The Future of Our Market

With 2019 coming to an end, it’s time to discuss the future of our market.

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What does the future hold for buyers and sellers in our real estate market? You may have heard stories telling you that the sky is falling, but it’s not. On the contrary, the future is still pretty bright.

We do expect a housing shortage, unfortunately, and that will cause prices to continue to rise. Over the course of 2020, we expect appreciation rates to be around 5%, which is a slight drop compared to what we’ve seen in previous years.

With January right around the corner, a lot of people tend to start thinking about their goals for next year, and these goals include real estate. When setting your goals, it’s always good to be as prepared as possible when it’s time to pull the trigger. If you plan on selling in April or May, for instance, you should start fixing things up around your house right after Christmas so you don’t have to do it all at once. If you’re thinking about buying soon, talk to a lender now.

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When setting your goals, it’s always good to be prepared when you want to pull the trigger.

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On a final note, I have a request to make of you. The holiday season is in full swing, which means everything is bright and cheery, but it’s not a joyous time for everyone. Keep these people in your thoughts and make their world a little brighter if you can. For example, try bringing an extra plate of food to the nice lady down the street who doesn’t have any family. This kind of thing is great to have your kids or grandkids be a part of as a learning experience.

Until next time, if you have any real estate questions, don’t hesitate to reach out to me. I’d love to help you, and I hope you have a happy holiday season.

Is Homeownership Always Better Than Renting?

Is buying a home always better than renting one? Not in every case, but in most cases, the answer is yes.

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Is homeownership always the right decision when it comes to the debate of whether to buy or rent? Let’s say that you’re renting a home now and thinking about buying, but you also know that you’ll be leaving the area within a few years. In this particular case, homeownership is probably not the best idea because you won’t build up enough equity to make the investment worth it. Even then, it could still be a good idea if you want home security for your family or to turn the home into a rental property. If you’re renting a home for $1,800 per month and you rent for three years, that’s $65,000 that you’ve spent on rent. What have you received? A home to live in, but no other financial benefits. No appreciation, no tax deductions.

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The money you spend on your home purchase will go towards much more than your rent.

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If you buy a home and the mortgage payment is $1,800 per month, that $65,000 you will spend in three years will not only go towards your rent, but for your interest and taxes as well. You will get a portion of what you’ve spent back at the end of the year, and continue to build up equity in your home over time. So homeownership isn’t the right decision in every single case, but it is a wise move in most cases. If you have any additional real estate-related questions for me, don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.

The Latest News From Lane County as We Move Through Fall

Prices aren’t appreciating like we’re used to in Lane County, but we’re still in a good market.

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For your latest Lane County market update, I’ll do a quick recap of what’s happened since the start of the year and then switch gears to focus on what’s transpired over the last couple of months. We’ve been accustomed to a yearly home price appreciation rate of about 10%, but we estimate that the rate will drop to 6% for 2019. In other words, prices are still rising and we’re still in a good market, but things are cooling off a bit. Since October, the number of pending sales has decreased by 16% compared to the previous month, and the number of closed sales and new listings has dropped 17.5% and 30% during that same time.

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We’ve been accustomed to a yearly home price appreciation rate of about 10%, but we estimate that the rate will drop to 6% for 2019.

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Moving forward, are November and December good months to list your home? There are advantages and disadvantages to consider. There won’t be as many buyers out and about, but there won’t be as many sellers either, so you won’t face as much competition. Furthermore, the buyers who are in the market are more motivated to buy. As always, if you have any more questions about our market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you.

What Should You Do to Prepare Your Home for Colder Weather?

If you want to minimize problems in your home this fall, all it takes is a little preparation. Here’s what you need to know.

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I’ve been hearing some rumors that it’s starting to cool off. While I could be talking about the real estate market, the weather is starting to cool off too. Today I have some tips to share that will help you get your home ready for fall: 1. Clear the gutters. If your gutters get clogged up, it causes all kinds of problems and can even damage your siding if not cleaned regularly. If you have a kitchen spatula, you can use that to scoop out your gutters instead of your hand. Make sure you wash it afterward, though! If you have water coming down behind the gutters, that means your gutters aren’t protected with an overlap and that should be fixed as well. 2. Repair any loose or damaged windows or door frames. Seal up any cracks to ensure your home heats efficiently when the weather cools down. 3. Make sure your furnace is running properly. Change your filters, too! The last thing you want to happen is a furnace to break in the dead of winter because you neglected it in the fall. 4. Get a chimney inspection. This can be a very big safety issue if not taken care of.

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Make sure you change your filters.

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5. Have your air ducts cleaned by a professional. It not only cleans up the air in your home, but it ensures there are no leaks either. 6. Cover outside faucets with a styrofoam cup and disconnect all of your hoses. That’s where your problems will start when it starts to freeze outside. 7. Clean up your yard. Clear debris, do your pruning, and be sure to fertilize your grass. Trim any tree limbs that are close to power lines as well. These are just a few simple things you can do to make sure your home is protected as we head toward the colder months. If you have any questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

What Can You Do to Sell Your Home Quickly?

Are you in need of a quick home sale, but don’t want to discount your home? Here are some tips to help get you there.

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Life happens, and that means you might have to make some life changes immediately, such as selling your home. What can you do to expedite this process? The first thing you need to focus on is price. You don’t want to price your home too low because you can end up leaving a lot of money on the table. If you list at market value, however, you might not sell as quickly as you want. I think that if you lower your price by 1% to 2% below its value, buyers will recognize that value and see your home first. This usually leads to multiple offers, which leads to bidding wars. In many cases, you can end up selling higher than market value because you offered a bargain from the start. The next thing to think about is decluttering your home as much as possible. If your home is empty because you've already moved to another state, you need to get it staged to have that home looking its best. 

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Pricing slightly below market value can lead to multiple offers.

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You also need to be flexible with showings. If you have restricted showings, you’re going to lose out to a quick sale. It should be available at all times to be shown. Offering an incentive is not a bad idea. For example, you could offer to pay for the buyer’s closing costs, or offer a vacation to a timeshare that you own and aren’t using. If you have any questions for me in the meantime about what you can do to sell your home fast and for top dollar, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

What the Apparent Cooling of Our Market Means for You

 Is our market entering a cooling period? Let’s discuss. 

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It seems like our market has been losing some momentum of late, but is it? Well, we’re receiving mixed signals, so the answer is not so clear cut. To get a better idea of what’s going on, let’s compare July’s market stats to this month’s numbers: Between the end of July and now, pending and closed sales actually increased by 2.5% and 4.5%, respectively. Less encouraging is the fact that new listings have gone down by about 1.5%.

Now, if we compare the year-over-year numbers for the first seven months of 2019, we see some definite signs of cooling. For example, pending sales have fallen 6.3% year over year and closed sales are down 7% compared to this time last year. New listings have also seen a year-over-year dropoff—almost 8.5%.

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And when it comes to interest rates, a win for buyers is a win for sellers.

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Do these numbers give at least some indication that the market is cooling?  

The short answer is yes, which will likely come as a welcome change for buyers currently occupying the fence. But there’s more good news: Just a few days ago, the 30-year rate for buyers with good credit dropped to 3.5%—the lowest it’s ever been! Meanwhile, the 15-year rate dropped 3%. Obviously, this is fantastic news for buyers, but it’s equally good for sellers. Since we don’t have a crystal ball that allows us to see into the future, we can never be too certain of what’s to come, but I can predict with some certainty that interest rates can’t fall any further. And when it comes to rates, a win for buyers is a win for sellers. This is a golden moment in our market, so don’t let it pass you by! If you have any questions or if you'd like to discuss your opportunities in today’s market, please feel free to give me a call at 541-554-5825 or you can send me an email at GaryRaze@Remax.net. I hope to hear from you soon!

Downsizing: Are You Ready?

Families tend to move into bigger homes as they grow, but, once children grow up and move out, parents are left with a large, expensive home without enough people to fill it. For many, this signals the perfect time to downsize into a smaller home with less maintenance and less financial liability.

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You can use the equity that you’ve built to buy a new home.

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If you no longer need your larger home, think about all the costs you can cut by downsizing. You can use the equity that you’ve built to buy a new home and invest in your retirement fund.

If you or someone you know is in a situation where they could benefit from moving into a smaller home with less maintenance, don’t hesitate to give me a call or send me an email today. I look forward to hearing from you soon.

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What’s in Store for Our Lane County Market

Our Lane County market is headed for a shift, but there’s still good news for buyers and sellers.

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As we know, the real estate market crashed in 2007 and 2008 and bottomed out around 2011. Since then, our Lane County market has appreciated by almost 10% per year, but lately, that rate has slowed to 5%

What does this mean? It means we’re reaching the peak of the market. We’re in year seven of our current market cycle, and we’ve never exceeded a seven-year run of appreciation, so that’s as good of an indicator as any that we’re in for a shift. 

Another indicator is interest rates. At the end of 2018, rates hovered around 5% range, and they were expected to be close to the 5.25% mark at this time, but that hasn’t happened. In fact, they’ve decreased, and as of the filming of this video, they’re expected to be at 4% or lower. Why the decrease? The economy is expected to slow down, which means now is the time to sell your home at the very top of the market. 

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The economy is expected to slow down, which means now is the time to sell your home at the very top of the market.

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Many sellers are noticing that home values are higher, and they’re taking advantage of that. As the law of supply and demand dictates, the more inventory increases, the more demand diminishes. At the moment, listings average about two to three offers before selling. Last year, the average was about seven.

If you’re a buyer, the drop in interest rates makes now the perfect time to buy—especially if you’re currently renting. If you buy now, your monthly mortgage payment would be lower than your rent.

If you have any other questions about our Lane County market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you.

Pick the Best Offer With These 5 Tips

Deciding between multiple offers on your home will be much easier if you follow these five tips. 

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So you’ve received multiple offers on your listing. Congratulations! Today I’ve got five tips for ensuring that the selling process goes off without a hitch:

1. Stay organized. Design a spreadsheet that includes all offers along with a table of all criteria that’s relevant to your decision. This way, you can go down the line and compare each offer against these criteria. Having an organized process of elimination will help inform your decision.

2. Create a sense of urgency. Part of this is having your Realtor set and announce a specific review date for any and all offers that come in. By doing that, interested buyers and their representation will know how long they have to place their offer, and they’ll understand that indecision could mean a missed opportunity.

3. Obtain information on every buyer who makes an offer. Your Realtor should make it their mission to learn as much as they can about the types of buyers you’re dealing with. Are any of them all-cash buyers? Contingent buyers? These are things that will likely have a major bearing on your sale.

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Having an organized process of elimination will help inform your decision.

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4. Inquire about all offers with a loan officer. If the loan officer sees an offer in a favorable light ahead of time, the chances of it going through go up exponentially, so make sure your Realtor brings your offers to a mortgage professional before you make a decision.

5. Don’t cut ties with buyers who aren’t your first choice. Once you’ve accepted an offer, ask the second- and third-place buyers whether they wish to place a back-up offer. The incentive for doing that is they can lock out any additional offers in the event that the deal you’ve accepted fails to come to fruition. Should that happen, their backup offer would be moved to the first position.

If you don’t already have a spreadsheet, as mentioned in point No. 1, we’d be happy to provide you with the one we’ve developed for free! Just contact me and I’ll send a copy for you and your Realtor to use.

And if you have any other questions about how to best handle your multiple-offer situation or about real estate in general, please email me at GaryRaze@Remax.net or call me at 541-554-5825. I’d be happy to help!

Should You Borrow Money From Relatives to Buy Your First Home?

For today’s topic, we’re going to discuss whether borrowing money from a relative to purchase your first home is a wise move.

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Especially for younger buyers, having the financial wherewithal to purchase their first home comes with its challenges. With home prices continuing to mount, breaking into the market for the first time can be difficult.

If you’re one of these first-time buyers, how can you get into a home?

The obvious answer is to borrow money from a relative, but it’s important to recognize the good, the bad, and the ugly associated with this course of action.

Let’s first consider the good. It could be that your parents or grandparents have set aside funds with the express intent of helping you get into your first home, giving you a leg up. There’s no real downside to this because your relative saved money for that very reason.

Alternatively, if you’ve established a retirement plan such as a Roth IRA or the like, you can borrow from that account to pay for a home without penalty. Check with an accountant or a professional who’s familiar with your situation beforehand, though.

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It’s important to recognize the good, the bad, and the ugly associated with this course of action.

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Now, I’d like to share a brief example that’s representative of the bad (plus the ugly): About four years ago, I happily assisted one of my clients in her home sale, from which she extracted $75,000 to $100,000 in equity.

I recently learned that, with that money, she helped her children get into their first home. By doing so, however, she exhausted all of that money. What’s worse, she didn’t have a retirement plan in place. Because her children couldn’t return the favor financially speaking, she’s now stuck with little money to live on month to month.

Therein lies the problem with relatives lending money to children or grandchildren in order for them to buy a home. Without having a keen awareness of what it means for their financial future, some people, unfortunately, give in to emotion and pass along money that’s vital to their own livelihood to their children or grandchildren.

A word of advice: Think twice before borrowing funds from a relative for your home purchase. If you do borrow from them, make sure you’re borrowing surplus funds that don’t eat into their own retirement system. 

If you have any questions about today’s topic or anything else real estate-related, feel free to give me a call at 541-554-5825 or email me at GaryRaze@Remax.net. I’d be happy to help!

How Can Buyers Compete in a Tight Seller’s Market?

The key to winning the home you want in a tight seller’s market is following a few simple tips.

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Here in Lane County, as we close the book on May, we’re down to 1.8 months of inventory. This means there are more buyers out there than there are available homes.

As a buyer, what can you do to make your offer more attractive to sellers without overpaying for the home you want?

First, have your agent call the listing agent and find out as much as they can about the seller. Why are they moving? What’s their moving date? Have they already purchased a new home? Knowing the answers to these questions will help you craft your offer. For example, if you find out when they need to move, you can adjust your closing date so it’s more appealing.

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In this market, why would anyone choose a low offer when they have other offers that are either at or above their asking price?

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Next, make sure you have a strong pre-qualification and offer a good earnest money deposit. The higher your deposit is, the safer your offer looks.

Also, try minimizing your inspection timeline. The average timeline for completing inspections is about 10 days, so if you tell the seller you can get yours done in, say, three to five days, that sends a clear message that you’re ready to buy now and you won’t be picky in terms of what repairs you ask for.

Whatever you do, don’t try lowballing the seller. Remember, they’ll likely have more than just your offer to look at. In this market, why would anyone choose a low offer when they have other offers that are either at or above their asking price?

If you’d like to know more about how you can compete in a seller’s market or you have any other real estate questions for me, don’t hesitate to reach out to me. I’d be happy to help you.

Preparing Your Home Before the Inspection

Before your home gets inspected, check off these easy-to-fix items so they don’t show up in the final report.   

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Let’s say you’re a seller and you’ve received an offer on your home. In the ensuing days, an inspector will come to the home and check for various items of concern—rot and pests are a few examples.

As the seller, you can act preemptively and take care of a few items before the inspector has to be the one who flags them. Here’s how: 

First, make sure all lightbulbs inside and outside your home are working. When it comes time for showings, illuminate your home a little more by installing brighter bulbs—especially if yours are a little older and have dulled.

You’ll want to check and potentially replace your CO2 and carbon monoxide detectors as well. Your current detectors may have served you well for the last ten years, but being as they’re older models, the inspector will make a note of that in the report.

Ensure that your water heater is secure in the event of an earthquake by tying two straps, not just one, to it. Next, clear any debris that may have collected around your electrical panel, your attic space, or underneath your house. The inspector needs to have unobstructed pathways and access to these areas.

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As the seller, you can act preemptively and take care of a few items before the inspector has to be the one who flags them.

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For those who have pets, be sure to place them in a carrier or take them with you when leaving the home to let the inspector conduct their work. 

Also, every toilet in your home will need to be squeaky clean before the inspector sets foot in your home.They will use a moisture detector to establish whether any seepage is coming out from the wax rings, so scrub the area around the base of the toilet.

Another thing that will catch the inspector’s eye is the downspout. If yours run straight down and water isn’t being properly diverted away from the home, you can expect to be flagged in the final report. To avoid this, purchase a plastic downspout diverter—they’re inexpensive, and they’ll funnel the water about nine to 12 inches away from the home.

Those are just a few easy and quick loose ends up to tie up in your home before having an inspection done. If you have any questions, please feel free to text or call me at 541-554-5825 or shoot me an email at garyraze@remax.net. I look forward to talking with you soon!

What Plummeting Interest Rates Mean for Buyers and Sellers

Interest rates are falling quickly in out market, which means buyers and sellers need to act now to take advantage of that.

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Interest rates are falling hard in our market.

In fact, they recently had the single largest one-week drop in a decade. They’re not the lowest they’ve ever been, but they’re still extremely low right now. For a 30-year conventional loan, rates are between 4.25% and 4.5%.

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Nobody knows how long rates will stay this low, so acting soon will make a big difference in your bottom line.

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That’s very impressive, and it’s something that affects everyone in the real estate market. If you’re thinking of buying or selling a home, make sure you do it sooner rather than later. Nobody knows how long rates will stay this low, so acting soon will make a big difference in your bottom line.

In the meantime, if you have any questions about our market or you have any real estate needs I can take care of, don’t hesitate to reach out to me. I’d be happy to help you.

Make the Outside of Your Home Sparkle With This Spring Cleaning Checklist

 If you’re gearing up to host plenty of friends and family at your home this spring, here’s a quick outdoor cleaning checklist you can use to make sure everything looks great. 

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To get the outside of your home ready for everything spring has to offer, here’s a quick cleaning checklist:

• Clear your lawn of debris
• Clean out your flower beds
• Layer in fresh mulch
• Divide any perennials so they’ll be blooming nicely for May and June
• Wash your outdoor furniture
• Power wash your house, sidewalks, and driveway—keep in mind that different areas require different levels of water pressure
• Clean your grill, and check your propane tank and its hose—there’s nothing worse than running out of fuel right in the middle of cooking!
• Apply an application to your lawn to prevent weeds from growing
• Fertilize your lawn, but be careful not to overdo it
• Remove your storm windows and wash your regular windows
• Repair any broken screens
• Clean your gutters
• Fix any cracks in the driveway
• Remove any dead leaves from your flowers and plants
• Add new flowers to your deck and lawn

And finally...don’t forget to invite me over to your first barbecue!

As always, if you’d like to know more about this topic or you have any other real estate questions for me, don’t hesitate to reach out to me. I’d be happy to speak with you.

Is It Time for You to Get in on the Madness?

 It’s almost time for the busy season in Lane County real estate. Here’s what you need to know in the coming weeks and months whether you’re buying or selling.

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Right now, it’s time for March Madness, both on the court and in the real estate market.

In the real estate world, our March “madness” is the beginning of the spring market. Now that the weather is finally getting better in Lane County, people will start making their decision to buy or sell rather quickly.

Right now, we still have just two months of inventory. If no new homes came on the market in two months, we would completely sell out. This is a huge advantage to you if you’re a seller, but not if you’re a buyer.

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In a few short months, your competition will be much stronger.

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First-time homebuyers are continuing to come into the market, and there are still buyers out there who will have a home to sell. However, they’re not too excited about putting those homes on the market until the kind of home they are looking for is available. It’s kind of a catch-22 situation.

Let’s say you're a first-time buyer: You want to see if there’s anything out there right now that works for you. In a few short months, you'll be competing against many more buyers than you would be right now. The chance of getting the right home at the right price is probably better now than it will be later.

Most sellers are waiting until April or May to list. That is when we’ll see an influx of buyers, but they'll also have more homes to choose from during that time.  Sellers can get ahead of the market curve by getting their homes listed now.

As you can see, March “madness” has begun in the real estate market. If you have any questions about buying or selling, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

How Will Our 2019 Market Be Different?

 As we move further into 2019, now is the perfect time to discuss how things have changed since last year and how things will continue to change in the months ahead.

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Even though it’s still early in the year, it’s already clear that our 2019 real estate market is going to be quite a bit different from what we saw last year.

In contrast to 2018’s record-low inventory, we believe that 2019 will see a nationwide increase in the number of available homes. Because of this, sellers will need to be careful with how they price their homes. We, therefore, highly recommend consulting with a trusted agent before you list.

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Buyers and sellers alike have a lot of opportunities before them this year.

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Of course, there are some similarities between the 2018 and 2019 markets. For one thing, millennials will continue to make up a significant portion of all homebuyers in our market. About 45% of all homebuyers today are millennials, and that percentage is expected to increase in the coming months.

All in all, our market is still very healthy. In Lane County, specifically, activity will remain strong despite rising prices. Buyers and sellers alike have a lot of opportunities before them this year, but with 1.9 months’ worth of available inventory, we are still technically in a seller’s market.

If you’ve got any questions or would like more information, don’t be afraid to reach out. Our team would be happy to serve you. We look forward to hearing from you soon.

Why Credit Scores Matter, How They Work, and More

 Credit scores are critical, but not everyone understands how they work. Thankfully, local mortgage professional Ron Smith of Opes Advisors sat down with us recently to answer a few common questions.

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Credit scores are a hot-button subject. Despite this, not everyone understands as much about them as they should.

To help amend this, I recently sat down for a discussion on this crucial subject with local mortgage consultant Ron Smith of Opes Advisors, and I’m excited to share a few highlights from our conversation with you today.

Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch the full message or use these timestamps to browse specific topics at your leisure:

0:45 - What is a credit score?

1:10 - How is a credit score determined?

1:54 - Why are credit scores so important?

2:42 - How can someone improve a credit score?

3:51 - How can major purchases or credit inquiries impact your score?

5:40 - How can someone check their score without damaging it?

6:44 - Are free credit reports legitimate?

7:41 - A few closing words about the importance of credit

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

How to Slay the Mortgage Monster

Slaying the mortgage monster can seem like an insurmountable task. Here are a few tips to make the task much easier.

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You may know this already, but when you get a 30-year mortgage, the interest is paid almost completely up front. The 360 payments you make throughout the life of the loan remain almost identical, aside from taxes. However, most of your first payments in the first few years strictly go toward interest. You don’t get to pay down the principal amount of the loan until after that.

However, today we’ve got some tips to help you eliminate some of that monster interest you are paying at the beginning of your loan. If you pay about $100 extra per month and put it toward your principal amount, it will have a huge effect on your bottom line down the road.

A lot of people also just make one extra mortgage payment per year. That will take seven years off of a 30-year mortgage right there.

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Making an extra payment per year will take seven years off a 30-year mortgage.

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Starting at 2:00 in the video above, you can see the differences in paying off a 30-year mortgage versus paying off a 15-year mortgage for a $250,000 home at 5.25%. For a 30-year mortgage, you’d be taking out a $237,500 loan, which would make your payment right around $1,300 per month. The amount that you’d be paying in interest over that time period would be $234,634.

As for a 15-year mortgage, that same $237,500 loan would have a monthly payment of around $1,900. However, once your home is paid off in 15 years, you will end up saving $128,476 in interest for taking the burden of adding that extra $600 per month to your payment.

If you want to know more about how to reduce your mortgage amount or anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.