National Insurance Awareness Day - June 28, 2020

                                                                          

June 28 is National Insurance Awareness Day.  Although it's not as much fun as Talk Like a Pirate Day, it is a valuable reminder for savvy homeowners. Conducting an annual review of your homeowner's insurance policy can contribute to your peace of mind all year long.

While it doesn't happen often, at least in my past experience, I have worked with homeowners who have run into snags with their homeowner insurance coverage. Here are a few examples:

• Insurance was cancelled due to a missed monthly payment - after having insurance through the same agency for multiple years, an unfortunate lack of effective communication or reaching out to the homeowner resulted in home insurance being cancelled for nearly 3 years without the homeowner's knowledge.  The homeowner discovered the lapse when they were considerng selling their home, and got the insurance re-instated.

• Insurance was cancelled when an agency went out of business, the clients were transferred to another insurance carrier, and the homeowner didn't update their records or payments with the new agency.

• Insurance was 'force applied' by the lender when the mortgage was sold to a different mortgage servicer but the home insurance information was not provided.  When mortgages get sold to a new servicer, or when homeowners change insurance carriers, updated insurance coverage information needs to be provided to the mortgage company.

• Homeowners were surprised when they learned upon selling their home, that the small creek behind their home had expanded into a flood zone on the FEMA maps requiring the homeowner to carry flood insurance.  The homeowner didn't have a mortgage, so it wasn't flagged by their insurance company as being needed.
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Is your homeowner's insurance doing its job?

You're probably familiar with the basics of homeowner's coverage since it's mandatory if you have a mortgage. Here's a rundown of the types of losses it may cover, including some additional coverage you may want to add if you don't carry it now.

Basic coverage may include dwelling coverage. It pays for damage to your home and detached structures, including sheds, fences, and garages up to the limit you specify. it will also include personal property coverage, which pays for repair or replacement of your home's contents such as furniture, appliances, electronics and clothing if they are damaged by a fire, weather or stolen during a burglary. If you haven't yet made out an inventory of your personal property, now is a good time to consider doing so. 

More coverage = more peace of mind

You may have options to bump up your basic coverage, which can save money if and when you file a claim. One option is replacement cost coverage. Instead of actual cash value coverage, which factors in depreciation to your possessions before issuing payment, replacement cost coverage will provide you with a bigger payment. This coverage helps you replace items at today's replacement cost so you won't have to make up the difference yourself.

Other Options to consider

• Liability and medical coverage protects you in case someone injures themselves on your property and files a claim against you.
• Loss of use coverage pays for your living expenses if your home is too damaged for you to inhabit while it is being repaired or rebuilt.
• Valuable items protection does just what it says. It provides additional coverage for jewelry, antiques, fine are, electronics, computer equipment and more.

Specialized coverage to help cover more bases

Flood insurance is often overlooked by homeowners if their mortgage lender didn't make it a mandatory purchase. But even if you're not in a low-lying area, it's worth checking out the Federal Emergency Management Agency's (FEMA's) Floodsmart web site. According to FEMA, people outside high-rish flood zones file more than 20% of all flood insurance claims.

Earthquake insurance can sometimes be added to a standard homeowner's insurance policy, although you may have to purchase separate, stand-alone insurance. The risk of being affected by an earthequake isn't limited to California - check out his online Earthquake Hazard Map to see if you should look into adding coverage.

Umbrella coverage picks up the slack from anything not covered by the coverages already described here. It protects you from major claims and lawsuits - things most of us would never anticipate until they happened. It kicks in when the liability protection provided by your homeowner's insurance and auto insurance is maxed out, or doesn't offer protection for a particular incident.

Here are some situations where umbrella coverage can make a difference: property damage, liability coverage on rental units you own, malicious prosecution, libel, slander, and other personal liability situations. Fore example, if a neighbor's child is injured on your back yard trampoline or bitten by your dog, or if you car is totaled by an under-insured party, umbrella coverage could save the day.

It's worth an annual call to your insurance agent to get answers to any questions you have and ensure you have the proper coverage you need.

Adapted from Equity Group Mortgage Blog; The information in this article is for informational purposes only and should not be considered legal advice or advice of a licensed insurance agent.

7 Strategies for a 2020 Open House

Some Highlights

• Buyer interest is high right now, so this summer is a great time to sell your house.
• Here are 7 strategies to help make your house showing a safe and effective one.
• Let’s connect today to get your house on the market while buying is hot.

Three Reasons Homebuyers Are Ready to Purchase This Year

                                                                              A recent survey by Lending Tree tapped into behaviors of over 1,000 prospective buyers. The results indicated 53% of all homebuyers are more likely to buy a home in the next year, even amid the current health crisis. The survey further revealed why, naming several reasons buyers are more likely to move this year (see graph below):Let’s break down why these are a few of the key factors motivating buyers to actively engage in the home search process, and the corresponding wins for sellers as well.

1. Low Mortgage Rates

                                                                           The biggest reason potential homebuyers indicated they’re eager to purchase this year is due to current mortgage rates, which are hovering near all-time lows. Today’s low rates are making it more affordable than ever to buy a home, which is a huge incentive for purchasers. In fact, 67% of respondents in the Lending Tree survey want to take advantage of low mortgage rates. This is no surprise when comparing historic mortgage rates by decade (see below):Sam Khater, Chief Economist at Freddie Mac recently said:

“As the economy is slowly rebounding, all signs continue to point to a solid recovery in home sales activity heading into the summer as prospective buyers jump back into the market. Low mortgage rates are a key factor in this recovery.”

2. Reduced Spending

Some people have also been able to save a little extra money over the past few months while sheltering in place. One of the upsides of staying home recently is that many have been able to work remotely and minimize extra spending on things like commuting expenses, social events, and more. For those who fall into this category, they may have a bit more saved up for down payments and closing costs, making purchasing a home more feasible today.

3. Re-Evaluating Their Space

Spending time at home has also given buyers a chance to really evaluate their living space, whether renting or as a current homeowner. With time available to craft a wish list of what they really need in their next home, from more square footage to a more spacious neighborhood, they’re ready to make it happen.

What does this mean for buyers and sellers?

With these three factors in play, the demand for housing will keep growing this year, especially over the summer as more communities continue their phased approach to reopening. Buyers can take advantage of additional savings and low mortgage rates. And if you’re thinking of selling, know that your home may be in high demand as buyer interest grows and the number of homes for sale continues to dwindle. This may be your moment to list your house and make a move into a new space as well.

Bottom Line

If you’re ready to buy or sell – or maybe both – let’s connect to put your plans in motion. With low mortgage rates leading the way, it’s a great time to take advantage of your position in today’s market.

Ways to Practice Self-Care

These days, we seem to be faced with many challenges in our world - the stress of how to maintain our health and safety within the COVID-19 environment, worldly events that are impacting our local communities, perhaps the struggles associated with a limited ability to remain employed, and possibly dealing with the needs of family and friends.

During times like this, we need to find ways to practice self-care so that we can reduce stress, stay healthy and be resilient.  There are lots of ways to engage in self-care, and giving ourselves a daily dose of compassion will inspire feelings of happiness.  

A recent article on WebMD, Ways to Practice Self-Care, gives some Self-Care suggestions that may be easy for you to incorporate into your daily routine.

'Agrihoods' - A New Housing Trend?

High Point Community Garden

A recent inman article, "Welcome to the 'agrihood': How COVID-19 is popularizing agricultural neighborhoods" by Marian McPherson shares information about a growing trend of neighborhoods focused on producing fruits, vegetables, dairy and more for homeowners that value lifestyle over location.

As the pandemic continues, Americans are reconsidering their real estate must-haves, as evidenced by trends that revealed residents abandoning their once-bustling city blocks for greener, less dense pastures.  Some experts say agricultural-based neighborhoods will go from real estate niche to mainstay.

Here is an example of one of the leading agrihoods in the Atlanta Georgia area.

Developers and residents of current agrihoods indicate the benefits of living in a shared agrihood include not only having access to fresh produce, but also enhanced health of the residents, restoration and preservation of the land, and use of sustainable farming methods.

This may be right up the alley for several of my buyers here in Oregon!  I'm not sure it would be the right living environment for me, yet I see the benefits of this way of living.  What are your thoughts?  Could you see yourself moving into this type of housing development?

May 2020 Real Estate Market Statistics

The following is the latest Real Estate Market Statistics for May 2020.
Click here for the full report

As we move through the year experiencing the impact of COVID-19, it is also important to review the month to month activity in the real estate market.  The activity slowed beginning around mid-March through mid-April, then began picking up again in many areas and in many price ranges. The May month to month statistics are a better reflection of the current market than the rolling average over a year. However, to really get a feel for what is happening in the market, one needs to delve deeper into price range and specific location to see what levels of activity are occuring.  In many areas, inventory of available homes is low, the supply of buyers is high, and multiple offers are received on available homes.  The lack of supply in many communities may be the primary factor in keeping home values high.

• Sales:   1,963 in May 2020 vs 2,969 last May:  -33.9%%
• Closed sales Decreased 2.6% from the 2,015 closings in April 2020

• Pending Sales:   3,112 in May 2020 vs 3,292 last May:  -5.5%
• Pending sales Increased 52.5% from the 2,041 offers accepted in April 2020

• New Listings:   3,419 in May 2020 vs 4,902 last May:  -30.3%
• New listings Increased 20.1% from the 2,847 listed in April 2020

• Average Sales Price:   $465,600 in May 2020 vs $452,700 last May:  2.8%
• Average Sales Price in April 2020 $465,200 - marginal change

• Total Market Time: 38 days in May 2020 vs 48 days last May:  -20.0%

• Inventory in Months: 2.3 months in May 2020 vs 2.1 months last May
• Inventory is slightly down from 2.4 months in April 2020

Inventory by Area:

• NW Washington County   2.80 months
• Beaverton/Aloha               1.44 months
• Hillsboro/Forest Grove     2.26 months

National Homeownership Month

Some Highlights

• National Homeownership Month is a great time to reflect on how we can each promote stronger community growth.
• Homeownership helps families build financial freedom, find greater happiness and satisfaction, and make a positive impact on our local communities.
• Let’s connect today if homeownership is part of your future plans.

Home Prices: It’s All About Supply and Demand

As we enter the summer months and work through the challenges associated with the current health crisis, many are wondering what impact the economic slowdown will have on home prices. Looking at the big picture, supply and demand will give us the clearest idea of what’s to come.

Making our way through the month of June and entering the second half of the year, we face an undersupply of homes on the market. Keep in mind, this undersupply is going to vary by location and by price point. According to the National Association of Realtors (NAR), across the country, we currently have a 4.1 months supply of homes on the market. Historically, 6 months of supply is considered a balanced market. Anything over 6 months is a buyer’s market, meaning prices will depreciate. Anything below 6 months is a seller’s market, where prices appreciate. The graph below shows inventory across the country since 2010 in months supply of homes for sale.

For the Portland Metro area, the current supply of homes for sale is just 2.4 months.

                                                                                       Robert Dietz, Chief Economist for the National Home Builders Association (NAHB) says:

“As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt. Estimates vary, but based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.” 

Given the undersupply of homes on the market today, there is upward pressure on prices. Looking at simple economics, when there is less of an item for sale and the demand is high, consumers are willing to pay more for that item. The undersupply is also prompting bidding wars, which can drive price points higher in the home sale process. According to a recent MarketWatch article:

“As buyers return to the market as the country rebounds from the pandemic, a limited inventory of homes for sale could fuel bidding wars and push prices higher.”

In addition, experts forecasting home prices have updated their projections given the impact of the pandemic. The major institutions expect home prices to appreciate through 2022. The chart below, updated as of earlier this week, notes these forecasts. As the year progresses, we may see these projections revised in a continued upward trend, given the lack of homes on the market. This could drive home prices even higher.

Bottom Line

Many may think home prices will depreciate due to the economic slowdown from the coronavirus, but experts disagree. As we approach the second half of this year, we may actually see home prices rise even higher given the lack of homes for sale.

The Benefits of Homeownership May Reach Further Than You Think

More than ever, our homes have become an integral part of our lives. Today they are much more than the houses we live in. They’re evolving into our workplaces, schools for our children, and safe havens that provide shelter, stability, and protection for our families through the evolving health crisis. Today, 65.3% of Americans are able to call their homes their own, a rate that has risen to its highest point in 8 years.

June is National Homeownership Month, and it’s a great time to reflect on the benefits of owning your own home. Below are some highlights and quotes recently shared by the National Association of Realtors (NAR). From non-financial to financial, and even including how owning a home benefits your local economy, these items may give you reason to think homeownership stretches well beyond a sound dollars and cents investment alone.

Non-Financial Benefits

Owning a home brings families a sense of happiness, satisfaction, and pride.

• Pride of Ownership: It feels good to have a place that’s truly your own, especially since you can customize it to your liking. “The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness and well-being for homeowners and those around them.”
• Property Maintenance and Improvement: Your home is your stake in the community, and a way to give back by driving value into your neighborhood.
• Civic Participation: Homeownership creates stability, a sense of community, and increases civic engagement. It’s a way to add to the strength of your local area.

Financial Benefits

Buying a home is also an investment in your family’s financial future.

• Net Worth: Homeownership builds your family’s net worth. “The median family net worth for all homeowners ($231,400) increased by nearly 15% since 2013, while net worth ($5,000) actually declined by approximately 9% since 2013 for renter families.”
• Financial Security: Equity, appreciation, and predictable monthly housing expenses are huge financial benefits of homeownership. Homeownership is truly the best way to improve your long-term net worth.

Economic Benefits

Homeownership is even a local economic driver.

• Housing-Related Spending: An economic force throughout our nation, housing-related expenses accounted for more than one-sixth of the country’s economic activity over the past three decades.
• GDP Growth: Homeownership also helps drive GDP growth as the country aims to make an economic rebound. “Every 10% increase in total housing market wealth would translate to approximately $147 billion in additional consumer spending, or 0.8% of GDP, as well as billions of dollars in new federal tax revenue.”
• Entrepreneurship: Homeownership is even a form of forced savings that provides entrepreneurial opportunities as well. “Owning a home enables new entrepreneurs to obtain access to credit to start or expand a business and generate new jobs by using their home as collateral for small business loans.”

Bottom Line

The benefits of homeownership are vast and go well beyond the surface level. Homeownership is truly a way to build financial freedom, find greater satisfaction and happiness, and make a substantial impact on your local economy. If owning a home is part of your dream, let’s connect today so you can begin the homebuying process.