It Really Is All About The Shopping!

The National Symbol

Ever since I experienced my first Thanksgiving in this country, it has always been my favorite holiday.  The beauty of its simplicity is very appealing.  Sit down with friends and family and enjoy a feast.  Everybody is included, no presents to buy and very little associated commercialism.

However, one thing has always been a mystery, why is Thanksgiving celebrated on the fourth Thursday in November?  Other holidays that are tied to a particular day of the week are on the first day (Labor Day) or the last day (Memorial Day) and that seems to make sense, but the Fourth Thursday??? What’s up with that?

I have asked this question many times over the years and I have found that most Americans have no clue as to why, and moreover, most of them don’t seem to think it is even something worth worrying about, it just IS.

Maybe it’s an immigrant thing, but I had to find out.

So, I was watching the History channel last night and, lo and behold, there was an explanation.  Apparently, the whole story does revolve around SHOPPING.  Unbelievable!

My favorite holiday is tied to commercialism after all.

Turns out, good old FDR made a decision to countermand Lincoln and moved the feast up a week back in 1939 in order to give retailers an early start to the traditional Christmas shopping season which has historical kicked off right after Thanksgiving. 

Who knew?  Well the nice chaps at the FDR library did apparently.  Click here to read a very nice summation of the historic decision and then, on the Fourth Thursday in November, you can astound your friends and family with the facts.

GOBBLE, GOBBLE

- Maria

Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink

Yesterday, the National Association of Realtors released the October 2009 real estate statsfor existing homes (currently built homes vs. new construction) which showed another strong uptrend established over the past seven months, while inventories continue to decline (fewer homes available for the existing buyers).

Existing home sales rose 10.1% nationally in October 2009, a 23.5% increase over October 2008.  Sales activity is at the highest pace since February 2007. 

These are national stats but we have also seen positive gains in the Portland Metro Real Estate market.  The RMLS Market Action Stats released November 12, 2009 showed a 37.1% increase in home sales in October 2009 when compared to October 2008.

If you’re curioius about what’s happening in you’re area – here’s a fun little tool to play with http://www.city-data.com/real-estate/PORTLAND-OR-97214.html, this report features zip code 97214 (Inner Southeast Portland) – to view the same report for another zip code, simply change the zip code in the URL directly (i.e. http://www.city-data.com/real-estate/PORTLAND-OR-97213.html).  As featured last week in “What Does It Really Cost to Buy a Home Today?“, 97214 has shown increased home values as did 97213 – both close-in Eastside neighborhoods.

What Does It Really Cost to Buy a Home Today?

As you know, on November 6th, President Obama announced the extension and expansion of the homebuyer tax credit.

If this news has started you thinking whether this is finally the time to buy a home but you’re unsure if you can make it work financially, you are not alone.

Who qualifies?  How much do I need to put down?  Are home values really as good as people say?  Can I afford to buy a home in a nice neighborhood?  When do I get the money for the tax credit?  Etc… 

There are distinct differences between the recently passed tax credit and the original legislation. Stick with me for a few minutes and I will make an attempt to clarify the situation.

Let’s work through a little scenario – what would it really cost to buy this adorable house in Portland today?

First, I will tell you about the house, then I will run through a few financing options for you using actual loan program options.

SAMPLE PROPERTY

Click on Image To Search Additional Listings

Listed By: Esther Saulle-Simek – RE/MAX Equity Group 
Price $379,000
4 bedrooms, 2 full baths
2868 square feet
Built: 1927
Schools: Beverly-Cleary School & Grant High School

SOME ADDITIONAL DETAILS ABOUT THE HOME AND THE NEIGHBORHOOD

This adorable home is conveniently located: just blocks to an East/West MAX station and bus stops, nestled between the heart of the Historic Hollywood District to the West, Rose City Park and Public Golf Course to the East and Normandale Park (which also has an off-leash dog park) to the South, and minutes to I-84 for easy access to the airport, downtown or other major areas. 

Whether you have children or not, it’s advisable to purchase your new home in a good school district for stronger future resale value; both Beverly-Cleary (K-8) and Grant High School hold an “Outstanding” rating from the Oregon Department of Education.  Both schools rate above the norm when compared with other schools with a similar demographic, the overall district and the overall state on reading, mathematics and science.  At the high school level, Grant has a 91.5% graduation rate, compared to 84.0% statewide and a 2.2% drop-out rate compared to 8.4% district-wide and 3.6% state-wide. 

So, this sounds like a great house and a wonderful neighborhood BUT $379,000 sounds like a lot of money – how much would it really cost to purchase a home like this in this quality of neighborhood?

Contrary to the ads you may hear on the radio, or the on-line mortgage calculators you may have played around with – there is more that goes into what it will cost you to purchase a home than just your down payment and interest rate.  However, current interest rates are at historic lows hovering around 4.75% right now compared to 6% – 8% during the real estate “boom” of the early to mid-2000’s.

While in some areas of Portland, prices are may still be declining, closer-in areas, such as this neighborhood, prices seem to have bottomed out and appear to be on the rise.  Combine great interest rates and home values with the tax incentives for both first time homebuyers and existing home owners has created the perfect storm and an opportune time to buy.

Taking a look at our sample property – here are three lending scenarios that might work for you, courtesy of Don MacKay, Equity Home Mortgage:

#1 – FHA with 3.5% down (minimum down payment)

• Interest Rate: 5.0%
• Purchase Price: $379,000
• Base Loan Amount: $365,735 (3.5% of purchase price $379,000)
• Loan Amount with MIP (Mortgage Insurance Premium): $372,135
• Down Payment: $13,265

Based on the above information your monthly payment would be calculated as follows:

• Principal & Interest: $1998
• Mortgage Insurance: $170
• Taxes: $349
• Insurance: $50
• Monthly Payment: $2567

#2 - 30 Year-Fixed (aka Conventional) with 5.0% down (minimum down payment)

• Interest Rate: 4.75%
• Purchase Price: $379,000
• Base Loan Amount: $360,050 (5% of purchase price $379,000)
• Morgage Insurance Premium is not added to the loan amount with Conventional Financing
• Down Payment: $18,950

Based on the above information your monthly payment would be calculated as follows:

• Principal & Interest: $1878
• Mortgage Insurance: $252
• Taxes: $349
• Insurance: $50
• Monthly Payment: $2529 

#3 - 30 Year-Fixed (aka Conventional) with 20.0% down (minimum down payment)

• Interest Rate: 4.75%
• Purchas Price: $379,000
• Base Loan Amount: $303,200 (20% of purchase price $379,000)
• Down Payment: $75,800

Based on the above information your monthly payment would be calculated as follows:

• Principal & Interest: $1582
• Mortgage Insurance no longer comes into play once you are at 20% loan to value
• Taxes: $349
• Insurance: $50
• Monthly Payment: $1981

*All the above figures are an estimation and not an exact quote.

This is only three possible mortgage examples, I hope you can see that there is more than one way to buy a house.  

The key to a sucessful home purchase that doesn’t result in future financial streesis to sit down with a good mortgage broker and figure out the best options for your particular situation and considering your short and long term goals.

Regardless, if you were to rent a four bedroom home in the Portland area today, you’d be looking at monthly rent between $1,399-$2,700 - no annual tax deduction or homebuyer tax incentive ($8000 for first time buyers and $6500 for current home owners); let alone, you’re paying for someone else to build their financial portfolio, not your own.

Ask yourself these simple questions:

• Have I been on title to a property in the last 3 years?  If the answer is no, you are considered a first time homebuyer per the IRS.
• Do you make $125,000 or less as a single taxpayer or $225,000 or less if you’re married and filing jointly?  If your answer is yes, you qualify for the $8,000 first time homebuyer tax credit!
• If you already own a home, have you lived in that home for 5 consecutive years out of the last 8 or more?  If the answer is yes, you qualify for the $6,500 repeat home buyer tax credit if the home you plan on purchasing will become your new primary residence.

Now, ask yourself:

• Are you currently employed?
• Do your tax returns show income? (that’s for you self-employed folks)
• Do you have good credit?
• Do you have a minimum of 3.5% of the purchase price that you can use as a down payment?

If you answered YES to the last four questions – you are an excellent candidate to purchase a home in what is one of the best buyer’s markets in Portland history!

Maria and I would love to help you with your real estate goals, drop us a line or give us a buzz to get started!

~Kori

RMLS Market Action Report – October 2009

The October 2009 RMLS stats came out just moments ago – if there was any doubt in any one’s mind that the First Time Homebuyer tax credit stimulated the economy you can just take a look at the October report.

Sales activity was up again in the month of October, year-over-year.  In particular, pending sales were up 64% to October 2008 and closed sales were up 37.1%.  The 64% increase in pending sales is the largest same-month increase since February 1996!  That’s huge!  Do you think it could be due to the looming expiration of the First Time Homebuyer tax credit that was planned for November 30, 2009?  Based on the decrease in average sales price year-over-year, I’d say undoubtedlythat the First Time Homebuyer tax credit had a huge impact and I am excited to see the credit extended and expanded.

Our average months of inventory is also down to 6.5 months.  At six months we consider the market to be “balanced”, neither a buyer’s market nor a seller’s market; which means ultimately, everyone needs to get along. 

With the Home Buyer tax credit extend and expanded last week we expect to see more homes on the market for the first time buyers (which would be great because inventory in that price range was become a little thin) and hopefully we will see some movement in the higher end properties with the “move-up” tax credit for existing homeowners.  Next we need something to be done about the condo market and the whole world would be back on it’s axis (well, that might be a bit of an over statement, but you get my drift).

We are in the best market we have ever seen for real estate – reasonable home values, fantastic interest rates and incredible tax incentives.  If you’re curious about whether you qualify for one of the two different tax credits or if you’re curious about how to start your home search, please give us a buzz.  Maria and I will be happy to help you with your real estate needs.

~Kori

Carbon Monoxide Detectors Required To Transfer Title

Did you know…

The Oregon House and Senate passed a law requiring the installation of carbon monoxide detectors in homes with a carbon monoxide source in order to transfer title.  The law officially goes into place April 2011 but it would not be shocking to see an update to our current real estate listing contracts prior to that deadline.  The current contract and law requires the seller to install approved smoke detectors in the home, adding carbon monoxide detectors to this clause seems fairly straight forward.

So, what is carbon monoxide?

Carbon monoxide (CO) is a poisonous, colorless, odorless, and tasteless gas. Although it has no detectable odor, CO is often mixed with other gases that do have an odor. So, you can inhale carbon monoxide right along with gases that you can smell and not even know that CO is present.

CO is a common industrial hazard resulting from the incomplete burning of natural gas and any other material containing carbon such as gasoline, kerosene, oil, propane, coal, or wood. Forges, blast furnaces and coke ovens produce CO.  

How does carbon monoxide harm you?

Carbon monoxide is harmful when breathed because it displaces oxygen in the blood and deprives the heart, brain, and other vital organs of oxygen. Large amounts of CO can overcome you in minutes without warning—causing you to lose consciousness and suffocate.

Besides tightness across the chest, initial symptoms of CO poisoning may include headache, fatigue, dizziness, drowsiness, or nausea. Sudden chest pain may occur in people with angina. During prolonged or high exposures, symptoms may worsen and include vomiting, confusion, and collapse in addition to loss of
consciousness and muscle weakness. Symptoms vary widely from person to person.

How do I select a carbon monoxide detector?

Similar to the seat belt law or the installation of fire alarms – the carbon monoxide law is going into effect for our own safety and well being—a small price to pay for peace of mind.

 ~Kori

2009 Leaf Removal Schedule – Portland, OR

For those of you lucky enough to live in a “leaf district” – here’s the street removal schedule in alphabetical order by neighborhood.  For those of you, like myself, who do not live in a designated “leaf district” but have fallen leaves none-the-less, I’ve also included a list of “leaf depots” and their hours of opperation.  Happy Autumn!

Leaf District Schedule 2009

Alphabetical by neighborhood

Leaf Depot Schedule 2009

Residents can deposit their leaves for a minimal fee at the locations listed below. The leaves will be recycled into high quality compost. 

Cost

$5.00 per car load

$10.00 per truck, SUV, or trailer load

$20.00 per truck and trailer (5 cubic yard maximum)

$No commercial loads – these individuals will be referred to small local businesses, commercial recycle centers, or Metro)

Only leaves will be accepted 

No other yard debris will be allowed. Please contact Metro Recycling at 503-234-3000 or use your curbside yard debris container for this material.

Depots open at 9:00 a.m. and close at 4:00 p.m.

 Happy Raking!

 ~Kori

Home Buyer Tax Credit Approved by the President

Minutes ago, President Obama announced the extension and expansion of the first-time home buyer tax credit.  Now, a home buyer tax credit, the new bill extends the $8000 to first-time buyers and expands the bill by offering $6500 to home owners who have lived in their homes for the past 5 of 8 year.  Here’s a link to a helpful chart that explains the benefits of the new bill.

http://www.realtoractioncenter.com/realtor-party/documents/2009-NAR-Issue-Brief-Homebuyer-Tax-Credit-Changes-1104-1107.pdf

Thank you Mr. President!

~Kori

FoundPortland Opening Tomorrow at the Architectural Heritage Center

Foundportland, a benefit for the Architectural Heritage Center opens tomorrow, Friday, November 6th!  Foundportland celebrates the work of local artists who have preserved elements of our past and explore them in creative new ways.  Tomorrow’s opening includes a catered reception with beer, wine and champagne.  This is a unique opportunity to see the work of 18 different local artists – all work will be for sale and a portion of all sales will go directly to the AHC to help continue preservation and education of our local built environment.

Location: 701 SE Grand Avenue
Date: Friday, November 6, 2009
Time: 6 pm – 9 pm

Special thanks to board member, Jeff Varner and…

Hope to see you there tomorrow night! 

~Kori

Home Buyer Tax Credit Extended and Expanded by The Senate – Next Stop, The House

This morning, the Senate voted to expand and extend the first time home-buyer tax credit that was due to expire on November 30, 2009 (98-0).  Next, the bill goes to the House were we expect them to vote and pass the bill later today.  At this rate, the bill could get to the President by Friday for final vote.

Moral of the story, the bill still has not been passed.  We all have great hope the bill will pass this week and in it’s current form.  Current bill relating to real estate transactions would included:

For first time home-buyers, which includes anyone who hasn’t owned a home in the past three years, the $8,000 tax credit would be expanded to April 30, 2010. You have to sign a sales contract by April 30 and close on the home by June 30, 2010. 

Secondly, the credit would be expanded to include a $6,500 tax credit for home-buyers who have owned their home for at least five years. The tax credit is only for a home purchase that will be your primary home and costs $800,000 or less.

The income limitations would also be increased for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000. (Previously, the credit was limited to individuals with an income of $75,000 or less and for joint filers $150,000 or less).  If you’re in the military serving outside The United States for at least 90 days the tax credit would be extended for another year.

This is all great news and would definitely help continue the momentum we’re currently experiencing in the real estate market, which ultimately effects the overall economy.  Keep those fingers and toes crossed until we get the final word of approval from the President.

Stay tuned, Maria and I will keep you posted when the bill has officially passed.

~Kori

Prepare Your Home For Winter – Winterization Tips from OPT

The rains have ceased for a few days and the cool crisp days of Fall have arrived.  The furnaces have been fired up and now you might be thinking… I still feel a breeze or why does it seem like it’s taking so long for my home to warm up – here are a few tips for staying warmer this winter in your home and some general “Good Housekeeping” ideas to keep your house in tip top condition.

 Furnace

• Change your filter – if you have pets, it’s recommended to change the filter monthly (this also allows you to purchase a less expensive filter) – animal hair gets into vents, into ducts and ends up in the filter which can compromise your furnace’s overall performance.
• Call an HVAC professional to service your furnace.  Just like taking your car in for service, it’s important to have your furnace serviced annually.  Again, this will insure your furnace is working at it’s peak performance levels resulting in a more efficient unit and lower energy bills for you.
• Inspect the area around your furnace and make sure there are not any flammable materials. 
• If you’re thinking about replacing your furnance, make sure you check first with the Energy Trust of Oregon – the Energy Trust offers a number of cash incentives for the replacement of less efficiant appliances.  The Energy Trust provides guidelines for these incentives and the guidelines for State and Federal credits as well so you’re sure to maximize the available cash incentives.  

Inspect the Exterior, Doors and Windows

• Inspect exterior for cracks and exposed entry points around pipes; seal these cracks and openings.  This will improve the energy envelope of your home and will also help prevent cold critters from taking refuge in your home.
• Use weatherstripping around doors and windows to prevent cool air from seeping in and warm air from leaking out.  Additionally, now is a good time to freshly caulk older windows.
• Switch out exterior screens with storm windows.
• If you have exposed wood on the exterior of your home, prime and paint to protect from mold and rot growth.

Inspect Roof, Gutters and Downspouts

• Add additional insulation to the attic to prevent warm air from escaping from your home.
• Check flashing to ensure water cannot enter your home - specifically around  the chimney and other roof vents.
• Clean out gutters and use a hose to spray water down the downspouts to clear away debris.
• Make sure your downspouts point away from your home by using an extension or grading the ground to push water away from your foundation.
• Remove fallen leaves and moss from your roof – however, do not power-wash, simply sweep with a stiff broom.  Power-washing can lift shingles and allow water to into your attic.

  Landscaping

• Rake away all debris and vegetation from foundation; also, make sure the dirt from your flowerbeds is not touching your siding - dirt traps moisture and ultimately creates rot.
• Trim back trees and other vegitation that may be touching roof or electrical lines.  Branches can be a problem in winter weather – high winds, snow and ice.  Cut it back now before it becomes a problem this winter.
• Clean, dry and store summer garden tools. 
• Drain gas from any gas powered summer equipment.
• Move sensitive potted plants inside.

Prevent Plumbing Freezes

• Locate your water main in the event you may need to shut off your water in an emergency.
• Drain all garden hoses.
• Insulate exposed plumbing pipes.
• If you have an AC unit, drain pipes and if the unit has a water shut off valve, turn it to off.
• If you go on vacation, leave the heat on at a minimum of 55 degrees.

Finally, if you’re stumped about where to get started or how, contact the Energy Trust of Oregon for your FREE home energy review to help you plan smart home improvements. 

~Kori