Wednesday, January 20, 2010

Don't we all wish we had a crystal ball right now. But who's got it? During a recent interview on MSNBC, Robert Schiller of Case-
Schiller said this real estate market is not behaving similar to any past market that we've seen. now what???
So here's what we know:
We have record low interest rates.....but not forever.
The Feds have stepped up their purchase of Mortgage Backed Securities. In essence, they are the money behind the mortgages being issued. Last week they purchased $14B in MBS, whereas the most recent prior purchases were around $9.5B. But this pot of money will not last much longer.
The Fed now has $113B left of their $1.25T allotted commitment, with the buying program set to wrap up on March 31st. The Fed's purchases have helped home loan rates stay historically low - and although there has been some buzz about an extension of the program, it seems unlikely that will come to fruition.
When the Fed purchases stop, home loan rates will be very susceptible to moving higher - so if you or someone you know is thinking of selling/purchasing or refinancing.....I can't make it any clearer than to say...."Get the Lead Out!" Rumor has it that interest could bounce at least a point to 3 points higher when the Fed's stop providing the mortgage money.
Well so much for Amy's crystal ball. I wish we could see further into the future to know what we're facing....but for now we can only see out about as far as the Spring.
So, don't hesitate to call us if you need help making sense of this, or if you need a referral to a lender. We're here to help with all your real estate needs.
Till next time,
Amy :)

Thursday, January 14, 2010


Happy New Year Friends. Were you as glad as I was when 2009 was over? Like all good Americans, though, we always take an opportunity in the New Year to look forward with renewed hope and expectation. And that's the position I'm taking this year.

But before we look forward, lets take a quick review of real estate in the Willamette Valley for 2009.

One bit of good news is that sales basically stabilized from 2008 to 2009. There were 5954 sales in 2008 and 5869 in 2009. That represents a drop of only -1.43%....really very small, all things considered.

Inventory also seems to be stabilizing, although it had a larger % change at -8.64%. There were 6760 listings in 2008 and 6176 in 2009....a slight float down.

But our average sales price has continued to move in the wrong direction. If you were selling in 2008, the average homes was sold at $240,780. In 2009 that price moved to $214,219. OUCH! Them there's some real hurtin' dollars at an approximate overall drop of 10%!

That's very reflective of what happens, though, when there's a First Time Homebuyer Tax Credit. Hey, guess what? The First Time Homebuyers came out and bought! So that may be more reflective of a market that has 50% of the sales attributed to those buyers.

Hardest hit for price drops were Keizer (12%), Northeast Salem (10%), Southeast Salem (12%), and South Salem (10%).

On the upside....Interest is phenomenal. Whether you're buying or refinancing, there couldn't be a better time, as interest rates hover around the 5% mark (+/-). And it is expected to stay low at least for the better part of 2010.

First Time Homebuyers got a little bonus time toward qualifying for the $8000 First Time Homebuyer Tax Credit. But they must have their homes under contract by April 30, 2010 and closed by June 30, 2010.

During the first program, we saw a lot of Buyers procrastinating until October (with a deadline of 11/30/2009). Encourage your friends and family - who want to take advantage of this program NOT to wait. Those buyers who did, ended up competing for homes -and probably paying a higher price than if they'd have come in earlier.

Move-up Buyers also got a little $6500 bonus. Main critieria is that you have lived in your primary residence for 5 years and are moving up. What a deal!

As always, please call us if you need a referral to a Mortgage Professional.

Well that's it.....2009 in review. Thank Heaven.

As I look back, I'm reminded that what's important, bottom-line, is our family, our friends, our health, and knowing that Annie was right....."The Sun Will Come Out Tomorrow!"

See you soon!

Tuesday, January 5, 2010

It's A NEW YEAR in Real Estate!

Happy New Year! It’s our hope at the McLeod Group that you had a wonderful Christmas and New Year’s holiday with your family and friends.

The McLeod Group is looking forward to a great 2010. The “Experts” tell us the recession ended in the Fall of 2009…..and that is great news. As a leading indicator, we’re looking forward to what that actually means in the real estate market.

Right now there are several positive signs.

First, we have the benefit of the First Time Homebuyer Tax Credit. The credit has been extended to homes put under contract as of April 30, 2010. As we reviewed our statistics for December, we noticed the greatest activity is still in the under $225k categories.

Second, interest is amazingly low. I know for some of you, a 5ish interest rate almost seems normal. But for those of us with a few more years of wear and tear – 5ish is LOW! We can give credit to the Fed’s for helping out by buying Mortgage Backed Securities. We’re expecting to see those rates last into the summer.

Now for a few challenges……

The job market is still dicey. Here in Salem the concern is over the effects of Measures 66 and 67 – whichever way the vote goes.

We’re also keeping an eye on the “shadow inventory” of distressed properties held by the banks. Distressed properties are those homes that are behind in payments at least two months, but on whom the banks have not yet filed a foreclosure notice. Word on the street is that the number is about 15 MILLION nationwide…..and that the banks may begin releasing them to the market in the early summer. That could have a dramatic effect on home values this year.

So what does this all mean for you and I?

Most of us have lost any memory of past real estate markets. But looking back can help us put this market back into some perspective.

We’ve entered a time that forces us to see our houses first as a home. They are no longer the ATM machine we were used to. So finding value in the benefits of homeownership will come from things other than a continuous cash flow – like privacy, quiet enjoyment and building memories with our family.

We’ve also entered a time when our homes will once again appreciate at more normal percentages; 3 – 4% is a more likely reality….once we hit bottom.

We are seeing an increase in lenders expecting sellers to provide a home that is pest free, dry rot free and safe. Selling “As Is” has no meaning to a lender. Pragmatically, if we want their money, we have to dance to their tune.

Lastly, change has become the norm in the real estate market. Nearly weekly there are new requirements, new advisories, new rules. Keeping an open mind and a willingness to be flexible will make the navigation of this real estate market that much less stressful.

Please stay tuned for additional posts as our team makes an effort to keep you up on the new changes in the real estate market.

If you have any questions, don’t hesitate to call or email us. We’re here for any real estate question you may have.

Wishing you and yours a very Happy New Year!