Strength of the Economy Is Surprising the Experts

We’re currently in the longest economic recovery in U.S. history. That has caused some to ask experts to project when the next economic slowdown (recession) could occur. Two years ago, 67% of the economists surveyed by the Wall Street Journal (WSJ) for the Economic Forecasting Survey predicted we would have a recession no later than the end of this year (2020). The same study done just three months ago showed more than one third of the economists still saw an economic slowdown right around the corner.

The news caused concern among consumers. This is evidenced by a recent survey done by realtor.com that shows 53% of home purchasers (first-time and repeat buyers) currently in the market believe a recession will occur by the end of this year.

Wait! It seems the experts are changing their minds….

Now, in an article earlier this month, the Wall Street Journal (WSJ) revealed only 14.3% of those economists now believe we’re in danger of a recession occurring this year (see graph below):

The WSJ article strongly stated,

“The U.S. expansion, now in its 11th year, will continue through the 2020 presidential election with a healthy labor market backing it up, economists say.”

This optimism regarding the economy was repeated by others as well.

CNBC, quoting Goldman Sachs economists:

“Just months after almost everyone on Wall Street worried that a recession was just around the corner, Goldman Sachs said a downturn is unlikely over the next several years. In fact, the firm’s economists stopped just short of saying that the U.S. economy is recession-proof.”

Barron’s:

“When Barron’s gathers some of Wall Street’s best minds—as we do every January for our annual Roundtable—we expect some consensus, some disagreement…But the 10 veteran investors and economists who convened in New York on Jan. 6 at the Barron’s offices agree that there’s almost no chance of a recession this year.”

Washington Post:

“The U.S. economy is heading into 2020 at a pace of steady, sustained growth after a series of interest rate cuts and the apparent resolution of two trade-related threats mostly eliminated the risk of a recession.”

Robert A. Dye, Chief Economist at Comerica Bank:

"I expect that the U.S. economy will avoid a recession in 2020."

Bottom Line

There probably won’t be a recession this year. That’s good news for you, whether you’re looking to buy or sell a home.

KCM 1/30/2020

The 2 Surprising Things Homebuyers Really Want

In a market where current inventory is low, it’s normal to think buyers might be willing to give up a few desirable features in their home search in order to make finding a house a little easier. Don’t be fooled, though – there’s still an interest in the market for some key upgrades. Here’s a look at the two surprising things buyers seem to be searching for in today’s market, and how they’re impacting new home builds.

Homebuyers Are Not Giving Up Their Garages

The National Association of Home Builders (NAHB) recently released an article showing the percentage of new single-family homes completed in 2018. The data reveals,

• 64% of new homes offer a 2-car garage
• 21% have a garage large enough to hold 3 or more cars
• 7% have a 1-car garage
• 7% do not include a garage or carport
• 1% have a carport

The following map represents this breakdown by region:Evidently, a garage is something homebuyers are looking for in their searches, but that’s not all.

Homebuyers Are Not Giving Up Their Patios

Patios are on the radar for buyers as well. Community areas are often common amenities in new neighborhoods, but as it turns out, private outdoor spaces are quite desirable too. NAHB also found that,

“Of the roughly 876,000 single-family homes started in 2018, 59.4% came with patios…This is the highest the number has been since NAHB began tracking the series in 2005.”

As shown in the graph below, the number of new homes built with patios has been increasing for the past 9 years. Clearly, they’re a desirable feature for new homeowners too.

Bottom Line

Homebuyers are looking for garage space and outdoor patio living. If you’re a homeowner thinking of selling a house with these amenities, it appears buyers are willing to spring for those key features. Let’s get together today to determine the current value and demand for your home.

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How Buyers Can Win By Downsizing in 2020

Home values have been increasing for 93 consecutive months, according to the National Association of Realtors. If you’re a homeowner, particularly one looking to downsize your living space, that’s great news, as you’ve likely built significant equity in your home.

Here’s some more good news: mortgage rates are expected to remain low throughout 2020 at an average of 3.8% for a 30-year fixed-rate loan.

The combination of leveraging your growing equity and capitalizing on low rates could make a big difference in your housing plans this year.

How to Use Your Home Equity

For move-up buyers, the typical pattern for building financial stability and wealth through homeownership works this way: you buy a house and gain equity over several years of mortgage payments and price appreciation. You then take that equity from the sale of your house to make a down payment on your next home and repeat the process.

For homeowners ready to downsize, home equity can work in a slightly different way. What you choose to do depends in part upon your goals.

According to HousingWire.com, for some, the desire to downsize may be related to retirement plans or children aging out of the home. Others may be choosing to live in a smaller home to save money or simplify their lifestyle in a space that’s easier to clean and declutter. The reasons can vary greatly and by generation.

Those who choose to put their equity toward a new home have the opportunity to make a substantial down payment or maybe even to buy their next home in cash. This is incredibly valuable if your goal is to have a minimal mortgage payment or none at all.

A local real estate professional can help you evaluate your equity and how to use it wisely. If you’re planning to downsize, keep in mind that home prices are anticipated to continue rising in 2020, which could influence your choices.

The Impact of Low Mortgage Rates

Low mortgage rates can offset price hikes, so locking in while rates are low will be key. For many downsizing homeowners, a loan with a shorter term is ideal, so the balance can be reduced more quickly.

Interest rates on 10, 15, and 20-year loans are lower than the rates on a 30-year fixed-rate loan. If you’re downsizing your housing costs, you may prefer a shorter-term loan to pay off your home faster. This way, you can save thousands in interest payments over time.

Bottom Line

If you’re planning a transition into a smaller home, the twin trends of low mortgage rates and rising home equity can kickstart or boost your plans, especially if you’re anticipating retirement soon or just want to live in a smaller home that’s easier to maintain. Let’s get together today to explore your options.

Real Estate Market Fast Facts - as we begin 2020

The infographic above shares information on the national real estate market.  As a comparison, here are some statistics for the Portland, Oregon Metro market as of 1/1/2020:

• Median Home Price:$405,000
• Median length of time homes are on the market:  3 Weeks
• Inventory of homes available for sale: 1.8 months

2020 Home Maintenance Resolutions

 

 

Homes need continuous maintenance to keep them in good condition. I recently had a Seller comment, when preparing their home for sale, that he was surprised how easy it was to do some of the simple repairs or improvements needed to be done before putting the home on the market. Even though he felt he didn't have many skills for making home improvements such as re-grouting, hanging new window blinds or patching drywall, he discovered that many things needing to be done are so easy and he'll be sure to keep on top of things in his next home.

Here are some maintenance items you may want to consider tackling in the coming year.

1. Interior
If you invest time in some simple maintenance, you can keep the inside of your home looking like new. Some tasks your home may need include repainting the walls, restripping and resealing wood, or restaining trim and built-ins. Some more complicated repairs may involve replacing worn or outdated floors or rebuilding fixtures.

2. Exterior
Taking time each year to maintain the exterior of your home will help ensure your home doesn’t take in excessive damage-causing moisture. Some tasks you should complete each year include cleaning and repairing your gutters/downspouts, inspecting and repairing your roof, and repainting, cleaning, and repairing your home’s siding, rafters/fascia and trim boards.

3. Systems
Part of keeping your home in good condition is ensuring your systems are running safely. Cleaning your chimney flue, replacing air filters, and other inspection and cleaning projects can keep your home and family safe by helping to prevent floods and fires caused by poorly maintained systems.

4. Landscaping
Keeping your outdoor structures and landscaping in good condition is also important. Keep an eye out for erosion issues, rodent infestations via crawl space access through torn foundation vent screens, and dangerous tree limbs hanging over the roof. You should also refinish your deck, fence, and other wood structures semi-annually.

Experts indicate homeowners should plan to invest one to four percent of your home’s value in maintenance costs each year to avoid losing home value!  

Adapted from RE/MAX LeadStreet Newsletter

The Spring Selling Season Has Begun!

The New Spring Real Estate Market is Here. Are You Ready?

Which month do you think most people who are considering buying a home actually start their search? If you’re like most of us, you probably think the surge happens in the spring, likely in April. Not anymore. According to new research, January 2019 was only 1% behind February for the most monthly views per listing on realtor.com.

So, what does that mean? The busiest season in real estate has just begun.

The same research indicates,

“Historically, April launched the kickoff of the home shopping season as buyers would come out of their winter hibernation looking for their new home. However, the spring shopping season now starts in January for many of the nation's largest markets.”

With the reality of fewer homes on the market in the winter, and that supply naturally increases as we head to the spring market, waiting for more competition to list in your neighborhood this year might put you behind the curve. Perhaps now is the time to jump into the market.

George Ratiu, Senior Economist at realtor.com says,

“As shoppers modify their strategies for navigating a housing market that has become more competitive due to rising prices and low inventory, the search for a home is beginning earlier and earlier.”

There is a lot of speculation in the market about why the search for a home is shifting to an earlier start. The one thing we do know is if you’re thinking about buying or selling a home this year, the earlier you get started, the better.

Reminder: When should you sell something? When there is less of that item for sale and the greatest number of buyers are in the market. That’s exactly what is happening in real estate right now.

Bottom Line

The new spring market for real estate is underway. If you’re considering buying or selling, let’s connect, so you have the advantage in this competitive market.

December 2019 Real Estate Market Statistics

(For the past few years, I've used my photographs for the headline photos on the monthly market updates, using local area scenes in 2017 and roof tops of homes sold in 2018.  This year I'm featuring public art that can be found in our local communities.)

The following is the latest Real Estate Market Statistics for December 2019.
Click here for the full report

• Sales:   2,213 in December 2019 vs 1,846 last December:  19.9 %

• Pending Sales:   1,772 in December 2019 vs 1,599 last December:  10.8%

• New Listings:   1,270 in December 2019 vs 1,255 last December:  1.2%

• Average Sales Price:   $452,400 in December 2019 vs $459,200 last December:  1.5%

• Total Market Time: 64 days in December 2019 vs 64 days last December:  0.0%

• Inventory in Months: 1.8 months in December 2019 vs 2.5 months last December

Inventory by Area:

• NW Washington County   1.76 months
• Beaverton/Aloha               1.21 months
• Hillsboro/Forest Grove     1.92 months

National Cut Your Energy Costs Day

Some Highlights:

• On January 10th of each year, “National Cut Your Energy Costs Day” encourages consumers to reduce their overall energy costs by improving home efficiency.
• According to Freddie Mac, a typical U.S. family spends $2,200 per year on energy bills. By making energy efficient upgrades, you could reduce your energy bills by up to 30%.
• To assess the energy efficiency of your home and see how it measures up, take a moment to check out Home Energy Yardstick to calculate your estimated opportunity. Don’t forget to have your energy bills nearby!

A Long Line of Portland Area Buyers Are Waiting For Your House

Waiting for the spring buyers' market may be a mistake this year. 

It seems the purchasers are already out and looking to buy.

A recent report by ShowingTime reveals how this year is different. Buyer activity is way up compared to the same time last year. The report explains,

The nation's 12.6% growth in home showings compared to 2018 was the most significant jump in buyer traffic during the current four-month streak of year-over-year increases. The West Region saw the greatest growth in activity, with a 23.1% jump – the region's greatest in the history of the Showing Index.

The increase has spread across all four regions of the country, as the graph below shows:
Many Sellers tend to be more reluctant to list during the colder time of year when the market typically makes a seasonal slowdown.  However, with the data shown above, waiting to list your home until the Spring may not be the best strategy this year.

If you're ready to put your home on the market for sale, give me a call!

What You Need to Know About Selling in Winter

 

Your home should look its best when it hits the market to help you get the best offers, and each season offers its own challenges. If you’re selling your home in the middle of winter, you’ll likely have to work around lackluster lighting and minimal visual assistance from your plants. However, here are some tips to make sure your home makes the best first impression possible.

1. Keep walkways clear.
Don’t let mother nature take up space on your walkways. Keep them clear to ensure the path to your house is safe and attractive.
 
2. Create atmosphere.
Make your home warm and inviting by keeping your thermostat set to a pleasant temperature when buyers come by, especially when it’s cold outside. You can tie in the idea of warmth by folding afghans or throw blankets across your living room furniture.
 
3. Let in light.
Pull back the curtains and open up the blinds before a showing to ensure you’re taking full advantage of any available natural light. A quick window cleaning will also ensure you don’t miss out on natural light.
 
4. Work with buyers’ schedules.
The winter months are often hectic as people try to accomplish tasks before the sun sets, so look for ways to add flexibility to your schedule so that buyers can view your home in the evenings and on weekends. Being flexible with your closing date can also help attract buyers.
 
If you or someone you know is thinking about making a move in the new year, give me a call! I’ll be glad to help.

RE/MAX LeadStreet Newsletter

When a House Becomes a Happy Home

We talk a lot about why it makes financial sense to buy a home, but more often than not we’re drawn to the emotional reasons for homeownership.

No matter the size or shape of a living space, the feeling of a home means different things to different people. Whether it’s a certain scent or a favorite chair, the feel-good connections to our own homes are typically more important to us than the financial ones. Here are some of the reasons why

1. Owning your home offers stability to start and raise a family

From the best neighborhoods to the top school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home they purchase.

2. There’s no place like home

Owning your own home offers not only safety and security, but also a comfortable place where you can simply relax and kick-back after a long day. Sometimes, that’s just what we need to feel re-charged and truly content.

3. You have more space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take all this into consideration when buying your dream home, so the space truly works for you.

4. You have control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Maybe you want to finally adopt that fur-baby puppy or kitten you’ve been hoping for. Who’s to say you can’t do all of these things in your own home?

Bottom Line

Whether you’re a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a happy home.