Credit Score Requirements Lower as Interest Rates Creep Higher!

Hi Friends!

Now is definitely the time to take advantage of the still historically low interest rates before their continue their upward trend!  

Take a look at this graphic -- it's clear that interest rates are heading upward.  

If you or someone you know is thinking of making their first, or next, move - please let us know how we can help!  

~Amy
Source: KCMBlog.com

Why You Should Stop Renting & Buy Today!

Hi Friends!

So many out there, especially in our younger generations, are wondering if now is a good time or not to make that first purchase rather than renting.  Interest rates, property taxes, etc -- they're all things people have to take into consideration.

But take a look at this article to help dispel a few of those concerns: Why You Should Stop Renting & Buy Today!

And if you, or someone you know, is ready to take that next step -- please don't hesitate to call!  Our full service team is ready to help you navigate this path!

~Amy

MORE MONTH THAN MONEY?

Handling the Stress of an Unaffordable Mortgage Payment

Whenever I research the latest foreclosure and distressed property statistics, the sheer number of Americans facing the stress of losing their homes amazes me. It is my goal to help as many homeowners I can either stay in their homes or relieve the burden of their mortgages. Knowing that there are so many that need my help is a driving force for me to continue doing what I do.

In fact, I just released another report that I’ve made available on my website today. It explains the CDPE designation and lists 10 options that homeowners can take advantage of to relieve the stress that comes with owing their mortgage lenders more money than they can afford to pay. You can find it at www.amyhelps.info.

The report also draws a contrast between short sales and foreclosures. Unfortunately, there’s a growing trend of “strategic defaulters” who think it’s smart to let their home go into foreclosure. As any one who follows this blog knows, there is nothing strategic about foreclosure; it’s one of the most long-lasting, negative financial challenges you can go through.

I’m excited about acting as a resource for more homeowners who have questions about what they should do. As always, if you know homeowners who may need my help, have them contact me immediately! Together, we can put them back on the path to financial stability.

I'll admit it - I love everything about Easter!

I attribute much of this to my Lutheran background and all the beautiful events that we are reminded of during the Lenten season.

I love Ash Wednesday and the reminder of how much we need a savior.

I used (!) to love the 40 days of Lent, and keeping up with my Catholic friends who were "giving up" something for Lent. Chocolate was always the biggie among us. What were we thinking?!?

I love Palm Sunday and the pagentry of Christ riding triumphantly into the City. I love receiving my palm and putting it in our home behind the mirror. It reminds me all year long of Christ our King.

I love Holy Wednesday and thinking about Jesus praying in the Garden of Gethsemane. How many of us have let a friend down in a moment of need? And even so, our Savior shows grace, yet again, to his 3 friends who chose to nap while he needed their prayers.

I love Maunday Thursday, Christ's last meal with his dearest friends. What must they have talked about? What events of the last three years were they reliving? How did they encourage one another about the events that were to unfold? Was the heart of Judas racing? Did he have any second thoughts? I wonder on Maunday Thursday.

I love the austerity of Good Friday in our church . There's an absolutely barren alter; no flowers, no gold adornments, no choir. Just the cross draped in black cloth, a crown of thorns hanging from the center post. There is an erie silence that compells my prayers for forgiveness.

And finally Easter Sunday. Outside, the church cross is covered in bright flowers. Kids are running everywhere. Inside the sanctuary is filled with Easter Lillies and bouquets of every kind of white flower you could think of. The cross....oh the cross, is now gloriously adorned in the purest white stole.....lillies surrounding its base. Jesus is alive!

I love everything about Easter - especially Jesus.

Christ is Risen.......He is risen indeed.

Happy Easter.

"DON'T TAKE MY WORD FOR IT!"

Some weeks are just more challenging in real estate. Last week was one of those weeks for me!

We've been in this adjusting real estate market for nearly four years now, but all of a sudden I've had a rash of sellers who don't want to hear the realities of the market.

So here's the low-down!

Homes are selling! There seems to be a pervasive myth that homes aren't selling. Well, they are. But it might not be at the price you had in mind. So strap up if you need to sell.

And that's my next subject: the need to sell. This, ladies and gentlemen, is not the market of 2004, 2005, 2006 or even 2007. We will never see that again in our lifetime. What this market and this economy is requiring from all of us is a paradigm shift from our "wants" to our "needs," especially in real estate. If you don't NEED to sell, then don't! It's no fun having your house clean all the time, strangers walking through it and waiting for an offer that just won't come if you're over priced. Plus, you probably have neighbors that do NEED to sell. Excess inventory doesn't help anyone.

What will help all of us is if we can take a deep breath and accept our new reality. This market will not be turning around for a long time. When this down-turn began four years ago, I was accused of being "negative" because I suggested it wouldn't be over by next spring! Well here we are, 4 years later, and now I get emails that go something like this: "we wish we had listened to you two years ago about the housing market." Dang, I wish they had too.

And while I wish I could report to you that we are near the bottom, I can't. We are counseling our clients to look 10 - 15 years out as they consider their real estate options. As recently as March my viewpoint was backed up by the owner of RE/Max International when he stated in his address to the RE/Max International Convention, that "we aren't even half way through this cycle in the market."

Cue: Groan loudly. I know, I know. But wouldn't you really rather know so you can plan accordingly - or change your plans if you need to??? Isn't that what a real professional does for you, is show you what's coming so you can get a jump on it? Wait, let me guess.....you don't want to believe me again. Heck, I don't want to believe myself.

So since I know, there's a lot of knashing of teeth right now, I thought I'd give you a link from the Distressed News Service, so you don't have to take my word for it. Once you've read the article (clear to the end!), please feel free to call me with any questions. There are many opportunities in real estate......you just have to know where they've shifted too!

HOME PRICES TO DOUBLE DIP IN THE WEST

Ciao for Now!

What's Up Pussycat?

There's an old song from the 60's (I think....if my memory hasn't failed me!), and it seems to describe our current real estate market and the reporting that's being done on it lately.

"What's up Pussycat? Whoa, ah, whoa ah, Whoa."

My clients tell me often how confusing the market is right now; headlines saying sales are up, but there are "For Sale" signs everywhere, in every neighborhood.

Take a look at this recent article in the REALTOR magazine. It really explains what's happening in our marketplace, and from a source who would want to paint a rosie picture if they could.

Existing Home Sales Fall in February

There are many factors affecting the stabilization of the real estate market. According to Dave Leniger, Co-Founder of RE/Max International, we're in for a see-saw recovery; some periods up, followed by some periods down. And in his opinion, were not even half way through this declining market. (I know it's a downer, but how can you make good financial decisions if you don't know the truth????)

We're trying to keep up on all the variables affecting the market, so don't hesitate to call or email us to get the skinny, 'cause we most likely will be chasing this cat for a while.

Ciao for now.

Will You Shift Your American Dream?

Secretary of the Treasury, Timothy Geithner has said that the government played a role in bringing down the housing market. But what's really interesting is that the reform that's being proposed will require a "shift of what many believe is the American Dream."

Click on this link to read more:

Government Role in Bringing Down Housing Market

What are your thoughts? Do you think, as a homeowner or future homebuyer that you should be shifting your American Dream?

Loan Modifications Not Working - Surprise!

This comes as no surprise in our office that Loan Modifications have had an anemic impact on this market. There's lots of reasons; far too many for this blog report. But needless to say, short sales are another alternative. Please read the article, and feel free to call me for further details.

http://www.dsnews.com/articles/tarp-inspector-generals-report-says-hamp-is-failing-2011-01-26

For more information on real estate in the Salem, OR area, visit my website at www.amymcleod.net

WHAT? - 27.2% Drop in House Sales. Who Knew?

Don't fall over in shock. 27.2% drop in housing sales and me blogging twice in one week, unheard of! But such shocking news being blasted everywhere requires this response!

Let me just say this, "Who Knew?" And the answer is, we did.

I'm just going to tell you I need to blow off some steam after listening to all the news reports yesterday. These same "reporters" were telling everyone in April, May and June that sales had made record increases over the previous year. As they were speaking then, I was yelling at my TV, "the 1st Time Home Buyer Credit stupid!" But did anyone listen. No! Especially not sellers.

Sellers heard the news and assumed the market was back. And for a moment, for some, it was. Unfortunately when most of us have visions of the market being back, it's at pre-2007 crash levels. The reality was, reporting those increases "over the previous year" referred to a market that was already way down in 2009.

So where are we today? While 27.2% sounds awful, it is simply a reflection of the 1st Time Home Buyer Credit ending. It's a reflection of a real estate market that is trying to normalize after being tampered with - again. It's a reflection of a real estate market that is often quieter in July because of families finishing up sports programs and taking vacations. And it's a reflection of a real estate market that is going to continue to decline a bit, until we clear out the distressed property inventory and improve the job picture.

And where does this leave you my friend? If you're a buyer, buy! You have 4% interest rates, home values that have nearly rolled back to pre-2000 pricing and inventory abounds. We even found that buyers buying now may do better on pricing than the value of the $8,000 tax credit. So what are you waiting for???? There is one caveat to buying, though. Buy with plans to be content in your home for about 12 - 15 years. No more musical houses!

If you're a seller, sell quickly. This market is projected to continue it's decline through 2012. Time is your enemy. To my Boomer friends, consider moving up your retirement plans. This is going to be a long slow recovery. Losing another chunk of your housing value, and then trying to down size in 5 - 10 years might not be the best plan. Call for my insights. My honey and I have been having long discussions over this very topic. Do you really want to vacuum the 2400sqft house when you're 65 and 70? How 'bout the weed-picking on the 1/4 ac lot? Think about it!

Think about it, you say. Let's be honest, these are confusing times. Most of us have never lived through an economic period like this. So when you hear this kind of news, CALL and get some good interpretation, and most of all, context for it. Your situation may call for action, or it may call for you to sit still. Either way, we're here as your Housing Counselors.

Lastly, don't be afraid. This housing market will correct itself when the job market improves. So lets put all our efforts and emotion into banging the drum on the legislative steps about JOBS. That's the key to cleaning up this mess.

Now - lets go have a glass of cyber-wine and take a deep breath!

ONLY A CRAZY PERSON WOULD BUY IN THIS MARKET!

WOW - it must have been summer, because time certainly got away from this amateur blogger!

That being said, what is going on in the real estate market now?? Everyday a person picks up a paper, listens to a news report or surfs the internet and finds nothing but confusion. Let me just say, it's not as confusing as it might seem. Most of the stories you hear or read carry little or no context, and certainly don't come from a local perspective.

Here's an example from just the past couple of months. Beginning in April 2010, reports were that sales were up. May, sales were up and, suprise, June sales were really up. Well no duh - it was the rush to close sales for the First Time Home Buyer Credit. Now, reports are that sales are down. Again I say, "Duh." First Time Home Buyer Credit is over!

So what should a buyer do? The burning question on everyone's mind is, "Should I buy now?" And let me respond ever so clearly, "YES!"

Well that sounds just crazy, doesn't it? And I have to be honest. I was having a hard time knowing whether to advise buyers to buy now or wait. That was, until I heard from an economist, that this is exactly the time you should be buying. Sound Crazy? Read further.

Only about once every generation (about every 35 years) does the gas literally go out of real estate values. Now I'm not talking a little 6 month downturn. I'm talking about an all out crash. In my most recent memory, this type of event has occurred during the Great Depression, In the late 70's/early 80's (remember 18% interest only - I do), and then now.

That gas going out is when your Aunt Tilly bought her home in San Diego for $9,000 and can now sell it for $350,000. That gas going out is when my Honey and I bought our first house in 1982 for $40,000 and it's now worth $200,000.

So what do you think this gas-out will bring? Combine these prices with a 4.5% interest rate and you've hit the jackpot baby!

But there's one little catch and this is where great Realtor's can help you with your buying decisions. That catch is the same one I've talked about before - changing your paradigm about what your house is. This home is a place for peaceful enjoyment, privacy and a place to build memories...for a VERY long time (read 15 - 20 years). It is no longer your ATM or the family's 3rd income earner. Contentment needs to reign supreme in your home.

Hope that helps. And now lets bring on the Fall!

DID I JUST HEAR THAT ON 60 MINUTES?

Did you just see what I saw on 60 Minutes Sunday night? If you didn't, then here's the link. It's really worth 12 minutes of your life to see this clip titled "MORTGAGES, WALKING AWAY": http://www.cbsnews.com/video/watch/?id=6470184n

My mouth was hanging open after watching the report. I don't even know what to say, except that this clip speaks to so many things that are going on in our culture right now.

There is no question that there were some shady mortgage brokers, some shady Realtors, some borrowers who pushed beyond their limits during the building of the real estate bubble. But it wasn't everyone.

And now our real estate market is in such a place that people who made responsible choices are often just one life event away from dealing with a house that's not worth what was paid for it. But does that mean you just walk away?

I say no. There are so many options. Renting, loan modifications, short sales, and then finally, foreclosure....to name a few. But what this report does, is make celebrity of a shoulder shrug that will affect us all.

Two couples, who for no other reason than they don't want to pay for a house that's now overpriced, are choosing a strategic default.

A young married couple, still employed, who see no sense in paying on a house that's worth less than what they paid for it and a 50ish couple who's house has lost about 75% of its value. They don't see how they'll ever recover the equity in their lifetime.

Both couple's in the piece seem to have forgotten there are real people behind those "evil" banks. People who loaned their life savings, their retirement portfolios and their investments, so that most of us could have a home far better than our parents or grandparents had.

And although the walk-away is easy, and the featured young couple's credit will be repaired in 7 - 10 years, I wonder if we'll have investors, at reasonable interest rates, who will provide the kind of cash we've become accustom to in the mortgage market? Would you put your stash into mortgage backed securities with a generation that has the attitude toward a contractual agreement that was displayed in this piece?

And don't think I'm letting the 50 year olds off either. I'm not. We all seem to have forgotten that a mortgage is a contract to pay....and there is no clause that says, "but only if the market continues to appreciate."

Oh, and don't even get me started about the so called "counselors" who have made a business of helping people get over their fear and guilt about walking away. Really?

I've said many times in the last 3 years, how fortunate I felt, to have had a Grandmother who lived through the Depression, and at the same time was a storyteller. I heard many stories of how that generation survived our last financial turmoil. And the lesson? They survived. Wait, scratch that thought. THEY THRIVED! My Grandmother lived on to own property again, to build a successful business (when women didn't really do that!), and to enjoy a comfortable retirement. I'm so grateful she passed on her perspective to me. Along with that perspective came the lesson that, "if you are nothing else, be a person of your word."

Too bad both those couples didn't know my Grandma.

Your thoughts?

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. Great....so 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 :)

SURVEY SAYS......

I was recently reading my favorite real estate publication when I came across an article titled,

"SURVEY: Owners Still Overvalue Homes." (RISMedia Real Estate/April 2009)

By the numbers, this is what their survey found:

• Close to 50% of homeowners think their houses should be priced 10% to 20% higher than their sales agents have recommended.
• Fewer than 20% of agents nationwide are reporting that homebuyers are telling them that homes on the market are priced fairly.
• Almost 60% of agents say potential buyers are telling them that home asking prices are too high.

Our own Willamette Valley Multiple Listing Service shows most sales in the Salem/Keizer area are occuring at about 90% of asking price!

Looks like we have an expectation gap!

Here's the bottom line; if you want to sell, most likely, get ready for some tough news - and let's not kill the messenger!

On the upside - think what you can buy!!!

MAYBE I NEED A DUNCE CAP!

Listening to all the talking heads, you'd think we Realtors need a dunce cap. In spite of the "opinions" of those on your television, I think you should be buying real estate (shocking, I know!) Wait, I can explain.

First, thanks to near record low interest rates, and home prices that have moderated, the number of potential buyers who can afford to buy has increased! According to data compiled from the 3rd quarter of 2008, 56.1% of all new & existing homes sold were affordable for families earning the median income. That's way above the 40% of families who could afford a home at the peak of the market!

Second, Housing still remains the way for most of us to build wealth. Now that really sounds crazy, doesn't it. A recently released report by Harvard University's Joint Center for Housing Studies indicates that even though housing has it's ups and downs, the average homeowner is dramatically wealthier than someone who rents. This holds true among all age groups.

Lastly, WE WILL SURVIVE THIS MARKET CORRECTION! And as we do, our housing market with perform like a bouncing ball. With that in mind, none of us knows when the market (ball) will hit bottom, but when it does, WOW - that ball (market) will pop right back up before we know it. So, as I have before, I will remind you again...the rule is, "Buy Low - Sell High." Let's get to buying.