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Explaining Today’s Low Housing Supply

Friday, September 29, 2023
by Liz Warren

 

            
 

Some Highlights

  • Wondering why the supply of homes for sale is limited today? There are a few factors at play.
  • Lack of building over time, the mortgage rate lock-in effect, and people staying in their houses longer are three of the main reasons why supply is low.
  • But real estate agents know exactly where to look and what to do to make your dream a reality. Let’s connect so you have an expert on your side to help you successfully navigate the market and find your next home. 
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Why Your House Didn't Sell

Thursday, September 28, 2023
by Liz Warren

Why Your House Didn’t Sell



 

If your listing expired and your house didn’t sell, you’re likely feeling a little frustrated. Not to mention, you're also probably wondering what went wrong. Here are three questions to think about as you figure out what to do next.

Did You Limit Access to Your House?

One of the biggest mistakes you can make when selling your house is restricting the days and times when potential buyers can tour it. Being flexible with your schedule is important when you're selling your house, even though it might feel a bit stressful to drop everything and leave when buyers want to see it. After all, minimal access means minimal exposure to buyers. ShowingTime advises:

“. . . do your best to be as flexible as possible when granting access to your house for showings.”

Sometimes, the most determined buyers might come from far away. Since they're traveling to see your house, they may not be able to change their plans easily if you only offer limited times for showings. So, try to make your house available as much as you can to accommodate them. It’s simple. If no one’s able to look at it, how’s it going to sell?

Did You Make Your House Stand Out?

When selling your house, the old saying matters: you never get a second chance to make a first impression. Putting in the work to make the exterior of your home look nice is just as important as how you stage it inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from U.S. News says:

“After all, if people drive by, but aren’t interested enough to walk through the front door, you’ll never sell your house.”

But don’t let that impact stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.

Did You Price Your House Compellingly?

Setting the right price is extremely important when you're selling your house. Even though it might feel tempting to push the price higher to maximize your profit, overpricing can scare away buyers and make it hard to sell quickly. Business Insider notes:

“. . . the biggest mistake sellers make is overpricing their home.”

If your house is priced higher than others like it, it could make buyers lose interest. Pay attention to the feedback people give your agent during open houses and showings. If lots of people are saying the same thing, it might be a good idea to think about lowering the price.

For all these insights and more, rely on a trusted real estate agent. A great agent will offer expert advice on relisting your house with effective strategies to get it sold.

Bottom Line

It’s natural to feel disappointed when your listing has expired and your house didn’t sell. Let’s connect to figure out what happened and what to reconsider or change if you want to get your house back on the market.

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The Return of Normal Seasonality for Home Price Appreciation on Mt. Hood

Tuesday, September 26, 2023
by Liz Warren

The Return of Normal Seasonality for Home Price Appreciation



 

If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.

That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.

After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:

“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”

Why This Is So Important to Understand

In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:

  • Appreciation: when prices increase.
  • Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
  • Depreciation: when prices decrease.

Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in our local area, let’s connect.

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Home Equity will Help with Affordability

Monday, September 25, 2023
by Liz Warren

           

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Buying on Mt. Hood? Start With A Pre-Approval

Monday, September 25, 2023
by Liz Warren

Beginning with Pre-Approval



 

If you’re looking to buy a home this fall, there are a few things you need to know. Affordability is tight with today’s mortgage rates and rising home prices. At the same time, there’s a limited number of homes on the market right now and that’s creating some competition among buyers. But, if you’re strategic, there are ways to navigate these waters. The first thing you’ll want to do is get pre-approved for a mortgage. That way you’ll know your numbers and can set yourself up for success from the start of your home search.

What Pre-Approval Does for You

To understand why it’s such an important step, you need to know what pre-approval is. As part of the homebuying process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you know how much money you can borrow. Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow. Why does this help you, especially today? With higher mortgage rates and home prices impacting affordability for many buyers right now, a solid understanding of your numbers is even more important so you can truly wrap your head around your options.

Pre-Approval Helps Show Sellers You’re a Serious Buyer

Let’s face it, there are more buyers looking to buy than there are homes available for sale and that imbalance is creating some competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you make an offer on a home. But getting pre-approved for a mortgage can help you stand out from other hopeful buyers.

As an article from Wall Street Journal (WSJ) says:

“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Pre-approval shows the seller you’re a serious buyer that’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or financial issues.

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. The more prepared you are, the better chance you have of getting the home you want. Connect with a trusted lender so you have the tools you need to purchase a home in today’s market.

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Are More Homes Coming on the Market on Mt. Hood?

Monday, September 18, 2023
by Liz Warren

Are More Homes Coming onto the Market?



 

An important factor shaping today’s market is the number of homes for sale. And, if you’re considering whether or not to list your house, that’s one of the biggest advantages you have right now. When housing inventory is this low, your house will stand out, especially if it’s priced right.

But there are some early signs that more listings are coming. According to the latest data, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.

More Homes Are Coming onto the Market than Usual

It’s well known that the busiest time in the housing market each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. Sellers are anticipating this and ramping up for the months when buyers are most active. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.

But here’s what’s surprising. Based on the latest data from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. You can see both the normal seasonal trend and the unusual August in the graph below:As Realtor.com explains:

“While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season . . .”

While this is only one month of data, it’s unusual enough to note. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.

What This Means for You

If you’ve been putting off selling your house, now may be the sweet spot to make your move. That’s because, if this trend continues, you’ll have more competition the longer you wait. And if your neighbor puts their house up for sale too, it means you may have to share buyers’ attention with that other homeowner. If you sell now, you can beat your neighbors to the punch. Mt. Hood only has 35 properties currently for sale!

But, even with more homes coming onto the market, the market is still well below normal supply levels. And, that inventory deficit isn’t going to be reversed overnight. The graph below helps put this into context, so you can see the opportunity you still have now: 

Bottom Line

Even though inventory is still low, you don’t want to wait for more competition to pop up in your neighborhood. You still have an incredible opportunity if you sell your house today. Let’s connect to explore the benefits of selling now before more homes come to the market.

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New STR Rental Regulations Approved by Board of County Commissioners

Friday, September 8, 2023
by Liz Warren

Board of County Commissioners approves Short-Term Rental regulations

Date

Rules will affect STRs in unincorporated areas in 90 days

The Board of County Commissioners unanimously approved rules and regulations regarding short-term rentals (STRs) earlier today. The action was taken after two public hearings were held on the issue – one earlier today, and one last month.

The regulations will take effect after 90 days (Dec. 6), and only affect the unincorporated areas of Clackamas County – there will be no effect on STRs located within city limits.

The Board of County Commissioners intends to revisit these regulations in two years in order to evaluate the cost and efficacy of the program and make a determination whether to continue, amend, or discontinue the regulations.

Residents are encouraged to review the STR regulations, which were adopted as presented at this morning’s Business Meeting. Those regulations can be found online on the county’s STR webpage where future updates can be found.

Before going into effect, the county will post the registration application (for owners/operators) online.

The Board of County Commissioners was effusive in their thanks this morning to the many members of the public that provided testimony in person and over Zoom at both public hearings, as well as many more that emailed in their perspectives. Changes were made to the proposed regulations in-between the time of the first and second public hearings in response to community input. Watch today’s hearing.

Changes

Clackamas County currently has no STR regulations. These new regulations will require all STRs in unincorporated Clackamas County to register with the county. The process will be free and an in-home inspection will not be required. When registering, the property owner and/or manager will certify that the property meets safety standards and that they will abide by the STR program rules. These include, but are not limited to:

  • STR owners will continue to pay the county’s transient lodging tax (6%) 
  • The STR regulations impose a .85% user fee on the total rental amount 
  • No STR may be publicly advertised for rent unless it has been registered with Clackamas County 
  • STRs shall comply with all building and fire standards  
  • STR registration identification numbers shall be included on any advertisement or rental platform 
  • Contact information of a party responsible for the STR shall be posted at all times while paying guests are on the property, in an area and size readily visible from the nearest public roadway. (Per the draft STR rental application, that person/company must be available 24/7 and able to respond to complaints within two hours. See pages 10-11.)  
  • The number of STR occupants shall not exceed the number authorized in the registration. Fifteen occupants is the maximum.  
  • Notice shall be clearly posted in the STR that identifies and informs occupants of the county's noise control ordinance  
  • Adequate parking – one off-street motor vehicle space per sleeping area – is required. There are exceptions to this for certain areas of the Mount Hood community. 
  • Vehicles shall never block access for emergency vehicles, access to the premise, or a parked motor vehicle. These violations, or other parking performed in a manner that violates the county’s current parking and towing ordinance standards, may subject the offending vehicle to immediate tow. 
  • The proposed STR regulations do not apply to hotels, motels, bed and breakfast facilities, hostels, campgrounds, lodging and resort accommodations in commercial zones, recreational vehicle camping facilities, or organizational camps

Violations

Clackamas County encourages any residents/parties to cooperate directly to resolve conflicts arising from an STR. First attempts to remedy violations should be to contact the posted STR representative. If a person does not respond within 24 hours or does not adequately remedy the issue, the county should be notified. Further details:

  • Clackamas County reserves the right to immediately revoke registration if it determines an STR is a fire or life safety risk 
  • Clackamas County reserves the right to review pertinent financial records or visit the STR to ensure violations have been resolved at any reasonable time 
  • When noncompliance of the STR regulation is suspected, the county shall issue up to two warnings in writing 
  • An owner that operates an STR without an approved registration or while suspended shall be subject to penalties

Members of the media may contact Clackamas County Public Affairs’ Dylan Blaylock. STR owners and interested parties with questions can contact Policy Advisors Caroline Hill or Everett Wild at 503-655-8581 or [email protected].

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Mortgage Rates: Past, Present, and Possible Future

Wednesday, September 6, 2023
by Liz Warren

Mortgage Rates: Past, Present, and Possible Future



 

If you’re hoping to buy a home this year, you’re probably paying close attention to mortgage rates. Since mortgage rates impact what you can afford when you take out a home loan – and affordability is a challenge today – it’s a good time to look at the big picture of where mortgage rates have been historically compared to where they are now. Beyond that, it’s important to understand their relationship with inflation for insights into where mortgage rates might go in the near future.

Giving Context to the Sticker Shock

Freddie Mac has been tracking the 30-year fixed mortgage rate since April of 1971. Every week, they release the results of their Primary Mortgage Market Survey, which averages mortgage application data from lenders across the country (see graph below):

Looking at the right side of the graph, mortgage rates have increased significantly since the start of last year. But even with that rise, today’s rates are still below the 52-year average. While that historical perspective is good context, buyers have gotten used to mortgage rates between 3% and 5%, which is where they’ve been over the past 15 years.

That’s important because it explains why the recent jump in rates might have you feeling sticker shock even though they’re close to their long-term average. While many buyers have adjusted to the elevated rates over the past year, a slightly lower rate would be a welcome sight. To determine if that’s a realistic possibility, it’s important to look at inflation.

Where Could Mortgage Rates Go in the Future? 

The Federal Reserve has been working hard to lower inflation since early 2022. That’s significant because, historically, there’s been a connection between inflation and mortgage rates (see graph below):

This graph shows a pretty reliable relationship between inflation and mortgage rates. Looking at the left side of the graph, each time inflation moves significantly (shown in blue), mortgage rates follow suit shortly after (shown in green).

The circled portion of the graph points out the most recent spike in inflation, with mortgage rates following closely behind. As inflation has moderated a bit this year, mortgage rates haven’t yet made a similar move.

That means, if history is any guide, the market is waiting for mortgage rates to follow inflation and head back down. It’s impossible to accurately predict where mortgage rates will go for sure, but moderating inflation means mortgage rates going down in the near future would fit a well-established trend. 

Bottom Line

To understand where mortgage rates may be going, it’s helpful to look at where they’ve been in the past. There’s a clear connection between inflation and mortgage rates, and if that historical relationship holds true, the recent decline in inflation may mean good news for the future of mortgage rates and your homeownership goals.

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Liz Warren
Merit Properties Group - Keller Williams Realty PDX Central
Box 131
Welches OR 97067
Direct: 503-705-3090
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