Fall 2017 Market Update

Autumn has arrived in Portland and the cooler temperatures are also extending to our local real estate market. Not to worry, I’m here to help you navigate it successfully. If you’re looking to buy or sell in the next 2 to 6 months, now is a great time to start forming your strategy, and I love to help with this kind of planning.

Overall, the local market has cooled off somewhat over the summer and into fall. We currently have the largest number of homes on the market since January of 2015. This is rather unusual, as we typically see a decrease in inventory going into fall and extending into winter. The present increase in available homes is largely due to houses either being overpriced or having unaddressed issues that make buyers uncomfortable.

Some homes are selling quickly and for top value, for full price or higher, depending on neighborhood, setting, pricing, condition, and how well the house is marketed and prepared for showing. But overall homes are selling at the slowest rate since January of 2015 and more than half the properties on the market are dropping their prices after going live. The average amount of time a home spends on the market is now up to 37 days.

But this isn’t a doom and gloom post. Well presented homes with strategic and accurate pricing, prep, and marketing are still capturing the interest of multiple buyers, bolstering the final selling price. For sellers it’s all about finding the perfect strategy for your home, your neighborhood, staging and marketing to reach the right buyers.

Buying? If you’re considering buying (and maybe took the summer off due to competition), now is a great time to start looking again. We have more inventory than we’ve had in years, there are fewer competing buyers, and prices are not going up as quickly and some prices have come down. Let’s find the ideal home for you before the end of the year!

I’m always available to pull the most recent market data and chat with you about your real estate goals. It’s truly no trouble at all. I love learning about your specific objectives and helping you achieve them. Please consider me at your service for anything related to your home!

What Market Trends Mean for your Mortgage

CNBC (the news network) recently reported that mortgage applications were down 6% in June. This week over week number fails to note that mortgage applications are still up 7.8% when compared year over year. Even though interest rates are approximately .375% higher than this time last year, demand remains high. The National Association of REALTORS (NAR) expects home prices to rise another 4% in 2017, after a healthy 6% increase last year.


So why are applications down? Lack of inventory!


Homes are again viewed as a good long-term investment. Even those paying private mortgage insurance on their mortgage are enjoying massive home appreciation. The average home buyer in the US is earning $13,000 per year in equity. In Portland, Oregon where prices rose nearly 13% in 2016, homeowners earned over $46,000 in home appreciation last year alone.

But what if rates go up? Mortgage rates change quickly with the economy, and with shifts in market sentiment. Mortgage-backed securities (MBS), the Wall Street asset upon which mortgage rates are ‘made,’ have been waiting for a reason to move one way or another. This has rates on shaky ground.

The average conventional 30-year fixed rate mortgage started June at just 3.95%. That’s down 7 basis points (0.07%) compared to the first week of May. These rates are down considerably as compared to January, when the thirty-year rate hit 4.20%. It’s still an advantageous time to be a buyer, but it may not stay that way for long.

MBS pricing responds to various economic influences, including the Federal Reserve’s monetary policy, jobs market reports, geopolitical concerns and forecasts for the new administration’s stance on economic issues. The Federal Reserve hiked rates on June 14th, and we could still see one more rate hike before the year end. The hike will immediately raise costs for homeowners with a home equity line of credit (HELOC) or any other debt based on Prime rate.

Fortunately, there’s no such direct relationship to mortgage rates. Over the last two decades, the Fed Funds Rate and the average 30-year fixed rate mortgage rate have differed by as much as 5.25%, and by as little as 0.50%. The Fed influences fixed mortgage rates, but doesn’t control them.

We don’t expect dramatic 30-year fixed mortgage rate swings after the Fed meetings. Rather, markets build in hikes long before they happen. The Fed makes its move known long before the meeting itself, in a series of statements and speeches by Fed members. Massive swings occur when the unexpected happens!

Mortgage shoppers should take note. Waiting for rates to go down could be an unwise move. The Fed, armed with every economic report available, says rates will only rise in coming years; 2017 could be the last opportunity at sub-4% rates in the next few decades.


So what is the mortgage industry doing in response to this high price, low interest and low inventory environment?


I serve two desirable markets limited by lack of inventory: Portland and Bend. Average median home prices within both city limits are increasing rapidly, forcing buyers to look outside to the surrounding areas for affordability. Those who do choose the city center are willing to pay for it. That means jumbo loans are back and very competitive.

During the mortgage crisis, jumbo loans all but disappeared. The ones that remained came with insurmountable guidelines for homeowners to meet. High down payments, interest rates, and credit standards made jumbo loans nearly obsolete. But jumbo loans have re-entered the lending landscape. In fact, jumbo mortgage rates are now nearly as low as conforming rates.

What is a jumbo mortgage? A jumbo mortgage finances loan amounts over $424,100 (the conforming loan limit in OR). Conforming loans meet guidelines established by Fannie Mae or Freddie Mac and can be easily sold to investors. A jumbo mortgage is often retained by the investor, and so the person with the money gets to make the rules. The underwriting requirements are similar to conforming guidelines but they are very detailed with less room for exception and often require some additional documentation and time needed to complete. It is a very viable loan product with competitive rates, but only for organized buyers who can accurately document their ability to qualify for it.

Other loan types have emerged to assist with this higher priced market as well. Fannie Mae and Freddie Mac have rolled out new programs for a wider array of buyers. An option called HomeReady requires just 3% down and is available to those with modest incomes.

Guild Mortgage has also recently announced a 1% down conventional loan. It is still structured as a 3% down conforming loan but the buyer’s personal contribution is only 1% and Guild Mortgage will contribute an additional 2% via a forgivable grant for the qualified buyer! The buyer moves in with 3% equity for only 1% down payment from personal funds.

For mortgage applicants with student loans, Fannie Mae has introduced easier qualification standards. Also, a Student Loan Cash-Out refinance program is now in available, with which homeowners can use their home equity to pay off student loans.

Not to be outdone, the government-backed VA home loans offer lenient credit requirements and are available to home buyers who have served in the U.S. military. There is no down payment necessary, and no monthly mortgage insurance charged.

FHA loans are still extremely popular for first-time homebuyers. Flexible lending requirements allow new graduates to obtain an approval just after starting their careers.

In this environment, finding the right home may be more difficult than financing it!


This piece was generously written by Brent Lucas of Guild Mortgage.

Guild Mortgage Company is an Equal Housing Lender NMLS#3274. Brent Lucas NMLS ID#590610 397 SW Upper Terrace Dr., Suite 150 Bend, OR 97702 ML-176. The information provided herein has been distributed for education purposes only. The positions, strategies or opinions of the author do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice.

Non-Alternative Real Estate Facts


Regardless of where you stand on our colorful political spectrum these days, the term “alternative facts” has likely been a recent invader your personal media stream. As an antidote to that concept, here’s a handful of non-alternative facts about real estate. That is to say, they’re not arguably not true. They are, in fact, just fun facts that (hopefully) few people will spend their time arguing.

  • The most expensive Portland home sold last year carried the final price tag of a mere $5,441,294.
  • If you happen to be on the prowl for a trophy home, don’t despair… the most expensive property on the market, a 16,359 square foot villa in West Linn listed at a cool $18,000,000, is still very much available.
  • While January 2017 bedecked Portland with 8.39 inches of snow, it was nothing compared to our record winter wonderland of January 1893 that blanketed the City of Roses with 31.8 inches of snow.
  • January 21st, 1943 still holds the record for most snowfall in Portland in a single day at 15.5 freezing inches.
  • Portland’s more traditional precipitation, warm liquid snow, led to the Willamette River flood of June 1894, where it reached its highest recorded mark at 33.5 feet. Flooding was so bad that downtown businesses sold their wares to boat traffic from their second floor windows.
  • 122 short years later, in 2016, Money Magazine named Portland the “Best City in the West” due subjective things like our undeniable charm, as well as more concrete numbers like our median home price of $349k and unemployment rate of 4.7%.
  • Several large tech companies agree with Money Magazine’s assessment, planting their own roots in our tree-studded home. Portland has recently earned the nickname the “Silicon Forest.” Feel free to use that when you’re traveling and people ask you where you’re from.


If you’ve got some non-alternative facts of your own to share, I’d love to hear them!

As always, it would be my honor to help you formulate your property plans. Please consider me your resident expert for all things real estate. I’m always happy to be of service, even if it’s for something not necessarily sale related, like answering questions about testing for radon levels or finding a trusted vendor to make repairs on your property. All my contacts and experience are at your disposal!

How’s the Market? December 2016

How’s the market? As always, it depends on your plans. Inventory is still low. We don’t have enough houses for sale to meet the buyer demand.  But interest rates have been going up since the election. The fed is expected to raise the bank’s rate this week which down the road could impact mortgage rates further. In my experience, when rates rise, prices may eventually soften because buyers will not be able to afford as much of a loan.

So if you are considering selling, call me sooner rather than later to discuss a plan.

Buying? The note above makes it sounds like buyers should wait because prices may soften. But if you are financing a purchase and rates rise, you will probably get more house by buying sooner than by waiting. If you are a cash buyer, then you could wait it out and see if prices soften. Confused? Happy to clarify, just give me a call.

Some homes are not selling as quickly as they were earlier this fall, and we have seen some price reductions this fall. Savvy buyers are considering these “leftover” homes that are sometimes ripe for a price reduction or have a motivated seller. 

Homes that are marketed with panache are attracting the people who will love (and buy) them. Homes that are appropriately priced, prepared and marketed are still eliciting multiple offers. Here’s an example of one of M’s listings that sold over asking price, and in less than a week.

We are working with many buyers who are looking for their dream home.  Call me if you’d like to get your home treated with our superior and unique marketing service called TrueView. I’d love to hear about your real estate goals and help you determine the best way to meet them.



6828 SE Ash St – $750,000

Sold in 3 days, $30k over asking!

Beds: 3 | Baths: 2.1 | 2,719 sqft.
This fantastic Mt Tabor contemporary home has been beautifully updated! Enjoy quick access to tons of SE Portland dining and entertainment options, while the nearby I-84 and I-205 are perfect for commuters. Neat landscaping decorates the front yard, welcoming guests to the home. A two-car garage offers tons of space for parking and storage. Entertain with ease in the backyard, where a sizable deck overlooks the lovely garden. A large patio sweeps around the side, leading to fruit trees and another garden space!








The Cost of Waiting


You’ve heard that “time is money” and it actually applies to our current real estate market. If you’re considering buying someday soon, there’s a definite cost to waiting.

For most people, the true cost of purchasing a home boils down to the property’s purchase price and the interest rate you can secure for your loan. This past year both those factors have been on the rise:

Rates have been rising since the 2016 election.

That might not sound like it would have a significant impact, but let’s take a look at an example of a $250,000 home with a 1% increase in interest rates. Those increases are likely to result in an extra $188.50 in your monthly payment, according to one of the mortgage pro’s we work with. That’s $2,262 a year and a total of $67,860 extra over the life of a 30-year loan. This is, by no means, reason to panic. But it’s absolutely something to consider if you’re thinking of buying in the near future. Looking for a $500,000 home? Double those numbers. (Of course the impact will vary depending on the percentage you put down).

What’s important here? If you’re not ready, don’t let these factors sway you. But if you’re on the fence, it might be wise to consider hopping into the market.

Are you thinking about a move? I’d love to answer any questions you have and help you formulate the best strategy for getting you into your ideal home!

Listing Now Means Max Visibility

If you’ve been following our real estate market at all over the past couple years, you’ve heard the term “low inventory” quite a bit. Even if you haven’t, let me assure you:

There aren’t enough homes for sale right now.

In the industry, we often measure inventory in the number of months it would take to sell all the homes currently on the market. January is typically the month with the highest inventory (which held true for the past two years). Take a look at where our numbers are right now in comparison.

Given that we were already experiencing an inventory crunch, imagine what this year will be like with the listed properties nearly cut in half!

Buyers compete fiercely for attractively presented homes and my M Realty team has the best marketing in the business.

Later in the year we are likely to have a little more inventory. A lot of people wait until summer. But why wait until you have more competition. Right now sellers get maximum exposure, and compete with fewer homes on the market.

If you’re thinking of selling or have any questions at all about making a move, consider me your resource. I’m always available to help you and your loved ones with anything home-related.

I’d love to chat with you about your real estate plans and see how we might turn the current market climate to your advantage.

Year In Review!

Portland and SW Washington saw fantastic real estate growth last year, and the RMLS 2015 Market Action Report has the data to back it up! With inventory at an all-time low, sales prices continued to jump from 2014, while homes spent less time on the market.
2016 is champing at the bit to continue this trend. If you’re even remotely thinking of selling, I would love to discuss how this hot market could fit nicely into your plans.
To learn more about last year’s market trends, read on. If you’re not into the numbers or if you’d like my professional opinion on anything, please don’t hesitate to reach out. I’m always available to take the very best care of you and anyone you refer me to!

SW Washington

End-of-Year Summary
Across the board, activity in 2015 ended ahead of 2014. Pending sales (8,780) rose 21.0%, closed sales (8,391) rose 19.4%, and new listings (10,625) rose 9.3%.

Average and median sales prices
Comparing the entirety of 2015 to 2014, the average sale price increased 8.6% from $274,700 to $298,300. In the same comparison, the median sale price rose 8.6% from $244,000 to $265,000.

PDX Metro

End-of-Year Summary
Portland metro activity in 2015 ended higher than 2014 in all measures. Pending sales (34,568) rose 22.5%, closed sales (33,307) rose 20.0%, and new listings (40,815) rose 8.4% for the year.
Average and median sales prices
Prices were higher in 2015 compared to 2014. Comparing each year, the average sale price rose 6.5% from $333,000 to $354,500. In the same comparison, the median sale price rose 7.9% from $285,500 to $308,000.

All statistics, graphs and verbiage provided courtesy of RMLS December 2015 Market Action Report.

What’s happening with home prices

The Year in Review:

What a wild year it has been in Portland real estate. In popular neighborhoods, we’ve seen multiple offers and many homes selling in a week or less. So many homes sold last year that a shrinking supply of listings led to even more competition among buyers. Sellers thought it was a bad time to sell, so most people held off on listing their homes. Skinny inventory resulted in rising prices.

Have we seen the bottom of the market? It sure looks that way. Especially in the close-in neighborhoods, and many of the popular neighborhoods farther out, too.

On the other hand, despite the rising competition among buyers, some homes stayed on the market a long time, as you may have noticed.


the house didn’t have what most buyers wanted, or
it wasn’t marketed well, or
it wasn’t staged or priced right, or
it had some quirk or oddity or location issue.

For these reasons, it didn’t sell. It stayed on the market for a couple of months or many more, and if the sellers were motivated, they made the necessary adjustments, and they stuck with it until their turn eventually came up.

A divided market. The market this year has been divided into homes that sold almost immediately (quick-sellers), and homes that didn’t sell for months or longer (lingerers). In my 25 years in this business, I’ve seen divided markets before. The good news is, I know quite a few ways to turn a lingerer into a quick-seller.

What’s it been like for buyers? Buyers have had trouble finding homes to look at. There are very few homes for sale. My buyers keep a close watch on the Looking Glass home searches I send them. They are looking day and night. When a house is new on the market, the house show “green” for 24 hours and they jump on those first. When they see something good, guess what? A bunch of other buyers have noticed it too, and we line up with other brokers and their clients waiting to get in for showings. It really is like that. Multiple offers? We are talking 4, 6, even 10 offers if the house looks like a good deal. Of course this drives up the price. It can be a roller coaster for my buyer clients, but more often than not, if my buyers write an offer they get the house.

For sellers? The quick-sellers were of course very pleased and grateful to have a good offer from an earnest buyer, or even multiple offers.

Prices. We are in a rising market. The prices of the quick-selling homes are rising. In fact, it’s important to be careful not to under-price.

For the lingerer houses it’s still been a rough ride. With the right adjustments, those houses have sold in 2012 too. I have outstanding tools to identify the factors that have created a lingering house and turn it into a quick-seller. One difficulty, perhaps not obvious to people outside of the real estate profession, is that homes that stay on the market longer tend to sell for less.  There are many reasons, but a home that sells quickly usually sells for substantially more than a home that is on the market a long time. That’s why we evaluate pricing very carefully. Having the right price encourages buyers to make offers right away.

So there is your (very) short course on the answer to “what’s up with prices?” I’d love to tell you more. Let’s talk about your plans for 2013. Contact me if you’d like to learn more about your home’s value or making a purchase, or any other real estate questions. Happy 2013!

Selling During The Holidays

During the winter holidays, many sellers withdraw their homes from the market or wait until after the first of the year to sell. Most often, it’s because of family visits and holiday celebrations. However in today’s market, having your home up for sale during the winter holidays can give you a competitive edge.

Serious Buyers. Only serious buyers are looking for homes during the holidays. Think about it. Would you rather be attending holiday events and getting your shopping done, or driving around in the rain and cold looking at homes? For buyers, their dedication and commitment to the home buying process during this time makes them perhaps more serious buyers than the summer tire-kickers. Most buyers start their search on the internet and will spend their holiday break surfing the web looking for homes. With more free time, buyers and their families will spend more time dreaming about what they will do in 2013. Why not give them a great home website created by M Realty to fall in love with?

Less competition. As other sellers take their homes off the market, this creates less competition for those committed buyers. With fewer homes to consider, buyers will be more likely to spend time looking at your home. This will shift in January as more sellers trickle back into the market, slowly increasing back up to normal levels by the beginning of March.

Moving up before prices increase.  The market appears to have hit bottom in 2012.  From here, the market will likely begin to move back up as foreclosures decrease and normal houses return to the market.  Ask yourself, “what is the cost of waiting until I know for sure?”  Given a 3% annual increase in the market, a $250,000 house will gain $7,500 in value, while a $500,000 house will gain $15,000 in value.  Your leverage in buying up to the next level house is much higher in actual dollars.

Holiday decorations. If you are already moving furniture and personal times to put up holiday decorations, it’s also a great time to clean behind the couch or sideboard. And the temporary storage for your personal items is the same as it is when having your home professionally staged. Give me a call to have my professional stager help you with both your holiday decorations and staging your home for sale at the same time. Buyers are emotional during the holidays. Capitalize on their emotions by using high quality holiday decorations to showcase what your home has to offer—in turn letting buyers experience the dream of living in your home.

Higher appraisal values.  Recent strong sales support the rising appraisal values of homes. With the market increase in sales of normal homes, now is the best time to sell. The percentage of bank-owned and foreclosure homes has shrunk, giving appraisers more information on the sale of regular homes as they begin to increase in value for the first time in over five years.