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Homeowners Still Have Positive Equity

By Catherine

If you are a homeowner, you should have noticed a huge boost in your net worth over the past couple of years. Most people have noticed the rising prices and, last year, you knew about the low interest rates. Although prices are softening and interest rates have gone up, a lot of homeowners still have substantial equity in their homes. Here’s how it happens and what it might mean for you, even as we see the changes in the market.

Equity means the current value of your home minus what you owe on the loan.

Over the last few years, with inventory as low as it has been, there was an imbalance between the number of homes available and the number of buyers that were searching for a home to buy. The low inventory and demand caused housing prices to skyrocket in Central Oregon.

And while home price appreciation has moderated this year, and even depreciated slightly in some overheated markets, that doesn’t mean you have lost all the equity you gained during the major Seller’s market we are all adjusting from.

The latest Homeowner Equity Insights from CoreLogic finds the average homeowner equity has actually grown by $34,300 over the past 12 months.

So, despite the headlines, the average homeowner still gained positive equity over the last year in most markets. Keep in mind that the gains may not be as drastic as they were in April or even May, but they are still significant. Another thing to note is the longer you have owned your home, the more equity you may have in it!

What Does This Mean For You?

Equity, of course helps you increase your overall net worth, but it can also help with other goals, like buying your next home, buying an investment property, and making major home improvements. Selling your current home could result in more cash from closing to provide you with a largerdown payment, or cash for other uses!

If you have been on the fence about wether or not you should sell, because you weren’t sure what the news has meant for you or your situation, you can take a deep breath. You likely still have substantial equity and we are here to help you know just how much might be there for you.

Bottom Line

If you are considering a move, the equity you’ve gained over time can make a big impact. To find out just how much equity you have in your current home, and how you can use it to fuel your next purchase, give us a call.

Filed Under: Blog Posts, News, Resources Tagged With: Market Statistics, Market Update, real estate

All Eyes on Central Oregon Statistics

By Kerry ONeal

I had the distinct pleasure of attending a one-hour continuing education class this past week on Valuation Process and Adjustment Methodologies. It may sound a little dry, but when the market is shifting, as is the case now, we all turn to metrics and statistics to make sense of it. The class was hosted by Deschutes Title and presented by Donnie Montagner. The former name is that of Central Oregon’s last locally owned title company..and the latter name should be familiar to anyone who watches the Central Oregon real estate market closely. Donnie Montagner heads up Beacon Appraisal services, and his “Beacon Report” is often cited as an independent gold standard in reporting the local market trends.

The class was well-attended by real estate brokers and appraisers alike. We quickly went over some cost, income, and sales approach strategies and then dove into the deeper weeds of paired analysis, ratio studies, binomial regressions and the like. Appraisers have the challenge of turning what brokers do as an informed guess into a distinct science. As one appraiser mentioned in the audience, “Houses come in red, yellow, brown and blue…but banks want us to turn it into black-and-white…and they don’t like gray.” (I should have gotten his name, because I’ll probably use his words throughout the rest of my career.)

Throughout the class, one theme that kept reemerging was the market’s rapid change. A fact that Donnie reflected on with a sense of glee. When what you do for a living is mostly measuring a trend, it is somewhat exciting when it switches direction. Many of the real estate brokers’ questions centered around what could be divined from the appraisers’ data, and the appraisers’ answers reminded the brokers that we are all working with the same data. And in the appraisers’ case, they are more interested in what happened than what’s coming.

The market is changing, and that is exactly what interest rate hikes were supposed to accomplish. Now how much the market has changed is just now coming into focus, and where it will go next is anyone’s guess. Many real estate brokers talk as if the world is shifting under their feet, and sometimes that itself can have an effect on consumers’ confidence. But we all must remember that real estate brokers were building their companies over the last two years to handle the onslaught of transactions that no one predicted coming out of the COVID-19 response. Any return to a more normal market is going to create a some slack in those systems, and may feel like a more dramatic shift than it really is.

I’ll borrow some of Donnie’s data to illustrate the point. One of the sentiments you hear from brokers recently is how rising interest rates have decimated the number of real estate buyers in the local market. Below are monthly sales numbers for the Bend single-family house market from Donnie’s Beacon Report. I’ve overlayed the average weekly rates for a 30-year mortgage.

Did you spot the decimation? Neither did I.

Do I believe the market is changing? Absolutely. But the magnitude does match up with the mourning. Not to say that a market can’t turn quickly. We certainly saw that in 2008, and I’m not convinced that it can’t happen again. We continue to watch everything very closely. If you have any questions about the market, statistics, or how your home value might be affected, please don’t hesitate to reach out.

Filed Under: Blog Posts, News Tagged With: Market Statistics, Market Update, real estate

What’s the COVID effect in Bend?

By Kerry ONeal

We’ve been getting a lot of questions regarding the impact that the COVID-19 virus and the stay-at-home order are having on the Bend Oregon real estate market. We made a quick video to update you on what we’re seeing int he Bend residential market by March 25th. We’ll continue to update these pages with statistics we’re pulling together to guide our clients through this difficult time.

Let us know how you like the update, and whether you would like to see more videos, graphs, tables, etc. Want copies of the graphs used in this video? Send us an email.

Filed Under: Blog Posts Tagged With: COVID, Market Statistics, Market Update

Is COVID Having an Effect on the Bend Real Estate Market?

By Kerry ONeal

March 22, 2020 – Life is quickly evolving to deal with the impending COVID-19 pandemic. We expect all of this to have serious effects on the local real estate market, but most of the publicly available statistics are too lagging to give us real insight into what’s going on right this moment.

In an effort to report to our clients and customers in real-time, we’ve starting pulling the raw data out of MLS, importing it into our own databases, and displaying the trends we can see. We expect we’ll continue these types of report until the end of the crisis. Our role is to educate and inform our clients so that they can make the best decision in an ever-changing market. During the financial crisis that started in 2008, we were a leader in problem solving, and a resource for the latest information. Today we return to that role with another decade of experience to share.

The first thing we were interested in looking at was the number of closings and whether perhaps buyers were canceling their escrows. As you’ve heard us say before, buyers can back out, sellers not so much. Buyers may have to leave their earnest money behind, but if there is a market panic, we’ve certainly seen that done without hesitation. Sellers usually don’t have contingencies that allow them to back out of the deal, so it’s much more difficult for a seller to change their mind.

As you can see from the above graph, it doesn’t appear that there is a recent downward trend in closings.

We then looked at the average sales price of recent closings to see if there is any trend regarding the types of properties that are selling. As you can see from the above graph, there is no real trend that we could tell except that there seems to less variety in the kind of properties that are closing.

This is the graph that we feel tells the most important story right now. This is a look at new residential contracts for purchase. As you can tell, there is a steep decline in new contracts which will show up in the closing numbers soon. We’ll continue to watch and report on this trend as the data becomes available.

Filed Under: Blog Posts Tagged With: COVID, Market Statistics, Market Update

Thinking About Selling This Fall? Five Reasons to Act NOW!

By Catherine

If you are considering selling your home you may be wondering why now would be the best time to list. Well here are some reasons why selling your home this fall makes the best sense!

Demand The latest information we have received from the National Association of Realtors tells us that the demand for housing is staying strong and the buyers are ready, willing and able to purchase…and the buyers are out hunting NOW! We are seeing more situations were buyers are looking at the same homes and competing with each other. Why not take advantage of this activity in our market?

Quicker Process With the amount of buyer competition, most will go out of their way to stand out in this market, including getting pre-approved which can make the process so much quicker as buyers already know exactly how much they will be approved for before they start shopping for a home. 

Less Competition With just over 3 months of residential inventory in Deschutes County your home will get noticed! There are simply not enough homes for sale for the buyers in our area! This is great news for homeowners thinking about selling. Don’t wait until everyone hears this news before you make your choice to list.

Looking To Upgrade? With home prices still high you may be able to sell your home and upgrade. There is more inventory in the higher price ranges and they tend to stay on the market longer, giving you time to sell your current home and get ready for the upgrade of your dreams.

Why Are You Wanting To Sell? Take a hard look at the reasons you may be considering selling your home. Is it worth waiting? You are the only person that can answer this question. If it’s time to sell, you can take control of your situation and call us today for a free Comparative Market Analysis. Strategic Realty, LLC has the knowledge, experience and determination to get you the best price on your home in our current market. Call us today for more information 541-595-8444.

Filed Under: Blog Posts, MarketSnaps, News Tagged With: Market Statistics, Market Update, Sellers

What Happened to Central Oregon in 2015?

By Kerry ONeal

2016-02-06_0740gThe Bend and Central Oregon real estate markets surged again in the the last year. Across all genres of the market we saw lower days-on-market, higher price per square foot, and lower inventories for sale when compared to recent years. As real estate brokers, we spent a lot of time explaining to new buyers that those fantastic deals they hear their friends talk about, have largely become a relic of the past…for now.

Buyers have responded to the financial pressures to make their Central Oregon relocation now. Historically low-interest rates, we’ve all been told, will soon start slipping away. That escalation in monthly interest payment combined with the constant rise in Central Oregon real estate prices, put a time limit on most buyers.

2016-02-06_0740

Click to Download 2015 Sales Report

Bend led the charge with higher buyer demand than we’ve seen in many years. Neighborhoods like Tetherow and Northwest Crossing have only picked up momentum and builders are struggling to keep up with the buyer demand for new houses.

New home demand has put pressure on land prices as Bend starts to struggle against its own Urban Growth Boundary. Custom home builders have benefited from buyers picking up “in-fill” lots and building new homes in established neighborhoods.

Buyers continues to assign a large premium to locations west of the Deschutes River, and developers wanting to capture that premium are pushing for more westside development. Watch neighborhoods like The Tree Farm (outside of the City Limits), Discovery Park, the unpublished Northwest Crossing Phase II, and the new Three Pines Ridge (located between Three Pines and Shevlin Ridge).

The new Oregon State University campus, currently under construction, won’t do anything to slow this push of the city’s physical and financial epicenters to the west. For all of the complaints that have been lodged against its construction, the new four-year university will be a popular amenity for area developers to take advantage of.

In a pattern reminiscent of the last boom cycle in Central Oregon, the strong demand and higher prices started in Bend, and now radiate out to surrounding communities in a slow tsunami. The patterns of lower inventory, higher prices, and shorter market times are moving through Redmond, La Pine, Sisters, and Prineville.2016-02-06_0740d

Some buyers think that the best strategy right now is to wait. The assumption is that a major price correction like what we saw in 2008 is just around the corner, and will be a better time to pick up a property. But we don’t think history is on their side. For sure there is always a downturn in the market looming in the future, but to what extent that downturn drives down prices is very material. We have to remember that the collapse we saw in 2008 was an anomaly. Experts had to look back 80 years to find parallels in the Great Depression. And in the meantime, the costs of waiting, in form of mortgage interest rates and rental prices, continue to put pressure on the decision.

*The one exception the rising markets seems to be Sunriver. We may have to study this further, but Sunriver’s market charts largely seem flat. A confused seasonal surge every year, but not a real upward movement that you can readily discern.

Filed Under: Blog Posts Tagged With: 2015, Market Statistics, Sales

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