Mortgage Interest Rates Stay Below 3% Yet Again

20240 Rock Canyon Road, Bend, OR 97703
Presented by Ruiz & Grandlund Real Estate Group | Offered at $3,495,000 | MLS# 220115644

From Forbes

We are nearly at the halfway point of the year and all the predictions from the end of last year suggesting that interest rates would steadily increase and never again see the low rates of the pandemic have only just barely proven true. As of this week they have stayed below 3% for five out of the last six weeks for 30-year fixed-rate loans, reaching 2.95% based on the Freddie Mac weekly report. When we closed out 2020, rates were at 2.67% which was just one basis point higher than their lowest level on record from a few weeks earlier.

Applications to purchase a home have increased slightly over the past few weeks but buyers continue to be held back by a lack of affordable inventory. A survey of over 400 metropolitan areas in the U.S. conducted by Redfin showed the number of homes that sold over list price had nudged over 50% for the first time during the four-week period ending May 16. Other record highs the survey revealed include: 45% of homes had an offer accepted within one week of going on the market and the average sale-to-list price ratio reached 101.7%. The median sales price for homes also reached a record high of $352,975.

As the Mortgage Banking Association reports, purchase applications have increased slightly the past few weeks, even though they are lower than they were a year ago. “Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “While purchase activity was around 4% lower than a year ago, the comparison is to last spring’s large upswing in activity as pandemic-related lockdowns lifted.”

This decline of 4% is still telling since it shows how strong the current demand is for it to only be a minimal decrease compared to a time period when pent up demand suddenly hit the market.

Activity for the upcoming summer season will be a competitive market for buyers while sellers can expect to receive record prices for their homes.

Full article on Forbes


Home Prices Rapidly Climbing Toward $375,000

8336 NW Thompson Rd, Portland, OR 97229
Presented by Jason Mendell & Braden Fridell | Offered at $1,264,950 | MLS# 21649654

From housingwire.com

Nearly 50% of all homes sold above listing price

National median home prices reached $370,528 for the month of April, a 22% increase year over year and a new record, according to a recent study from Redfin.

The number of homes for sale also sank to a record-low average of only 19 days on the market. And 49% of homes sold for above asking price — a record high.

The numbers are a bit exaggerated, per Redfin Chief Economist Daryl Fairweather, due to the COVID-19 pandemic slowing homebuying and selling in April 2020 and skewing the numbers. But the fact remains, she said, that low inventory is going to keep prices high.

“There simply aren’t enough homes for sale in America for everyone with the desire and the means to buy one right now,” Fairweather said. “Until new construction takes off — over the course of years, not months — home prices will continue to increase. This housing boom is nowhere close to over.”

With an aforementioned 49% of April homes already selling above asking price, it’s likely May and June will report record highs as well, Fairweather said.

“To put the scarcity of housing into context, there is plenty of room for supply to increase and demand to taper off, and we would still find ourselves in a historically strong seller’s market,” Fairweather said.

Also of note was April’s average sale-to-list price ratio, which went above 100% to a record high of 101.6%.

“This measure also typically peaks in June, so the next two months may also hit record highs if the market continues to follow a typical seasonal pattern into summer,” Fairweather said.

Regional numbers also reflect the enormous difference in house sales from April 2020.

The number of homes sold in April was up 34% from a year earlier, but only 8% from the same time in 2019. The only metro area that saw home sales decline was Rochester, New York (-3%). The largest gains in sales were in places that had the most abrupt slowdown of home sales in April 2020, including San Francisco (up 184%) and San Jose, California (up 150%) and Miami, Florida (up 120%).

Median home prices increased from a year earlier in all of the 85 largest metro areas Redfin tracks. The smallest increase was in Honolulu, Hawaii, where prices went up 0.2% from a year ago. The largest home price increases were in Austin, (up 42%), Oxnard, California (up 26%) and Miami (+26%).

Indianapolis, specifically, saw the largest decline in days homes spent for sale over the past year. In April 2020, homes were selling in 10 days, on average, in the midwestern city. Now, homes in Indianapolis are selling in four days, on average, underlining the trend of homebuyers seeking lots in states with less income tax and more overall space.

“I’m helping buyers understand the current market by advising them that it’s no longer unusual for a home to sell for up to $50,000 above asking price,” said Andrea Ratcliff, an Indianapolis-based Redfin agent. “Builders have waiting lists of at least a year and people are hesitant to sell their homes because there are so few options available for them to buy.”

Approximately half of all homes in Denver, Seattle, Portland, Oregon and Omaha, Nebraska sold in five days, Redfin reported.

Full article at housingwire.com


Your House Could Be the Oasis in an Inventory Desert

112 Woodland Rd, Goldendale, WA 98620
Presented by Dennis Coxen | Offered at $2,200,000 | MLS# 20644070

From Keeping Current Matters

Homebuyers are flooding the housing market right now to take advantage of record-low mortgage rates. Many have a sense of urgency to find a home soon since experts forecast a steady rise in both rates and home prices this year and next. As a result, buyer demand greatly outweighs the current housing supply. Here’s how the shortage of houses for sale sets yours up to be the oasis in an inventory desert.

According to the National Association of Realtors (NAR), today’s housing inventory sits at an incredibly low 2.1-month supply, far below the 6-month mark for a neutral market. Inventory of single-family homes a year ago was already very low, and as you can see in the graph below, this year’s levels are even lower:

Due to these market conditions, today’s buyers frequently enter fierce bidding wars while trying to purchase a home. This in turn drives up home prices and gives sellers incredible leverage in the negotiation process, two big wins if you’re going to sell your house this year.

Full article on Keeping Current Matters


‘This Isn’t a Bubble’

80644 Hwy 101, Cannon Beach, OR 97110
Presented by Sally Conrad | Offered at $4,995,000 | MLS# 19-1245

From REALTOR® Magazine

The U.S. housing market is on a hot streak with double-digit annual gains in home prices, bidding wars, and surging buyer demand. That type of soaring housing market is prompting more “bubble” fears in some corners, but economists say the housing market isn’t getting overinflated.

“We have strong conviction that we are not experiencing a bubble in U.S. housing,” Vishwanath Tirupattur, a Morgan Stanley strategist, wrote in a note to clients this week.

Lawrence Yun, chief economist of the National Association of REALTORS®, agrees. He told Axios last month: “This is not a bubble. It is simply lack of supply.”

The rapid rise in prices may be concerning to home shoppers, however. The median selling price for a home is up $35,000 compared to a year ago, which is the fastest-paced increase since 2006, Tirupattur said.

But this isn’t 2006. Housing inventories are low, credit remains tight, and lenders aren’t issuing risky loans at rates like they did back then. Product risk—such as from mortgages with introductory periods, teaser rates, or balloon payments—comprised about 40% of the mortgage market between 2004 to 2006. More recently, those factors are now at only 2% of the mortgage market, according to Morgan Stanley.

Also, the housing market has a record low number of homes available for sale. At the end of March, there were 1.07 million homes available for sale, according to NAR data. For comparison, during the housing bubble, in July 2007, there were more than four times that—4 million homes available for sale.

Still, while home prices won’t keep climbing at the current pace. They aren’t expected to fall either, economists say.

“We are not at all suggesting that home price appreciation will maintain its current torrid pace,” Tirupattur writes. “Home prices will continue to rise, but more gradually.”

Full article on REALTOR® Magazine


NerdWallet’s Home Seller Report Reveals What Buyers And Sellers Should Know In Today’s Market

21725 Rickard Road, Bend, OR 97702
Presented by Sheila Balyeat | Offered at $2,850,000 | MLS# 220110327

From Forbes

NerdWallet’s Home Seller Report reveals what buyers and sellers should know in today’s market. NerdWallet recently released its Home Seller Report. Though the number of homes for sale across the country remains at record low, it appears more sellers will be coming to market over the next 18 months.

According to the report, “1 in 6 (17%) of homeowners. plan on selling their home in the next 18 months, and 45% of those planning to sell said recent changes in the housing market have spurred them to sell earlier than initially planned.”

More than 4 in 5 (81%) of homeowners who are planning to sell in the next 18 months plan on spending at least $2,000 on repairs or renovations feeling that will add additional appeal for buyers. NerdWallet Data Analyst, Elizabeth Renter shares her thoughts on the report’s findings. “One thing that surprised me is that 17% of homeowners planning to sell in the next 18 months say they’ll spend more than $15,000 on repairs and renovations before listing their homes.”

With a market defined by multiple offers and bidding wars resulting in homes selling for above-asking prices, Renter thinks sellers can share those renovation costs with eager buyers. “If there’s any market in which buyers are willing to shoulder the costs of repairs or renovations, this is it. The supply of homes for sale is so low, informed buyers anticipate they’ll have to make sacrifices in order to get under contract, first, but also to close on the home,” Renter observes.

Sellers take note—those costly renovations may not be necessary to sell your home to an eager buyer in the current market. “So, while we recommend being forthcoming about repairs that might be needed — and your agent can help guide you through that — there’s likely little need to make costly upgrades in order to get an impressive offer on your home,” Renter added.

The March survey conducted by the Harris Poll revealed motivations by future sellers. Over 90 % will buy another home. Reasons for selling included the two top ones of “wanting to upsize” and “moving closer to family.” Clearly, the pandemic has brought a shift in why people are buying and selling. Only 10 % of those surveyed no longer wanted to be homeowners.

Sellers need to realize before listing their home that there’s a good chance it will sell quickly as this market shows no signs of slowing down. Listen to Renter. “Sellers must be ready for everything to move very quickly. Homes are going under contract in a matter of days, and even closing much faster than usual because buyers are waiving contingencies and even skipping a mortgage altogether, in some cases,” she explains.

They need to be ahead of the game, which could mean finding their replacement home first. “Getting under contract for your next house before you have an offer on your current one can be a little scary, but the risk of not selling is quite low in this market,” Renter observes.

Consider that being a seller in this market is far better than being a buyer. At least for now that is.

Full article on Forbes