates fueling activity among hopeful buyers, there are a lot of people who are highly motivated and looking for homes to purchase right now. In this environment, it can be challenging to find a home to buy, so a local real estate agent will be key to your success if you’re thinking of buying too. Working with a trusted real estate professional to navigate the process while rates are in your favor might be the best move you can make.

Bottom Line

If you’re ready to buy a home, it may be wise to make your move before mortgage rates begin to rise. Let’s connect to discuss how today’s low rates can create more opportunities for you this year.

buyers • Uncategorized • February 11, 2021

Involving Children in the Home Buying Process

by Bene Foley

One of my clients recently asked me how much consideration she should be giving to her child’s desires when buying a house. Since I was an elementary school teacher for 15 years before becoming an agent, she thought I would have an opinion. I suppose I do, but it is complicated.

Buying a house is a big deal for a family. However, choosing just the right one is not as difficult as one might guess. Fifty percent of my clients find a house that they want on the first trip out. Many times, once the top 6 or so needs/wants are established, it is more a matter of “a good feeling” about a house that ultimately decides a buyer. Sometimes the parent(s) feels great about a house and the child—or children don’t.

There are two major points I want to make. One is about the younger child and the other is about the teenager. For the young child, what makes a house a home, is that their parent(s) lives there and their belongings are present. It is hard for some of them to imagine, the way adults can, what their furniture would look like in a different space. Once the family has moved in, the child is content in their new home. Often time, just one little aspect will excite a child. For some children it is a play structure, a secret door or hiding place. When we bought our house, my nine-year-old did not want to move there. Once he saw the laundry chute, he was sold! So, no, don’t take their opinion too seriously. That said, if you subscribe to the notion of the spiritual, children can be more open to the ‘energy’ of the house. I happen to believe that you can change the energy a space, but that is only an opinion.

Teenagers have strong opinions. They also have more logic than the young child. If the wants and needs of the family are spelled out clearly to them and they still don’t like the house the parents want, I say this: in most cases, your teenagers will not be living there long. I know it feels like a long time to you (and them), but three, four years and they will be gone. You, their parent(s), will still be there. The true needs of the family will be met with a roof over their heads. Again, I wouldn’t take their opinions too much to heart. However, it is nice to bring teenagers into the process early on. If they are educated about the process the parent(s) is going through, they may feel like they are part of it and can be more supportive of the chosen house.

Do you have stories to share my readers about your child’s wishes when buying a house?

market news • January 21, 2021

Owning a Home Is Still More Affordable Than Renting One

by Bene Foley

If spending more time at home over the past year is making you really think hard about buying a home instead of renting one, you’re not alone. You may be wondering, however, if the dollars and cents add up in your favor as home prices continue to rise. According to the experts, in many cases, it’s still more affordable to buy a home than rent one. Here’s why.

ATTOM Data Solutions recently released the 2021 Rental Affordability Report, which states:

“Owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed for the report.

That has happened even though median home prices have increased more than average rents over the past year in 83 percent of those counties and have risen more than wages in almost two-thirds of the nation.”

How is this possible?

The answer: historically low mortgage interest rates. Todd Teta, Chief Product Officer with ATTOM Data Solutions, explains:

“Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check.”

In 2020, mortgage rates reached all-time lows 16 times, and so far, they’re continuing to hover in low territory this year. These low rates are a big factor in driving affordability. Teta also notes:

“It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the Coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”

Bottom Line

If you’re considering buying a home this year, let’s connect today to discuss the options that match your budget while affordability is in your favor.

buyers • January 7, 2021

The Importance of Home Equity in Building Wealth

by Bene Foley

Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted:

“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.

You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, contact me or any real estate professional.

Is homeownership truly a better path to wealth than renting?

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.

As proof of this, First American broke down the net worth of homeowners and renters by income categories. Here are their findings:Only one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.

According to the latest Homeowner Equity Insights Report from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state. Check out Oregon:

When can you cash in on your housing wealth?

Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:

Selling
Refinancing

Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.

Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.

How can these options help homeowners?

During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently explained that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:

“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”

What might the future bring?

Most experts are calling for home prices to continue appreciating going forward. The Home Price Expectation Survey, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:

Bottom Line

Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.

Things to do in Portland • December 22, 2020

Nature Walks in the City

by Bene Foley

Photo of views from Mt. Tabor by Sarah Ardin

If you have followed my blog, you know that I love to walk in my neighborhood—or really in any Portland neighborhood. But occasionally I will drive to walk elsewhere. There are a couple of urban walks I like to do, but often if I am going to drive to get somewhere, I want a little more nature. This blog post is not meant to be a complete walking guide for Portland. In fact, there are so many great places to walk in this city that I would need an entire book to catalogue them. I won’t be writing that one, but I am sure you can find a great book at Powell’s. So for now, here are a few of my most common walks:

Powell Butte

Powell Butte is a bit on the outskirts heading toward Gresham. But it is worth the distance. The walk takes you up to a high grassy hilltop with few trees and excellent views on a clear day. A stone structure points to each of the mountains that can be seen in the distance. But what I love about Powell Butte is that you can also go down from the barren hilltop to a forested area where you can cool off in the summer or shelter from the rain in the winter. Mountain bikers come here too, so watch for them tearing down the paths in the forest area. Powell Butte Nature Park

Mt. Tabor

Mt. Tabor sits right in the center of East Portland. You can take public transit to get there or ride a bike from anywhere on the east side. Mt. Tabor, an extinct volcano, has several reservoirs and beautiful views of the city. There are wide paved paths as well as sets of steep stairs and many side dirt paths. It even hosts a huge dog park that is out of the way enough that some people do not even know it exists there! Mt. Tabor has playgrounds in the shade and sunny grassy areas that are great places to throw down a blanket and stay awhile—after you walk. Mt. Tabor Park

Oaks Bottom

Oaks Bottom Wildlife Refuge is a 163-acre piece of land that borders the Willamette River. I like to access it on Milwaukie Avenue, just north of Westmoreland. The small parking lot leads onto a paved path that takes you into the refuge. The paths are mostly heavily wooded, though beautiful wetlands and meadows make up a large portion of this park. There are a few different directions to take here and you may end up on the Spring Water Corridor. That is not a bad place to be, but if you want to avoid bikes, search out the dirt paths that go along the river. As much as I love this park, I don’t often walk here alone. Parts of it are rather secluded and being female, I feel a little vulnerable—though maybe I just listen to too many crime podcasts and read too many murder mysteries! I particularly love this walk on a rainy day. Oaks Bottom Wildlife Refuge

River View Cemetery

I am not a particularly morbid person and I think cemeteries in general are a waste of space. This, however, is a beautiful spot that is popular with walkers and bikers alike. I am assuming that bikers are on a longer ride that cuts through the cemetery, but the grounds are sufficient for an hour or so of walking. This is not your typical cemetery. It is anything but flat and barren. It is steeply sloped with large trees that shade the paved paths. Cars are allowed, but on most walks, I only encounter one or two. At the top of this steep climb, there are brilliant views of the eastside of Portland and on a clear day, you can see Mt. Hood.

There are so many more fabulous walks in Portland and you may have noticed that all of mine (except for the River View Cemetery, which is just across the Sellwood bridge) are in Southeast. To which I say, of course that is where I go to walk, that is where I live. Southeast has so much to offer, I just never really feel the need to leave! But if you live in other parts of town and love to venture out, write to me about your favorite walks and I will include them in another blog.

market news • December 12, 2020

Why It Makes Sense to Sell Your House This Holiday Season

by Bene Foley

If you’re one of the many homeowners thinking about taking your house off the market for the holidays, hang on. You definitely don’t want to miss the great selling opportunity you have right now. Here’s why this month is the optimal time to make sure your house is available for holiday buyers.

The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale has dropped to an astonishing all-time low. It now sits at a 2.5-month supply at the current sales pace. Portland’s east side show the inventory at 1.3 month supply!

Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market, in which there are enough homes available for active buyers (See graph below):When the supply of houses for sale is as low as it is today, it’s much harder for buyers to find homes to purchase. This means competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.

As this happens, prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. So, if your neighbors decide to remove their listings this season, your house may quickly rise to the top of a holiday buyer’s wish list if you stay on the market.

Today, there are many buyers who are ready, willing, and able to purchase. Record-low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live and to take action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.

Bottom Line

Home prices are appreciating in today’s sellers’ market. Making your home available over the next few weeks will give you the most exposure to buyers who will be actively competing against each other to purchase it. Get in touch if you want to start that process.

market news • October 28, 2020

September 2020 Real Estate Statistics

by Bene Foley

If you are a numbers person, this post is for you. The following link provides an in depth look at the real estate data in Portland, Oregon for September 2020. The report includes available inventory, average list price, average days on market, sold vs. list price, and months of inventory broken down by areas and zip codes.

For example, in Southeast Portland in zip code 97202, there were 88 houses on the market in September. That is a change of -46% from last September. The average list price was $790,000, up 7.2% from last year. Houses were on the market an average of 31 days. To be clear, days on the market statistics including all the days that it is pending and well as for sale. Which means most of the houses on the market had only 3-5 days before an offer was accepted!

Houses in 97202 were sold, on average, at 100.4% of the list price. In other areas of Portland this was as high as 104%. These are the numbers, but anecdotally, every agent in Portland has a story similar to mine: My clients just put an offer on a house in Sellwood. They offered $50,000 over asking price. They lost the house to someone whose offer was around $60,000 over asking.

There were 1.6 months of inventory in 97202, down 63.6% from last September. The simplest way to explain “months of inventory” is that at our current rate of home sales, if no new properties came on the market, we would be out of inventory in X # of months.

For information on other areas–including Clackamas County you can go to the link below:

A – By the Numbers – September 2020 (1)

If you have any questions or want to become one of the statistics for next month, give me a call.