Real Estate Information Archive

On April 1st, the Federal Housing Administration (FHA) raised the annual mortgage insurance premium rates, with its primary goal being to bolster the Mutual Mortgage Insurance Fund (MMI Fund). And there are more substantial changes coming our way this summer, starting June 3rd when the administration increases the required duration time for the entire life of its mortgage insurance.

The yearly premium on the majority of the FHA mortgage loans impacted by the April Fool's Day changes jumped up about 0.10 of a percentage point, which translates into an approximately $100 annual increase for every $100,000 in the amount of the loan.

If the loan is $625,000 or more, and has a term length of 15 years or more, the amount of the loan will increase by only 0.05 of a percentage point, or $50 annually for each $100,000. The premium varies for each loan, depending on the loan's overall amount, length of term and loan-to-value ratio.

FHA-backed mortgage loans have been a popular financing option, especially for folks with relatively low credit scores, and lower down payment amounts.

Beginning on June 3rd, borrowers with a 78 percent loan-to-value ratio will no longer be able to terminate their mortgage insurance payments, leaving open a small window of opportunity for those with a 20 percent or less down payment to take advantage of FHA's current policy.

What this new policy essentially means for borrowers who take out a loan after June 3rd, is that their mortgage insurance will run all the way to the end of the loan's term. Even those who take out a 15-year loan carrying a starting loan-to-value ratio of 78 percent or more can expect to pay mortgage insurance for at least 11 years.

Home buyers planning on living in their new residence for less than 10 years may not feel much of a financial impact from these new mortgage loan changes. Those expecting to plant their family roots at their recently purchased property can consider refinancing options, such as a conventional, mortgage-insurance-free loan, when the equity has risen because of appreciation and amortization.

For all of the details straight from the horses mouth, so to speak, go to HUD.gov, the U.S. Department of Housing and Urban Development's (HUD's) website.

Check out my new chart below, I am now showing average and median sales price changes.  All areas of real estate activity are positive when comparing July 2012 with July 2011. There were 2,372 accepted offers, 23% more than the 1,928 reported in July 2011 although down slightly (-2.6%) from last month. The 1,973 closed sales represent a 15.4% increase over the same month last year, when 1,709 were recorded. This represents the highest numberof closed sales in the month of July since 2009.

New listings rose 7.5% from 2,942 to 3,162 when comparing July 2011 to July 2012 but were down slightly (-1.4%) from the previous month.  Overall real estate activity is positive when comparing July 2012 to the same month last year but down slightly from the previous month. We’ve seen a similar pattern in prior years with activity dropping in July from June highs.The unsold inventory in months ticked up slightly from 3.9 in June to 4.6 in July and is lower than any July since 2006. It would take only 4.6 months to sell the 9,041 active listings at the July rate of sales.

Home sale price measures were all positive in July. The median sales price rose 7.8% when comparing July 2012 with the same month in 2011 and 1.2% when comparing it to the previous month. When comparing the percent change of the last 12 months with the previous 12 months we see a 0.7% gain in the median price.

There was a fascinating article jsut released from the urban land institute about the future of housing in the United States, leaning towards the future - what will sell, what wont and where the needs are.  Conributing factors such as aging boomers, echo boomers buying etc. It points to a growing need for rental houses as well as handicap accessible houses etc.
http://www.urban.org/UploadedPDF/412520-Demographic-Challenges-and-Opportunities-for-US-Housing-Markets.pdf

That's right, Travel and Leisure Magazine has voted Portland, Oregon "America's Greenest City" in it's latest issue.   This is mostly to do with the huge amount of trees and parks, but also because of our transit system, electric charging stations, bike routes and more.  Check out the article America's Greenest City

It seems when the property rental market is already tight in Portland, the market gets even tigher. Articles abound in various publications but a recent one in the Willamette Week really sums it up - the title is "Renters Hell" and explains why we are in the nation's toughest rental market.

The main issue is due to the high distressed property rate now (as much as 37% of all sales in metro Portland - distressed means either a short sale, or bank owned sale) many former homeowners are looking for places to rent, at the same time as a city known for appealing to the younger crowd (typically who are renters) from all over the country.  Property owners are also pleased because someome who formerly owned a home and is now a tenant usually rents for a longer period because they can't purchase another home for four or more years, and they tend to have a "homeowner" mentaility, so are easier to work with than a new to renting tenant, and in a market where there is a lot to choose from.

Investors out there....  There are lots of great buys out there with houses selling at low prices, with low interest rates and now a shortage of rentals. Maybe now is a good time to think about adding to your portfolio, or buying that first rental.  Check with the Rob Levy team at Atlantic & Pacific Real Estate today, we have unparallelled access to bank owned homes, many of which make for perfect rentals.

As the US comes out of the recession, it seems some areas are doing better than others and Kipplinger this week gave some encouraging news when it picked the top 11 cites in the USA to make a comeback, it listed Portland, Oregon as one of them.   The full article can be READ BY CLICKING HERE

Also good news for the Pacific Northwest is Seattle was also on the list.   The Portland area is prime for a comeback according to Kipplinger due to the investment in clean energy, and the high tech field.  There have been many solar power companies putting facilities here, and Intel (the states largest private employer) announced it is bringing 1000 new jobs too.  These jobs tend to be well paying, and bring in an educated workforce.

Portland's location as a city of about 2.25m people and next to a state of 37m people (California) seems poised for more growth once the economy improves, and this is a great step in the right direction.

Metro, the regional government for the Portland, Oregon metropolitan area recently released their projections for population growth in the area for both 2030 and for 2060.

Given the population from the 2000 census being at 1.93 Million, projections are there is a 90% chance that in the year 2030 (only 21 years from today) the population could be as much as 3.2 Million (between 2.9m and 3.2m), and in 2060 between 3.61 & 4.38 Million.

The forecasts are for the seven county area of the Portland-Vancouver(WA)-Beaverton MSA and include the counties of Multnomah, Clackamas, Washington, Yamhill & Columbia in Oregon and Clark and Scamania in Washington.

With our urban growth boundary, the question remains... Where do we put them all ?  But the bigger question from Portland's top Prudential Realtor's point of veiw is what do I tell my clients when they ask me to look inside my crystal ball and predict where prices will go in the next several years.  Clearly with our land use restrictions, booming population and UGB (urban growth boundary) our prices have no place to go but up in the long run.  In fact even in our slower market, the last 8 weeks have been very busy for us on the Rob Levy team to the extent we just hired a new assistant / office manager to keep up with all the sales.

Clearly in my mind, both from my personal and professional experience, there has not been a better time to invest in the future of Portland.  Prices are down,rates are down, inventory is high and we know the future is bright.

That really is the million dollar question.  Should I buy a house now, or should I wait and see if prices fall ?  But what if interest rates go up (per Bernanke's 60 Minutes interview in March, 09) then where do I stand ?   This chart REALLY shows the benefits of buying a home now vs waiting.

For more information or to find some homes that really make sense to buy now, give us a call.  As Portland's top selling Prudential Real Estate team for two years running and with over 20 years experience.

I sold a house this week that made me really think.....  A young couple were buying their first home, and they bought the house for more than $50,000 less than what it first went on the market for, and got the sellers to pay some closing cost assistance.   The net out of pocket for the buyers will be about $7,000.   Then - the US Government will pay them $8,000 as first time home buyers meaning they actually make $1,000 when the house closes!   Add to this the 4.875% interest rate they locked in and could there really be a better time for a first time home buyer to buy a home ?

Please listen to my podcast all about the $8,000 credit at http://www.roblevy.com/agent_files/talkrealty/player.htm

CLICK HERE to see the actual IRS form to claim the credit

We had a busy few weeks at the RobLevy team and again were #1 in the Portland area for Prudential Real Estate.  In fact, we have written more offers in the last 10 days than in the last 90 days.  It does seem to be picking up and the information above validates this.

If you know of anyone who could qualify as a first time home buyer (generally meaning someone who hasnt owned a home in more than three years), please