Demand for Vacation Homes Is Still Strong

21690 Butte Ranch Road, Bend, OR 97702
Presented by Mark Garcia | Offered at $1,999,999 | MLS# 220116465

From Keeping Current Matters

The pandemic created a tremendous interest in vacation homes across the country. Throughout the last year, many people purchased second homes as a safe getaway from the challenges of the health crisis. With many professionals working from home and many students taking classes remotely, it made sense to see a migration away from cities and into counties with more vacation destinations.

The 2021 Vacation Home Counties Report from the National Association of Realtors (NAR) shows that this increase in vacation home sales continues in 2021. The report examines sales in counties where “vacant seasonal, occasional, or recreational use housing account for at least 20% of the housing stock” and compares that data to the overall residential market.

Their findings show:

  • Vacation home sales rose by 16.4% to 310,600 in 2020, outpacing the 5.6% growth in total existing-home sales.
  • Vacation home sales are up 57.2% year-over-year during January-April 2021 compared to the 20% year-over-year change in total existing-home sales.
  • Home prices rose more in vacation home counties – the median existing price rose by 14.2% in vacation home counties, compared to 10.1% in non-vacation home counties.

This coincides with data released by Zelman & Associates on the increase in sales of second homes throughout the country last year.

As the data above shows, there is still high demand for second getaway homes in 2021 even as the pandemic winds down. While we may see a rise in second-home sellers as life returns to normal, ongoing low supply and high demand will continue to provide those sellers with a good return on their investment.

Full article on Keeping Current Matters


Faster, Stronger: May was a Record Month for U.S. Real Estate

1825 SW Vista Ave, Portland, OR 97201
Presented by Tami Ferrey | Offered at $2,900,000 | MLS# 21061105

From Mansion Global

The median home price, the speed of sales and premiums—a sign of bidding wars—hit all-time highs last month, according to Redfin.

The soaring housing demand, cutthroat competition and overall zealous market conditions seen across the U.S. in the past year built to a record-breaking month in May.

The national median home-sale price reached a record high of $377,200 last month, up a whopping 26% year over year, the highest annual jump recorded, according to a report Thursday from Redfin.

But they weren’t the only records set. The typical home sold in just 16 days, a record low and down from 38 days in May 2020; 54% of homes sold above their list price, a record high, up from 26% a year ago; and the number of homes for sale fell to a record low, down 27% from 2020.

It’s crucial to note though, in May 2020 the country was still gripped by pandemic-driven lockdowns, which drastically slowed the property market, “meaning the year-over-year trends for home prices, pending sales, closed sales and new listings are exaggerated,” the online property portal and brokerage said.

But with buyers and sellers now frequently vaccinated and gradually returning to pre-pandemic living, May is likely to have been the peak of “the blazing-hot pandemic housing market,” Redfin lead economist Taylor Marr, said in the report. “Sellers are still squarely in the drivers’ seat, but buyers have hit a limit on their willingness to pay. The affordability boost from low mortgage rates has been offset by high home price growth.”

The largest property price gains were recorded in the most popular destinations for migrating Americans, a separate report Thursday from Redfin said.

Nationwide, 31.4% of Redfin.com users looked to move to a different metro area in April and May, up from 27% at the same time last year.

Topping the list as the most popular spots for movers were Phoenix; Las Vegas; Sacramento, California; Austin, Texas; and Miami.

In Phoenix, the top destination for relocators, buyers from California, Oregon, Washington and the Midwest “are flooding the market, depleting inventory and pushing up prices,” Vincent Shook, a Redfin agent in Phoenix, said in the report.

“So many people can work remotely from anywhere in the country, so they started looking at Arizona versus a place like Los Angeles or Seattle and thinking, ‘why stay in such a high-priced market when I can get a larger home in Phoenix for a lower price?’” Mr. Shook said.

Those buyers, with higher salaries and the ability to make offers over the listing price, are causing almost every home to sell for more than its asking price, he added.

Sales prices in Phoenix jumped 33.3% annually in May to $400,000, the second-highest annual price jump across the 88 metro areas the report tracks and well above the national figure of 26%.

Sacramento logged the fifth-largest price increase with annual price gains of 29.3% leaving the median sale price at $550,000.

But Austin topped the list for soaring prices, where sale prices skyrocketed 42.4% year over year in May to $470,000.

Full article on Mansion Global


Homeowners Got $2 Trillion Richer During the First Three Months of the Year

13501 SW Riggs Road, Powell Butte, OR 97753
Presented by Perry Cross | Offered at $3,590,000 | MLS# 220114992

From cnbc.com

Homeowners are getting richer and richer as prices keep soaring – and the numbers are staggering.

Those with mortgages — about 62% of all properties — saw their equity jump by 20% in the first quarter from a year earlier, according to CoreLogic. This represents a collective cash gain of close to $2 trillion. Per borrower, the average gain was $33,400.

The massive gain is thanks to soaring home prices, which CoreLogic said were up over 11% in March, the end of the quarter, from a year earlier. That’s the sharpest gain since 2006. Prices rose an even stronger 13% in April.

High demand for homes spurred by the coronavirus pandemic amid an already low supply caused bidding wars in markets across the nation. Record-low mortgage rates for much of last year only added to the buying frenzy and helped fuel the price gains.

“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic,” said Frank Martell, president and CEO of CoreLogic. “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.”

As of June 1, there were still just over 2 million homeowners in Covid-related mortgage bailout programs, according to the Black Knight real estate data company. As these plans begin to expire, having home equity will help those in trouble. They can still sell and get out with a potential profit if they have to.

“This reduces the likelihood for a large numbers of distressed sales of homeowners to emerge from forbearance later in the year,” CoreLogic chief economist Frank Nothaft said, adding that the average homeowner now has about $216,000 in equity.

The share of borrowers in a negative equity position, owing more on their mortgages than their homes are worth, consequently dropped. From the fourth quarter of 2020 to the first quarter of 2021, the total number of mortgaged homes in negative equity decreased by 7% to 1.4 million homes, or 2.6% of all mortgaged properties. Annually, the number of underwater homes dropped by 24%.

Home values are expected to cool off in coming months because buyers are already hitting an affordability wall. Sales have begun to slow, and price drops usually follow.

Home prices are not, however, expected to crash, since there is still strong demand for housing, and the demographics support that going forward. As prices moderate, buyers will come back. Unlike the last time home prices crashed, today’s mortgage underwriting is far more stringent.

Full article at cnbc.com


Buyers are Realistic About Housing Shortage Challenges

25800 SW Petes Mountain Rd, West Linn, OR 97068
Presented by Kristen Kohnstamm | Offered at $2,895,000 | MLS# 21113135

From REALTOR® Magazine

House hunters are realizing they may need to expand their timelines to find a home. While they’re still anxious to buy, they are getting the messages about the competitive housing market and fierce bidding wars that they realize may delay their plans.

The share of consumers who hoped to buy a home in the next six months plummeted from 34% a year ago to 21% this year, according to a newly released homebuyer flash survey conducted by Point2 Homes, an online real estate marketplace.

But it’s not from a lack of eagerness: 50% of respondents said they were determined to buy as soon as they find the right property.

Concerns about housing shortages are increasing. But fewer respondents this year appear worried about their personal financial stability.

As such, the higher home prices aren’t scaring them away. Fifty-one percent of the more than 2,600 respondents said they were confident that the steep price hikes would not be a problem in their house hunt. On the other hand, 45% of consumers surveyed said they did not believe they’ll be able to keep up with the price hikes.

Also, buyers are still showing an interest in virtual home tours to shop for homes, but that interest does seem to be waning in favor of a return to in-person viewings. Interest in online pictures declined, while 11% of respondents expressed an interest in going to showing this year compared to just 4% last year, according to the Point2 Homes survey.

“Home seekers all across the U.S. remain positive about the home buying process, and seem more determined than ever to find the perfect home,” the report says. “Although the competition is fiercer than it has been in the past, many Americans are keeping their eyes on the market and are willing to play by the new rules—which imply more preparation, higher offers, and going through bidding wars without losing hope.”

Full article on REALTOR® Magazine


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


U.S. Home Prices Hit All-Time High in March—Surging 17.2% Annually

4050 Sylvester Dr, Hood River, OR 97031
Presented by Molly Donnell | Offered at $1,950,000 | MLS# 20605426

From Mansion Global

It was another record-breaking month for the housing market, but sales have begun to slow.

March was another record-busting month for the U.S. real estate market, though sales have begun to slow in the face of a housing shortage, according to a report Thursday from the National Association of Realtors.

The median sales price for existing homes was $329,100 in March, the highest on record and a 17.2% jump compared to the same time last year, the data showed. All four U.S. regions posted double-digit prices increases.

At the same time, existing-home sales slipped 3.7% last month compared to February, the report found. That’s the second-consecutive month of declines in transactions, although sales were up 12.3% year over year for March—a sign that both limited inventory and affordability were slowing sales.

“Consumers are facing much higher home prices, rising mortgage rates and falling affordability, Lawrence Yun, NAR’s chief economist, said in the report. “However, buyers are still actively in the market.”

Indeed, housing inventory was down 28.2% in March, compared to the same time in 2020, according to the report. Homes sold in an average of 18 days, a record low.

“The sales for March would have been measurably higher, had there been more inventory,” according to Mr. Yun. “Days on market are swift, multiple offers are prevalent, and buyer confidence is rising.”

Regionally, the West saw the biggest dip in deals last month. Sales of existing homes there dropped 8% month over month, but are still up 15.5% compared to 2020, the report found. The median price was $493,300, up 16.8% from the same time last year..

Existing-home sales in the South were down 2.9% in March compared to February, but up 15.9% compared to March 2020, according to the report. The median price was up 15.6% year over year to $283,900.

Sales of existing Midwest homes increased a modest 0.8% in March, compared to the same time the previous year, and dipped 2.3% month over month, the data showed. The median price there was $248,200, a 13.5% jump from March 2020.

The Northwest saw the biggest increase in year-over-year sales in March, 16.9%, although it registered a 1.3% decline in deals compared to the previous month, according to the data. The median price has spiked 21.4% from March 2020 to $364,800.

Although mortgage rates are up slightly, they are still “favorable,” and Mr. Yun still considers the economic outlook “promising.”

“At least half of the adult population has received a Covid-19 vaccination, according to reports, and recent housing starts and job creation data show encouraging dynamics of more supply and strong demand in the housing sector,” he said in the report.

Full article on Mansion Global