Skip the Starter Home
Skip the Starter Home
For generations, people have begun their homeowner experience with a “starter” home. Part of the logic may be that by beginning with a smaller home, they can learn what it takes to run the home and discover some of the unexpected costs that come along with it. A slightly longer view into the future could suggest a different strategy.
As of March 4, 2021, the average 30-year mortgage rate according to Freddie Mac was 3.02%; up .37% from the week of January 7th this year. At the same time, in 2020, the rate was 3.29% and in 2019, it was 4.41%. That is a difference of 28 and 139 basis points.
The principal and interest payment on a $300,000 mortgage would have been $236 higher two-years ago and $44 more one-year ago. Today’s low mortgage rates are saving buyers lots of interest especially when you factor in the median tenure for sellers is approximately ten years. Even though prices have increased over the last two years, some people may be able to afford more now with the lower rates.
Anticipating the future wants and needs now may present some opportunities for preparing for the inevitable. By purchasing a larger home today, a buyer can lock in today’s low rates and prices to allow themselves room to grow without the expenses of moving.
Each time you sell and purchase a home, there are expenses associated with each side of the transaction. Purchase costs could be 1.5 to 3% while sales expenses could easily be 2.5 times that much. These expenses lower the value of your equity.
Instead of looking at the low mortgage rates as generating a savings from the payment you might normally have to make, consider it an opportunity to purchase more home that will possibly meet your needs for a longer time while eliminating the cost of selling and purchasing in the transition.
If you would like any professional residential Real Estate advice, contact us at Paramount Real Estate Services. 1008 12th St. SE Salem, OR 97302 503-851-1645
Also, to mobilize us right away to help you move, visit us here:
Real Estate Annual Advisory
Homeownership is a privilege and a responsibility. Even after decades of owning a home, you may still need some help to handle some of its challenges by focusing on the three “M”s of homeownership: maintenance, minimizing expenses and managing debt and risk.
While many people recognize the benefits of annual wellness, financial, vehicle and equipment maintenance visits, an important checkup that you may not have considered is an annual homeowner advisory or real estate review. Why would you treat the investment in your home with less care than you treat your car or your HVAC system?
Consider exploring the following:
- Do you know the current value of your home? (You can, by obtaining a list of comparable sales in your immediate area, as well as what is currently on the market for sale.)
- Have you compared your assessed value for tax purposes to the fair market value in order to possibly reduce your property taxes?
- Even if you’ve refinanced in the last two years, can you save money and recapture the cost of refinancing in the length of time you plan to remain in your home?
- Have you considered reducing your mortgage debt with low-earning cash reserves that will not be needed soon?
- Do you have a record of the improvements you’ve made to your home since you purchased it? Do you know what items can be included?
- Have you considered investing in rental homes in good neighborhoods to increase your yields and avoid the volatility of the stock market?
- When was the last time you updated your home inventory of personal belongings? Do you have pictures as well as written documentation?
- Do you need recommendations of repairmen and other service providers?
This service is part of my point of difference as a real estate professional to provide information to help homeowners not only when they buy and sell but all the years in between too. My goal is to create lifelong relationships with our customers as their “go to” person whenever they have a real estate question.
My strategy is to provide reliable, consumer-based information about homeownership on a regular basis through email and social networking. If it benefits you by helping you be a better homeowner, maybe you’ll consider us your real estate professional.
When you don’t know the answers to real estate questions, you know where to get them.
We’re always here to serve your real estate needs. By helping you with the three “M”s of homeownership, we can earn your confidence and trust for the next time you move or a friend of yours needs a recommendation.
If you’d like to have a list of the market activity in your area or any of the other information mentioned, please contact me at (503) 851-1645 or email@example.com.
If you would like any professional residential Real Estate advice, contact us at Paramount Real Estate Services. 1008 12th St. SE Salem, OR 97302
Also, to mobilize us right away to help you move, visit us here:
Press Release-Brian White of Paramount Real Estate Services earns prestigious Certified Distressed Property Expert designation (CDPE)
Brian White from Paramount Real Estate Services Earns Real Estate, Short Sale Designation to Help Homeowners in Danger of Foreclosure
Salem, Oregon – February 18, 2012 – Brian White of Paramount Real Estate Services in Salem has earned the prestigious Certified Distressed Property Expert® (CDPE) designation, having completed extensive training in foreclosure avoidance, with a particular emphasis on short sales. At a time when millions of homeowners are struggling with the possibility of foreclosure, the skills and education amassed by White will help benefit Salem & Keizer-area residents and communities.
Short sales allow the distressed homeowner to repay the mortgage at the price that the home sells for, even if it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.
Today, more than 13 percent of homeowners are delinquent on their mortgage or in the foreclosure process. This is occurring across all price ranges, and the fastest-growing category of homes in foreclosure is the luxury home market.
“The CDPE designation has been invaluable as I work with homeowners and lenders on complicated short sales,” said Brian. “It is so rewarding to be able to help families save their homes from foreclosure and help them sell their home on their own terms with dignity.”
Alex Charfen, co-founder and CEO of the Distressed Property Institute in Austin, Texas, said that agents such as Brian White with the CDPE Designation have valuable perspective on the market, and training in short sales that can offer homeowners real alternatives to foreclosure, which can be devastating to credit ratings.
“These experts better understand market conditions than the average agent, and can help sellers through the complications of foreclosure avoidance,” he said.
The Distressed Property Institute provides live and online courses to train real estate professionals how to help homeowners in distress, with a strong focus on handling short sales.
“Our goal is to help as many homeowners as possible, by educating as many real estate professionals as possible,” Charfen said. “Brian White has demonstrated a commitment to struggling homeowners, a commitment that can provide much-needed stabilization to the community.”
Brian says, “in order for our communities, our towns, our states and our country to become healthy and vibrant again; we need to tackle this demanding issue head on. We need to first find successful ways to help homeowners stay in their homes and then clear out the inventory of the homes where homeowners were not successful. This is a critical time for the American people.”
To visit the Distressed Property information page CLICK HERE.
For more information about CDPE Designation, visit www.cdpe.com.
Fall Discounts on all Salem OR Real Estate?
Everyone loves a Fall discount, especially on Salem OR Real Estate. The Fall season is a wonderful time of year. In many parts of the country we are experiencing the changing of the season. The leaves are starting to change color and the sun is hiding further South. With that, commerce usually shows signs of discounting products to get inventory off the shelves before the end of the year. Real Estate is really no different. Although the motivation for a seller to sell a home before the end of the year may not be as previlent as a retail store manager, they are still driven by the fact that most Real Estate activity slows down near the end of the year and doesn’t pick up until the Spring in the Salem OR area.
Like most of the country, here in Salem OR, we are still dealing with high unemployment and declining values. Couple that with the fact that the small pool of buyers that are currently in the market tend to busy themselves with school, Holidays, and the fact that the long cold and rainy Winter months here in the Willamette Valley are not “feel good buying months”. All the better to get great discounts on Real Estate for buyers.
As sellers lean further into Fall with their home looming on the market, their motivations can heighten during this time. They understand that our market slows during those months and they also fear that their property will be worth less by Spring. No one enjoys losing money, and that fear can drive their motivation to get their house sold as soon as possible.
With the amazing low interest rates, now is an amazing time to experience some great Fall Discounts on Salem OR Real Estate!
To learn more visit our web site: www.old.paramountoregon.com
To search for great Salem OR Foreclosure & Short Sale deals visit: http://www.old.paramountoregon.com/foreclosures-short-sales/
FHA Loan Limits Looking to Decrease
HUD is planning another shift in loan limits for FHA loans coming this October. Currently they are set at $295,000 for our Marion & Polk Counties within the Mid Willamette Valley in Oregon. Currently FHA requires a down payment of 3.5% of the sales price leaving a potential sales price to be no more than $280,880.00 come this October. Hopefully this will not have a huge affect on our home sales in this area. Many of the FHA buyers in this market are purchasing homes below $200,000. However, you will see that many move up buyers want to take advantage of the FHA backed mortgages with the minimal 3.5% down payment leaving some sellers with homes priced around the $280,000 price range and above in an ever more difficult position to find a qualified buyer.
Like most markets around the country, ours is also flooded with homes priced above $280,000 and it is a difficult task to find a buyer able to put down 20% during these economic times. Sellers need to look ahead so they are able to position themselves correctly for the coming changes.
Is this the Bottom?
We have always said that no one will know when the bottom is until it is at least 3 to 6 months after the fact. With the amount of dips and rises that we have seen lately, it can only leave you feeling like you just got off of the worlds best roller coaster. The only thing the average person can do is just hang on and try not to puke. Because just like on a roller coaster, most of the time that puke is going to hit you right in the face.
This week Congress is fighting over extending the tax cuts. Most people agree that a compromise will be reached here very soon. Republicans feel they have the upper hand and Democrats understand that if they don’t reach a deal, then they will be wearing the blame for a long time. This kind of situation forces the elected to get down to business and get the job done for the American people. This is what we need even though any compromise won’t be perfect and it won’t appease everyone. Its just too bad that things have to get so bad before they put their own ambitions aside and remember who they are working for.
Well, this week could be the turning point for our economy. It is understood that adding almost $900 Billion more to the deficit is continuing to dig the grave, but the confidence that this should bring to the American people should be priceless. I personally feel that the two year extension is only adding another bandage without addressing the real problem, but it will help. If Congress really wanted to make a difference, then they would attach strings to the tax breaks. For example, giving tax breaks to higher income business who create jobs would be an incentive’ instead of breaking taxes for everyone without any performance. The problem with the TARP program back in 2008 was that they just bailed the banks out without any strings. They did not keep them accountable. And they continue to make the same mistakes.
I do see this tax compromise a very possible turning point to our economy. Businesses have done well the last year. There is an estimated $2 Trillion ready to be invested in jobs, company growth, etc. The item that we need to bring it all together is going to be CONFIDENCE. Once that is established, then look to see our economy recover in a stable way. It will be slow to begin with, but it will start recovering. The only problem is that people need to plan for the future of higher taxes in every category. The rich are not the only ones that are going to bail us out. Everyone will be effected. The damage has already been done.
The housing market will recover slowly after the economy recovers. Job growth is still our largest adversary to the housing market. The estimated amount of foreclosures in the next two years, as we have pointed out numerous times, needs to be hedged by job growth. People need to make enough money to keep their homes as well as their spending habits. This era of confidence just may be the start of this recovery.
April Jobs Report tied to Strategic Defaults?
Jobs continued to gain in the month of April according to the Bureau of Labor & Statistics. 290,000 non farm jobs were created with 66,000 of them for the government as temporary jobs for the census continue to gain momentum. Have you had your friendly census worker visit you yet?
Over the last 2.5 years this Great Recession has contributed to approximately 8 Million jobs lost. Last months jobs report is encouraging, but I am not expecting numbers like that to follow month after month. And even if it did it would take about 3 years to get all of those jobs back that we lost. I hate to be a pessimist here. I want this our economy to thrive again and thrive now! I hope I am wrong, but I just don’t see how we can continue to spend the money that we don’t have and sustain any kind of momentum that we are seeing. The bailout of Greece is a prime example of that. The U. S. holds 17% responsibility in the International Monetary Fund and they just decided to bail out Greece for a whopping 1 Trillion Dollars! Greece is a perfect example of entitlement programs coming to a head. The working class can not afford to pay for all of these programs! More taxes means higher costs for good and services or less jobs. Period.
A lot of this “growth” that we are seeing is believed to be due to the seasonal time of year and the notion that many people are out spending more money instead of paying for their mortgage every month. Many of these are people who have jobs and have the money to pay for their bills, but they are strategically missing payments in order to have a little more fun this year. People are frustrated that their equity is gone so they are not seeing the value in making their mortgage payments. This is known as Strategic Defaulting. They miss a couple of months, which can mount out to a chunk of change, every month or so until the bank comes knocking. The borrower then makes a payment to appease their lender and the cycle continues over and over again. This obviously brings up a moral dilemma. What would you do? Studies show that once the value of a person’s home decreases to 75% of their balance owed, that person considers a strategic default. The more popular this idea becomes the more people will consider it. This won’t help out the recovery of our economy, but it is the sign of the times.
So the deadline for the Tax Credit was last Friday. I am curious to see how the market is going to respond. I have talked to some people who feel that there are enough buyers out there that don’t seem to care about the credit. They think this is a wonderful time to buy and won’t be persuaded by $8000 or $6500. I feel that I come from a more logical approach. I would think that if anyone was in the market to buy a house, then they would have gotten off the fence to capitalize on the tax credit. I can understand people waiting if they didn’t find what they were looking for, but that raises another issue. Those people are more than likely hard to please and quite possibly may never find a home that they like. There are so many options out there. And there will continue to be more options. If those buyers decided not to pull the trigger because they felt that prices may fall further than the tax credit value; then I can see that argument. They will also have many options for the next couple years since the defaults continue to stream in and unemployment more than likely won’t change dramatically from our current 10% rate.
So, time always tells what the future holds. I predict that sales will slow up for a month or two while we work through this. The tax credit will not be extended, but I wouldn’t be surprised if the government came up with another carrot to chase. They have spent so much money on this program already and they don’t want it to become another Cash for Clunkers program. We all know how that helped us. I’m afraid that as much as the government tries to help, and I do believe their intentions are good, they need to just allow the market to work itself out. That means that it may hurt even worse for a while, but we can’t continue to throw money that we don’t have to fix a problem. We are only prolonging the inevitable each dollar we waste. What do you think?
Real Estate Outlook
It is March 30th and the Federal Government has committed to purchasing Mortgage Backed Securities until the end of this month. This ends, or at least appears to end at the moment, a $1.2 Trillion program to keep Mortgage interest rates in check. Of course, we’ve been spoiled with interest rates as low as the high 4’s over the last few years; however expect things to change if the Fed really does stop purchasing these bad packaged loans. We very well could see them stop buying them for a little while, but if interest rates increase very much, then expect them to continue throwing more money at the program. If the market suffers even more because of the lack of a purchaser for these loans, then the money spent for the program in the amount of over $1.2 Trillion could be considered another wasteful attempt to pump life into the market. Sooner or later, though, this liberal government will need to realize that we can not sustain to continue spending money that we don’t have in order to carry the burdens. They need to understand that unemployment is the driving force to getting us out of this funk that we are in, and we are in one of the largest funks in recent history. This could turn out to be worse than the 80’s if they don’t get things figured out very quickly. It doesn’t take a rocket scientist to understand that spending more money than one is making is a recipe for disaster, and raising taxes in a recession is another recipe for disaster. People who have gotten themselves into too much debt and weren’t able to make their payments is one reason why this country is in the financial mess that we are in now; and you tell me that the governments solution is go to deeper into debt with China?! How ridiculously ignorant do you have to be?