Amid another record sales figure, buyers are pushing back

Median sales figure graphThe median sales price of a home in Bend, Oregon, set another record in July, the second month in a row that figure has reached unprecedented levels. But along with the rising median sales price came evidence that the market is highly competitive and buyers are pushing back on overpriced homes.

July’s median sales price was $412,500. That’s $3,500 (0.9 percent) more than June’s median price. June and July are the only two months out of the more than 10 years for which the Skjersaa Group has data that Bend’s median sales price has exceeded $400,000.

Compared with the median sales price of July 2016, this July’s figure rose 13.2 percent. The year-over-year increase in June was 10.5 percent – meaning that July’s sales prices showed a greater annual increase than June’s.

But there are signs that sellers need to get ahead of the game and price their homes competitively.

The average days on the market in July was 141 days, compared with 91 days in June. The 141 days is the highest for any July since 2012, which is the only year since 2010 that a July has had a higher days-on-market figure than this year. Put another way: July 2017’s days on the market are the second-highest for any July in the last eight years.

Looking at it another way, consider that the highest figure for average days on the market in any month in 2016 was 142 days – and that came in February, a typically slow month for home sales.

Inventory of homes matches high for 2017

And the inventory – the number of months it would take to sell all homes currently on the market given the current pace of sales – rose in July to 3.7 months, matching the highest month of this calendar year (January) and last exceeded in February 2016, when there was 4.9 months of inventory.

Our data is broken down by various price ranges, and as is usual with our monthly sales figures, not every price range tells the same story.

The inventory of homes priced at $625,000 and less is at most three months. Homes priced at more than $625,000 are driving a big part of the overall inventory figure.

Sellers reduce prices on sizable fraction of homes

Accompanying the record for median sales price figures these last two months is another noteworthy — and perhaps counterintuitive — statistic: the percentage of homes on the market with price reductions.

That number was 43 percent in June and 40 percent in July. We have to go back to February 2009 — before the housing market rebounded — to find a month in which 40 percent of the homes for sale had a price reduction.

There were 570 active listings in July. That’s the highest amount since August 2015 (583 active listings). And on Aug. 1, 2017, there were 638 active listings, the most since there were 638 in October 2014.

The sales data these past couple of months are open to various interpretations. Wherever you are in the real estate cycle — buying a home or thinking of selling — I can help you. My integrity, ethics and experience will ensure you of an optimal outcome. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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ARM vs. fixed-rate loan: Which is right for you?

Even though interest rates for traditional 30-year mortgages are near the lowest on record, some home buyers in Bend, Oregon, take on adjustable-rate mortgages, or ARMs. These loans start, for a predetermined time, with an interest rate even lower than that of a traditional 30-year loan, after which the rate adjusts – and payments can increase dramatically.

Are there advantages to ARMs? And if so, who can benefit from them?

The obvious benefit of an adjustable-rate mortgage is the money saved during the initial, fixed-interest rate period. A few years ago, The Motley Fool ran the numbers on a $200,000 home and said the difference in lower payments and greater equity after five years – just before the interest rate would adjust – would be $8,450 compared with a fixed-rate loan.

Adjustable-rate loans can work for short-term owners

The example from The Motley Fool highlights one type of home buyer who can benefit from an ARM. “For people who know they probably won’t remain in their homes beyond a five-year period as the result of personal, work, or family situations, an ARM could make a lot of sense,” the article notes.

Even if an owner will be in a home after the interest rate in an ARM changes, there is a window of time in which an ARM will have required less in payments than a traditional mortgage.

A financial services firm in Bend provided an example of a $300,000 loan, a 10-year ARM at 3.625 percent and a 30-year fixed rate of 4.25 percent. The firm’s calculations showed that the ARM would be $107 a month cheaper than the fixed-rate loan for the first 10 years.

And even in a worst-case scenario of the interest rate adjusting to 8.25 percent after 10 years, the home buyer would save money compared with a fixed-rate loan for 22 months into the adjustable-rate period. So, for nearly 12 years, the homebuyer would have paid less with an ARM than with a fixed-rate loan.

An ARM can work if your income will increase

If you know your income will increase before the interest rate on an ARM resets, this type of loan might be something to consider. An adjustable-rate loan can allow you to get into a house at a lower monthly price point than a traditional loan, and once that bump in income arrives – a spouse re-enters the work force, for example – the post-adjustment payment could be manageable.

Many of the scenarios in which an ARM appears not just workable but even advantageous are predicated on knowing what the future holds about your situation – whether you will still be in your house, whether your income will be greater, and so on. As the cliché goes, even the best laid plans … .

Knowing one’s risk-tolerance level and understanding the subtleties of an ARM are necessary in weighing whether one is better than a traditional fixed-rate mortgage. I have a wealth of contacts in the financial services industry and can put you in touch with a professional who will help you map out the most advantageous loan for your situation.

If you’re in the market for a home, or considering putting yours up for sale, as your Realtor, I will exceed your expectations in the course of your transaction. To learn more about how I can assist you in your Bend real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Median sales price falls for second month in a row. What happened last time that occurred?

The housing market in Bend, Oregon, tapered slightly in May, as the median sales price fell for the second month in succession and the inventory of homes on the market rose compared with April. Still, the year-to-date median price remained steady at a price that represents a high for the 10-plus years for which we have data.

May’s median sales price was $379,000. That’s 4.1 percent lower than March’s median sales price of $395,000 and 2.8 percent lower than April’s median of $389,950.

If recent history is any indication, this dip could eventually turn into a trampoline. The last time monthly median sales prices declined in consecutive months was in 2016 (when they fell for three months in a row, in fact). That stretch of monthly declines after the median price reached $374,000 in May ended emphatically with a 7.5 percent month-over-month increase from August to September to $385,750 – the calendar-year high for 2016.

Two hundred seventeen homes were sold in May, four fewer than in April. The number of houses whose priced was reduced was 107 — 32 percent. The last time the percentage of active listings with a reduced price was that high was in the three-month stretch in 2016 when the monthly median sales figure dropped. (See the previous paragraph for what happened after that three-month stretch.)

Year over year, May’s median sales price showed a 1.3 percent increase from the corresponding month in 2016. That is the smallest year-over-year increase in a monthly median sales figure since January 2016. That month, the median sales price of $317,450 was 3.7 percent lower than in January 2015.

The 2017 year-to-date median price stayed at $380,000 after taking into account May’s sales. That remains the highest year-to-date median price on record. In fact, each month of 2017 has reset or tied the record for the highest year-to-date median sales price.

High-end homes a big part of inventory

The inventory of homes rose to 3.1 months in May. Inventory — expressed as the time that would be required to sell all homes on the market given the current pace of activity — was 1.7 months in May 2016.

May 2017’s inventory is skewed, however, toward higher-priced homes. Of May’s 337 active listings, 33 percent were priced at more than $725,000 (that percentage was 25 percent in March and 31 percent in April). For homes priced from $225,100 to $625,000, the inventory is in the range of two months. And two months of inventory falls well on the side of being a “seller’s market.”

Tied to the inventory is the volume of homes on the market. Each month this year, the active listings have been the fewest for those respective months in the 10-plus years for which the Skjersaa Group has data. As mentioned in the previous paragraph, the quantity of homes priced at $725,000 and less is particularly tight.

Late spring and summer traditionally are the most active months for real estate, and if you’re looking to buy a home or considering putting yours on the market, I can be of help. In my time as a Realtor, I have helped clients achieve their desired results regardless of the time of year and the trend of the market. To learn more about how I can assist you in your real estate transaction, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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What are a buyer’s options after receiving a home inspection report?

After having your offer on a home accepted, a common next step is to have a home inspection. Rare is the home that will yield an inspection report that doesn’t call for attention to at least some non-trivial matters.

A buyer has two primary ways to respond to an inspection report. One is to submit an addendum to the sales agreement specifying that the seller will remedy items identified on the inspection report, employing qualified tradespeople and providing proof of completed work. Another option is to have the buyer receive a credit for closing costs and prepaid expenses, to cover the cost of the buyer having the issues addressed.

With Option A, the buyer has the peace of mind that an expert will have fixed a component of the house identified as requiring attention — furnace, water heater, etc. — and completed necessary repairs before he moves in.

It’s important to do a final walk-through before closing to make sure that issues buyer and seller have agreed will be fixed by the seller truly have been addressed. Naturally, you will want to obtain and keep proof that such work was completed. If something goes wrong during the period covered by the tradesperson’s warranty, having documentation will make it easier to get the problem resolved.

Option B might be preferred by some sellers. There is a school of thought that sellers should not examine any part of a buyer’s inspection report. Instead, this line of thinking goes, a seller should provide a credit for the costs of repairs and have the buyer take care of getting issues identified in the inspection addressed.

More responsibility falls to the buyer under Option B. Rather than having the seller arrange and pay for repairs, this buyer has to obtain estimates for the necessary work to receive a sufficient credit to cover repairs he will have done. Keep in mind that an estimate of the costs for a repair can be superseded once the work is done.

There are other options, of course, in working toward a compromise — such as using a combination of Option A and Option B to address whatever the home inspection report shows as needing attention.

Working with an experienced Realtor can help make the post-offer, pre-closing process go smoother for you. If you’re a buyer, I can help you decode a home inspection report while keeping the deal on track.

If you’re thinking of selling your home, I can help you negotiate a fair agreement arising from a home report. Whatever your status, I can assist you in your real estate transaction. Please contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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In the spirit of the holiday season …

The leaves have fallen from the trees. A light dusting of snow has covered the ground on a couple of recent mornings. Car windshields have to be scraped clear of frost and ice for the morning drive to work.

Yes, we’re full-on into autumn and just days from Thanksgiving.

This time of year is often used to reflect on the good fortune we might have in our lives. For me, one aspect of my personal and professional life that I’m grateful for is the ability to work and live — truly live — in Bend. This area is special, a belief reflected in the growth in our population and the steady demand for housing.

I’m thankful that clients of the Skjersaa Group have chosen our company to represent them in the buying or selling process (or both). We believe our knowledge of the community and the market sets us apart, but we offer more than that. We care deeply about this area. Our abiding concern for Bend and the surrounding area prompts us to support various causes dedicated to sustaining the high quality of life Bend offers.

In 2015, the Skjersaa Group donated more than $9,500 to local outdoors and environmentally oriented organizations, including the Deschutes Land Trust, the Deschutes River Conservancy and The Environmental Center.

This calendar year, the Skjersaa Group has donated more than $6,500 to various organizations, including Deschutes County Search & Rescue and Court Appointed Special Advocates for Children (which works on behalf of abused or neglected children).

BendPropertySearch itself provides $1,500 a year in sponsorship of Bend Endurance Academy. This non-profit provides programs in rock climbing, cycling and nordic skiing and emphasizes teamwork, personal growth and community responsibility.

Our community giving circles back to our clients. Our ability to support local charitable organizations wouldn’t be possible without the support of our clients. We’re grateful for their faith in our ability to serve their needs.

Best wishes for a wonderful holiday season.

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Homeowner’s motto: Be prepared (to sell or buy a home)

Cleaning a home before putting it on the market can be drudgery.

Cleaning a home before putting it on the market can be drudgery.

By Jason Boone

In a lot of instances, a homeowner might not be able to control when he sells his house. A change in jobs, a development affecting a family member who resides in a different town or a sudden alteration in one’s lifestyle choice can result in the need to sell a home now.

And as nearly anyone who has sold a home would attest, selling a home is among the most stressful things we can experience. There never seems to be enough time to tie up loose ends, and the need to keep the home in a welcoming yet mint-condition state adds to the angst.

But even though we might not be able to control when we sell a home, we can take small but significant steps to ensure we’re always prepared to sell a home. The other side of the transaction is similar — buying a home can be time-consuming and stress-inducing — and, likewise, we can be as prepared as possible to buy a home, even if we have no idea when we might do so.

Selling a home involves a lot of paperwork — and that’s well before the sales documents need to be signed. Know where all of the important documentation about your house is. Have the latest annual statement from your mortgage company handy, so you know your payoff amount. It will also help to have your latest property tax statement and your most recent invoice for homeowner’s insurance, as your Realtor and prospective buyers might want to know their cost.

Documentation includes information on appliances and other durable components of your home. In this matter, a seller should think like a buyer. You will want to know how old the water heater is, when the furnace and/or air conditioner was last inspected, the estimated age of the roof. Consulting the home inspection report from when you bought your home could yield valuable information.

As for the home itself, calling the process of getting it into an open house-ready state a nightmare would be unfair to nightmares. Even regular cleaning and maintenance almost certainly won’t be enough to give it that “Buy me!” look that can be crucial in selling a home. To ease the burden when the time comes to sell your home, you might want to consider performing more frequent but smaller-scale cleaning routines.

Anyone can call to mind any number of unpleasant but necessary chores that contribute to making a house market-ready: cleaning window runners of dirt, grime and dead flies; sweeping and mopping behind large appliances; cleaning the inside of kitchen cabinets and the refrigerator. Instead of attacking them all at once — when your time is already stretched thin with other tasks involved in selling your home — why not tackle them one, two or three at a time according to a regular schedule? The time investment on each scheduled day of such work won’t be as intimidating as with an all-in-one approach that might otherwise be necessary.

As mentioned, the flip side of selling a home for many people is buying a new one. Assuming you will need a loan to purchase a new home, you’ll need what seems like a terabyte of financial information. Documents your loan officer might want include your most recent pay stubs, the most recent two months of statements from any bank and investment accounts you have, copies of the previous year’s federal tax return and recent statements from your current mortgage.

Many of these documents are available digitally. Rather than spending time every two weeks or every month updating your store of personal financial documents, you might want to just make sure you know how to quickly access digital versions of these documents.

Other personal data — such as previous addresses if you’ve moved recently, the name and address of previous employers and contact information for previous work supervisors — can also be valuable when applying for a loan. Better to collect this information when you’re not under stress as opposed to when you’re having to scamper out the door for your latest showing.

I know how stressful selling and buying a home can be. With my knowledge of the Bend, Oregon, market, you can be confident that I’ll make your real estate transaction as smooth as possible. To learn more about Bend home options, get started with listing your Bend home, or to view area homes, contact me at (541) 383-1426, or visit Bend Property Search to connect with me through my website.

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Jason Boone | Principal Broker, CRIS | Duke Warner Realty | Skjersaa Group
Oregon Real Estate Licensee | 1033 NW Newport Ave Bend, Oregon