Top 3 Myths About Today’s Real Estate Market

There are many conflicting headlines when it comes to describing today’s real estate market. Some are making comparisons to the market we experienced 10 years ago and are starting to believe that we may be doomed to repeat ourselves. Others are just plain wrong when it comes to what it takes to qualify for a mortgage.

Today, we want to try and clear the air by shedding some light on what’s causing some of these headlines, as well as what’s truly going on.

Myth #1: We Are Headed for Another Housing Bubble

Home prices have appreciated year-over-year for the last 76 straight months. Many areas of the country are at or near their peak prices achieved before the last housing bubble burst. This has many worried that we are headed towards another housing bubble.

Reality: The biggest challenge facing today’s real estate market is a lack of homes for sale! Demand is strong, as many renters have come off the fence and are searching for their dream homes.

Historically, a normal market requires a 6-month supply of inventory in order for prices to rise with the rate of inflation. According to the National Association of Realtors (NAR) there is currently a 4.3-month supply of inventory.

The US housing market hasn’t had 6-months inventory since August 2012! The concept of supply and demand is what is driving home prices up!

Myth #2: The Rumored Recession Will Lead to Another Housing Market Crash

Economists and analysts know that the country has experienced economic growth for almost a decade. When this happens, they also know that a recession can’t be too far off. But what is a recession?

Merriam-Webster defines a recession as “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two consecutive quarters.”

Reality: Recession DOES NOT equal housing crisis. Many people associate these two terms with one another because the last time we had a recession it was caused by a housing crisis. According to the Federal Reserve, over the last 40 years, there have been six recessions. In each of the previous five recessions, home values appreciated.

Myth #3: There is an Affordability Crisis Looming

Rising home prices have many concerned that the average family will no longer be able to afford the most precious piece of the American Dream – their own home.

There are many different affordability indexes supported by different organizations that all measure different data. For this reason, there is a lot of confusion about what “affordable” actually means.

The monthly cost of a home is determined by the home’s price and the interest rate on the mortgage used to purchase it. According to Freddie Mac, interest rates have risen from 3.95% in January to 4.59% just last week.

Reality: As we mentioned earlier, home prices have appreciated year-over-year for the last 76 months, largely driven by high demand and low supply.

According to a recent study by Zillow, the percentage of median income necessary to buy a home in today’s market (17.1%) is well below the mark reached in 1985 – 2000 (21%), as well as the mark reached in 2006 (25.4)! Interest rates would have to increase to 6% before buying a home would be less affordable than historical norms.

The starter-home market has appreciated at higher levels (9.4% year-over-year) than any other market. One reason for this is the fact that many of the first-time buyers who have flocked to the starter-home market are being met with high competition. For some hopeful buyers, it may take more than a good offer to stand out from the crowd!

Bottom Line

There is a lot of confusion in today’s real estate market. If your future plans include buying or selling, make sure you have a trusted advisor and market expert – The McLeod Group Network - by your side to help guide you to the best decision for you and your family. 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew

Exploring Salem Oregon: The Oregon State Fair

August 24, 2018 - September 4, 2018

Come have fun at the Oregon State Fair!  Celebrate the best that Oregon has to offer with concerts, livestock, competitions, yummy fair food, shopping and so much more!

Oregon State Fairgrounds
2330 17^th St. NE
Salem, OR 97301

Event Website

Purchase Tickets

Courtesy of Amy McLeod, The McLeod Group Network

Photo Credit: travelsalem.com

Having Trouble Saving Enough for Your Down Payment? Crowdfund It!

You read that right! First-time buyers across the country are getting creative when it comes to saving the necessary down payment to buy a home.

Many couples are asking their wedding guests to contribute to their “Down Payment Fund” rather than fulfilling a traditional registry. This is fueled by the fact that many couples live together prior to marriage and already have the necessary items to make a house a home…they just need the house!

The average wedding in the United States has 120 guests who give wedding gifts valued, on average, at $186. This means that couples could walk away from their nuptials with over $22,000 towards their down payment!

Services like HomeFundMe allow friends, family members, and almost anyone else in a buyer’s network to contribute funds toward the buyer’s down payment. Contributors can determine, at the time of their donation, if their gifts are ‘conditional’ or ‘non-conditional’ on the beneficiary buying a home.

According to a recent Wall Street Journal article, “about 400 borrowers have used HomeFundMe to help buy homes since the program launched in October and on average, they raise about $2,500.” The article went on to explain that most borrowers use these funds in combination with their personal savings to shorten the time needed to achieve their goal of homeownership.

There are more and more programs surfacing from lenders that allow buyers to put down as little as 3% to buy their dream home. Fannie Mae and Freddie Mac loan programs require 3% down payments, while FHA programs require as little as 3.5%, and VA Loans are often approved with 0% down!

Bottom Line

Gone are the days of 20% down or no loan! If your dreams include buying a home of your own in the next year, you can get creative with your down payment savings to make it happen!

Let the professionals on The McLeodGroup Network help guide you through the home-buying process. 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew

588 Dearborn Ave N: Charming Cottage on a Large Lot!

Salem-Keizer OR Home For Sale
588 Dearborn Ave N, Keizer, OR  97301

Welcome home to 588 Dearborn Ave, a darling cottage on a large lot conveniently located near shopping, dining and other services. Relax in this nicely sized living room with a gas stove that flows into the dining area for formal entertaining. This well-organized kitchen makes meal prep a breeze with tons of storage space, counters, a large sink and durable tile flooring. The two generously sized bedrooms feature wood floors and built in closet organizers. Keep things tidy in this bright laundry room complete with stacking washer and dryer! Enjoy BBQ’s and relaxing on the patio overlooking your fenced yard with so much room to run and play. Low maintenance vinyl siding is another desirable feature! Turn this lovely house into your home!

The McLeod Group Network has distinguished themselves as a leader in the Salem Oregon real estate market. As a full service, real estate team - focused on working with our Seller and Buyer clients to help achieve their real estate goals!

We bring a keen eye for the details of buying or selling a Salem Oregon home and seemingly boundless determination and energy, which is why our clients benefit from our unique brand of real estate service. Rooted in Tradition, focused on the Future –The McLeod Group Network will help make the most of your Salem Oregon real estate experience. With over 40 years of combined experience, you can rest assured that your real estate transaction will be handled and cared for with the utmost respect and attention to detail. Give us a call today 503-798-4001 and discover the difference we can make during your family's move.

Homebuyers Willing to Sacrifice ‘Must-Haves’ in Favor of Good School Districts

It should come as no surprise that buying a home in a good school district is important to homebuyers. According to a report from Realtor.com, 86% of 18-34 year-olds and 84% of those aged 35-54 indicated that their home search areas were defined by school district boundaries.

What is surprising, however, is that 78% of recent homebuyers sacrificed features from their “must-have”lists in order to find homes within their dream school districts.

The top feature sacrificed was a garage at 19%, followed closely by a large backyard, an updated kitchen, the desired number of bedrooms, and an outdoor living area. The full results are shown in the graph below.

Buyers are attracted to schools with high test scores, accelerated academic programs, art and music programs, diversity, and before and after-school programs.

With a limited number of homes available to buy in today’s real estate market, competition is fierce for homes in good school districts. Danielle Hale, Chief Economist for Realtor.com, explained further,

“Most buyers understand that they may not be able to find a home that covers every single item on their wish list, but our survey shows that school districts are an area where many buyers aren’t willing to compromise.

For many buyers and not just buyers with children, ‘location, location, location,’ means ‘schools, schools, schools.’” (emphasis added)

Bottom LineFor buyers across the country, the quality of their children’s (or future children’s) education ranks highest on their must-have lists. 

Before you start the search for your next home, let’s get together to discuss the market conditions in our area. 971.208.5093 or mcleodgroupoffice@gmail.com.

By: KCM Crew

Are You Thinking of Selling Your Home? Competition Is Coming!

The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of building permits issued in June was 850,000, a 0.8% increase from May.

How will this impact buyers?
More inventory means more options. Mark Fleming, First American’s Chief Economist, explained that this is good news for the housing market – especially for those looking to buy:

“The continued year-over-year growth in completions means more homes on the market in the short-term, offering some immediate relief in alleviating housing supply shortages.”

How will this impact sellers?
More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:

1. A great price on their home as buyers outbid each other for it.
2. A quick sale as buyers have such little inventory to choose from.
3. Fewer hassles as buyers don’t want to “rock the boat” on the deal.

Bottom Line
If you are considering selling your house, you’ll want to beat this new competition to market to ensure that you get the most attention on your listing and the best price for your house.

Find out how much your home is worth by contacting The McLeod Group Network at 971.208.5093 or mcleodgroupoffice@gmail.com.

By: KCM Crew

4963 Manning Ct NE: Hard to Find Single Level 4 Bedroom Home!

Salem-Keizer OR Home For Sale
4963 Manning Ct NE, Salem, OR  97305

Perfectly situated on a quiet cul de sac lot in the Jan Rae North neighborhood sits this hard to find single level 4 bedroom home! New carpet, vinyl, counters, interior paint and some fixture are just a few of the many desirable features 4963 Manning Court has to offer! Soaring high vaulted ceilings create a dramatic entrance into the living room. A built in ledge around the top of the room is perfect for all your display pieces. Natural light illuminates this space that opens to the eat in kitchen making for easy entertaining and function. An abundance of cabinet and counterspace highlight the kitchen, plus there is a breakfast bar and dining area where guests can relax while you prepare a meal. Sliding doors lead to the patio overlooking your large, fenced backyard where you will enjoy grilling and chilling! Plush carpeting, a walk in closet and private bath make this master suite a delightful space. The three secondary bedrooms and second full bath provide space for everyone! An attached 2 car garage offers plenty of vehicle and tool storage, plus vinyl siding for low maintenance living. You MUST see this home to truly appreciate all it has to offer.

The McLeod Group Network has distinguished themselves as a leader in the Salem Oregon real estate market. As a full service, real estate team - focused on working with our Seller and Buyer clients to help achieve their real estate goals!

We bring a keen eye for the details of buying or selling a Salem Oregon home and seemingly boundless determination and energy, which is why our clients benefit from our unique brand of real estate service. Rooted in Tradition, focused on the Future –The McLeod Group Network will help make the most of your Salem Oregon real estate experience. With over 40 years of combined experience, you can rest assured that your real estate transaction will be handled and cared for with the utmost respect and attention to detail. Give us a call today 503-798-4001 and discover the difference we can make during your family's move.