Portland area home buyers may have heard the announcement last week regarding FHA mortgage changes.  Why pay attention to these details since it only usually affects first-time buyers?  Well, changes to entry level financing affect all Portland real estate in reality.  Also, FHA loans are by far the most popular right now and are not used by only first time buyers.  Home purchasers take advantage of the low down payment option of 3.5% and that’s the attraction. 

Financing options during boom years of 2005 and 2006 made use of loser lending guidelines like the ever popular 80/20 loans which eliminated mortgage insurance.  Those days are in the rear view mirror.  Mortgage insurance is pretty much a requirment today for anyone putting less than 20% down.  Although no buyer ever wants to pay these extra fees they are a necessary evil and insure lenders against default.  Portland’s entry level market is sustained by first-time buyers coming in with minimum down.  If we went back to yesteryear requirements of 20% down minimum the market would be crippled. 

New FHA loan guidelines:

• Mortgage Insurance Premium (MIP) increase from 1.75% to 2.25% of loan amount
• FICO minimum (credit score) 580 to qualify for 3.5% down payment
• Seller credit to buyer’s closing costs down from 6% to 3% of purchase price
• Mortgage Insurance Premium payment shifted some cost from up-front MIP to annual MIP

What does this mean for the Portland real estate?  Since first time home buyers drive the entire housing model, without these there are minimal upper end sales.  Move-up buyers are critical to the cycle.  Looser lending guidelines generate more buyers, tight guidelines eliminate qualified buyers.  Changes mentioned above are tighter and will have some affect on Portland house sales. 

Most area home buyers come in with only 3.5% total cash (the down payment) for their first home.  Statistically that’s just reality.  Sellers often are requested in the offer to pay buyer’s closing costs (loan costs) which keeps cash out of pocket to a minimum.  Figure $200,000 houses for sale in Portland will cost buyers closer to 4% of purchase price, or $8000.  With new seller contribution limits going from 6 down to 3 percent this leaves buyers coming up with the difference.  More money out of pocket is now required to get into a house, potentially.

Tightening restrictions cautiously and slowly is key to not rocking the already fragile housing market.  My guess is that overall we’ll see minimal affect on Portland real estate in general and it’d take a micro-economic guru to place figures on such changes.  Yes, home buyers may have to come up with slightly more money but we’re only talking another thousand or two and if cash is really that tight buyers may want to build up a bit more reserve before purchasing anyway.  No one wants to be house rich and cash poor, right?  Something to consider…

Portland area homes have a plethera of ideas to offer home buyers. the sky is the limit as far as varieties to choose from.  From a cozy studio condo in Beaverton to a monster classic 1900’s craftsman close to downtown close in NE portland’s Irvington district.  What’s your fancy?  Pretty much depends upon the depth of a person’s wallet. Closer in to downtown you get, the higher the price.  Stands to reason, right?  Buyers looks for upside potential through investment in Portland’s real estate should take a closer look at some of the cool vintage areas such as Irvington, Alemeda, or Laurelhurst.

For buyers not faint of heart and willing to wield a large hammer might want to take a look at recent find on 2732 NE 15th. This property is offered for sale through RMLS (rmls #9077589) by Gary Had Real Estate and gets my pick of the moment vote.  At over 5000 square feet this large classic is just waiting for a buyer to see the big picture and seize opportunity.  Driving down the 15th you’ll notice that this has got to be the last vintage structure with no remodeling. Well hidden between giant cedars it’s easy to miss. Currently offered to the public for $450,000.  Homes of similar size have sold for a million or more recently.

Taking a closer peek into the innards of our pick shows incredible features not easily found in newer homes.  Select lathe and plaster, leaded glass windows, bi-fold 8 pane interior doors separating the high ceiling rooms.  Boxed beam, wainscoting, built-in dinettes, storage cabinets and even a real dumbwaiter with original crank!  Talk about cool features!  This place has got them.  Hardwoods are on the main, 2nd and 3rd floors with nice ceiling height throughout every level, including a full basement. This is a large house!

Vintage also means that there’s tons of original everything included.  Sometimes that’s not a great plus but hey, we’re talking upside potential here.  Check out the awesome octupus dinosaur furnace deep withing the basement confines.  Gravity fed oil heat at it’s best.  This beast looks like it came straight from a Freddie Krueger movie. Not sure that keeping this guy is in a rehabber’s best interest.  Oil heating was typical of the era and buyers are always advised to check buried oil tanks for ground contamination.  Better to have sellers absorb DEQ costs if there’s an issue.

Die-hard enthusiasts may want to keep reminiscent features of the old lathe and plaster but I’m not convinced that this adds to resale value.  Observations of home buyers in Portland throughout my 8+ years in the business tells me that you’d have to come across a fairly particular buyer wanting cracked original plaster over conversion to drywall.  One of the big obstacles is how the heck to insulate these homes without destroying such.  Heating costs were no big deal in the day and, I’m going out on a limb here, but don’t think this place is going to get a LEED gold stamp of approval.

Updates required for resale on most of these home will involve electrical and plumbing.  We’re looking at possible knob and tube in this place, although there is an updated electric panel.  Most homes in Portland area neighborhoods with electrical updates have gone to a 200 amp service.  Early 1900’s homes don’t have many outlets and this place is no exception but maybe a lack of receptacles will promote Oregon’s green agenda… well, maybe not.  Owners may find it rather annoying not having a place to charge the Ipod.  Hey, just because you live in a cool classic home doesn’t mean you can’t enjoy modern amenities.

Speaking of modern amenities, the kitchen is reminiscent of days gone by.  Although, there’s some updating to some version of 80’s red laminate countertops. Most will agree that investment into kitchen updates is money well spent and easily recouped upon resale.  Our subject home has a decent sized kitchen but could benefit from rearrangement of a few walls for enlargement.  Sky is the limit here.

Overall I’d give this Irvington project house a great rating due to it’s upside potential. Investing in Portland real estate will pay off on this place if buyers limit their use of contractors and swing the hammer themselves more.  Sweat equity always helps return on investment.  A ballpark figure may put expenses in the hundred’s of thousands for our subject but when all is said and done sellers will also be looking at a home that’s pushing $800k plus within only a few short years.  Portland’s market will recover and buying opportunities like this have never been better!

Contact us to see this home today or visit the main site to search Portland homes for sale.

In the market for high end foreclosures?  Portland Oregon is offering some amazing deals with Street of Dreams quality construction by builders who cater to the upper end buyer.  Several recent showcase-of-homes tours featured locations on the outskirts of Portland’s metro area, mainly Oregon City.  With a drive that’s under 25 minutes to downtown Portland there are 3 locations that offer huge bang for the buck right now.

Because of changes to our market place there is incredible opportunity.  Take a quick trip back to early 2005.  Remember the Portland real estate market?  It was going gangbusters and builders were scarcely able to build fast enough to keep up iwht public demand.  One obstacle was availability of land to put these new construction projects on the table.  The urban growth boundary keeps tight reign on development so luxury home builders had to move further out in order to capture estate sized lots.

In comes Oregon City and it’s ability to cater to high end clientele.  Luxury home development was much more in demand during fast paced days of 15 – 20% appreciation of homes.  Large lots are incredibly hard to find in prime upscale areas such as Stafford, West Linn and Lake Oswego.  Much better availability in Oregon City.

With estate sizes ranging from about 2.5 acres to over 5, luxury home builders found pricing much easier to work with.  Finishes are immaculate.  Landscaping individually designed into every nook of the lot to the tune of $250,000 or more.  Ornate architecture on every wall.  Mature trees positioned in just the right location to compliment grand homes and sculpted landscape.  Almost every home is entitled to show off some form of water feature.  Many have several coi ponds and cascading waterfalls.

At the time, several investors in these estates were reaping advantages of our economy and loose credit terms, income was abundant.  That was three years ago.  Now it’s a bit different.  While short sales and foreclosures run amuk on entry level pricing there are also several on the luxury home end.  Most of this Portland luxury real estate is selling for less than half the construction costs.  Often even one third.

Looking for a deal?  Check out Hidden lake homes for sale.  There is a foreclosed property which will be offered shortly close to $1.1m, a guesstimate.  Construction cost is somewhere around $2.8m.  It is a foreclosed property and may need a slight amount of attention, around $50k worth.  Investment in a few kitchen appliances will mean big returns down the road when real estate heads in it’s historical upward direction.

There are essentially 3 main estate subdivisions catering to Street of Dreams buyers in the SE area of Portland’s Oregon City.  All are gated communities; Grasle Road, Hidden Lake and Beaver Lake.  Guess which two offer their own small bodies of water?  Pretty tough to compete with over the top finishes and settings of all these locations.  Several homes are offered as short sales and even a few have been foreclosures over the past 6 months.  Opportunity is here!

For more information on these and other Luxury Homes in Portland check out the property search or give a call.  We’re happy to help point home buyers in the right direction.   www.maxwellsinclair.com

Portland’s real estate market is not bad. Buyers of investment properties need to take advantage.  Want a competitive edge?  Better be on top of the new listings.  Most websites offer automatic email functions.  These can often be set to send immediately as new property listings become available but some only send once per day.  Only looking once per day may not cut it when competing for hot properties around Portland Oregon neighborhoods.

How can buyers have first shot at the good deals?  Reality is that 99.9% of real estate transactions happen through Realtors.  Hook up with a good one.  Agents working with investment property buyers need to stay on top of new listings and do market research immediately as houses become available.

What’s a good deal for investors?  Take a look at Portland’s west side for example.  Beaverton homes and Hillsboro neighborhoods often offer better cash flow than those found elsewhere.  When looking at the home purchase consider what sort of expenses are attached directly to PITI (principle, interest, taxes and insurance) and what neighborhood rents are.  Entry level homes offer much more bang for the buck than higher end, rental wise.  Rents on a 1200′ 3 bedroom 2 bath detached Beaverton home are running around $1100/mo at the moment.  Figure a good price for such a property might be $175k.  Compare that with cash flow on a $350k home where rents may be $1600/mo.  You do the math.

Competitive nature of investors.  Being first to the table with an offer is key.  It’s almost better to shoot first then aim in this market, you’ll have opportunity to bail out later.  I’m referring to red hot bank dumped properties here and not average run-of-the-mill real estate.  Hot properties like ones priced at $90 sq. ft. vs. the neighboring ones selling around $150.  These will be bank-owned foreclosures in Portland and surrounding areas, and they’re marketed through agents just the same as any other property.  I’ve seen several in the last few months around Beaverton and Hillsboro, they do exist.  Jump on them the same day they hit the market.

Sitting on the fence. At any given time there are a ton of buyers who say “wow, that was a good deal.  I’d have bought that one… if I’d known about it.”  The only reason buyers don’t know about it is because they (and their Realtor) are not paying attention.  Countless would-be investors sit on the fence analyzing a particular property while another savvy investor snatches it up.  That way the little kid mentality can kick in; That guy wants it, now I really want it.  Not all properties listed in RMLS are still available, some are awaiting bank paperwork before listing a property as “pending” in the system.  Dilly dallying doesn’t pay!

One of the most common questions out there for bargain hunters and Portland home buyers is; “How do I get a hold of Portland foreclosure lists?”  Great question and reality is that most of these properties are already listed on RMLS (Regional Multiple Listing Service).  Yes, there are lists of Portland bank owned properties available without a doubt and numerous companies sell these.  But, how many of these are really top secret, dumped at bargain basement price on the courthouse steps, or not openly publicized on an MLS?  Few, if any these days.

• Find bank owned not short sales
• Get foreclosure updates immediately
• Figure offer financing strategy beforehand
• Up your chances of getting an accepted offer
• What kind of deal can I get?

Find bank owned listings - Realtors now have a specific field in which to indicate whether a property is bank owned.  Unfortunately, I believe that this data does not transfer to sites outside of RMLS, which means that buyers of foreclosures will need to have a Realtor set up an automated search to get notifications of new listings.  It’s really quite painless, even though you have to talk with an agent.

Short sales and foreclosures are not the same.  If home buyers want to be assured of closing the deal, don’t go for short sale listings.  Short sales mean that offers are subject to a 3rd party approval and sellers really aren’t in control.  RMLS has a required data field specifying whether such approval is needed for each house but again, you’ll have to have a Portland Oregon Realtor filter your search because this parameter is typically not available on public sites.  Dang!

Financing requirements -Comments on listed properties are available in two locations; public comment and private comment sections.  Portland’s MLS breaks the fields up into separate regions so that listing agents can write notes to other Realtors without displaying on public sites.  Notes may include mention of financing requirements, earnest money and instructions on offer writing.  It’s quite common that foreclosure/bank owned homes for sale will not qualify for FHA or VA type financing and selling bank will not even entertain offers of such.  Most often the reason is that the subject home is in such poor condition that not meet lending guidelines.

Up chances for offer acceptance - Cash speaks volumes to banks.  Eliminate contingencies like loan qualification, appraisal and underwriting.  Do a quick close, two weeks or less is quite doable for cash transactions.  Even when using a mortgage broker 3 weeks is often possible but be aware that selling banks usually have a per diem charge for not closing on time.  If a buyer’s financing is delayed it can become costly very quickly (often $100 per day closing is delayed).

How low can you go? - Offering 50 cents on the dollar against listed price is not going to fly.  Typically bank owned properties in Portland have been very aggressively priced.  That’s not to say that there’s no room for movement but it’s unlikely that you’re going to get more than 5% off list for homes that’ve been active in the marketplace for less than a week.  Multiple offer situations are more common on foreclosures than regular resale due to aggressive pricing.  The key is to be first in line with your offer and make it strong by comparison to listed price.

For example:  A Beaverton Oregon home for sale lists at $250k and is a extremely good deal by comparison to surrounding properties.  Buyer should consider immediately offering something like $255k (net to the seller).  Do this the same day house hits the market!  Sitting on the fence in these situations will guarantee competition from other buyers and limit chances of success.  Paying a couple bucks more than list price is negligible in the big scheme of things.

For more information on Portland Real Estate visit www.maxwellsinclair.com .

Data: June 8, 2009

Source: RMLS Area Report Metro Portland & Adjacent Regions

Dave’s Commentary on the Portland Real Estate Market:

RMLS numbers reflect a reduction in Portland’s housing inventory. We’re down to an 11 month supply for April’s final figures. This is a good sign that the market is starting to improve. Typically the amount of homes for sale rises in spring as do the number of closed sales. A reduction in overall inventory means that buyers are purchasing at a faster rate than homes are being listed for sale.

Working with buyers provides me an opportunity to interact with listing agents when out showing homes. I always ask other agents what their offices are seeing and what that person’s take on the market is. Lately it’s all been the same. Business is up!

Comments vary across the range of course but the majority of agents I’ve spoken with are raving about the amount of buyers they’re currently working with. While May’s inventory numbers are not out yet it’s exciting to anticipate. My guess is that it’ll be down even more, showing more market improvement.

RMLS data shows dwindling appreciation figures so keep in mind that these are a reflection of activity 3 -6 month’s ago. Forecasts are still fairly abundant that late 3rd quarter/early 4th will show we’ve reached a plateau. By the time the media starts reporting on such buyers will start seeing sellers being less desperate.

Dave’s prediction; We’re getting very close to bottoming out or may have already done so. Buyers closing in 2009 will reap huge benefits 5 years from now. Fence sitters need to make their move.

Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers. Find YOUR HOME WORTH now.

To search for your home anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Dave at (503) 789-7633, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Dave now. Make informed decisions; make smart choices. Call Dave now at (503) 789-7633 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Data: June 8, 2009

Source: RMLS Area Report Metro Portland & Adjacent Regions

Dave’s Commentary on the Portland Real Estate Market:

RMLS numbers reflect a reduction in Portland’s housing inventory. We’re down to an 11 month supply for April’s final figures. This is a good sign that the market is starting to improve. Typically the amount of homes for sale rises in spring as do the number of closed sales. A reduction in overall inventory means that buyers are purchasing at a faster rate than homes are being listed for sale.

Working with buyers provides me an opportunity to interact with listing agents when out showing homes. I always ask other agents what their offices are seeing and what that person’s take on the market is. Lately it’s all been the same. Business is up!

Comments vary across the range of course but the majority of agents I’ve spoken with are raving about the amount of buyers they’re currently working with. While May’s inventory numbers are not out yet it’s exciting to anticipate. My guess is that it’ll be down even more, showing more market improvement.

RMLS data shows dwindling appreciation figures so keep in mind that these are a reflection of activity 3 -6 month’s ago. Forecasts are still fairly abundant that late 3rd quarter/early 4th will show we’ve reached a plateau. By the time the media starts reporting on such buyers will start seeing sellers being less desperate.

Dave’s prediction; We’re getting very close to bottoming out or may have already done so. Buyers closing in 2009 will reap huge benefits 5 years from now. Fence sitters need to make their move.

Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers. Find YOUR HOME WORTH now.

To search for your home anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Dave at (503) 789-7633, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Dave now. Make informed decisions; make smart choices. Call Dave now at (503) 789-7633 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Call us at 503-789-7633 (cell) or email us to see how we can help you with your home buying and selling needs.

Home buyers often bring up the old adage that newer homes aren’t being built like they used to be.  Hmm, might depend upon what they’re specifically referring to.  Ever heard of a predicted earthquake Portlanders lovingly refer to as “the big one?” Buyer’s may want to ask themselves this;  Would I rather be standing in the 2nd story of a 1940’s home or the 2nd story of a 2009 home if that thing hits?

Engineering vs. finished product, maybe that’s the question.

Materials are different. Asbestos and lead based paints have been replaced with more edible products like fiber cement and polyethylene.  Realtors are required to give lead based paint pamphlets to any person buying a 1977 or older home.  The pamphlet tells you not to snort paint dust or each the chips.  Actually, none of the materials mentioned are edible so please don’t try.  Sellers are required to disclose any known hazardous substances on the property and all for good reason.

Changes to construction materials can be due to improvement out of necessity but often also because of end cost to consumers.  How much did your parents pay for their house?  Prices today are outrageous!  Well, OK, they’ve come down 20% so maybe they’re in line with inflation.  Everyone’s trying to make a buck. Not trying to defend use of inferior materials here but have to understand that competitiveness is everything.  Using premium natural occuring organic green sustainable renewable stuff sounds good in theory but find a steady flow of consumers who will pay extra costs may be a bit challenging.

new construction

Fiber cement siding and polyethylene piping have replaced real wood and galvanized.  Is one better than the other?  Portland neighborhoods range from classic Victorian to contemporary.  New homes are often wrapped so tightly with siding materials that the house can’t breathe, causing moisture/mold problems.  I’ve also heard several buyers comment on the fumes from new materials/chemicals not agreeing with their health.  Neighborhoods with older home will probably contain far more natural materials.  Portland offers it all.

Engineering practices of today are much tighter than 100 years ago, that’s for sure.  Practices used then are not necessarily used now. Walk into some of SE Portland’s Belmont or Hawthorne houses and you’d think you’re may have enjoyed one too many of the local micro brews.  “Hey, these doorways and floors seem slanted.”  They are.  The plus side is that when you spill liquids they’ll run only to one corner and be easier to clean up…  Most buyers write off slants and crooked doorways to “character”, things you just won’t find in newer construction (or tolerate).  It’d be interesting to see how homes hold up over the next 100 years.

Changes to requirements for shear wall, tie downs, joist hangers and anchor bolts have all come a long way.  It’s educational to look at new construction and see all the metal that’s attached for engineering purposes, things that were just not present years ago.

Which is built better?  Points can be debated.  Tell you what though, when the big one hits I’d rather be in a home engineered to today’s standards than one from 50 years ago.  Of course, I may croak from the mold and chemicals before that…

Check out www.maxwellsinclair.com for more information regarding Portland real estate and home buying!