Eugene Oregon Real Estate Blog

Good Monday Morning!

As we approach the end of another hot year for the market, homebuyers and sellers are eagerly looking ahead to the 2022 housing market. Will the market continue its streak of strong growth, or are we finally about to see a slow down? 

Here’s a high-level forecast for what to expect next year, based on the supply and demand signals we can already see in today’s data. I’ll also highlight which variables we should be watching for unexpected market shifts.

1. Demand will continue to be strong into 2022.

The first signal we look at to forecast the strength of the housing market is days on market – how fast are homes moving? Right now, we’re seeing a median of 49 days on market and climbing, as it normally does this time of year. A typical December would see market time at 85-100 days, so you can see from the chart that demand is staying elevated later in the year, which is a bullish sign for next year.

Due to the strong seasonal patterns, I predict days on market will hit a low of 21 days in April, tying the record-fast market times from earlier this year.

With homebuyer demand off the charts earlier this year, Altos Research began tracking the phenomenon we call “immediate sales.” You’ve probably seen this in your local market, where offers happen more or less immediately after the home gets listed for sale. At this moment, about 25% of properties are going into contract essentially immediately every week (around 20,000 of them within hours or days of listing) — even as supply and transaction volume declines through the end of the year. 

I actually expected immediate sales to be dropping at this point, but it isn’t. Even over the Thanksgiving holiday, total volumes were down, but immediate sales as an indicator of demand were still dominant. The fact that this trend is continuing unabated into the winter indicates continued strong demand into next year. 

That being said, if the housing market turns, immediate sales will be one of the first places we’ll be able to see it. For example, if buyers are cooled by higher interest rates, the first thing that’s going to happen is they’re not going to make those immediate offers. 

Since it will take several months for rates to rise high enough to discourage buyers, we can expect immediate sales and all the related buyer competition characteristics (multiple offers, over-bidding) to remain common well into at least the second quarter of 2022.

Another signal pointing to continued elevated demand is the percent of homes on the market taking price reductions. In a normal market, we tend to see about 30% to 35% of sellers initially over-price their homes and eventually reduce the price to attract buyers. 

Right now price reductions are at 27%, and starting to tick down again after the fall peak in September. You can see that it’s higher than last year, but still lower than normal. Home sellers with properties on the market now know that the demand is there, and they don’t have to cut their prices. This tells us that the transactions for these homes that happen in the first quarter will still be priced very strongly.

2. Low inventory will continue to be a major issue.

Unfortunately for all these eager homebuyers, inventory continues to be at record low levels. We are currently at just over 350,000 single-family homes on the market. You can see from this chart that inventory has been on a downward trajectory for years, and recent strong demand has only accelerated this trend. You can also see that it’s normal for inventory to drop at this time of year, but it’s actually declining faster than I expected even a few weeks ago, which indicates that we’ll start 2022 with record- low levels of available inventory, even less than in 2021.

At this point, it looks like we’re going to end the year at just under 300,000 single-family homes for sale. If we’re lucky, we’ll start getting greater inventory in the housing market in February, then it’ll start climbing and be at a more normal curve next year, but we’re still miles away from a normal level, with no indication that we’ll return to our usual million homes anytime soon.

That being said, keep an eye on rising interest rates. If you look at the 2018 line in the inventory chart, you’ll see that inventory hadn’t yet declined by this time of year in 2018. Why? Because interest rates rose from around 3.9% to 4.9% between April and December, and that cooled the market enough that a little bit of inventory built up during 2018. You can see that 2019 was the only recent year that started with more inventory than the year before.

3. Home prices will remain high into 2022.

With demand showing no signs of cooling and record-low inventory, I expect home prices to remain high into next year. The median home price for single family homes this week is $375,000, which is about 10% higher than last year and where we are likely to end the year.

As we look towards 2022, all the leading indicators show tight inventory and strong demand keeping prices high — a strong seller’s market. If interest rates start rising, and we’re seeing inflation or other economic challenges, this could have a cooling effect on the market. These variables aren’t in the data yet, but they’re looming. We’ll want to keep watching the data closely to spot any major shifts.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

1514 NW Parker AVE, Waldport, OR 

Price: $75,000    0.14 Acres

Build your beach home on this fantastic lot located in Bayshore Beach Club in Waldport. Two blocks from the beach & club house. Amenities include club house, swimming pool, recreation room, meeting room, fitness room, tennis court and playground...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

Inflation continues to rear it's ugly head and with sustained inflation comes many painful economic issues for the citizens of our country.  Long term and uncontrolled inflation is one of the worst things that can happen to an economy and it hurts everyone.  I am asked frequently, "what does this mean for the national housing market?" Here is an article that I found in "Realtor.com" that does a good job of explaining inflation issues for the national housing market.

Inflation is a red-hot topic right now, and for good reason: In October, the annual inflation rate rose to an alarming 6.2%. That’s the highest it’s hit since November 1990, over 30 years ago, and a steep uptick from the manageable 2% that we’ve enjoyed for the past five years.

Translated to your daily life, this means Americans are shelling out more money for just about everything, from gas for your tank to heating bills to groceries and more. Our money simply doesn’t go as far as it used to.

So what’s the impact of inflation on housing?

Not surprisingly, inflation is influencing the real estate market in a big way, too. According to a Stanford University study, residential real estate has historically been an “investment safe-haven” during inflationary periods. Researchers found that during the 1970s (another moment of surging inflation), home prices rose relative to the size of the economy. This was good news for homeowners and real estate investors, since it meant that their home’s rising value helped offset rising prices elsewhere.

If you were shopping for a new home, though, this was a major challenge—and the same may hold true today.

What is inflation, and what causes it?

Simply put, inflation is when the prices of goods and services rise, thereby decreasing the purchasing power of the money you have to spend. Right now, several factors are contributing to inflation. First, consider the impact of government aid during the COVID-19 pandemic.

“As the government supported American households and provided [financial assistance], that gave many people more purchasing power,” explains George Ratiu, manager of economic research at Realtor.com®. “But a lot of Americans could work remotely and didn’t need to spend on, say, takeout lunches at the office, commuting and parking, dry cleaning, and other expenses. So companies on the supply side of those goods and services needed to charge more since they had fewer customers.”

As the number of transactions dropped, business owners raised their prices to stay afloat to make ends meet. (This often happens during recessionary times.)

Another factor contributing to inflation today: the supply chain issues occurring around the globe. Manufacturing was disrupted due to the pandemic, as illness and lockdowns slowed business, and there continue to be significant problems with goods getting into ports. (The Los Angeles/Long Beach area is one oft-cited bottleneck, with so many products typically arriving there from Asia.) Trucking those items across America once they arrive has also been challenging since there are fewer people available to drive the 16-wheelers to get goods where they need to go.

“There is worker shortage. Companies are raising wages to address that, but also consequently raising prices,” says Lawrence Yun, chief economist at the National Association of Realtors®. So if a bathroom sink might normally sell for $100, when you have to pay your workers and drivers more, the manufacturer must raise prices to offset that.

How does inflation affect home prices?

Now that you understand why prices are painfully high, let’s consider how that affects home prices. Even before inflation started rising, the housing market has been tight, with prices and rents climbing. Brace yourself, because things are not heading in a more affordable direction anytime soon.

“Inflation exacerbates the housing demand-supply imbalance, which means even higher prices for housing,” explains Lawrence J. White, the Robert Kavesh Professor of Economics at New York University’s Leonard N. Stern School of Business. “People think, ‘I need a hedge against inflation, housing has traditionally been a long-lived, durable asset.’”

The more people jump into the housing market, the greater the demand, the lower the supply, and the higher the prices go. The air is already thin on this front, with home sales and median rents reaching record highs this year, says Ratiu.

White also says there’s a serious zoning construction problem throughout much of the U.S., making the market even tougher for people looking to buy and rent.

“Land use restrictions, whether the size of a lot that a single-family house can go on or for a multifamily rental or condo property, is further restricting supply,” White explains.

What does inflation mean to homebuyers and sellers?

There’s no doubt that strong inflation will affect homebuyers’ budgets. The majority of buyers tend to finance a home purchase, which means they need a down payment and then must apply for a mortgage.

“Assuming they have a down payment, the mortgage payment will be a main determinant of what they can afford,” says Ratiu. “Mortgage rates tend to move in tandem with inflation, so mortgage rates will rise. The Fed has been a principal purchaser of mortgage-backed securities, but that will wind down by April 2022, driving rates higher. By late November, Freddie Mac rates went up to 3.10%, meaning that today’s buyers of a median-priced home will spend $160 a month more on their mortgage payment, which is a noticeable impact.”

For home sellers, the current tight market can be a good time to reap a profit—provided that postsale, they can find somewhere affordable to move. If the house you bought for $200,000 is now worth $300,000, that’s terrific. But if you sell and want to stay in the area, can you afford to buy what you want, or has inflation decimated your spending power? It’s an important question to ask.

How long will inflation last?

As inflation eats away at homebuyers’ spending power, many may be wondering: When will things get better?

“My prediction would be most places will see higher prices for housing as we untangle supply chain issues,” says White. “We are also reconciling with trends in consumption going back 50 years. People had been shifting from spending on goods to spending on experiences—going to the gym, dining out, taking a cruise. COVID-19 totally reversed that. Who wants to go to a restaurant or movie during a pandemic?

“But if things shift and we do spend more on services, that will help untangle supply chain issues,” says White. “There will be less demand for goods at bottlenecked ports.”

Once that happens, inflation should abate and allow homebuyers to return to their pre-pandemic budget.

The other big question that will affect the real estate market is where mortgage interest rates go next. A lot of that depends on what steps the Federal Reserve takes.

“The 30-year mortgage rate could rise to 3.7% by the end of next year from the current 3%,” says Yun. As a result, some buyers will no longer qualify for mortgages at higher interest rates. They will have to either take their spend down a notch or sit on the sidelines for a while as the market becomes too pricey. For homebuyers who have extra cash on hand, this will be a good time to jump into the market as they look to hedge against inflation during this moment when money isn’t going as far as it used to.

While inflation will favor home sellers and investors in the near term, the hope is that after 2022, inflation will be reined in. Then, the tide would turn in favor of homebuyers, making it easier to buy a home in the new year.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

2548 35th Place, Springfield, OR 

Price: $439,000    Beds: 3    Baths: 2.0    Sq Ft: 1524

Beautifully updated home in desirable Hayden Bridge area. Almost everything is brand new inside! New kitchen cabinets w/granite counters & breakfast nook, beautiful tile flooring in entry & bathrooms. New Carpet and paint inside and out. Seller spar...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

It's that exciting time of year again as we get ready for Christmas and everything that it means!  For many of us, the tradition of Christmas means decorating our homes both on the inside and out. One of the little know advantages of decorating our homes is the fact that we get to look more closely at parts of our home that we typically are not in touch with.  The following article talks about how you can inspect portions of your home as you decorate and uncover some issues or potential home issues.

Holiday decorating is in full swing, and as homeowners deck their halls, they may want to also use the festivities as an excuse to inspect several out-of-sight ares of their home.

Groundworks, a basement and foundations firm, offers up tips to spot needed repairs in the home while also hanging your holiday decor. Here are the top seven home issues they suggest looking for:

Electrical outlets 

Is a plug no longer working? Outdoor outlets are exposed to the elements and can become damaged. A ground fault circuit interrupter may have been tripped. Take precautions if you find any loose connections or exposed wiring.

Circuit breakers

While installing an outdoor light display, homeowners may discover problems with the home’s electrical system or circuit breaker box. “Some homeowners may only check out their electrical panel if they accidentally throw a breaker,” GroundWorks says. “However, proactive homeowners may want to look at their breaker box before installing holiday lights. You may discover that you need a diagram of which circuits are connected to which outlets or appliances. This can help you avoid overloading a single circuit.” LED Christmas lights tend to use less electricity and may help avoid blown fuses.

Overgrown shrubs

Plants should be about two feet from your house to protect your foundation. Tend to any overgrown plants while hanging holiday lights, or make a note on your calendar to do so in March or April. “If you have overgrown evergreens, you can also give them a light trim around the holidays and use that greenery for home decorations,” Groundworks says.

The roof or gutters

If you’re on a ladder to hang Christmas lights, be sure to take a look at the roof and gutters. Are the gutters clogged? Is rainwater pooling right next to the foundation? Are any shingles missing on your roof? Spot existing damage and avoid creating more problems by using light clips on the edge of your gutter while hanging Christmas lights, GroundWorks suggests.

Chimney

Take a close look at the chimney. Does it look like it’s tilting or starting to separate from the house? This could be a sign of foundation issues. To test it, Groundworks suggests, hold a string with a small weight from the top edge of the house. The string will always fall straight down. Compare that to the structure to determine whether there is a tilt to any portion of the home, including the chimney. A tilting chimney may show a visible gap where it is pulling away from the remainder of the house, Groundworks says. A foundation expert may need to identify the problems and explore the best ways to fix them.

Pest damage

You may also spot damage from pests. “Along the eaves, you could find woodpecker holes or wasp nests,” Groundworks says. “Where the house meets the ground, you could find signs of termites or ants.”

Siding damage or wood rot

Look for any signs of deterioration, damage, or wood rot on your siding or window frames. If you find any, your home could be vulnerable to water damage. “In the warmer months, your home could be unprotected from heavy rains, resulting in flooding or moisture in your basement or crawl space,” Groundworks warns. “As the weather turns cold, the damaged siding could allow water inside the walls, cracking the concrete when it freezes.”

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

2947 Dry Creek Rd, Eugene, OR 

Price: $465,000    Beds: 3    Baths: 2.0    Sq Ft: 1609

Gorgeous and completely updated one level home. Granite counters, stainless appliances and very open kitchen family room. Large landscaped and fenced backyard with 400 sq foot + shop storage building. Beautiful fully covered patio, large RV parking...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

If you are considering building a new home or even a remodel of your existing home, it can be challenging right now. Supply chain disruptions have created huge shortgages of building supplies such as tile, paint, hardwood flooring, lighting fixtures, plumbing fixtures, appliances and much more.  Don't expect that you won't deal with many long delays and in some cases the inablity to get the products you want.  I know of remodels that should have taken 2-3 months that are taking over a year to complete.  Also, look for prices on all of these building supplies to continue to escalate as scarcity drives prices higher.  All of this is putting pressure on an already highly inflated new home industry.  It's a much different world for new construction that we live in today and it has all happened within the last year.  Here is an article from "Realtor.com" that speaks to this issue.

New home construction ebbed in October, but permitting activity continued at a steady clip, pointing to the challenges builders are facing in starting and completing projects.

U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.52 million in October, representing a 0.7% decrease from the previous month, the U.S. Census Bureau reported Wednesday. Compared with October 2020, housing starts were up 0.4%.

The pace of permitting for new housing units increased in October, however. Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.65 million, up 4% from September and 3.4% from a year ago. Economists polled by MarketWatch had expected housing starts to occur at a median pace of 1.63 million and building permits to come in at a median pace of 1.58 million.

What happened

The overall pace of housing projects being completed remained unchanged between September and October, but the rate at which builders finished work on single-family homes declined roughly 1.7% over that period.

Every region nationally saw an increase in permitting activity, led by an 8.3% uptick in the Midwest. Permits rose for all building types as well. Single-family permits increased 2.7%, whereas permits for buildings with two to four units lifted 8.2% between September and October. Multifamily permits increased 6.5% on a monthly basis.

The drop in housing starts was caused by a 3.9% decline in new construction for single-family homes. Multifamily starts actually rose 6.8% between September and October. Regionally, every part of the country recorded a downturn in housing starts except for the Midwest.

The big picture

The mixed message from the Census Bureau’s new home construction report points to the supply chain-related challenges home builders are facing.

Building materials are still harder to come by than they were before the COVID-19 pandemic, and labor shortages continue to plague the construction sector. Both these factors have hampered home builders’ ability to scale up the pace of construction.

That said, the demand for new homes remains elevated. “September new home sales figures were strong which reflects market optimism, and indicates that once materials and labor become readily available we are likely to see a similar surge in starts,” said Kelly Mangold, a principal with RCLCO Real Estate Consulting.

What they’re saying

“In September, homes under construction hit a 47-year high. With builders’ resources so stretched, starting new constructions is being held back,” Benjamin Reitzes, macro strategist at BMO Capital Markets said in a note, citing research from his colleague, BMO senior economist Sal Guatieri.

“With demand still strong and inventories low, the backdrop for building activity should improve as supply constraints gradually ease,” Rubeela Farooqi, chief U.S. economist for High Frequency Economics, said in a research note.

“With one-in-four homeowners reporting that they aren’t selling this year because they can’t find a next home to buy in their price range, existing homeowners are facing a bit of a catch-22. For many markets, new construction is the solution,” said Danielle Hale, chief economist at Realtor.com.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

2548 35th Place, Springfield, OR 

Price: $439,000    Beds: 3    Baths: 2.0    Sq Ft: 1524

Beautifully updated home in desirable Hayden Bridge area. Almost everything is brand new inside! New kitchen cabinets w/granite counters & breakfast nook, beautiful tile flooring in entry & bathrooms. New Carpet and paint inside and out. Seller spar...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

The Real Estate market in the Eugene and Springfield area seems to be slowing a bit.  I am not sure if this is purely seasonal or if the higher prices paid for homes and the lack of inventory of homes for sale is causing most of the slow down.  Currently there is .9 months of home inventory on the market in Lane County.  A healthy Real Estate market will have around 4-6 months of inventory.  With inflation hitting hard over the past several months and reaching 6.2% last month, it could eventually hit mortgage interest rates hard as the Fed will begin raising rates in an attempt to curb inflation.  At this time, mortgage interest rates remain extremely attractive.  If you are sitting on the fence about purchasing or selling a home, my suggestion is to take advantage of this current market.  The market that we have down the road may look quite different. Here are the home sales numbers in Lane County for October of 2021.

New listings (482) decreased 5.7% from the 511 listed in October 2020, and decreased 3.2% from the 498 listed in September 2021.

Pending sales (461) decreased 5.9% from the 490 offers accepted in October 2020, and increased 1.8% from the 453 offers accepted in September 2021.

Closed sales (455) decreased 6.0% from the 484 closings in October 2020, and decreased 0.9% from the 459 closings in September 2021.

Inventory and Market Time

Inventory decreased to 0.9 months in October. Total market time increased to 22 days.

Year-To-Date Summary

Comparing the first ten months of 2021 to the same period in 2020, new listings (5,245) increased 4.7%, pending sales (4,506) increased 4.2%, and closed sales (4,259) increased 7.0%.

Average and Median Sale Prices

Comparing 2021 to 2020 through October, the average sale price has increased 19.3% from $361,700 to $431,400. In the same comparison, the median sale price has increased 18.2% from $334,300 to $395,000.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

1609 NW Oceanic Loop, Waldport, OR 

Price: $449,900    Beds: 2    Baths: 2.0    Sq Ft: 1228

BEAUTIFUL BEACH HOUSE located in Bayshore Beach Club in Waldport. One short block from the beach & club house. Decks w/ wind protection glass panels. Open floor plan w/ sliding doors in the living room, kitchen & primary bedroom. Den can be used as...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

Mortgage interest rates have declined slightly, but this could be one of the last drops in rates we see for a while.  With inflation raging in our country and now with the passage of the infrastructure bill by Congress that will fuel further inflation, rates may begin to rise soon in an an attempt to curb the inflation rise. Inflation at levels this country has never seen is on the horizon due to reckless spending by the governement and poor money management policy.  Yes, this is soon to have a huge impact on homebuyers. As of right now, mortgage rates have declined some and this offers what many think will be your last shot at these incredible rates.  Here is an article that speaks to our current mortgage rate situation.

Offering slight relief to home buyers this week, the 30-year fixed-rate mortgage fell to a 3.09% average. But rates may rise again soon.

Housing analysts largely expect mortgage rates to increase in the following months due to the Federal Reserve’s announcement this week that it will slowly reduce its monthly bond purchases.

“While mortgage rates fell after several weeks on the rise, we expect future upticks due to strong economic data and as the Federal Reserve pulls back on its stimulus,” says Sam Khater, Freddie Mac’s chief economist. “That said, the housing market remains favorable for consumers, as rates remain below pre-pandemic levels and continue to support sustainable purchase and refinance opportunities.”

The National Association of REALTORS® forecasts the 30-year fixed-rate mortgage to average 3.5% by the second quarter of 2022.

How Will Higher Mortgage Rates Impact Home Buying?

Freddie Initiative Adds Rent Payments to Credit Reports

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 4:

• 30-year fixed-rate mortgages: averaged 3.09%, with an average 0.7 points, falling from last week’s 3.14% average. Last year at this time, 30-year rates averaged 2.78%.
• 15-year fixed-rate mortgages: averaged 2.35%, with an average 0.6 points, decreasing from last week’s 2.37% average. A year ago, 15-year rates averaged 2.32%.
• 5-year Treasury-indexed hybrid adjustable-rate mortgages: averaged 2.54%, with an average 0.3 points, dropping from last week’s 2.56% average. A year ago, 5-year ARMs averaged 2.89%.

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!

2947 Dry Creek Rd, Eugene, OR 

Price: $465,000    Beds: 3    Baths: 2.0    Sq Ft: 1609

Gorgeous and completely updated one level home. Granite counters, stainless appliances and very open kitchen family room. Large landscaped and fenced backyard with 400 sq foot + shop storage building. Beautiful fully covered patio, large RV parking...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

There certainly is no stopping the escalating home prices in the Eugene and Springfield area.  Even though the numbers of home buyers may be decreasing slightly, a shortage of homes for sale in our area is keeping home prices high and even increasing. The market of $400,000 homes and below remains tough and bidding wars may still take place.  Nationwide, this trend seems to be taking place as well.  How long this market will continue is anyones guess at this time.  If inflation continues to roar and interest rates rise as a result, the current market we are experiencing could come to a screeching halt.  Here is an article from "Realtor.com" that addresses to national housing market trends.

The numbers: Home prices maintain record levels

The pace of home-price growth slowed slightly in August, though buying a home remained more expensive.

The latest edition of the S&P CoreLogic Case-Shiller Home Price Index showed that home prices increased nationally 19.8% from a year ago in August, roughly in line with the previous month’s increase. The separate 20-city index, which measures price appreciation among a group of major metropolitan areas across the country, notched a 19.7% year-over-year gain, down from a revised 20% annual gain the month before.

“Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels,” Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, said in the report.

What happened

The top two cities to see the largest annual gains remained the same—Phoenix (33.3%) and San Diego (26.2%). But Tampa, Fla., edged out cities like Dallas and Seattle to record the third-largest gain in home prices nationwide, with a 25.9% increase.

All 20 of the major cities that the index tracks saw increases in home prices in August, but in most cases it was at a slower pace than in July.

The big picture

A separate report from the Federal Housing Finance Agency found that prices had risen 18.5% between August 2020 and August 2021. Regionally, there were significant variations in the direction of home prices.

The FHFA reported that home prices decreased very slightly in New England on a monthly basis between July and August, whereas they rose by nearly 2% over that same time frame in the South Atlantic region, which includes Delaware, Maryland, Virginia, West Virginia, North Carolina, South Carolina, Georgia and Florida.

“Annual house price gains remained extremely high in August but the pace of month-over-month gains continues to decelerate,” Lynn Fisher, the deputy director of the division of research and statistics at the FHFA, said in the report. “This does not mean house prices are at risk of declining—far from it, they continue to climb at a double-digit pace in all regions—but it does suggest we may have seen the peak in annual gains for the time being.”

What they’re saying

“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply. The average mortgage rate for a 30-year fixed-rate loan rose 10 basis points from 2.77% to 2.87% in August and has breached 3.0% with no sign of slowing since then, limiting some buyers’ ability to push home prices higher.

Furthermore, the availability of homes for sale remains low as new construction climbs out of a decade-long deficit and the inventory of existing home listings continues to fall short from 2020 levels,” said Danielle Hale, chief economist at Realtor.com.

“Persistently strong demand among traditional homebuyers has been amplified by an increase in demand among investors this summer. Together, demand pressures continue to drive home-price growth higher, despite some early signs of buyer fatigue and slight improvements in the availability of for-sale homes,” said CoreLogic deputy chief economist Selma Hepp.

“And while strong home-price appreciation rates are narrowing the pool of buyers, particularly first-time buyers, the depth of the supply and demand imbalance and robust demand among higher-income earners will continue to push prices higher,” she added.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

1609 NW Oceanic Loop, Waldport, OR 

Price: $449,900    Beds: 2    Baths: 2.0    Sq Ft: 1228

BEAUTIFUL BEACH HOUSE located in Bayshore Beach Club in Waldport. One short block from the beach & club house. Decks w/ wind protection glass panels. Open floor plan w/ sliding doors in the living room, kitchen & primary bedroom. Den can be used as...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

The supply of homes for sale remains extremely low in the Eugene and Springfield market area.  This continues to drive home prices higher and frustrate home buyers.  In our area the difficulty of building affordable new homes isn't getting any easier.  The cost of building supplies, lumber and land are making it near impossible to provide affordable housing in our local market.  The combination of this with a low supply of existing homes is making home purchases difficult, especially for first time home buyers.  This situation is not just unique to our local market, but is taking place nation wide. The following is an article from "Realtor.com" that speaks to this situation.

The numbers: New construction slows down

U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.56 million in September, representing a 1.6% decrease from the previous month, the U.S. Census Bureau reported Tuesday. Compared with September 2020, housing starts were up 7.4%.

The pace of permitting for new housing units also dropped in September. Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.59 million, down 7.7% from August, in line with the rate of permitting from a year ago.

Economists polled by MarketWatch had expected housing starts to occur at a pace of 1.61 million and building permits to come in at a pace of 1.67 million.

The drop in permits was driven mainly by a decrease in multifamily housing units, though fewer single-family homes were permitted as well. Multifamily permits fell 21% on a monthly basis, while single-family permits decreased nearly 1%. The number of permits issued in September was the lowest it has been since a year ago, and all regions saw a downturn in permitting activity except for the Midwest.

Notably, there was a 22% increase in permits for buildings with between two and four housing units, such as duplexes and triplexes.

New construction on multifamily buildings also decreased in September, with a 5% downturn, though single-family starts remained unchanged from the previous month. It was the slowest pace for housing starts since April, driven by downturns in the Northeast and South.

The big picture

To a large extent, the month’s decline in housing starts and building permits could be a reflection of the ongoing operational hurdles construction firms are facing.

“New home starts declined in September after an initial rebound in August, amid continued concerns about delivery timelines,” said Kelly Mangold, a principal with RCLCO Real Estate Consulting. Shortages of building materials and labor mean that home builders are having a tough time completing projects as quickly as they had in the past. The number of housing projects completed in September fell nearly 5% from the previous month, slipping to the lowest level in over a year.

But another factor driving the slowdown in new construction is almost certainly the slight pullback in demand in the housing market today. “Demand has fallen back to its pre-COVID level, so new construction activity has softened,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note. “It remains elevated compared to the recent pace of new home sales because inventory is still low, and home builders don’t want to leave money on the table.”

He adds, though, that the recent recovery in the volume of mortgage applications for loans used to purchase homes could be the prelude to a rebound in home sales. That would lead to an uptick in construction, Shepherdson suggested.

What they’re saying

“With the supply of properties constrained in the existing home market and underlying housing demand remaining sturdy despite softening from its torrid turn-of the-year state, new residential construction has been trending up,” Michael Gregory, deputy chief economist for BMO Capital Markets, said in a research note, adding “that, once started, it’s now taking much longer to complete construction owing to supply bottlenecks and labor shortages.”

“The transition to remote work that began during the pandemic is maturing into the preferred long-term employment arrangement for the majority of Americans. This shift is also changing homebuyer preferences, with larger homes, quieter suburban neighborhoods, and access to the outdoors high on the list of must-haves. For builders, the biggest challenge remains building enough homes with these features at affordable prices,” noted George Ratiu, manager of economic research at Realtor.com.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

1616 Fetters Lp, Eugene, OR 

Price: $245,000    Beds: 2    Baths: 1.5    Sq Ft: 1118

Well maintained with newer carpet, interior paint and vinyl flooring. Sliding door to nice rear patio. Master has 3 closets! Two exterior storage areas in the front and back. HOA includes trash, landscaping, common areas, pool and covered carport. N...View this property >> 

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Good Monday Morning!

There has not been much change in the Real Estate market in the Eugene and Springfiled area over the past month.  The inventory of homes for sale has increased very slightly and home prices remained fairly steady, although they have increased significantly over the year.  As we go into Fall, I would look for the inventory of homes for sale to continue increasing.  My guess is that home prices will flatten out and could even decline in some areas and price ranges. Much of what takes place in our local housing market will depend upon mortgage interest rates and the overall economy.  Here are the numbers for home sales in Lane county for September of 2021.

Residential Highlights

New listings (498) increased 5.1% from the 474 listed in September 2020, and decreased 17.0% from the 600 listed in August 2021.

Pending sales (453) increased 1.3% from the 447 offers accepted in September 2020, and decreased 17.5% from the 549 offers accepted in August 2021.

Closed sales (459) increased 3.4% from the 444 closings in September 2020, and decreased 5.6% from the 486 closings in August 2021.

Inventory and Market Time

Inventory increased to 1.0 months in September. Total market time increased to 19 days.

Year-To-Date Summary

Comparing the first nine months of 2021 to the same period in 2020, new listings (4,751) increased 5.9%, pending sales (4,045) increased 4.7%, and closed sales (3,788) increased 9.0%.

Average and Median Sale Prices

Comparing 2021 to 2020 through September, the average sale price has increased 19.8% from $357,800 to $428,600. In the same comparison, the median sale price has increased 19.5% from $330,000 to $394,400.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

4927 Fox Hollow Rd, Eugene, OR 

Price: $439,000    Beds: 3    Baths: 2.0    Sq Ft: 1366

Updated one level home in desirable East Eugene neighborhood. Beautiful views out of back of home into private wooded backyard. Large and open living room connected to family/dining room area. Large laundry room with plenty of storage. Home security...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

Just when we thought the super low mortgage interest rates had left us behind, the rates decided to take another drop. It is a pleasant suprise, but don't get too excited about these super low rates hanging in there for the long haul.  If you are sitting on the fence about a home purchase or a refinance, it might be wise to act quickly.  The following is and update on the current mortgage rate market from "Realtor.com".

Mortgage rates retreated below 3% this week, but the factors that pushed them higher in previous weeks remains—all while Americans grow increasingly frustrated with the competitive housing market.

The 30-year fixed-rate mortgage averaged 2.99% for the week ending Oct. 7, down two basis points from the previous week, Freddie Mac reported Thursday. Last year, this mortgage product carried an average interest rate of 2.87%.

The 15-year fixed-rate mortgage fell five basis points to an average of 2.23%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage rose by four basis point to an average of 2.52%.

“Mortgage rates continue to hover at around 3% again this week due to rising economic and financial market uncertainties,” Sam Khater, Freddie Mac’s chief economist, said in the report. “Unfortunately, with the expectation that both mortgage rates and home prices will continue to rise, competition remains high and housing affordability is declining.”

All that competition continues to weigh on consumers, causing them to sour on the housing market. The results of a new survey from Fannie Mae released Thursday showed that roughly two-thirds of consumers believe now is a bad time to buy a home, and most people think it’s a good time to sell. Over half of the survey takers said that home prices will either go up or stay the same over the next 12 months.

“In our view, other housing market fundamentals remain supportive of further home price appreciation—including low levels of inventory and low interest rate,” Doug Duncan, chief economist at Fannie Mae, said in the report.

The Fannie Mae survey also showed, though, that a growing number of people are likely in for a bad surprise when it comes to mortgage rates. The share of people who expect interest rates to drop over the next year went up slightly from 6% to 8%, but most economists expect rates to increase over that time frame.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

4927 Fox Hollow Rd, Eugene, OR 

Price: $439,000    Beds: 3    Baths: 2.0    Sq Ft: 1366

Updated one level home in desirable East Eugene neighborhood. Beautiful views out of back of home into private wooded backyard. Large and open living room connected to family/dining room area. Large laundry room with plenty of storage. Home security...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!