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Category: Advice to Buyers

What in the World is Really Happening in the Real Estate Market?

Posted on by Eric Hagstette

Watch the video here or read the transcription below (with some edits for clarity)

What’s up everybody and thanks for joining me for this week’s market minute. Now, somehow we found ourselves in 2023 and how we got here I have no idea, but the market is just cruising right along. I’m here to bring clarification to the number one question we’ve been getting from our buyers, our sellers, and those sitting on the sidelines — what in the world is going on in the market out there? We’re getting tons of varying market information ranging from multiple offers, bidding wars, hot market activity, and conversely, price reductions and no market activity. So I can totally imagine how this conflicting information would be confusing to the layperson who’s trying to make sense of the market.

So here’s my rundown.  The market is changing on a week-to-week basis. It’s very important to pay close attention and rely on a professional to navigate these waters for you. The feds are manipulating interest rates, not mortgage interest rates, but the federal interest rates have a lot of the people watching the news concerned about what’s going on out there. Now, while mortgage interest rates are volatile, we’re still creating wins every week for our buyers and sellers. How? you ask.  Well number one, our buyers are showing fortitude and sometimes patience as they navigate the market and trust us to use buying tools such as rate buy downs, closing cost credits, concessions, and other negotiations that we haven’t seen others using. And for our sellers, it gets even easier because we still have a low inventory market and so we’re focusing on the basics of listing real estate based on price, condition, and access. If you give us those three or as many of those three as you can, we’re going to create great results for you in the market.

So my lesson to you today is that sidelining can actually cost you money. How? Well, if we all waited for a “hot market” we would all be stymied and frustrated with tight market conditions once again. So if you’re taking yourself off the sidelines in an opportunistic market like today, you may be narrowing your chances of homeownership or making the move that you want in a market that can afford you to move up or down. Now I realize that many of you have low-interest rates locked in. Actually, 65% of homeowners in America are locked in under 3% so we realize the bottleneck that this creates. However, once we move through that and once the market starts easing up we’re all going to be able to move around a little bit better and take advantage of these conditions. So please don’t wait until the market is good because when it’s good for someone it’s usually not good for this other person. Your unique real estate goals and needs are specific to you, not the market. In general, I promise we have a solution just for you. It’s never too early just to call and talk shop. Thanks for reading or listening and I’ll see you on the next one.

2023 Portland Real Estate Market Outlook

Posted on by Eric Hagstette

Watch the video here or read the transcription below (with some edits for clarity)

 

Happy New Year everybody! I’m Eric Hagstette with Inhabit Real Estate and I am really glad to be taking on this subject with you. We have a lot to talk about, so let’s jump right in! 2022 is in the rearview mirror; for some, it was a good year and for others a tough one. For most real estate professionals, we are likely saying “see you later 2022”, and we’re really excited to have a new year in front of us.

With all that said, there’s still a ton of noise and mixed information floating around out there, so I would like to share with you my projections and outlook as I look into the new year. I don’t have a crystal ball, but after almost 20 years in the business, I’ve been in similar markets before and I want to share with you what I believe is going on.

Let’s start with what the experts are saying. We’ve been hearing for months that this high-interest rate environment is going to stymie the market until mid to late 2023. Then interest rates will begin to stabilize which will encourage more inventory in the market and more buyers’ confidence.

What is happening now, in all reality here in Portland, is inventory is dipping down. We are now below two months of housing inventory and even further down for detached single-family homes. Remember, lower inventory means higher demand. Also, we are really excited to see interest rates coming down. Now, we’ve all heard about improving inflationary numbers which is the reason for interest rates decreasing. Buyers are coming out of the holidays really hungry; the market is active and our brokers are out there showing property. So that’s the truth about what’s happening here in the Portland market.

My concern, outlook, or projection is that we’ll continue to see a reduction of housing inventory as the buyers get out and gobble it up and we might be entering another tight year of housing inventory and pricing on the rise. I know that sounds very different than what you were expecting to hear, but
Portland’s market is pointing in a direction that is similar to a cycle we’ve seen here in the past.

So, what is my advice with all this information? Number one, listen to your local real estate expert. Call your favorite Inhabit broker and have them give you the lowdown on your neighborhood and your specific real estate. Everybody’s goals and situations are different and very specific so get it locally and ignore the national news. Number two, Portland is so hyper-local. We have an urban growth boundary that has always limited our supply and we’ve always shown a significant amount of resilience in unusual market times. When they say “keep Portland weird,” it applies to real estate as well. Finally, transitioning or moderating markets are those that bring opportunity. That’s one of the silver linings to all this. There are great buys out there for our buyers. We are negotiating on price, credits, repairs, and even rate buy-down points for our buyers, and at the same time, we are making our sellers really happy with proper pricing, presentation and a marketing plan to position their sale for best results.

So, in the end, real estate is based on you (our clients). Your timeline, your goals and your specific situation. It’s not about market conditions, seasonality, or what some brokers say. So, ignore the noise and call us for advice. It’s never too early and you know we will be here for you. Thanks for listening (or reading). I look forward to bringing you a lot more information in the new year along with some of my broker colleagues. So, tune in, ask your questions and post your comments. Thanks for being here.

Why Embracing the Motto “Don’t Do it Yourself” Can be a Good Thing

Posted on by Kelley Hutchison

Thanks to home improvements shows like This Old House, the HGTV network and YouTube how to videos, an entire generation of homeowners have grown up believing that they might be able to to DIY many home projects. And in fact they may be able to. But even if you have the skill to pull off a home project that may work, is it worth it? Here are some reasons why you may want to embrace DDIY—Don’t Do it Yourself!—if not all the time, at least for some of your projects.

Your Time is Valuable

The number one reason why folks choose to DIY is the cost of labor. And, I get it, hiring licensed professionals can be expensive. But your time is also worth something. If you aren’t loving spending your nights and weekends building that fence that would have taken a contractor a day and a half to knock out, perhaps you should evaluate what your time is worth to you and calculate it at an hourly rate. Also, think about the time you would be enjoying the finished product if a professional had completed it in a timely manner. Particularly, when you take on a large renovation like a kitchen or bath remodel, a crew is often at your house all day during the work hours. Ask yourself, if you really want to perform someone else’s full time job (or several people’s) in your free time before you dive in. Additionally, do you want to live in a construction zone for much longer than you have to? I’ve heard countless stories of DIY-ers who have lived without a kitchen, cooking on a hot plate for two years while they painstakingly learned how to tile a backsplash. If the idea of that sends shivers up your spine, think twice about taking on a major remodel without hiring a pro.

You are Paying for Experience

When you hire a landscape designer or a kitchen contractor or a plumber, you are paying for much more for than their time and labor—you are paying for their experience. Think about it: how good were you the first time you did something challenging at your job? What about the 30th time? or the 300th? Hiring a professional who can anticipate the pitfalls of a project and navigate any potential headaches is worth a lot. When I decided to completely overhaul my backyard with a big landscaping project, I could have probably come up with a lot of the ideas myself and even executed a lot of the planting. I could have hired the concrete sub contractors on my own and cut out the designer. But, I wanted someone to advise me on how to direct drainage water off of the new pergola so that my foundation isn’t impacted by rain, someone who would anticipate where the light was falling on various parts of the yard, someone who would know exactly which plants will thrive in this climate in a particular space in my yard. All of that guidance and know-how is invaluable. But that also means that when you hire a licensed professional to do a home project or repair for you, you need to spend some time vetting them. Ask for professional referrals, speak with past clients, ask how they might anticipate problems and if they see any unknowns right now that could be planned for.

Mistakes are not cheap

While we are on the subject of experience, if you are motivated by the possible savings that a DIY project may offer, consider the cost of mistakes. General contractors and designers are also often serving as project manager on your renovation—they know the order in which to execute each step, when to order certain parts and materials (something that has become even more important during our current reality of material shortages and inflation), and how to pivot when things don’t go well. When I remodeled my kitchen, my general contractor anticipated that after unearthing the original Doug Fir wood floors from the orange marmoleum that lay on top, they may not be salvageable. He had a plan B to keep me within budget, should this be the case. And when, as he suspected, the original floors were ruined by decades old tar, he proposed two options: one that would keep me within budget and one that would accomplish the look I really desired. But, most importantly, he had sub contractors in place to complete that work. And there were countless other steps along the way, that had they been done incorrectly, could have cost me big time: what if the counter top space had been measured incorrectly and then the slab was cut to the wrong measurements? Would I have eventually chosen the intricately patterned and hard to install mosaic tile floor if I had had to learn a highly skilled trade on the fly in order to install it? Experienced contractors and design professionals anticipate the WHAT IFs because they know that there will be many and that they need to have a solution or back up plan in place. Don’t underestimate the financial value in that.

Buyers like to see receipts and permits

I can’t tell you how many times I hear a home inspector say “This looks like a homeowner repair” and they don’t mean it in a good way. Womp womp. If you intend to sell any time in the reasonably near future, think about how beneficial it may be to be able to show buyers, all of the work you have had done professionally by licensed contractors along with the permit records. Buyers are also often impressed by the dollar amount that you may have spent. Save the receipts. Track the permits and city records. Especially for the unsexy things: plumbing, electrical, sewer line, foundation work, roof, siding, windows. A lot of buyers do not appreciate these system upgrades until the inspector comes back saying that they are not in great condition. If you are selling and you can show that the home has a brand new electrical panel that is permitted with the city or all new plumbing lines done by a reputable company, that can show the buyer up front that there is a lot of “hidden” value in your home. It also can communicate that you took great care of the home and did not cut corners. It may also influence a buyer who is choosing between your home and another that weekend: Imagine if you had a receipt for the $45,000 of new windows that you installed a few years ago but the competition still has aluminum single paned. Maybe the buyers would not have even recognized the cost of that potential replacement until seeing your records. Save the receipts. I like to advise clients to do so in a Google Drive folder.

*****

Have I convinced you to join me and become at least a partial DDIYer? If you are swayed a bit but still feel the pangs of guilt created by those Home Depot “Doer” commercials, I’ll leave you with one final point: When you hire local tradespeople, contractors, and designers, you are also creating a job and pumping money directly back into your local economy. Maybe that will help you rest well during all the naps you’ll be taking instead of putting that darn fence up.

Inspired to hire a professional and need a referral? I have a whole list of diverse folks who are good at what they do and am happy to connect you. Please contact me and I’ll put you in touch. Coming soon: a more complete directory of my favorite, vetted contractors, designers, and more!

Portland Housing Market Forecast: What’s ahead for 2022?

Posted on by Kelley Hutchison

After meeting with lenders, title companies, and, just this week, The Oregon Office of Economic Analysis, I have a few important takeaways that all buyers, sellers, homeowners, and investors should know about what is likely to come in 2022 in the Portland housing market. So, what should we expect?

Buyer demand will continue as home loan interest rates rise

If you are looking to purchase a home in the Portland Metro area in 2022, expect that you will still be competing against a lot of other qualified buyers in order to get in contract on a home. Now, you may be thinking: “But I heard rates are going up? Won’t that slow down the market?” Yes, rates are already ticking up and are currently averaging about 3.5% this week. However, the housing shortage is what is really leading to the demand. So, while rates are not as favorable as they have been for the last few years, they are right around where they were pre-pandemic (and we thought those were great rates then!). If you can buy your next home before 2023, you may still get a loan with a rate under 4% but if inflation increases and the Federal Reserve does not return to buying mortgage backed securities—something they did during the pandemic for the first time ever—expect interest rates to continue to slowly creep up year after year for a bit of time. Historically speaking, we have all become used to these rockbottom rates but it isn’t the norm and it likely won’t continue indefinitely.

Sale prices will increase but not as fast as in 2021

Do not interpret that to mean sales will be flat or decline. Oregon Economists are predicting an 8-11% annual increase in home prices over the next year and then 3-4% in 2023. However, with the raise in rates, buyers will have less purchasing power which may result in a slowing of price hikes. It’s also really hard—not to mention unsustainable—to see 17% growth year over year. 11% more next year is probably still more than you want to pay but it may make the market a little more tolerable for first time buyers. Sellers: your home will still see a lot of equity gains this year but be reasonable when you list. Listen to a pricing expert and do not overprice your home when you go to market.

Fewer vacation properties will be bought and sold after April

Effective April 1, the interest rates on second homes will be comparable to non-owner occupied (investment) properties, meaning they will be significantly higher. However, down payment requirements will remain the same. We saw a lot of homes being purchased and sold in secondary markets on the coast and at lakes during the height of the pandemic due to the perfect storm of work from home realities, a rise in American wealth, and low interest rates. But as we approach spring, expect that that buying appetite may begin to slow as folks contemplating a beach condo or lake side cottage think twice when considering the increased monthly payment.

Rents will also rise and keep pace or exceed mortgages

When folks ask “are we in a bubble?” there are a lot of factors that I explain which essentially lead tot he answer “Not likely.” But one big one is that rents are outpacing or staying on par with mortgages. At the end of the day a roof over your head is just that, which means potential homebuyers who can qualify for a loan are willing to pay in a mortgage what they will pay in rental income. After all, with few exceptions, owning a home is generally more advantageous than renting.

Condos and townhomes will become more of a seller’s market than in recent years

Many well qualified buyers who are tired of being outbid on a single family home, may begin to consider the townhome or condo market. After all, there is 2.5 months inventory of condos as opposed to less than half of a month in single family homes. And, sellers take note: condo inventory has shrunk in recent months as well which is making it a much better time to sell if you are thinking of moving on. Additionally, buying a single family under $500,000 in many Portland neighborhoods is becoming nearly impossible but is very approachable when considering attached or condo style homes, making them a solid investment and home for someone who values location and condition over lot, size, and independent walls.

Big takeaways

It’s not getting cheaper for buyers here in Portland and our housing stock is limited. We need to build more—likely increasing density and building upward—if we want to decrease the housing shortage. Rock bottom interest rates are probably a thing of the recent past but they are not so high yet that it should prevent buyers from purchasing a home. Sellers: it is still a great time to sell to unlock all the equity in your home by selling but be sure to price aggressively rather than overshoot the market—a hot market does not mean buyers will pay anything if they don’t perceive that your home deserves it. Overall, 2022 looks to be another busy year in real estate!

If you have questions about what is to come, please reach out; I am always happy to help!

 

Summer Lovin’

Posted on by Devin Tani

June is National Homeowners Month, and homeowners have much to celebrate. Not only is real estate one of the best investments you can make in your lifetime, owning your home helps strengthen your connection to neighbors and community. It acts as a private safe haven, and, if managed correctly, can provide personal and financial stability.

Today, 65.6% of Americans own their own homes, and as a result of the most recent real estate boom, owners are now sitting on record amounts of home equity. What can you do with that equity? Some of the best ways to leverage your home equity include: financing large home improvement projects that may help raise the overall value; consolidating or paying off high-interest debts like student loans or credit cards; purchasing long-term investments like vacation property; funding college-bound children, a wedding, or even a new business venture.

It is always a good idea to consult with your lender and/or financial advisor to ensure the best course of action. Tapping your home equity in a proper and constructive manner can be a highly effective way to further build your personal wealth.

 

Market Update: June 2021

It’s hard to believe but the average sales price of Portland homes just keeps spiraling higher and higher, up an astonishing 18.9% from last June. The insatiable buyer appetite is gobbling up well-positioned inventory whenever it appears, in shorter amounts of time, and often for over the asking price which continues to be terrific news for sellers. With historically low interest rates, it’s actually more affordable to buy a home today than at any time in the past eight years. Rates are still above the record lows we saw at the end of 2020, but they are better than the slight spike in February and March of this year. Buying while mortgage rates are this low many help save you money over the course of your home loan.

 

Local Getaway: Beavercreek

My wife and I recently celebrated our wedding anniversary with a weekend in nearby wine country. Located just 20 miles south of Portland in Beavercreek, we found one gem of an AirBnB on a small family farm and vineyard bordering an old growth forest. We were hosted by a very kind family in a beautiful and thoughtfully designed passive solar home complete with a magical garden, cedar hot tub, in-house massages, home-cooked meals, and of course, some fantastic pinot noir. Anyone looking for a tranquil getaway in a gorgeous setting, let me know and I’ll spill the beans on the listing.

If you’re looking for a little more data, reach out for a custom analysis to support your personal real estate goals. I am always available to help answer any home related questions you may have.

Market Optimism

Posted on by Devin Tani

Do you fancy yourself an electrician? Perhaps a plumber? Certainly a painter? If you are anything like me, you may think that the easiest, quickest and most inexpensive solution to your home improvement needs is you, your trusty hammer and a reliable YouTube tutorial. Over the past year the DIY industry has been in full swing as more homeowners have been tackling their own house projects. From the bathroom to the garage and everywhere in between, the yearning to correct that wonky cabinet door, replace a loose shower tile or build a backyard fence is evident and the solution clearly in your hands. Yet, homeowners have reported spending an average of $184.13 to fix their failed DIY house projects, according to a new survey from Cinch Home Services, a home warranty company.

These are the most common DIY fails, according to the survey:

 

If you are all right in handing over the hammer to a professional, from roofers and landscapers, to chimney and foundation specialists, I’ve amassed an extensive list of reputable (local) vendors for your every home need. Just say the word and I will happily share a contact, or several. It’s always a good practice to consult more than one vendor for ideas and pricing and never hurts to get a second opinion, aside from that of your loyal pet or significant other.

Market Update: May 2021

The strong sellers market continues to loom large. Interest rates remain at historic lows, multiple offers are the norm on well positioned homes and the average sales price ($557,900 in Portland Metro) is still on the rise. For those considering a home sale, it behooves you to take advantage of exceedingly high buyer demand and before you have any added competition in your neighborhood, with all the competition out there it is best to remain positive. Be patient and try to keep emotional decisions to a minimum – we want you to enjoy your home and your investment for years to come.

There is still a ways to go before we see an abundance of homes on the market but there are some promising signs as of late. As the economy continues to improve (along with those flush with newfound equity and aiming for new horizons), and people get vaccinated and feel more comfortable getting out, more inventory is certain to appear.

Fannie Mae reports consumer positivity regarding home-selling conditions matching an all-time high. And a realtor.com survey concluded that one-in-ten homeowners plan on selling this year, with 63% of those looking to list in the next six months.

Please feel free to reach out if you’d like a custom home analysis or have any questions.

Local Artist Spotlight: Me!

For the past twenty years, I’ve been designing program logos and communication collateral for corporate events. These were created largely for business meetings and incentive campaigns that took savvy travelers to destinations around the globe. Sadly, these elaborate events came to a screeching halt at the onset of the pandemic. As a result, hundreds of thousands of livelihoods have been upturned, including my own; it will be some time before they return in full.

In the spirit of Beeple, the digital artist who recently created and sold the most expensive piece of NFT (non-fungible token) art, I’ve compiled dozens of my own creations, favorite logos from over the years. From Bora Bora to Prague, Japan to South Africa, my aim was to capture the essence of these dreamy locations within a single brand. And now for your armchair-travel-viewing pleasure. If you’ve been looking to jump into the crypto-currency arena and are in the market for an NFT, perhaps I can put my screen-savvy sons to task in getting this onto the EPH blockchain.

I understand most of you are relatively settled in your current homes. But if your friends, family members, neighbors and work colleagues have expressed any interest in seeking greener pastures, your referrals would mean the world to me.

Crafting a Strong Offer: Bidding Wars Explained

Posted on by Kelley Hutchison

Most buyers think that the winning offer in a bidding war is simply the highest dollar amount. It’s not uncommon for me to hear first time home buyer clients say that they often feel perplexed with how to choose a price and rise to the top, that it feels like throwing a dart at a dartboard and hoping for the best. However, price is rarely the only factor and a good agent will spend quite a bit of time gathering information from a variety of sources in order to narrow down what it will take to craft a strong offer. I often advise my buyers to think like a seller. Sellers are not just enticed by a high price; they are also always considering the strength of the offer as well. After all, an offer that does not close is not only worthless but it actually hurts the sale overall because it is unlikely you will ever get all those other offers back. So, how does a listing agent advise their clients on the strength of an offer and how can you make your offer communicate to that seller that you are the most committed and strong offer? Examine these factors:

INSPECTION

Inspection is the most common point at which a buyer terminates the sale agreement. Sellers are very nervous during this part of the process and when they look over multiple offers, they are looking for points where the buyers have shown a commitment to the property as well as fewer opportunities for the buyer to find problems and back out. Of course, buyers want to protect themselves against expensive unknown repairs and costs. However, you should know that some competing offers may waive certain elements of the inspection or the inspection all together. This is fairly risky for a buyer to do and many aren’t willing to completely waive the inspection contingency but many use other tactics to get close. Have you considered shortening the inspection period contingency to 6 or 7 days? Have you considered which inspections are vital to this home? Perhaps, eliminate those that seem excessive. A savvy buyer’s agent will also–with the client’s permission–write that buyer will not ask for specific kinds of repairs or credits. Any combination of these terms can strengthen your offer and give you a leg up when other parts of your offer are not as strong. I must put a big BUYER BEWARE sticker on this one. Inspections are an important factor in protecting you from purchasing a home with problems you may not want to deal with. However, there are ways to demonstrate your commitment to the home while still protecting yourself from catastrophe. Ask your agent to go into more detail about how to carefully deploy these strategies.

APPRAISAL

When a listing agent begins to receive multiple offers, it’s pretty typical for the price to start escalating 5%, 10%–sometimes even more–over asking price. But, if you, the buyer, escalate the price, what will you do if the home doesn’t appraise for the agreed upon sale price? If you have an appraisal contingency in place, you probably aren’t terribly concerned as the buyer. But the seller is very worried. Sellers want to know that the buyer can or will cover the value difference if the appraisal comes in lower than the offer price; the last thing a seller wants is a terminated sale agreement due to a low appraisal. If the buyer has a small down payment, the seller knows the buyer likely can’t cover a large gap so they view the escalation as monopoly money when compared to a lower offer with a lot of money down. If a buyer can’t waive an appraisal completely but have a significant down payment, some buyers will write a clause in the sale contract stating that they will contribute a specific amount towards a low appraisal, which can give the sellers a bit of confidence that the deal will close and that they won’t have to pay for the price discrepancy. Buyers who can’t cover the difference between the offer price and the appraised value should know that sellers may have an incentive to consider a lower offer price with some combination of larger down payment and appraisal contributions/waivers. This is also why a cash offer at the same or even a slightly lower price than a financed offer is so valuable to a seller—cash offers do not have to appraise. If you are financing your home purchase, as most folks are, consider how much you might be willing to contribute towards a low appraisal. A term like that can make you more competitive against cash offers while still preventing you from covering an unknown amount.

LENDER

Another common factor that is overlooked by buyers is the importance of the lender. Once you submit an offer, a strong listing agent will spend time vetting the buyer’s lender to make sure that they are well qualified and that the deal will not fall through. All lenders are not created equal in terms of service or their pre-approval process and listing agents know that. A weak lender or a lender that the buyer’s agent has had no communication with does not give the listing agent or seller confidence. If your buyer’s agent has a good relationship with the lender, the lender is more likely to do things like call a listing agent and vouch for you, write a specific pre-approval letter for that home and price point, and explain how far through the underwriting process you have gone. A strong lender will also reiterate that the close date on the contract can be achieved and that the loan can be processed within that time frame.

If you are financing the transaction, it can sometimes be confusing why the way a buyer pays for the home can matter to the transaction. After all, it all deposits the same in a seller’s account right? Sure. But a financed deal must appraise and takes 30 days to close. That’s 30 days for something to go wrong and for the buyer to back out of the deal. Cash can close much faster—often in under two weeks—and it doesn’t have to appraise or be in any sort of condition, as is the case with some loans. So, what do you do if you are at a disadvantage to cash? You have to increase your terms, communication, and prove to the sellers that you are well qualified to the property. A good lender and agent can help communicate that.

PRICE

It can often feel like a bidding war goes to whoever guesses the top dollar correctly. It is not. Bidding wars tend to be won by agents who gather a lot of information over the course of 24-48 hours about what other offers are in hand and what it is going to take to overcome those offers. Agents compare recent sales in the neighborhood—not just looking at the sale price but also how much over asking the home sold for—and a great buyer’s agent will also follow up with the listing agent several times before submitting and offer to see if they can get answers to direct questions—Has the top bid already exceeded this price? What percentage over asking is the top offer? Is it cash or financed? Then, they inform their client of what it will likely take to win and the client decides how to move forward. Trust your agent to gather the key information and advise you on how to craft a strong offer. Ultimately, you make the final decision about price and terms.

COMMUNICATION

Above all, the communication between a buyer and their agent is an important key to a successful offer as well as the communication between the buyer’s agent and the listing agent. In order to represent the buyer’s best interests in the transaction, the agent needs to have time to study the property, know what concerns, questions, needs, and buying power the client has for that specific property. In a multiple offer situation, it’s important for the buyer’s agent to prove to the listing agent that the buyer is well qualified financially, committed to the home, educated in the process, and trustworthy. This helps build confidence in the listing agent that both sides are going to uphold their end of the contract and see the deal through to the end. Weak communication is often why transactions fall apart. During those initial conversations, agents build rapport; the listing agent is trying to find out how well the buyer’s agent knows their client and the strength of the team: lender, agent, inspector, etc. In multiple offers situations, buyers often feel like the seller has all the cards, but once they are in contract, only the buyer can back out of the agreement; this makes vetting the offers in the initial stage crucial to the health of the transaction. Make sure your buyer’s agent knows your questions, concerns and interest in the property up front and keep them updated along the way. If they know what you are thinking or feeling about a specific property, they can help navigate the situation for your best interest and secure a much sought after home.

There are many more tips and tricks for overcoming multiple offers. If you are thinking about entering into a competitive seller’s market, let’s schedule a buyer’s consultation to go over the many ways that we can highlight your strengths in an offer and secure the right home for you.

Seasonal Real Estate

Posted on by Devin Tani

Growing up in Santa Fe, New Mexico and Tulsa, Oklahoma, I developed an affinity for the seasons. Delightfully, here in Portland, we get a wonderful taste of all four seasons, from the *generous* rainy season to some gorgeous spring days, a handful of summer scorchers and even some blustery snow days. The variety is as welcomed as it is vital, to my mental state anyway. Even the recent ice storm was something to behold. While entertaining in its drama, it was certainly disconcerting for many of us. And yet another reminder of how dear it is …our place called home.

As with the weather, the real estate market typically follows a seasonal pattern. With COVID dramatically altering that pattern in the spring of 2020, and confidence now growing with the rollout of vaccines, we suspect that inventory will start to increase as people feel more confident to sell. Sales in 2021 may not follow traditional seasonal patterns and hopefully, buyer demand and consumer confidence will remain aloft.

Even during the financial crisis of 2008 there was still demand for properties that had the right look, the right price, and were in the right location. In 2021, sellers should follow similar behavior, fixing up their property and pricing appropriately to attract the widest range of buyers. Buyers should be prepared to move quickly, possibly use pre-emptive offers (which are becoming more common), and keep an open mind when looking for their home: all purchases require some compromise (yes, even for multi-million dollar properties), so you might need a little more creativity and patience to take a diamond in the rough and make it yours.

Reach out if you want to know how to best prepare for 2021.

Market Update: January 2021

What a year already. Median home prices in the Portland Metro area reached a new high: $460,000, an eye-opening 13.3% increase over the previous year. Homes sold an average of 11.2% over list price in January, in an average of 44 days on market.

There are a large number of sellers getting ready to list sooner than the typical spring selling market, so buyers should be ready to move quickly, and sellers should be ready for a higher level of competition.

Mortgage Update

Interest rates remain at near record lows, with purchase rates in the mid to upper 2’s and refinance rates only marginally higher.  We are seeing day to day volatility the past few weeks resulting in a slight upward trend in rates.  Among economists there is much disagreement, with President Biden’s proposed $1.9 Trillion Relief Plan of greatest concern. The concern is that this plan may overheat the economy, leading to a stock market bubble and increased inflation, this in turn would cause mortgage interest rates to rise.  The general consensus for 2021 is that we will see more rates in the 3’s and less in the 2’s, which is still low enough to continue to support the strong demand for housing.

For now, rates are at record lows and it’s still a great time to refinance or get pre-approved for a mortgage. If you have any questions, please contact Martin Matsumura at Academy Mortgage via martin.matsumura@academymortgage.com or 503.536.9385.

 

How We are Handling the Second Wave of COVID-19

Posted on by Eric Hagstette

November 16, 2020 Update

As we all know, COVID-19 is on the rise in Oregon and Governor Brown has instituted a statewide freeze.  At Inhabit, we are committed to keeping the health and safety of our clients and agents at the forefront of everything we do.  Strict office policies are in place to ensure a safe work environment.  We also updated all of our client engagement protocols so the health and safety of our clients come first.  Last March, we launched our Couch Concierge service that brings the entire home buying and selling process to our clients.  Everything from virtual open houses, live video showings with our agents, to virtual contracts and closings.

Here is a recap of how we continue to tailor and improve our services during COVID-19:

Our sellers shouldn’t worry about canceled open houses.  We will create a digital marketing campaign that brings your house to potential buyers all without risking anyone’s health or safety.  Our agents will tailor a showing plan that you feel the most comfortable with.

We have a lot of active buyers right now.  To short-list property options, we offer live video tours.  Your agent will walk you through the property showing you every nook and cranny with honest feedback on quality or construction issues they see– all from the safety of your home.   

In-person tours of your “must-see” homes are still an option in most cases when necessary, but with precautions we take very seriously.  Our agents are following the recommended 6 ft of social distancing, mask-wearing, and strict hand-washing and disinfecting policies.  We will not show homes to anyone that has cold or flu symptoms or has had any exposure to COVID-19 within 2 weeks of the showing.  As your agent, we promise you the same courtesy and will pair you with another Inhabit team member to safely show you the home if we are under the weather or are concerned about personal exposure.  Your agent will provide our COVID-19 Safe Showing Policies for your review prior to visiting any property in-person so you can make the best decision for your health and safety.

As a small business, we put the care of our clients and agents first.  We are all in this together. We promise to use integrity and knowledge as our guiding force.

Here’s to peace, health, and prosperity for all of us in the coming months.

Eric 

Listing Your Home From Afar: The Beauty of the Internet and a Hard Working Agent!

Posted on by Lisa Cicconetti

Have you pondered selling your investment property but are not sure how to make it happen since you live outside of Portland, and do not plan to travel during the pandemic? My client was in this exact situation. Having recently finished school, and returning to her home out of state during the “stay home” order, she thought that it might be time to sell her Portland condo of 5 years. 

Living Room (Before)

Over our initial phone call, we discussed the processes of Facetime, Docusign, and the importance of very regular phone calls to make sure we were on the same page and schedule. I agreed that I would make myself available to assist in organizing the cleaning and repairs necessary for tidying up and listing, since it would not be possible for her to be here for the majority of the transaction. My client called in the house and carpet cleaners, and I met them to give them access and check them out. We also decided that the interior would look much better with a fresh coat of paint. This turned out to be the biggest expense and the piece of the equation that took the most time, so if you are planning to sell, please factor this into your schedule and budget if necessary. The results were tangible and attractive!

Bedroom (Before)

You may be wondering about staging also. The entry price for a simple staging of a smaller space starts at around $1500. Since my client was not working, and was gearing up to pay back student loans starting in September, I wanted to help ease the burden of any extra expense. This way, if any repairs were to arise during inspection, she would still have room to breathe. It just so happened that a friend had some extra furniture right next door, and some lovely folks volunteered their time to help stage one bedroom and a living room. This will not be an option for most people. However, we often find that good things happen once we make a decision and have faith that we will make it to the finish line.

Bedroom (After)

Due to our excellent two-way communication, and my organization of the parties involved, the condo was actually cleaned, painted, staged, and photographed in a week. Yes, there were some very long, eventful days. The end result was a home that received 4 offers in less than a week, 3 above listing price! The final logistics included my client and her co-seller needing separate appointments to sign the closing paperwork, as my client was busy taking her boards, and not in her hometown. No worries here. A few days of pre-planning were necessary. The title company worked with my folks to arrange separate signing appointments, when and where convenient for them at the time. 

If you have special circumstances that surround a purchase or sale, we can brainstorm together. With a little bit of technology and strategy, we can work together to free you from something you no longer need, or get you into your dream home.

COVID-19 Update from Inhabit’s Owner

Posted on by Eric Hagstette

March 31, 2020

The coronavirus is impacting everyone and every business in some way and the real estate industry is no exception.  In many ways we are lucky because our shift to doing things virtually isn’t as big a leap as some businesses are facing.  As a matter of fact, for many years we’ve been able to handle most of the home buying and selling transactions electronically.  During the COVID-19 pandemic, Inhabit is committed to keeping the health and safety of our clients and agents at the forefront of everything we do.  Even before Governor Brown initiated Oregon’s shelter-in-place order, Inhabit launched our Couch Concierge service that brings the entire home buying and selling process to our clients.  Everything from virtual open houses, live video showings with our agents, to virtual contracts and closings.

Our listing clients shouldn’t worry about canceled open houses.  We will create a digital marketing campaign that brings your house to potential buyers all without risking anyone’s health or safety.  Our agents will tailor a showing plan that you feel the most comfortable with.

For our buyers, we are hosting live video tours.  Our agents will walk you through the property showing you every nook and cranny with honest feedback on quality or construction issues they see.  

In-person tours are still an option in many cases when necessary, but with precautions we take very seriously.  We recommend live video tours for anyone that has cold or flu symptoms or concerned about a possible COVID-19 exposure.  This goes for clients, as well as, agents.  Our agents are following the recommended 6 ft of social distancing and strict hand-washing and disinfecting policies.  Our agents provide our COVID-19 Safe Showing policies to clients for review prior to visiting any property in-person so you can make the best decision for your health and safety.

We are a small business that puts the care of our clients and agents first.  I started this company six years ago because I knew there was a better, more innovative way to serve clients.  This is an industry that one-size definitely does not fit all.  Inhabit has always been forward-looking and our size allows us to be nimble in creating services that address changing needs and goals.  We are here to give you the best real estate advice possible, now and into the future.

Yours in health and prosperity!

Eric

How Your Home Can Provide Stability

Posted on by Eric Hagstette

For those of us invested in the stock market, we’ve all been wondering if the historic run of this bull market was ever going to end.  No one, however, could have predicted the coronavirus or imagine its global impact. The next few months are still unwritten and as we brace ourselves for how far reaching the effects will be.  It’s unsettling for everyone. The stock market volatility is reminiscent of 2008, but the cause is totally different, and it will have different effects. A recent New York Times article titled Buying a Home During a Pandemic reflected on the 2008 market by saying, “Many real estate shoppers were trying to weigh multiple moving pieces back in late 2008. That crisis was different — the S&P 500 would ultimately lose half its value from its peak, and home prices cratered, too. That’s not the case this time (so far, at least). And what has happened since 2008 should provide us some comfort right now.”

The article also reflects on the stability of the housing market versus the instability of the rental market.  There is some piece of mind knowing that you can capitalize on historically low interest rates to lock in a monthly payment that won’t change.  This is making home ownership much more attractive than renting in many cases.  

The news around COVID-19 feels surreal right now with everything seemingly in a holding pattern, but the root cause of what’s driving Portland’s housing demand will not be affected in the long run.  Portland is one of the strongest real estate markets in the country. It’s during times of crisis that people take the time to reflect on what’s really important. The certainty of having a safe place to call home tops most lists.  Also, the push to create a stay-at-home economy makes where you live more important than ever. Companies may realize that having their employees work from home has some financial benefits. This could very well make a shift to more people getting to decide where they want to live.  Lifestyle is a major driver to Portland’s growth. Are we now poised more than ever to see accelerated growth? I don’t have a crystal ball, but I would be willing to make a bet that the net effect of what’s happening right now will make people pause and consider what’s really important in life.

We have a unique situation with interest rates at historic lows and Portland housing demand still high.  With all the stock market volatility, finding some stability with a large asset like homeownership should be a consideration.  Whatever is important to you, there are options. You can refinance to lock in a lower monthly payment. You can upgrade your home and with the low interest rates end up paying close to what you are now.  You can downsize to streamline your finances and put money away to safeguard yourself against any future volatility. If you are a renter, you can give yourself more certainty by purchasing a home, locking in a monthly payment and having piece of mind that your dollars are going towards an investment for your future.

Whatever is important to you, please know that my team at Inhabit Real Estate is here to help you navigate your decision-making process.  We pride ourselves on being advisors, not salespeople. Let us help you find a strategy that works in your best interest. We are all in this together!

2020 PDX Real Estate Outlook from Inhabit’s Owner Eric Hagstette

Posted on by Eric Hagstette

Settle in as Eric Pulls Back the Curtain on 2020 Portland Real Estate

And just like that, it’s February 2020. If someone asked you when you were a kid what you thought 2020 would look like, did you picture this? I visualized space travel, robots, flying cars, lasers and futuristic stuff…not this everyday adulty life gig.

So where the heck did January go? To be honest, the reason my annual market outlook is so delayed is because this January was super busy for the Portland market. Now that I think about it, we were even selling houses right through the holidays as well. Portland may be experiencing growing pains, but the real estate market is alive and flourishing.

Last Year’s Prediction: Nailed it! 

A year ago, I was calling for our buyers and investor clients to get into the market. It was a year of opportunity for our buyer clients after many years of seller-favored, tight inventory conditions. For the first time in a long while, buyers enjoyed shopping the market without urgency & pressure, having more than one house to choose from, price drops, seller incentives, and contingent offers. How sweet it was! Instead of calling it a buyer’s market or a seller’s market, we called it a “broker’s market” as we could make both sides happy by creating win/win transactions for our clients. We could place our buyers in homes without real estate “whiplash” and our sellers were walking away from the closing table with a smile on their face excited to move on in the market. It was a unique time. Everyone was pretty happy. I hope that you or someone you know took advantage of it. 

2020 Current Conditions

The Portland market has always been nimble and this year is no exception. It changed quickly! Midway through  Q4 of 2019, Portland inventory started to dwindle down. Furthermore, most sellers don’t list during the winter and holiday months, so market inventory continued to fall. Despite the BRUTAL Portland weather this winter, the buyers came out of the holidays with a big appetite and gobbled up what was left on the market. The close in Portland neighborhoods currently sit at 1.3 months of housing inventory (in the 450k-700k range).  So the 2020 cycle begins with a fiery combination of low housing inventory, great interest rates, a seemingly healthy economy (with many new jobs coming to Portland) and a rapid erosion of affordability (this pushes buyers further from town to seek more affordable options). The market is behaving accordingly in response to high demand. Demand is being driven to Portland by a combination of reasons: jobs/economy, lifestyle, climate & natural resources, and an affordable option for many West Coast transplants. 

2020 Outlook

Welp….it’s an election year which has a tendency to slow the market. Buyers and sellers that aren’t being pushed into the market tend to sit tight through election times out of fear of the unknown. However, the upcoming election doesn’t seem to be having an impact on the market…yet.  Portland shows resilience when other markets slow. When things have slowed for us in the past, we bounce back quickly (including the recession). Thanks to our urban growth boundary and natural geographic barriers, we don’t have sprawl which has been a saving grace for our unique market. Portland offers jobs plus lifestyle and attracts a wide demographic spectrum of folks looking to call Portland home.  Pair this with a mild climate and abundant natural resources and you have a winner. Therefore, I predict 2020 will continue its low-inventory trend which favor sellers, drives prices and frustrates buyers. We have to be careful with the “drives prices” part though.  Affordability is a major concern. The chasm between the cost of Portland real estate and our median household income seems to be growing. Jobs are coming but wages haven’t caught up and the cost of living keeps climbing. This pushes buyers to outlier markets (Vancouver, Milwaukie, Beaverton, Oregon City, etc). For the urbanites that don’t want to pay for the high priced houses but want to stay in town, they’ll drive demand in the ‘attached’ market (townhouses/condos) which had a slow 2019. This will stabilize pricing in the attached market. Properly priced, well-presented, detached houses from the $200k to $1m range will continue to fly off the shelf. The $1m-$1.5m market is a ‘move up’ market for many wanting to upgrade from their existing home .  This market presents opportunities for buyers to make a great purchase; however, tapping their “trapped equity” from their existing home in order to make this purchase can present challenges (certainly not insurmountable but can be daunting to the client). In surprising fashion, Portland’s upper end market ($1.5m +) is moving at a pace you may find interesting (fast). Of course, these properties need to deliver the full package to fetch the price, but this market segment seems very confident in Portland as a place to make these big purchases. I find these big numbers surprising as I clearly remember how freaked out I was when I bought my first house in Mt. Tabor for $185k. However, like many other places, we are bursting at the seams. The numbers for incoming population growth are staggering which in real estate economics translates to demand. Portland is in high demand which has all but diminished the lower end of the market and made it feel normal to buy and sell very expensive real estate. 

Natural disaster or other non-natural market forces aside, Portland real estate has a very promising future and has always been well-insulated. With all this said, if our local government doesn’t figure out a way to better manage our addiction/mental health/homelessness crisis, Portland may lose its reputation as the “darling” of the Pacific Northwest and no matter how great this city is, many people will choose different markets to call home. Rainy weather is tolerable but corruption and greed are inexcusable especially with what it costs to live here. 

2020 Buzz Words & New Concepts 

iBuyer: Also known as institutional buyers or residential REIT (real estate investment trust): Have you heard the OpenDoor commercials on the radio? iBuyer or ‘instant offer’ is easily the biggest new disruptor in real estate and Inhabit is all over it. iBuyers have come into the market backed by billions of venture capital funds and are buying up real estate that fits in their “buy box”. Homeowners that qualify for an instant offer (and choose to take it), are typically taking a discounted price for the convenience and avoiding the traditional selling route.  As a student of change, I became very intrigued with iBuyer and became certified as an iRep Professional. Our philosophy with iBuyer is “pro-consumer choice”…what works best for our clients. iBuyers are real in today’s market and we want to share all of the options with our clients so they get the most out of their real estate assets. It works for some clients and we can show you how. 

Trapped equity: Many homeowners who have owned their real estate for 5 + years are sitting on a decent amount of equity that is trapped in their real estate. In a tight market, trapped equity can add challenges to a buyer that wants to move up or move down within the market. We’ve found that many people will simply opt out of moving around in the market simply because of the perceived risks and challenges with using the equity in your home to help achieve the daunting buy/sell or sell/buy. There are more layers, but we manage these all the time. In the end, our clients say that it’s worth the effort. 

Concierge real estate services: It is more important than ever for real estate professionals to be a trusted advisor not only throughout the sale, but on an ongoing basis after the sale. Realtors are on the front line of clients’ needs as a sale closes. Concierge real estate service continues after closing where Realtors continue to provide useful resources, information and advice on an ongoing basis. In today’s demanding and competitive market, we are reinforcing our value by continuing to support our clients on all things real estate. 

Final Words

Even though we’re not living in the Jetson-like society that I envisioned as a kid, 2020 is chock full of new and exciting stuff: self-parking, electric cars, virtual reality, and an impressive (and concerning) amount of technology & connectivity. At the push of a button, you can have almost anything you want delivered to your doorstep within hours.  Heck, you can push a button and order up a random Realtor to open up a house for you (but how dare you do that!). Real estate is no exception to the expectation of today’s “now society”. As professionals, our response time must be faster, our knowledge deeper and our ability to navigate this market must be sharp and focused. One thing that technology can’t change, is the human factor that is necessary to create happy buyers and happy sellers in real estate transactions. This is our wheelhouse. We embrace today’s disruptions & technology and use them as tools to enhance our clients’ position and experience; however, we feel more strongly than ever that real estate is a people business and we are here to stay. 

Thank you for your continued support and trust. Here’s to a prosperous 2020!

Eric

Boom or Doom?

Posted on by Amy Seaholt

I’m sending a quick update on the Portland housing market to dispel a couple of myths. See below for what this could mean for you.

First, two of the most frequent questions people ask me are; can this crazy housing market last, and what about the impending bust? Well, in the most recent market report gathered by RMLS, the data doesn’t support either one of those assumptions. First, the “boom.” The median sales price in Portland rose 2.2% over the past year. That’s a pretty steady, sustainable, un-boomish rate. Next, the “doom.” The market may crash at any moment, right? Nope. The demand in Portland remains steady with 2.3 months of inventory on the market. In addition, the increase in Portland population paired with an unmatched rate of new building permits (apartments aside) means that demand is projected to remain high.

So what does this mean? It’s a BALANCED market. This is great news! Buyers now have time to actually think about a home before writing an offer, and we’re not seeing nearly as many competitive offer situations. Sellers are still getting offers, but may have to negotiate more on pricing or repairs (little secret: this is normal!). And since most sellers are going to turn around and purchase a new home, this is great for sellers as well. It keeps them from being in a situation where everyone wants their home, but there isn’t anything to purchase. So if you or someone you know is ready to move up to their next house or downsize to something different, now is a great time to do it.

The Numbers

Median 12 month increase in sale price is 2.2%

Pending sales are down 1.1% compared to 2018

Homes average 48 days on the market before an accepted offer

If you’re interested, you can find the full report here.

Numbers Don’t Lie, April is the Best Time to List Your Home in Portland

Posted on by Amy Seaholt

 When is the best time to put my home on the market? It’s a question we Realtors get from clients all the time. Now, thanks to recent data gathered and evaluated by Realtor.com, we can give a definitive answer for the Portland metro area: The week of April 14.

Why? Buyers have started looking and they’re eager to buy before the summer market heats up, but in early April, most sellers aren’t on the market yet. It’s a classic example of the law of supply and demand. In fact, there are 23.9% fewer listings on the market that week than on average throughout the year. Only the Seattle and Denver areas had larger inventory swings than Portland. And anecdotally it makes sense, as many buyers want to enjoy summer in their new homes rather than move during our short-but-beautiful summer window. As a result, sellers are able to list their homes 5.5% higher than at the slow start of the year.

You may have seen the recent article in the New York Times that examines this further. They point out that in most major markets nationwide, April is ideal for sellers. Portland is no exception. Because of the aforementioned demand, sellers who list in our area in mid-April enjoy 24% more views of their homes online and 23% fewer days on the market than the market average.

Spring of 2019 promises more of the same. Interest rates are currently below 5% (30-year fixed) and inventory of mid-level single-family homes remains below demand. Factor in the giddy exhilaration Pacific Northwesterners feel when the spring sun finally gives them a good dose of vitamin D, and you’ve got excited April and May buyers.

We at Inhabit also understand that there are a lot of factors, often out of your control, that can affect the timing of putting a home on the market. Family and work demands, completing long overdue projects around the house, or even waiting for a neighbor down the street to sell before you put your sign up can all come into play.  If that’s the case, talk with us. We know the market and can help you with great service and market knowledge at any time of the year.

 

 

Why 2019 Could be a Great Year to Sell Your Home

Posted on by Eric Hagstette

With the Feds increasing interest rates already 3 times the last 12 months (and a possible 4th predicted); it’s understandable that people could be hesitant to make any real estate moves. Mortgage rates tend to mirror interest rates, but with some caveats. Mortgage rates are based on the current market, your financial status and the property you are trying to purchase. Mortgage rates hit a 7-year high in November, 2018 at just under 5% as reported by Freddy Mac, but as of February the rates have lowered to the mid to low 4% range. These rates are still incredible if you consider the historic high of 18% in 1981.

 

Housing markets and volatility will vary depending on where you live. Thankfully, Portland is still a growing and sought after destination which helps keep our market volatility more steady. So why would selling in 2019 be better than 2020 or 2021? Our housing market has a cycle of its own that is influenced by the economy. Typically the cycle is somewhere between 10-16 years. Some experts are predicting the next recession happening in 2020 or 2021. That prediction would be in line with our typical cycle length since the last housing “crash” was in 2008.

 

If you are unsure what to do, here are some compelling things to think about…

Reasons to Sell in 2019:

  1. Do you have plans to make a move in the next 3 years?
  2. Do you have considerable equity in your home? The higher your down payment on a new home, the better your interest rate.
  3. Interest rates are predicted to rise again in the next year
  4. New home buyers are entering the market. Based on a recent Trulia survey, millennials are the largest buying group with 1 out of 5 reporting they will buy a home in the next 12 months.
  5. If you are getting close to retirement and the equity in your home is a big part of your financial picture, then waiting out the next economic cycle might not be the best plan.

Reasons not to Sell in 2019:

  1. You haven’t owned your current home for long enough to build up enough equity. If you’ve owned for less than 2 years, then paying capital gains on your profit is a deterrent as well.
  2. You are happy with your home and believe it can meet your needs for the next 5 years or more, then staying put and waiting until the next cycle is probably in your best interest.

 

I created Inhabit to be a trusted resource for guiding people on how to get the most out of their largest and most important asset. Our overarching goal is to be a trusted advisor and build relationships that withstand all the market ups and downs.

If you want help assessing what you should do to get the most out of your real estate investment, I’m just a phone call away.

 

What to Expect When You’re Inspecting

Posted on by Shane Morgan

Your Guide to the Home Inspection Process

 

There’s often a feeling of uncertainty when deciding if you want to “pull the trigger” and make an offer on a home. So many unknowns!

“What’s the deal with the foundation?” “Is that crack in the ceiling a bad sign?”  “Is the electrical in this room up to code?”

A good Realtor can help with many of these questions, but you won’t know everything about the house until you have it professionally inspected.  This step only happens once you make an offer and it’s accepted by the seller.

A certified home inspector really takes a close look at the house and, for many home purchasers; it’s often the most stressful time in the home buying process. – But it doesn’t have to be!

If you have clear expectations, you can get through it easily and be on your way to moving day.

 

The first thing you need to know about your home inspection:

You’ll feel a myriad of emotions.

First there’s excitement. The inspection could be the longest time you’ve been in the house, after the showings.
Then there’s anxiety. What if the inspector finds something wrong? So wrong you can’t buy the house?
Finally, there’s impatience. Seriously, is this whole home-buying process over yet?

Not yet. But you’re close!

You will typically have up to ten business days to complete inspections and present the seller with any requested repairs. In the Portland area, it’s common to have a general home inspection, as well as, a sewer scope, radon test, and underground oil tank search.

 

Let’s review all 4 inspection types:

General Home Inspection

  • Typically takes 2-3 hours depending on home size. The cost varies, but plan to budget between $400-$500 for it. (Yes, you have to pay for ALL inspections yourself…congrats; it’s your first homeowner expense!)
  • Once finished, the inspector will share initial results with you, highlighting any areas of concern. There will be a formal report later that you and your Realtor can review in more detail to determine the next steps.
  • Keep in mind that the report will highlight only the negatives of the home. At first glance, it can feel like there’s so much wrong (and maybe there is!), but it’s important to remember there’s plenty right with it, it’s just not in the report.
  • When sifting through the report details, don’t sweat the small stuff and focus on “The Big 3”:
    • Structural (siding, foundation, roof, chimney, etc.) 
    • Safety/Health (loose/missing railings or stairs, bad wiring, pests)
    • Systems (furnace, water heater, plumbing)
  • Remember, items large and small that are not completely perfect will be in the report.  It will cover everything from serious stuff to a loose handle on a drawer. While everyone wants to move in with as little to fix as possible, stay focused on the “big ticket” items such as a new roof, sewer line, or foundation work.  Save the inexpensive stuff for later.
  • Your Inspector Won’t Check Everything – Generally, inspectors only examine houses for problems that can be seen with the naked eye. They won’t be tearing down walls or using magical X-ray vision to find hidden faults. Also, your general inspection does not include:
    • fireplaces
    • garages, shops or out-buildings
    • pools


Sewer Scope

This inspection takes an hour or less in most cases and costs about $150. This involves a small camera attached to a pipe that snakes its way into the sewer line. The inspector is looking to see if there is a clean line from your house to the street and if there is any damage along the way. The most common issue that can be found here is root intrusion (like it sounds; tree roots have started growing into the line), and a party sewer (not as fun as it sounds; your line meets with the neighbors’ line before it goes to the street). If either of these is found, your Realtor will likely recommend asking the seller to repair them.

Sewer issues are more common in older homes, but you never know! 

 


Radon Testing

Testing radon may be unfamiliar to some, but it’s serious stuff! In a nutshell, radon is an odorless, naturally occurring radioactive gas found in granite rich soil and is common here in our lovely Portland rain forest. Radon is in the air all around us. There’s nothing to fear if it’s not in an enclosed space, but exposure to elevated levels in a confined area has been shown to cause lung cancer over time. You can learn more here

Testing costs about $100 and involves simply placing a small monitoring device in the lowest livable area of the home.  Results are measured after 3 days. The EPA suggests a reading over 4pCi/L should be corrected. Typically the seller will fix the issue by installing a ventilation fan (often in the basement) that vents out along the side of the home keeping levels low and steady.


Underground Oil Tank Search

This is not always necessary, but if you or your Realtor sees that there may have been oil heat in the past and you don’t find a record of decommissioning, you should get it done! Most old homes around Portland were heated with oil back in the day (many still are), and while oil heat can be just fine, an old neglected tank is not! Old tanks can corrode over time, leaking oil and sludge into the soil that can seriously mess up your gardening plans. 

The search costs about $100. If a tank is found, a Soil Test is recommended to determine if there has been any contamination. As with radon, the seller generally expects to pay for decommissioning. 


Your Next Steps

At this point, if you have concerns over any of the inspection results, you have 3 options:

  1. Ask the seller to repair specific items at their expense
    • You don’t want to send them a laundry list of a million things, but anything from “The Big 3” should be considered.
  2. Request a credit to pay for those repairs
    • I’m a big fan of requesting credits. That way you can determine for yourself who will do the work, plus those credits will go towards paying off your closing costs.
  3. Walk away and find another house
    • Every situation is unique and while most homes are in good enough shape so that a credit or a few fixes make both the seller and buyer happy, sometimes it’s best to cut your losses and move on.


That’s It!

There’s more to it, but that’s the basics. If you or someone you know is considering buying a home, let’s chat about the specifics and make a plan together.

In Which I Call B.S. on a Recent HousingWire Story

Posted on by Brian Belefant

Did you see the headline from last week? “It costs more to own a home than to rent one in every U.S. state.” For a link to the article, click here.

The story talks about how using US Census Bureau data, CNBC was able to compare the median cost of renting a home to the median cost of owning a home.

Remember what a median is? A median is “the value or quantity lying at the midpoint of a frequency distribution of observed values or quantities.” In other words, if you have 1,001 houses, exactly 500 will cost more and 500 will cost less.

And this is where the methodology is screwed up. RentCafe took the same data that CNBC used and figured out that in the US, there are 73% more apartments rented than houses. And the Terner Center at Berkley took that same data and determined that “Today, single-family detached homes make up more than 62 percent of the housing stock in the United States…” .

So the median rental is way more likely to be an apartment, while the median home that’s owned is way more likely to be a house.

Here’s another way to think of it. Jennifer Lopez has a $28 million home. So she and all the other millionaires who own mansions skew the median cost of home ownership up. But unless
there are a lot of millionaires out there renting apartments for like $2 million a month, it’s a pretty safe bet that median rental doesn’t skew as far north.

If all those numbers make your eyes glaze over, let me frame it one more way. The common
sense way.

The CNBC story implies that in every single state, people who rent out their homes are, on
average, losing money. In other words, we have a country full of generous landlords.

Sorry, that just doesn’t fly.

As a realtor®, it’s important to stay informed. But it’s way more important to think.

Dreaming of a Vacation Property?

Posted on by Eric Hagstette

If I told you that you could own a peaceful vacation retreat at an affordable price within a half hour of downtown Portland would you believe me? Believe it or not, it’s true. Within minutes of downtown Portland  (and in some cases a stone’s throw), there are hundreds of FLOATING HOMES right in front of our eyes. These unique homes come in all shapes, sizes and prices and deliver a truly peaceful, fun retreat from the day-to-day grind of life.

Whether it’s on the Willamette, Columbia or Multnomah Channel, there are moorages of all different styles and flavors with a myriad of floating homes enjoying a convenient, peaceful existence right on the water.

With Portland’s explosive growth, dense housing landscape, affordability concerns and emphasis on lifestyle,  it’s surprising that these homes aren’t wildly more popular. The cat is certainly out of the bag in our “sister” cities like Seattle and San Francisco where floating homes are often just as much a consideration as land homes for primary residences or second homes.

As brokers, we hear quite often from our clients the desire to purchase a second property whether it’s at Mt. Hood, Bend or other destinations which could take hours to get to. One of the most important factors when purchasing a second home is convenient access. Taken from first-hand experience, once the honeymoon period is over after purchasing a vacation property, it’s all too easy to talk yourself out of a long drive on a Friday after work to retreat to your vacation home. However, with dozens of floating home moorages within a half hour of Portland, the much-needed escape is only a short drive away.

On top of relaxation, these properties afford fun and entertainment such as swimming, boating, fishing, wildlife observation, kayaking, and unlimited access to waterways, islands, and much more.

We realize that floating homes may not be for everyone, but we want to bring light to these special properties….especially given the abundance of them within a short drive from Portland. As our town continues to bust at the seams, we predict more buyers will begin to consider them as an option for their primary residence or as an escape from city life.

Currently, during the off-season, there are 36 floating homes for sale on the Portland area waterways ranging in price from $80k – $1.1M (with the median price of $266K).  Suprised? I was too when my family and I started looking and decided to buy one on Sauvie Island 2 ½ years ago. It was the best decision we ever made. Our summers and weekends are filled with memories that will last a lifetime.  Why wait for a vacation when you can live like you’re on one all the time!

 

 

2019 PDX Real Estate Outlook From Inhabit’s Owner Eric Hagstette

Posted on by Eric Hagstette

It’s 2019! I hope you had a restful holiday season and are as excited about the new year as I am. I find this time of year refreshing as I look ahead. The following is my market outlook for 2019. I was excited to look back on my 2018 predictions and am happy to report that I pretty much nailed it! Our Portland real estate market is very healthy….different, but healthy. We’ve been enjoying solid appreciation since 2012 and our market continues to strengthen the fundamental components required to keep a market healthy and resilient (ie., job growth, buyer qualifications, lending guidelines, availability of financing, desirability, popularity, and so forth). With this being said, the Portland market has changed and we think it is chock-full of opportunity for both our buyer and seller clients.

Inventory

Real estate buzz word #1. This simply means “supply” of housing for sale. Inventory levels determine who has the upper hand (or level hand) in the real estate market. Portland’s historically low inventory has always favored our seller clients; however, as of late 2018, inventory levels rose to a point (approximately 3 months) that has given our buyer clients hope of achieving their dreams of owning real estate. We are excited for our buyer clients and investors and doing our best to encourage them to take advantage of this “correction” or “softening” or “shift”. Call it what you will, we think this is a great time to get into the market or move around within the market.

Interest Rates

Real estate buzz word #2. We’ve been warned for years that rates would be going up and it finally happened. As we all knew, 3-4% long-term interest rates were unsustainable. These low rates were simply a tool (“quantitative easing”) used for economic recovery and stimulation as a result of the “great recession”. We’ve begun the march back to more sustainable rates for real estate financing. While these rates are still at historic lows, we understand the impacts (and discomfort) that rising rates have on real estate prices (they both can’t go up at the same time). Our sources say that we will likely have a couple more rate hikes in 2019 so, again, we’re encouraging our buyer clients to jump in the market before rates creep up more. Interestingly enough, as I write this, rates are at an 8 month low which is stirring up activity for us. On a positive note, there is still ample liquidity and loan programs for real estate financing and qualified buyers. Great lenders paired with skilled real estate negotiators (me) can introduce ways to buy rates down for our buyer clients and lower the barrier into the market.

Price, Value, Affordability

Buzz word(s) #3. Inventory, rates and real estate prices are all tied together. As mentioned, rates and prices don’t normally go up at the same time. It’s no secret that Portland (and many other metro markets) have a huge “affordability” issue. Rising rates and inventory have joined forces to encourage (or force) our seller clients to price their real estate realistically based on these new inventory levels. It is important to look at this from a positive perspective. 2019 sellers have not “missed the market”. Most of our sellers have enjoyed huge gains in appreciation of their holdings since 2012 (or longer). In my humble opinion, if we simply adjust those appreciation averages to account for today’s market conditions, most people would still be more than happy with their rate of return when spread across the years.

Luxury Homes & High-End Market

This market is all over the board. We’re seeing examples of high-end listings sitting on the market. We’re also seeing examples of high-end listings flying off the shelf. Every property has a price and there are still buyers that can and will appreciate high-end luxury homes. Keep in mind, Portland has always been insulated by the famous migration of buyers moving from California, Seattle, New York, and other “jumbo” markets. To these buyers, our “high-end” listings may seem like a bargain. With this said, regardless of the market segment, it is imperative to price real estate competitively.

Condominiums/Attached Townhomes

While these types of properties continue to grow in popularity in Portland, so does the buying power for condos and townhouses. The recent over-saturation new rental apartments in Portland has softened prices for condos and townhouses. With Portland’s limited land for development (and sprawl) and encouraged density, these properties will remain a player in the market and will “weather” this shift as our population continues to grow and buyers prioritize simplicity and efficiency. In the meantime, this is an outstanding market segment to take advantage of for our buyer and investor clients.

There you have it….my two cents on the local market for 2019

I strongly believe that these “in between” markets present the greatest opportunities for our clients. Unfortunately, we usually don’t realize these opportunities until they’re gone. While we’re experiencing a market correction, we’re still very bullish in the Portland market. We’ve built the fundamentals of a solid market while our job base and popularity continue to thrive. As “the darling” of the Pacific Northwest, Portland may experience blips like this one; however, the combination of current/future population growth with our Urban Growth Boundary and natural land barriers (to development), we feel we have a recipe for strong upward appreciation over the next 10-year cycle. The long and short of it….we do not think buyers should wait to take advantage of this market. At the same time, we feel like sellers who properly price and present their real estate will have a satisfying outcome. It’s a solid market for both sides! The key component is accepting the change and adapting to it. As usual, if you know of anyone considering buying, selling or investing in real estate, we would be honored to receive your referrals and serve your friends and family with outstanding service.