Real Estate Information Archive

Good Monday Morning!

Demand for housing here in the Eugene/Springfield area is not slowing down.  But, nationally, the demand for new housing has slowed and it could be temporary or it could also be the start of a downturn.  The price of new homes has continued to increase due to many factors and this certainly could be contributing to a slowdown.  The following is an article from"Realtor.com" that gives details on the recent reduction in new home sales.

The numbers: New home sales dropped by a larger-than-expected amount, falling to the lowest level in a year.

New home sales occurred at a seasonally-adjusted annual rate of 769,000 in May, the U.S. Census Bureau reported Wednesday. The figure represented a 5.9% drop from the previous month’s revised figure, but was up 9.2% from a year ago.

The new home sales report often sees very significant revisions in subsequent months following the initial estimates. The U.S. Census Bureau noted that the change in new home sales between March and May could be 18.6% larger or smaller than what it is currently reporting, a wide confidence interval.

The median forecast of economists polled by MarketWatch was 859,000.

What happened: The decline in sales was mostly driven by a 14.5% drop in the South. The Northeast saw the volume of new home sales increase 33%, while the West witnessed a 4.8% uptick. Sales were flat in the Midwest.

The number of homes for sale at the end of the month was up 4.8% from April. The total inventory of new homes for sale represented a 5.1-month supply, the highest since last May. The median sales price for a new home was over $374,000, up from around $365,000 the month prior.

The big picture: Constraints in the market for existing homes continue to provide a runway for new home sales to take off. “Right now, we view the shortage of housing inventory as the primary limiting factor for home sales as we start looking forward into the second half of the year,” said Ruben Gonzalez, chief economist at Keller Williams.

Many home builders in recent months were forced to pause, or in some anecdotal cases completely cancel, project because of the short supply of lumber used in construction. The lumber shortage pushed prices for homes higher and squeezed the margins at construction firms. The shortage stemmed from production backlogs at sawmills—many mills opted to ramp operations down last spring as the COVID-19 pandemic hit the economy, only to be caught flat-footed months later when the U.S. housing market roared back to life.

But now, lumber prices appear to be coming back down to earth, which should reduce some of the supply-chain related pressures builders were facing and allow them to resume their operations. That said, builders still face headwinds, including labor shortages, that will make it hard to really ramp up the pace of sales and construction.

What they’re saying: “As far as the drop in mortgage applications for home purchase goes, the downtrend is most likely primarily due to supply-constrained weakness in existing home sales, as demand for new homes has held up comparatively well even as mortgage applications for home purchase have dropped,” said Joshua Shapiro, chief U.S. economist at independent global economic and financial consulting firm Maria Fiorini Ramirez.

“Aside from surging home prices squeezing some potential buyers out of the market, I do not have a good explanation for the latest fall,” said Stephen Stanley, chief economist at Amherst Pierpont. “I’m guessing the May reading is mostly an anomaly.”

“Sales of newly constructed homes are held back by the uncertainty that builders face. Prices for lumber, drywall, doors, and roofing products are all higher than they were a year ago. As builders pass along those costs, they encounter resistance from would-be buyers. The rising costs for construction materials come at a bad time, as vigorous construction is the solution to the housing shortage,” said Holden Lewis, home and mortgage expert at personal-finance website NerdWallet.

Market reaction: The Dow Jones Industrial Average and S&P 500 index were both up slightly following the report’s release, while homebuilder stocks—including D.R. Horton, Lennar Corp. and PulteGroup—fell in morning trading.

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THIS WEEKS HOT HOME LISTING!

33749 Meyer Rd, Cottage Grove, OR 

Price: $595,000    Beds: 2    Baths: 2.0    Sq Ft: 1803

Gorgeous one level home on 5.5 irrigated acres. Over 3 acres of pasture. Water rights to pump water from year-round creek. Lovely home with great room, large open kitchen, huge laundry sewing/craft room with tons of cabinet storage. 36'x44' shop wit...View this property >> 

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Good Monday Morning!

I recently read this article in "Realtor Magazine" about the "Top Ten Things Effecting The Real Estate Market This Year".  I found it interesting and wanted to pass it along.  Here is that article.

Remote work and mobility are expected to have the most significant impact on real estate over the next year, according to The Counselors of Real Estate’s list. The group identified current and emerging issues expected to have an influence over real estate in the 2021-2022 cycle. Remote work and mobility and its influence over commercial buildings globally was named as the top issue, followed by technology and ESG (Environment, Social, and Governance).

“The pandemic was a stress test, revealing vulnerabilities, appetites, and new and increased risks,” says Michel Couillard, global chair of The Counselors of Real Estate. “These themes present themselves in the 2021-2022 Top Ten Issues, which are highly interconnected and indicative of a newly changed and further evolving real estate environment. We have been awakened to some familiar but nascent areas of importance, namely cybersecurity, supply chain, and price instability. None of these are new concepts, but in a span of months or even just weeks, we saw high profile hacks, shortages of resources like microchips, lumber and labor, and rising prices across the board.”

Here’s a closer look at the top 10 issues on CRE’s list for 2021-2022:

1. Remote work and mobility

The pandemic greatly disrupted the workplace as many employees began to work remotely—and still are more than a year later. Commercial properties may need to be repositioned as the workplace adapts to more flexible and even shareable spaces.

“As we emerge from COVID-19 into a new world replete with local and global disruptions alike, our industry has been forced to recognize that adaptability and resiliency are paramount in real estate markets,” says Couillard. “It is undeniable that the pandemic’s disruption significantly impacted human behavior in how and where people have chosen to work. Now, with an escalating return to ‘business as usual,’ and workers beginning to return to offices, landlords, and companies nevertheless are facing repositioning of the workspace and the benefit of easily adaptable and shareable spaces. …. Property owners and managers should be flexible in order to accommodate these demand-driven changes in the desired use and location of space."

2. Technology acceleration and innovation

The Counselors of Real Estate also ranked the acceleration and adoption of technology as having the second greatest impact on the real estate industry. “The stressors were not about new tech, but about the acceptance of it,” Coulliard says. “Lockdown-driven changes in our work, the economy, in social structures, and in our personal behavior forced the industry to put any earlier reluctance aside.” Growing technology themes include artificial intelligence, machine learning, the Internet of Things, and cybersecurity, the report notes.

3. ESG at a tipping point

Environmental, social, and governance (ESG) initiatives are growing. In 2020, ESG funds more than doubled net new money intakes. “The growth in recent years is fueled by multiple drivers, including consumer shifts, regulatory requirements, trillions of dollars of wealth transferring to generation Z and millennials committed to philanthropic living, a blurring of work and societal expectations, and a full sprint to attract and retain top talent,” the report notes.

4. Logistics

“Whether it’s a port, rail line, pipeline … manufacturing facility, warehouse, farm, ranch, or grocery store, all these real estate assets are a critical segment in the supply-chain funnel that is logistics,” the report notes. “How logistics is functioning impacts the utilization of commercial real estate. Redundancy and the ability to process disruption are two key elements required to support the fast-moving, high-volume requirements of modern-day logistics in the ‘shop-online-and-deliver-to-me’ era in which we find ourselves.”

5. Infrastructure

The Civil Engineers estimates the U.S. infrastructure funding gap in 2021 to be $2.6 trillion, a 24% increase compared to 2017. “The COVID-19 pandemic, climate change, and heightened societal interest in social and economic equity have redefined infrastructure imperatives beyond the significant ongoing necessity for improved roads, bridges, airports, ports, mass transit, and other traditional infrastructure needs,” the report notes. A proposal on Capitol Hill sets out to allocate $110 billion in new spending to bridges and roads, $65 billion to expanding access to broadband, and $48.5 billion to public transit, and more. Stay updated here: NAR resource page on transportation and infrastructure in real estate

6. Housing supply and affordability

The National Association of REALTORS® and the Rosen Consulting Group released a report last week calling for a “once-in-a-generation” response to address decades of underinvestment and underbuilding in the housing market. The nation has faced a shortfall of 5.5 million to 6.8 million housing units since 2001, according to the report. Housing groups are calling on lawmakers to expand access to resources, remove barriers to incentivize new development, and more. Read more from NAR’s report on this: ‘The State of America’s Housing Stock Is Dire’

7. Political polarization

“Political friction is holding back America’s economic productivity,” the report notes. “We are squandering resources as we try to address problems that arise from the partisan divide rather than problems confronting us as common issues …. And the real estate industry’s well-being is a function of our economic growth.”

8. Economic structural change

Economic growth is mostly an unknown. As the report notes, how do we assess the real potential of the economy for sustainable growth? What numbers indicate a true trend and which are merely adjustments from the low bottom of the second quarter of 2020? Which behavioral changes made by U.S. households in the pandemic will persist? The ability for businesses to anticipate what’s next is met with challenges. For example, “even though real estate investors may reasonably expect an uptick in demand in the coming year, the ability to anticipate when occupancy and rent will rise frustrates underwriting,” the report notes. “We are observing many investors increasing their focus on property management aimed at retaining tenants and defending cash flow, while selectively seeking ‘value-add’ properties amenable to active asset management. The thinking is ‘focus on what you can control’ during this period where macro-level uncertainty is the governing headwind at the policy level in terms of the structural problems in this economy.”

9. Adaptive Reuse 2.0

The term is not new but the focus is getting bigger. CRE refers to Adaptive Reuse 2.0 as “The Neighborhood Approach.” It aims to address the challenges of what to do with defunct suburban malls and thousands of empty big-box retail stores that are surrounded by desirable and affordable neighborhoods. It requires a re-examination of suburban communities in repositioning and transforming areas that could be at risk for blight. A number of projects have been completed or are underway to help reconnect communities, prevent blight, and restore green space.

10. Bifurcation of capital markets

Debt capital markets have been volatile since the pandemic, namely public markets like commercial mortgage-backed securities, mortgage REITs, and agencies such as Freddie Mac and Fannie Mae. “Mortgage REITs took a significant hit early in the pandemic, with some recent recovery driven by restructuring credit lines and paying down credit facilities that experienced margin calls,” the report notes. Still, the “market continues to be flush with debt capital liquidity, despite property type and market uncertainty. Looking out to the remainder of 2021 and into 2022, performance will dictate the amount of distress and losses, and risk management should dictate markets, property types, leverage, loan structure, and pricing for mortgage debt. The next year should also tell us if commercial real estate debt was too rich and whether perceived risk underestimated where pricing should have been.”

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THIS WEEKS HOT HOME LISTING!

2941 Edgewater Dr, Eugene, OR 

Price: $1,150,000    Beds: 3    Baths: 4.0    Sq Ft: 3397

Don't miss this elegant 1-level executive home in a quiet cul-de-sac. Large covered patio w/ infrared ceiling heat & a gas fire table overlook a pond & waterfall making it a relaxing & private retreat. Spacious indoor/outdoor entertaining w/ Sonos s...View this property >> 

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Good Monday Morning!

The shortage of available housing continues both nationally and locally.  The escalation in home prices caused by extreme demand, high cost of lumber and building supplies and the shortage of skilled labor have all lead to a huge problem for those wanting to purchase homes.  Right now the shortage of affordable housing is extreme and the situation is not improving.  In the Eugene and Springfileld area, high housing costs, the lack of affordable building sites and the high cost of material and labor are creating a situation where home buyers are forced into the market of existing homes. This has been the perfect storm for creating a housing shortage.  The following is an article from "Realtor.com" that talks about this problem nation wide.

The numbers: Construction on new homes rose slightly in May, but high lumber prices and labor shortages have stymied builders and could leave many customers frustrated as the busy U.S. summer home-buying season gets underway.

Builders started construction on new homes at a 1.57 million annual pace in May, the U.S. Census Bureau said Wednesday.

In other words, that’s how many houses would be started in a year if construction companies did the same amount of work every month as they did in May.

The increase was somewhat of mirage, however. April’s originally reported increase of 1.57 million was trimmed to 1.52 million.

Permits to build new homes, meanwhile, fell 3% last month in another sign of the trouble builders are running into. They slipped to an annual rate of 1.68 million from a revised 1.73 million in April.

Big picture: Demand for new homes is sky high with the economy recovering from the pandemic and mortgage interest rates still near rock bottom. Housing starts and permits recently hit a 15-year peak.

The problem is, construction companies simply can’t build new homes fast enough or keep the prices within most the range of most buyers.

High costs of raw materials, a shortage of skilled workers, and a limited number of vacant lots all pose barriers to new construction.

The result: Home shoppers should expect a limited selection of properties of sale and higher home prices, potentially limiting the number of buyers.

Applications for new mortgages, for example, have declined recently in a sign that higher prices are scaring away buyers.

What’s compounded the problem is a paucity of existing homes for sale. Listings have tumbled 13% since they touched a 14-year high last October.

The housing market has been a big contributor to the U.S. economic recovery. It’s likely to continue to play a big role, just not as big as it has in the past year.

Key details: New construction on single-family houses increased by a solid 4.2% to 1.1 million rate in May, but permits declined again. Permits have fallen almost 11% from a 15-year high in January.

About two-thirds of new units built are single-family homes.

Builders also started work on more multi-family projects with at least five units: Condos, townhouses, apartment buildings and the like. They increased 4% to an annual rate of 465,000.

Permits on multi-family units also fell, however.

Construction increased sharply in the Midwest and grew more slowly in the South and West. Only the Northeast saw a decline.

Home building is much higher in all four regions compared to one year ago, but construction is likely to take place at a more subdued pace until all the bottlenecks ease.

There is some good news. Lumber prices have tumbled 40% from a record peak in May, for example. Yet some of the barriers to construction, such as a shortage of skilled labor, have existed for years and are likely to be a chronic problem.

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THIS WEEKS HOT HOME LISTING!

1122 Alderdale Dr, Junction City, OR 

Price: $450,000    Beds: 3    Baths: 2.0    Sq Ft: 1729

Beautiful open concept home with spacious living area, kitchen and large bedrooms with additional den that could be a 4th bedroom. Large private lot with huge RV parking area and room to build small shop or outdoor living structure. There is lots of...View this property >> 

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Good Monday Morning!

The Real Estate market in the Eugene and Springfield area remains robust.  The number of homes going on the market for sale has continued to increase, but sales activity is so active that the inventory level remains extremely low.  As with most of the country home values remain in an inflationary state and continue to increase with demand.  Mortgage rates for the most part remain stable and low. Change is on the horizon as inflation expands with most consumer goods at high levels.  An overall decline in our national economy is on the horizon unless inflation can be kept in control.  Here are the statistics for home sales in Lane County for May of 2021.

New listings (608) increased 25.4% from the 485 listed in May 2020, and increased 16.3% from the 523 listed in April 2021.

Pending sales (554) increased 19.1% from the 465 offers accepted in May 2020, and increased 21.2% from the 457 offers accepted in April 2021.

Closed sales (394) increased 26.7% from the 311 closings in May 2020, and increased 6.5% from the 370 closings in April 2021.

Inventory and Market Time

Inventory held steady at 0.7 months in May. Total market time decreased to 15 days.

Year-To-Date Summary

Comparing the first five months of 2021 to the same period in 2020, new listings (2,345) increased 2.4%, pending sales (2,096) increased 13.8%, and closed sales (1,758) increased 14.2%.

Average and Median Sale Prices

Comparing 2021 to 2020 through May, the average sale price has increased 18.6% from $340,700 to $404,100. In the same comparison, the median sale price has increased 17.2% from $320,000 to $375,000.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3620 Berkshire St, Eugene, OR 

Price: $449,000    Beds: 3    Baths: 2.0    Sq Ft: 1455

Beautifully maintained home in desirable Ferry Street area. High ceilings and vaulted areas make home feel open and spacious. Backyard has gazebo with fire pit and wonderful landscaping with private feel to it. Sideyard could potentially be area for...View this property >> 

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Good Monday Morning!

A shortage of homes for sale plagues the nation and has created a hot market for home sellers.  Adding to this is the continuation of extremely low and favorable mortgage interest rates.  Rates at this time are well below that of last year at the same time and it looks like we should continue to enjoy the low rates for some time with some moderate increases.  Here is an update on recent mortgage rates.

Mortgage rates were on the rise last week but remained just below 3%, offering borrowers another opportunity to lock in historically low rates.

Still, the National Association of REALTORS® cautions that borrowers should expect mortgage rates to increase modestly in the following months as the economy continues to recover. NAR forecasts the 30-year fixed-rate mortgage to average 3.20% in 2021.

“Home prices continue to accelerate while inventory remains low and new home construction cannot happen fast enough,” says Sam Khater, Freddie Mac’s chief economist. “There are many potential home buyers who would like to take advantage of low mortgage rates, but competition is strong. For homeowners, however, continued low rates make refinancing an option worth considering.”

Freddie Mac reports the following national averages with rates for the week ending June 3:

• 30-year fixed-rate mortgages: averaged 2.99%, with an average 0.6 point, up from last week’s 2.95% average. Last year at this time, 30-year rates averaged 3.18%.


• 15-year fixed-rate mortgages: averaged 2.27%, with an average 0.6 point, unchanged from last week. A year ago, 15-year rates averaged 2.62%.


• 5-year hybrid adjustable-rate mortgages: averaged 2.64%, with an average 0.2 point, up from last week’s 2.59% average. A year ago, 5-year ARMs averaged 3.10%.

Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3620 Berkshire St, Eugene, OR 

Price: $449,000    Beds: 3    Baths: 2.0    Sq Ft: 1455

Beautifully maintained home in desirable Ferry Street area. High ceilings and vaulted areas make home feel open and spacious. Backyard has gazebo with fire pit and wonderful landscaping with private feel to it. Sideyard could potentially be area for...View this property >> 

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Good Monday Morning!

There has not been much change in the housing market in the Eugene and Springfield area over the past year.  Low inventories of homes for sale and rising home prices have created a challenging market for homebuyers.  This kind of market has also embraced most of the nation.  Here is an article from "Realtor.com" that describes our current national housing market.

The numbers: Existing-home sales declined yet again, a result of the low inventory of properties for sale and rising prices keeping buyers at bay.

Existing-home sales fell 2.7% to a seasonally adjusted annual rate of 5.85 million in April, the National Association of Realtors reported. It was the third consecutive month in which home sales fell. Compared with April 2020, home sales were up nearly 34%, though the year-over-year comparisons are skewed by the onset of the COVID-19 pandemic in the early months of last year.

“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” Lawrence Yun, chief economist at the National Association of Realtors, said in the report.

“We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” Yun said, adding that the declining number of homes in forbearance would also help matters.

What happened: The Midwest was the only region to see sales growth between March and April, with a 0.8% uptick. The Northeast had the biggest decline, with a 3.9% drop in sales.

The overall decline in sales was caused by a 3.2% drop in single-family home sales — whereas sales of condominiums and co-ops rose 1.4% from March.

The median existing-home price in April was $341,600, a new record high that represents a 19.1% increase from a year before. Properties stayed on the market for 17 days in April on average, and 88% of homes sold last month were on the market for less than a month.

There were signs of improving inventory conditions, though. Unsold inventory was at a 2.4-month supply in April, up from a 2.1-month supply the month before.

The big picture: Most economists argue that one the biggest factors holding back the housing market right now is a lack of inventory. Unfortunately for everyone in the housing market, from home buyers to real-estate agents to mortgage lenders, it could take years to rectify the situation.

A new analysis from title insurer First American Financial Corp. examined the “Great Housing Supply Crash” of the past year — and explained how it was really years in the making.

A lot of Americans who already own homes opted not to sell them this past year, in many cases because of concerns related to the pandemic. As these homeowners start to warm to the idea of selling now that COVID cases are lower and vaccines are readily available, that should reduce some of the pressure.

But it won’t solve everything. “Inventory turnover — the supply of homes for sale nationwide as a percentage of occupied residential inventory — was low even prior to the pandemic, but dropped precipitously last spring,” First American chief economist Mark Fleming wrote in the report. Plus, years of underbuilding mean that America in general doesn’t have enough housing to go around.

To truly get supply and demand back in sync, it “will take years of accelerated new home construction,” Fleming wrote, adding that “an end to the pandemic by itself is unlikely to bring enough sellers to the market to bridge the gap.”

What they’re saying: “Despite still-strong demand for “more house” amid the work-from-home trend, inventories remain extremely lean. Pending home sales have wilted, and new mortgage applications have slowed, suggesting activity has somewhat been capped as home prices surge and mortgage rates creep higher.

“Overall, while the housing market is likely to remain sturdy, we expect momentum to ease by the end of the year,” Priscilla Thiagamoorthy, an economist with BMO Capital Markets, wrote in a research note.

“Even if a bit wary of the conditions they face in today’s market, buyers remain eager, which has resulted in quick home sales and at record prices,” said Danielle Hale, chief economist at Realtor.com.

“Meanwhile, rising seller sentiment could mean some relief is ahead with perhaps even a greater than normal share of homeowners stepping in the market later this year,” she added.

“While it’s not enough to end the shortage of homes for sale, this wave of sellers will make a dent, giving home buyers more options to choose from,” Hale said.

“Fewer than 1 million existing single-family homes are now on the market, less than half the 2 million low at the peak of the boom in 2005. As supply starts to rise, the recent explosive rate of increase in home prices probably will slow,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3220 Crescent Ave #55, Eugene, OR 

Price: $230,000    Beds: 3    Baths: 2.0    Sq Ft: 1829

Beautifully updated home located on the largest lot in Summer Oaks. Open floor plan w/vaulted ceilings & lots of windows throughout. Large kitchen w/ ample storage, island & eating area. Master suite with w/in closet, large bathroom w/ double sinks,...View this property >> 

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Good Monday Morning!

It appears that even though we remain in a "HOT" sellers market in the Eugene and Springfield area, things are starting to get even hotter.  April home sales numbers indicate more home listings, more sales and of course a continuation in the amount of money that homes are selling for.  Mortgage interest rates remain favorable and this of course is fueling the strong housing market here.  The inventory of homes on the market remains extremely low and competitive buying situations remain the rule.  Here are the number for Lane County homes sales in April of 2021.

April Residential Highlights

New listings (523) increased 27.3% from the 411 listed in April 2020, and increased 14.4% from the 457 listed in March 2021.

Pending sales (457) increased 29.1% from the 354 offers accepted in April 2020, and increased 5.3% from the 434 offers accepted in March 2021.

Closed sales (370) increased 16.0% from the 319 closings in April 2020, and decreased 4.9% from the 389 closings in March 2021.

Inventory and Market Time

Inventory increased to 0.7 months in April. Total market time decreased to 25 days.

Year-To-Date Summary

Comparing the first four months of 2021 to the same period in 2020, new listings (1,715) decreased 4.6%, pending sales (1,560) increased 12.0%, and closed sales (1,350) increased 10.6%.

Average and Median Sale Prices

Comparing 2021 to 2020 through April, the average sale price has increased 16.8% from $341,300 to $398,800. In the same comparison, the median sale price has increased 15.3% from $320,000 to $369,000.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

81 Shady Loop, Springfield, OR 

Price: $325,000    Beds: 3    Baths: 2.0    Sq Ft: 1260

Fabulous Hayden Bridge one level home that is move in ready! Several skylights. Make this home light & welcoming. Lots of storage! Fully fenced back yard with play structure and dog run. Kitchen has newer appliances and hot water heater, roof. This ho...View this property >> 

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Good Monday Morning!

Are we currently in the middle of another housing bubble in the United States.  As we watch the price of both existing and new home prices soar, it is hard to believe that we are not experiencing a housing bubble. This is the common thought by most of the public, but the experts seem to feel differently about our current housing market, 

The U.S. housing market is on a hot streak with double-digit annual gains in home prices, bidding wars, and surging buyer demand. That type of soaring housing market is prompting more “bubble” fears in some corners, but economists say the housing market isn’t getting overinflated.

“We have strong conviction that we are not experiencing a bubble in U.S. housing,” Vishwanath Tirupattur, a Morgan Stanley strategist, wrote in a note to clients this week.

Lawrence Yun, chief economist of the National Association of REALTORS®, agrees. He told Axios last month: “This is not a bubble. It is simply lack of supply.”

The rapid rise in prices may be concerning to home shoppers, however. The median selling price for a home is up $35,000 compared to a year ago, which is the fastest-paced increase since 2006, Tirupattur said.

But this isn’t 2006. Housing inventories are low, credit remains tight, and lenders aren’t issuing risky loans at rates like they did back then. Product risk—such as from mortgages with introductory periods, teaser rates, or balloon payments—comprised about 40% of the mortgage market between 2004 to 2006. More recently, those factors are now at only 2% of the mortgage market, according to Morgan Stanley.

Also, the housing market has a record low number of homes available for sale. At the end of March, there were 1.07 million homes available for sale, according to NAR data. For comparison, during the housing bubble, in July 2007, there were more than four times that—4 million homes available for sale.

Still, while home prices won’t keep climbing at the current pace. They aren’t expected to fall either, economists say.

“We are not at all suggesting that home price appreciation will maintain its current torrid pace,” Tirupattur writes. “Home prices will continue to rise, but more gradually.”

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

81 Shady Loop, Springfield, OR 

Price: $325,000    Beds: 3    Baths: 2.0    Sq Ft: 1260

Fabulous Hayden Bridge one level home that is move in ready! Several skylights. Make this home light & welcoming. Lots of storage! Fully fenced back yard with play structure and dog run. Kitchen has newer appliances and hot water heater, roof. This ho...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

Things are changing quickly with tax laws that could have significant effects on you as a homeowner.  It is time to begin watching closely all of the tax changes that are being proposed.  Some are out front and some are quietly hidden within other proposed legislation.  With all of the increased spending by the Feds, the need for more revenue is going to be huge and taxing homeowners further is coming our way.  Here is an article from "Realtor.com" that talks about what is being proposed that will effect a major function of many Real Estate transactions, 1031 tax deferred exchanges.

President Biden’s new economic plan would eliminate a tax break for many real-estate owners that has enabled them to defer paying capital gains on property sales.

Closing that tax loophole, which has existed since 1921, is part of his $1.9 trillion spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds in other properties within six months of the sale.

The deals are known as 1031 exchanges, named for the section in the U.S. tax code. The Biden proposal would abolish 1031 exchanges on real-estate profits of more than $500,000.

In theory, capital-gains tax from these deals eventually gets paid. But on the advice of estate planners, many real-estate investors continue to buy and sell properties this way until they die, passing the capital gains on to their heirs tax-free at death. Mr. Biden seeks to close the death loophole, too, by taxing capital gains on inherited assets.

A U.S. congressional tax committee estimated that the 1031 tax break would save property investors more than $41 billion between 2020 and 2024.

In the plan released by the White House on Wednesday, the Biden administration argued the real-estate loophole is one of many on the books that disproportionately allow the very wealthy to avoid taxation. “Without these changes, billions in capital income would continue to escape taxation entirely,” the administration said.

Mr. Biden’s proposal would also raise the top rate paid on capital gains and dividends to 39.6% from 20%, and it would increase taxes that hedge funds pay on carried interest.

Real-estate investors say that the 1031 tax treatment encourages businesses to expand, creating jobs and pumping more money into the economy, especially during times of lower overall economic activity, such as recessions.

Most 1031 deals are done by individuals, rather than by corporations, according to a report from the Congressional Joint Committee on Taxation. They have been popular with wealthy investors who have pooled money to buy small apartment buildings, motels or other types of less expensive commercial real estate.

They are also favored by privately held commercial real-estate firms. Publicly traded real-estate investment trusts, or REITs, have less need for the exchanges because they enjoy other tax benefits.

Dozens of organizations have registered to lobby the federal government against repealing 1031 exchanges, according to Senate lobbying disclosures, including the American Farm Bureau Federation, the National Association of Realtors and the Asian American Hotel Owners Association.

Sandy Sigal, a Southern California-based owner of shopping malls, oversees a $2 billion real-estate portfolio. Over the course of his 35-year career, he said he has completed about 50 exchanges, which have given him more cash on hand to grow his business.

He sold a shopping center in Baldwin Park, Calif., last year, then reinvested the proceeds by buying and redeveloping another shopping center. He said that during difficult times like the pandemic these tax exchanges helped him generate more business and hire more workers than he would have otherwise.

“Would we have done that without [a 1031 exchange]? No, we would have held on to the cash,” Mr. Sigal said.

An entire cottage industry of brokers and advisers also exists to facilitate these niche transactions, who would also be threatened by a change in the law. The obscure line in the tax code even has its own lobbying group, the Federation of Exchange Accommodators.

“Section 1031 encourages real-estate transactional activity, and in doing so, is a powerful stimulator of the U.S. economy,” said Suzanne Baker, a co-chair of the group, which opposes the Biden proposal.

The tax treatment also applies to residential sales, enabling home sellers to defer capital gains by reinvesting sales proceeds in a home other than their primary residence. The Biden proposal would continue to allow 1031 exchanges of less than $500,000, meaning many homeowners and smaller investors could still take advantage.

Originally, the exchanges applied to other forms of personal property, such as artwork or machinery. Those property types were eliminated by Congress and President Trump in 2017, in an effort to offset the other large tax cuts they enacted. Real-estate exchanges were preserved.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

485 SW Juniper St, Junction City, OR 

Price: $315,000    Beds: 3    Baths: 1.0    Sq Ft: 1066

Don't miss this darling updated & move-in ready home in a great Junction City neighborhood. New kitchen cabinetry, fresh interior paint, new doors & trim, vinyl windows & a ductless HP. Beautiful landscaping in the front & back w/ a covered patio pe...View this property >> 

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Good Monday Morning!

As mortgage interest rates fall again, the housing market in the Eugene and Springfield area is heating up even more.  The shortage of homes on the market for sale is not discouraging home buyers as they are making offers on homes for sale causing bidding wars in most cases.  The inventory is the lowest in the first time buyer prices ranges of $250,000 to $400,000. This of course is the price range where competiition is the greatest.  I would not look for any change in the market conditions here in the near future.  The following is an article from"Realtor.com" that talks about the recent market and mortgage interest rates.

The spring housing market is heating up faster than the temperature.

Already-high home prices continued to climb to yet new heights as mortgage interest rates dipped below 3%. Median home sale prices soared 17.2% year over year in March, to hit a record high of $329,100, according to the National Association of Realtors®. This was for existing homes and did not include new construction. Sale prices of single-family homes were even higher, jumping 18.4% annually in March, to reach $334,500.

This comes as buyers have flooded the market and found a severe shortage of properties for sale. Sellers have been hesitant to list during the pandemic, and builders haven’t been able to keep up with demand. The imbalance has led to offers well over asking price, frenzied bidding wars, and the waiving of all sorts of contingencies.

Median list prices, which is what the sellers are asking for homes, not what they sell for, also shot up 17.2% on Realtor.com in the week ending April 17.

One the big reasons for the meteoric rise in prices has been low mortgage rates. The lower the rates, the lower the buyer’s monthly mortgage payment. This has enabled many buyers to afford more expensive homes without having to shell out more for them every month.

“Today’s mortgage rates give home buyers a much needed boost in purchasing power that will help them navigate higher home prices, which nearly every housing market across the country is seeing right now,” says Realtor.com® Chief Economist Danielle Hale.

Rates fell well below 3% for the first time during the coronavirus pandemic. They rose above the 3% threshold only in March, but they’ve since come back down a little. They dipped to an average 2.97% for a 30-year fixed-rate loan in the week ending April 22, according to Freddie Mac.

“Going forward, there will be no shortage of buyer interest in housing, and we’ll still see climbing mortgage rates,” says Hale

“But I expect the increases to be more gradual, which will make it easier for buyers to adjust to higher monthly payments. The top challenge for buyers will still be finding a home, but even that should get a bit easier as we see a seasonal ramp-up in sellers.”

The lower rates have also been a boon for homeowners who refinance their mortgages to capitalize on the lower rates. 

“Low and declining mortgage rates provide [lower-income] homeowners the opportunity to reduce their monthly payment and improve their financial position,” Freddie Mac Chief Economist Sam Khater said in a statement.

However, the high prices, coupled with a dearth of homes on the market, coupled with the high price tags, is hurting the number of sales. Closed transactions dropped 3.7% in March compared with February on existing homes, according to NAR. However, sales were 12.3% higher than a year ago, at the start of the pandemic when many buyers were not allowed to visit properties in certain parts of the country.

The number of homes for sale was just 1.07 million units in March—a 28.2% plunge from the previous year. And they sold quickly, at a median 18 days. Roughly 83% of homes were sold in less than a month.

“The sales for March would have been measurably higher, had there been more inventory,” NAR’s Chief Economist Lawrence Yun said in a statement. “Without an increase in supply, the society wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners.”

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

2924 Norkenzie Rd, Eugene, OR 

Price: $485,000    Beds: 3    Baths: 2.0    Sq Ft: 1693

Don't miss this tastefully updated one level home nestled in a quiet North Gilham neighborhood. Stunning kitchen w/ granite countertops, soft-close cabinetry, stainless steel appliances, breakfast bar & large windows looking to the private backyard...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!