Of dead cats and a recovery

As I sat down (late again! Damn!) to write this months blog posting, the headlines blared “July existing home sales down 27%!” or something like that. (Actually, in Oregon it was 29.8%. Come on. Round up! I mean seriously……)

Tell me something I don’t know.

What I do know, that many don’t is that we have bounced, and are busy again. Decent August, big September. The inventory, is quietly disappearing. Not the properties I would have thought, mind you, lot’s of stuff over $400, but some at really aggressive discounts, up to 10%, some more, most less. (See Justin Fox’s Latest) If there is a bottom, 10% off this years already lowered prices is probably getting there.

Its funny how fast my news cycle has become. I don’t read the electronic newspapers dropped into my inbox every morning, because I read it on the news feed already. My cycle has become quite instant.

But back to granularity. Here’s what a real instant cycle and granularity get you in the HR market. The aforementioned news headline is based on data from July. Since then, (these last three weeks) We have had a large jump in volume of transactions, while the newspaper titles are still promoting that we languish, Buyers moved in and went for it. My impression from seeing recent sales, is that these closings are going to set off a reset in valuation in some neighborhoods. Not much, but that rash of closings, (discounted) plus the winter, plus the increased restrictions on mortgage financing will push the prices a touch lower (5%-maybe 10%, a la fox), touch off a good bump in September (because of low rates) that will close into October, but not reset anything, and then the winter buyers will move in for their traditional late season searching. Someone should send a memo out to the Sellers, so they don’t get blindsided by the raft of appraisals that are not about to make it…….Weirdly, and (insert raft of external event caveats here) I’m thinking 2011 Spring could be alright.

So it boils down to this….

Sellers, you are close, but you aren’t there yet. Keep up with the recent closings in your market, because appraisals will be required to use them. One meltdown by your neighbor, and you are stuck. Be open to compromise, and renting you home and remember, in a declining market, todays price is the one you should seriously consider. Tomorrow’s price will most likely be lower. And regardless, they will not be recovering for quite some time.

Buyers: Hood River isn’t a suburb in Reno. Understand, that this is the place you are choosing to vacation in, live in, grow your children in, and a community to be a part of (not apart of) Leave something on the table, you are moving here for love of a place, because otherwise, Reno would be perfectly fine. Others are moving here, and have understood that. They are getting the deals, and great ones at that.

See you next month.

Benefits of Government Loan Programs-Brandon Fischer

The Pacific Northwest is a beautiful part of the country to call home, but buying a house can easily become daunting. That’s why there are government loan programs to help the process become less so. More Americans – especially those who have spent time in the armed forces – deserve to own their own homes, and the following three loan programs are there to help them do just that.

VA Loans

If you’re a veteran, the VA loan program definitely your best loan option. They have no down payments as well as other money-saving benefits. The Department of Veterans Affairs has been helping veterans become homeowners with this program since 1944, and 80% of the veterans who borrow VA loans could not have qualified for a conventional loan. This program is truly meant to help. In addition to the zero money down advantage, VA loans also have lower interest rates than conventional loans by about .5%-1%, and they don’t require Private Mortgage Insurance either. Combined, these two benefits will save you a couple or a few hundred dollars each month, depending on your loan size. For most parts of the country, VA loans have a limit of $417,000, which can be found using a VA benefit calculator, and they must be used towards a primary residence. In order to qualify, there are requirements for how much time you served, but if you are a veteran, this is an option that is sure to save you money and help you buy your own house.

FHA Loans

If you’re worried about qualifying for a loan in the first place, you shouldn’t write the whole thing off before exploring FHA loans. This loan program is backed by the Federal Housing Administration, so banks are able to prepare mortgages for more people, including those with higher debt-to-income ratios. FHA loans are generally smaller than conventional loans and have limits based on average home prices in each area, but they have very low down payments with a minimum of 3.5%. For first-time homebuyers or those with low income, this is a great advantage. They also have low closing costs that can be included in your loan, and the mortgage insurance premium on these loans is only 1.5%. FHA loans are a option you definitely want to look into if you’re unsure about qualifying for a conventional loan, and compared to a conventional loan, they’ll save you money too!

USDA Loans

USDA loans are specifically for homebuyers in rural areas. In order to qualify for a USDA loan, you have to live in an area with a population of 10,000 or less, although sometimes this is extended to 25,000 for certain towns and cities. They’re the only loan program that offers zero down payments to non-veterans, even if your financing your entire home purchase. They also do not require mortgage insurance, so if you feel comfortable choosing not to get it, you can save hundreds of dollars each month. Unlike FHA loans, there are income restrictions for USDA loans, so not everyone is eligible. But if you’re looking to live in a rural area or even a smaller suburb, a USDA loan could be a good fit.

Exploring these three options more is a wise thing to do if you need to borrow money to pay for your home. Each has different requirements and different benefits, so it’s important to find the one that’s right for you.