Susan McCall

Portland Metro Real Estate and Southwestern Oregon Real Estate Up or Down?

According to a new article posted on MSNBC, the economic recovery is predicted to start in five states:

 Colorado, Idaho, Oregon, Texas and Washington

To read the full story:  http://www.msnbc.msn.com/id/30991972/ns/us_news-the_elkhart_project/

This is good news for us as we live in 2 of the top five states that should take off in the last quarter of the year.  Real estate prices are keeping their value and the $8,000 tax credit is spurring first time buyers to enter the market.

Portland is a city that is experiencing an influx of young professionals who are moving here for the livestyle and for the opportunites.  The lastest statistics I have heard is 40,000 new residents this year.  This is propping up the rental market.  With prices on investment properties lower than they have been in 5 years, this may be a good time to invest.  

If You've Been Thinking of Buying a Home Now May be the RIght Time

If

A sy     A syndicated article that was published in the Oregonian in the Homes and Rentals section prompted me to “get down” and do some serious research. 

In th     In the article by Tom Kelly, (6-7-09)  he said as of May 29, 2009, the $8,000 federal tax credit can be used as “the down payment or closing costs” for buyers who apply for mortgages

insur     insured by the Federal Housing AdAdministration before Dec. 1, 2009.

TTh     There are a number of incorrect facts in this newspaper article, to the best of my knowledge, and someone please let me know if I am incorrect.  The information changes daily. 

I wa     I was in attendance at the PMAR HOWNW Committee Meeting this morning and we were part of a phone call by Roberta Ando from  U.S. Department of Housing and Urban Development

in w     in which  she stated that the information was correct.  However, it will take a third party to put this together such as a lender.

            A good resource for a first time homebuyer to investigate all the different options is: http://www.HOWNW.com  There are some excellent loans, some for 100% in which the first time homebuyer

can       can purchase a property with no money down.  There are designated areas which tend to be more rural but not all of the areas are rural.

1. T     1.  The $8,000 cannot be used as a down payment or for closing costs, except in some states where the legislature has created a fund where the buyers can utilize this money through a vehicle

such      such as a promissory note to be paid in the near future.  Oregon and Washington do not have this legislation in place.  The states that I’ve found are: 

Utah     Utah (a $6,000 credit), Idaho, Colorado, Delaware, Kentucky, Missouri, New Mexico, Ohio, Pennsylvania and Tennessee.

2. T     2.  The link to verify or research these resources: http://www.ncsha.org/section.cfm/3/34/2920

Wh       Where do you get the money if you don’t have the 3-1/2% down payment?

1. A     1.  Anyone can give you the money!  There are no restrictions on this. If you know a kind hearted relative or friend this would work.  

.  Th      The seller of the home cannot give you the money as in the past with certain programs such as Ameridream.  The seller cannot be a part of this equation. 

You      You could pay the wonderful angel back when you get the refund at a later date.

Oregon Association of Realtors opposes the new tax increases and fears loss of jobs

Oregon REALTORS® Joins Broad Coalition in Opposition to New Tax Proposals

With the push to conclude the 2009 Legislative Session now upon us, the budget debate is at the crux of conversations in Salem. Recently, the Co-Chairs of Ways & Means released a proposed budget for the 2009-11 biennium, which calls for spending $15.2 billion in general fund and lottery funds, which is a 5.3% (almost $1 billion) increase from the 2007-09 budget.

To essentially balance the budget, the proposal calls for $2 billion in cuts, $800 to $900 million in new taxes, the allocation of $941 million in federal stimulus funds and the use of $361 million in reserve funds. It is important to note that the proposed budget “cuts” are not cuts in state spending; they’re cuts to projected government spending increases proposed in the Co-Chairs budget.

In response to the challenge to generate $800 to $900 million in new revenue, the House Revenue Committee revealed several legislative proposals that attack Oregon’s businesses and taxpayers. Specifically, the proposals include a new permanent corporate minimum tax featuring a sliding scale based on gross receipts (House Bill 3405-A), a new permanent corporate income tax on Corporations with net incomes above $250,000 (House Bill 3405-A), and a new permanent personal income tax (House Bill 2649-A). The creation of a new 11% tax bracket for filings greater than $125,000 will give Oregon the distinction of having the highest marginal income tax rate in the nation.

Despite strong opposition from the business community, HB 2649-A and HB 3405-A were passed out of the House Revenue Committee on a party-line vote to the Joint Ways and Means Committee on Thursday. The bill passed the next stage of this process by passing out of a Ways and Means Subcommittee this afternoon, and are expected to pass the full Ways and Means Committee this evening. It is estimated that combined, the proposals would raise approximately $725 to $750 million to balance the Co-Chairs 2009-11 proposed budget.

The Portland Business Journal article “Business groups slam proposed tax increases” illustrates the business community’s united opposition against new taxes that will detract from Oregon’s ability to stimulate an economic recovery. Simply put, this proposal will cost jobs. According to the non-partisan Legislative Revenue Office, the new tax increases will result in the loss of at least 5,865 more jobs. The Oregon Association of REALTORS® joined the business coalition in opposition to the new tax proposals to protect Oregon’s businesses during these challenging times.  With debate expected to go to the floors of the Senate and House next week, stay tuned for a call-to-action on Monday to educate legislators on the devastating impacts these tax increases would have on the real estate industry.  

I have been corresponding via Email with my legislator and am experiencing a new level of participation than I did when I wrote letters.

To find your personal legislator follow this link. 

  http://www.leg.state.or.us/findlegsltr/

Cost vs Value in Remodeling - Should you fix up before you sell?

Fix up?  Sell as is?

According to the latest NAR survey the projects that recoup the most remodeling dollars are Decks, Siding, Kitchens and Windows.  Each year in December through a very complicated process NAR gathers information from builders and remodelers and compiles a list and a perchantage invested for pojects such as bathrooms, kitchens, whole house remodels, basements, etc. PLEASE don't go out and spend your money on these projects.

As a keen observer of what is selling and what is not selling I have a few ideas and opinions.  This will not be a complete list as what to do and what not to do. These are a few of my observations.

Neighborhood counts the most.  A dated house in a desirable neighborhood will sell quickly.  Portland Metro has neighborhoods that are sought after and investors look for rehab houses in these neighborhoods.

There is a price for every house and a buyer for every house.  That sounds like a no brainer, but it is the job of a real estate professional to discover this price through proper marketing and feedback from potential buyers.

Some homes have good floorplans and good bones.  Depending on the circumstances of the sellers, spending an amount of money may realize a desired price.  For instance, a house is on the market for $250,000 and no one is interested in purchasing it because of the condition.  The condition is dated and the house needs some fix ups in the amount of $10,000.  If this money were spent correctly with the right improvements this same house may now sell in the neighborhood of $275,000.  OK, you say, I just spent $10,000 to get an extra $15,000?  My response would be you spent $10,000 and the house SOLD -  AND -  you got an extra $15,000.  Without the remodeling the house would still be on the market. You could have lowered the price to $225,000 and it may have sold, or maybe not.

Today there is a very large inventory of houses on the market.  Many of the houses on the market are short sales and bank owned properties.  Many houses on the market means one thing.  Each house on the market is competing against every other house on the market for attention.  We have a decent market in Portland/Vancouver Metro  There are buyers out there but there are fewer buyers than houses on the market.  Where do you put your house as far as price, value and presentation?

Q and A about Inspections and Appraisals

Question

 Hi Susan,

I have a few ideas rolling around in my mind :) So back to the super old farm house that I first sent you. Since there was an offer before then does that mean there would be an inspection report available? And is it kept with the county or the inspector?
And what about an appraisal? Are those things kept secret or can the public access them? I am wondering if the house is salvageable and/or is the value in the lot without the house? Since there was an offier would it be possible that there is an inspection and the appraisal?      "T"

Answer

The inspection and the appraisal are paid for by the buyer.  The bank (or investor, or mortgage company) is the beneficiary of the appraisal even though it is the buyer's responsibility to pay for it. 

This would go for the inspection also.  The buyer hires an inspector to decide if the house is worth buying, and if so, what the condition of the property is.  I had a buyer back out of a sale, after having the inspection completed.  There were just way too many things that needed to be addressed and there was no extra money, outside the mortgage payment - taxes - insurance, for this buyer to take this on. 

About a week later another buyer came along and and the listing agent gave the new buyer's agent my phone number and told them there was an inspection report.  So I called my buyer and asked if it would be OK to share the report (already paid for). We discussed the request.  There was no benefit to either my buyer or me to share this (other than being nice).  In my case it would have taken time and an addendum/disclosure signed by all parties involved.  The reasons are many for having everything is writing, mainly fiduciary for my real estate license and to protect everyone involved. 

For instance, when you have an inspection completed by a professional inspector, there is a 2 or 3 page contract that is presented before the inspection will take place.  This is to protect the inspector basically for anything that may arise later.  (For instance, what if the inspector "missed" some dry rot that was not evident until the new owners moved in and discovered this problem)?  If this report were shared with anyone other than the person that signed the contract, it is possible to have consequences down the road.

Some agents are chatty and will share information.  There is a law that if a seller is made aware of a problem they are required to disclose the deficiency or problem in a disclosure statement.  This is usually sent out after an offer is accepted, although some sellers or their agents may disclose deficiencies up front.  This basically saves everyone a lot of trouble in the beginning.

As far as an appraisal, this has become a very interesting phenomenon in the last year or so.  The quantity of foreclosed properties is driving down real estate values, especially in certain neighborhoods where there is a lot of newer construction.  Many of these homes were purchased at the height of real estate values skyrocking and financed with 100% loans with Adjustable Rate Mortgages.  These ARMS are now resetting after a few years and homeowners are unable to make the increased payments. Therefore it is basically difficult to refinance these homes since the value is less than it was when purchased a few years ago. 

There is a new loan out there that will allow a refinance at 105% of the appraised value for persons and properties in this predicament, i.e., those homeowners who want to keep their homes and move into a fixed rate mortgage.  I have heard reports that most of those buyers that took out these risky ARMS could actually have contracted for a fixed rate, except for the fact that certain mortgage brokers or banks made more money on these riskier products and so promoted them vigorously.

I had an appraiser value a property for some buyers at $1,000 below their bid price.  (I think this was a personal thing and had nothing to do with the actual property.  It took a whole day of "ME" doing another appraisal and transmitting comparable properties for an "appraisal review" to the bank to justify the value). Appraisers have all kind of formulas that they plug in to arrive at a value.  But real estate values right now are a moving target and changing daily so it all comes down to an opinion.  There is deinitely an art to appraisals and different appraisers specialize in different kinds of properties.

Mortgage brokers almost always had their own appraisers that they knew well and had a working relationship with.  (I'm sure there were brokers/appraisers that did things that were not legal to justify a loan). There has recently been a law passed about by the State of Oregon on how an appaiser will be selected.  It is my understanding that mortgage brokers have the opportunity to select 4 or 5 appraisers that they work with on a regular basis and keep this list as an official list in the office.

A really good way to get an idea of the land value is to look it up on www.portlandmaps.com, or other websites for the different counties.  The improved value is different than the land value.  I just looked it up and the real market value is listed at $373,100, with the land valued at $245,390. It is zoned commercial and backs up to a busy street which may explain why the list price is  low and ithe property s not selling.  Check it out.  There is a photo available and you can see a major parking lot at the back side of the property.

Here, my dear, have $8,000!

Portland rocks!  President Obama and the Federal Government would like to reward you for living in such an amazing city by handing you a check for $8,000!!  What a great country we live in! 

To make life even better you get a house to live in and many tax deductions for years to come.  It truly is the gift that keeps on giving.  You could have a really great house (first time homebuyers or someone who hasn’t owed a home in 3 years), at an amazing interest rate, the lowest in 45 years!

A lower interest rate will enable you to buy that house that you’ve always wanted but never thought you could possibly have.

Live in and grow your equity by living in your very own place.  Are you worried about house values continuing to fall?  Remember, politics and real estate is local. There are great houses on the market and a very good  selection.

We have a very stable market in Portland/Vancouver  Metro. The average home has appreciated over the last 40 years at a steady 6% a year average.  It’s true that houses in the Portland area didn’t appreciate last year – the appreciation rate actually was minus 3.7%.  But consider 2005 at 15% and 2006 at 14%.  2007 comes it at a measly 6.3%.  Average the last four years and the appreciation rate is 7.9%!!!

What does a home mean to you.,…   For the last few years before the housing bubble burst, a home was an investment vehicle.  The world has shifted in the last few years and our values are changing.  People are saving more money than ever before.  Prices are down on just about anything you want to buy. 

The tax incentive expires on December 1, 2009.  You must have a house selected by October to make sure that it closes and becomes your property before this date.  What are you waiting for?

Call ….   Or email…..TODAY!  The time is now and this opportunity may not happen again.  Don’t take a chance on this boat, it’s leaving the shore now and there are no pirates in sight.

Price Reduced on 95 SW 131st Ave in Cedar Hills

Cedar Hills, Washington County  -  Announcing a price reduction on 95 SW 131st Ave, a 1,957 sq. ft., 2 bath, 4 bdrm 2 story. Now MLS® $294,900 - .

Property information

Single Story For Sale in Parkrose

Mid Century Ranch

• 1,620 sq. ft., 1 bath, 2 bdrm single story "Ranch" - MLS® $200,000

Parkrose, Portland  -  Great 1945 Ranch with 810 square feet on the main level and a full 810 square feet basement to be finished the way you want.

The house sits on a corner square lot, totally fenced. The garage is on the back side of the lot with a long driveway where an RV or boat would fit just great.

The house features a new gas furnace 05, mostly new vinyl windows 08, a remodeled kitchen 07, a new tear off new roof approximately 1996 and an Energy Star electric water heater.

The floor plan features a living room and dining room that is L-shaped. The dining room has a ceiling fan. The living room has a wood burning fireplace. The 2 bedrooms on the main level are good sized (11 X 9) and (13 X 11).

Access to the basement is in the inside back of the house.

Property information

12508 SE Angus St in Cascade Park is Sold!

Cascade Park, Vancouver  -  The 2 story at 12508 SE Angus St has been sold.

 Special Notes:  The house was originally purchased at the very pinnacle of the real estate market.  The owners took possession and improved the home to suit their needs.  15 months later they decided to relocate to another state and put this house on the market.  The listing was entered into the market when real estate was just beginning to take the remarkable dip that was summer of 07 and buyers stopped buying.  The comparables were for this home were at $425,000.  There was a time when this home was "competing" with similar homes that were new construction and priced for less.  The house was subsequently listed by another broker and sold by another agent in the same office. 

Property information

Is It a Good Time to Buy a House?

Blah blah blah.....Are you inundated with information from many sources like me?  Real estate in the last couple of years turned from a place to live to an investment vehicle.  I personally know a few people that tried to jump in to the market in a frenzy and were less than successful.  I also know people that have an amazing amount of equity in their homes that should invest in real estate.  I'm not talking about flippers or contractors, but folks building up a small nest egg to retire and have a small income stream.  Property values keep going up and so do rents.

Back to the question about timing and house buying.  I was reading an investment column written by Chris Mayer (an investment analyst).  He had  attended an annual meeting of Wesco.  Charlie Munger was the speaker and is Vice President of Berkshire Hathaway.  At the meeting a person from the audience asked Charlie Munger when the best time to buy a house was.  Charlie answered "when you need one".  Seems simple enough, doesn't it?  Is it the right time to buy a house?  I've heard that some buyers are waiting to buy until the "market"  has reached the bottom. 

Let me ask you this:  Would you rather buy a house when you want or wait until the market is on the way up again?  If you wait until the market is on the way up again, you may end up paying more. Interest rates are below 6%, there are many first time buyer programs, many motivated sellers, and the very best part of all there are real choices in just about any neighborhood or price range that you are looking.

What if you are someone that has a house to sell and you are wating for the prices to go up again?  If you wait for the market to go up again to get more money for your house you will pay more to buy another house.  Think about this for a minute.  You presently have a house that would sell for $225000.  It's a smaller house and you want something bigger, maybe more bedrooms and another bathroom.  Most people buy a house that is worth 50% more than what they presently have which would be in the range of $337,500.  So you're one of those that's going to wait.  Maybe in the near future your house is worth $250,000. This is an increase of 11%. That house that you want to buy has now gone up 11% also and is now $374,600 a difference of $37,100..  What this means is the time you spent waiting for the value of your present home to increase $25,000, the replacement home increased and cost you an extra  $12,100.  OK there's math involved here....$37,100 - $25,000 = $12,500. This translates to approximately an extra $73 per month mortgage payment (amortized over 30 years).  This is at 5.75% interest rate.  This is the price you pay for waiting. 

Today, there are real choices on the market.  Homes that are priced well and presented in tip top condition, are selling well in front of the average market time of 60 days.

It's just my opinion!