Figuring out when to plunge into the real estate market can be quite intimidating-especially when prices are high, choices are limited, and history urges restraint.
“We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record-low number of homes for sale across the country,” says Javier Vivas, director of economic research for realtor.com. “When you factor those together, you have a market that has to either explode or see some relief.”
Comforting, right? Well, take heart: Experts agree that relief is indeed on the horizon.
A lot depends on where you live (and how much you plan to finance), but theses factors combined could mean 2018 will be your year to take the buying plunge.
- Rates are going up
After years of record-low interest rates (hello 3%), the Fed is finally making some noticeable increases: The rate for a 30-year fixed mortgage broke 4% mark last year. And with the economic growth continuing to carry momentum, Vivas predicts we’ll see at least two to four more rate increases throughout 2018. Rates are anticipated to hit 5% by the end of the year.”The big story is that those increases will further constrict affordability,” Vivas says. “The more buyers wait, the more expensive it will be to buy-not just because of home prices, but because of inflationary pressure.”In other words, if you want in on the American dream, now might be the time.
- Prices are climbing, but not crazily fast
Home prices have soared over the past few years, pricing otherwise well-positioned buyers out of high-cost areas and leading some experts to cry “bubble”. But in 2018, price increases are expected to moderate.Vivas forcasts a home price increase of 3.2% year over year, after finishing 2017 with a 5.5% year over year increase. Existing-home sale prices are predicted to increase 2.5% year over year.Of course, it all depends on where you live. While red-hot markets such as San Francisco are predicted to finally lose some steam, sales numbers and home prices are poised to climb in Southern states such as Texas and Florida, where economic momentum continues chugging along and new construction is happening in the right price points.So what does that mean? Basically, home prices will still increase, but not at the same pace as they have over the past few years.
- Inventory levels will begin to increaseAn inventory shortage has plagued the U.S. housing market since 2015, forcing some buyers to settle (a tiny house with linoleum floors for $1 million, anyone?) and keeping others out of the buying game entirely. But by fall 2018, the tides will begin to turn, with markets such as Boston; Detroit; and Nashville, TN, recovering first.The majority of inventory growth will happen in the middle- to upper- tier price point, in the ranges of $350,000 and $750,000 and above $750,000, Vivas Predicts.New home construction is also expected to expand. But that will happen slowly, thanks to a constricted labor market, limitations on the amount of lots and land that’s available, tight bank financing for building loans, and a run-up in building material prices, says National Association of Home Builders chief economist Robert Dietz.
“It’s been a slow climb back from the recession, and now we’re confronting all of these limiting factors and supply-side constraints,” Dietz says.
It’s particularly tough, he says, for builders to break ground at the entry level for first-time buyers, particularity in high-cost coastal markets such as California. That means it will take longer for those inventory levels to recover.
But there’s a bright spot: Builder confidence is at its highest level since 1999, according to the NAHB. And that means hope is on the horizon.
“As we head into 2019 and beyond, we expect to see the inventory increases take hold and provide relief for first-timer and drive sales growth,” Vivas says.
The wildcard: Taxes and politics
When the Republican tax plan was introduced, the proposed elimination of the mortgage interest deduction was all anyone could talk about: While the new limitations on the deduction will affect only 2.5% of all existing mortgages in the U.S., it will have a disproportionate effect on Western markets, where 20% to 30% of mortgages are above the new threshold, according to Vivas.
Across the board, experts agree that the new tax plan decreases incentives for homeownership and reduces the tax benefits of owning a home- particularly in highly taxed, expensive markets such as California, Illinois, New York, and New Jersey. But on the flip side, that means that if fewer folks are motivated to but, then there’s less competition for those who want in the game. Plus, some taxpayers- including renters- will see a tax cut. That increase in buyers’ disposable income could spur demand from folks who are looking to build equity as a homeowner, rather than flushing away their savings on rent.
“Buying remains the more attractive option in the long term- that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option.”
Article courtesy of realtor.com Holly Amaya
There’s a reason white is the go-to color for homeowners and designers alike- it’s classic, clean and calm.
The color of billowy clouds and freshly fallen snow, white signifies clarity, cleanliness and simplicity. It’s a quiet moment. It’s peaceful pause. It’s the darling of the design world. The possibilities are endless when it comes to this pure and positive hue.
Decorator’s White CC-20 Benjamin Moore
“This tried-and-true white is ideal for rooms that get a lot of light, as well as those that need it. It has a slight grey undertone, which is both modern and classic,” according to designer Jennifer Ferreira.
Paper White OC-55 Benjamin Moore
“Use this fresh but diffused white on the walls of a laundry room; it pairs well with both white and grey cabinetry.” according to Ingrid Oomen.
Pure White SW 7005 Sherwin Williams
“A dining room doesn’t always have to be dark and dramatic. Let it be a continuation of adjacent rooms to give furniture and fabrics a backdrop to pop against.” according to designer Tara Fingold.
Content courtesy of Style At Home/ Decorate with Colour 2018
It’s been nearly a decade since the Great Recession delivered the worst housing crash in modern memory. But these days, the fallout feels squarely in the rearview mirror. Markets have bounced back with fervor, and confidence is skyrocketing. From Charlotte, NC, to Stockton, CA- and everywhere in between-homes are flying off the market at record prices, and buyers are still clamoring to get in the game.
One thing is clear: It’s a great time to be a seller.
“We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record low number of homes for sale across the country”, says Javier Vivas director of economic research for realtor.com.
Sounds like the stuff of seller’s dreams, right? But know this: If you plan to sell in 2018- and you want to unload your home quickly and for maximum money- your window of opportunity may be rapidly narrowing. Here’s why you should get moving ASAP.
- Rates are still historically low, drawing buyers into the market.
We may not be enjoying the rock-bottom interest rates of yore, but by historical standards, today’s 30-year mortgage rates-hovering just above 4%- are still low. And experts agree mortgage credit will remain relatively cheap for most of the year.
That means the getting’s still good for buyers- and, subsequently, for sellers looking to unload their homes.
But rates are on the rise, and it’s been widely predicted that they’ll reach 5% before year’s end. Buyers know that the longer they wait to buy, the more expensive it will be.
Roughly translated, that means you’d be wise to list your home earlier in the year, before more rate hikes kick in. Not only will you capture the market of buyer’s scurrying to close a deal, but if your buying after you sell, you’ll also benefit from those lower rates.
- Inventory remains tight- and demand high
Simply put, there are more buyers than available homes- particularly in red-hot markets where land is scarce and it isn’t cheap to build.
And the hosing shortage will likely get worse before it gets better. Realtor.com data predict inventory will remain tight in the first part of this year, reaching a 4% year-over decline by March.
Sellers, that means this is your opportunity to be wooed. Buyers, their choices limited, are going lengths (and making some major concessions) to win the house, says Katie Griswold, a Realtor with Pacific Sotheby’s in Southern California.
“We’re in a very favorable seller’s market,” she says. “We’re seeing bidding wars-which push up prices-and buyers are submitting offers with very pro-seller terms, like forgoing the repair request or waiving the appraisal contingency.”
And cash investors are in the mix, too, accounting for 22% of all home sales transactions in November 2017 (up from 20% in October), according to the National Association of Realtors.
Those cash buyers are snapping up homes in an already tight market and keeping some first-time buyers at bay (sorry buyers!). But if your selling, you stand a better shot at an all-cash offer-one you just might be crazy to refuse.
Of course, there’s a catch: Inventory levels are predicted to begin rising in the fourth quarter, making the first inventory gain since 2015 and setting the stage for more dramatic housing gains to come. So if you’re thinking of selling, start preparing now in order to walk away with a sweet paycheck.
- Home prices are still increasing
From coast to coast, home prices continue to rise-which translates to more money in your pocket when you sell.
But the gains are predicted to be more moderate than in years past. Realtor.com data suggest a 3.2% increase year over year, after finishing 2017 with a 5.5% year-over-year increase.
Bottom line: You still stand to make a pretty profit if you sell this year, but the earlier you can list, the better off you’ll be.
- People have more money win their pocket
Record levels of consumer confidence, low unemployment, and stock market surges are setting the stage for high home buyer turnout in 2018. For the first time since the 1960’s, the Fed has projected that the unemployment rate will drop below 4%, and the domestic stock market is enjoying a nearly unprecedented rally.
The housing market is already reflecting this boom: Existing-home sales soared 5.6% in November 2017 (the most recent month for which data are available) and reached their strongest pace in almost 11 years, according to the NAR.
“Incomes are growing and people are finding better and more stable jobs,” Vivas says. Buyer’s “are feeling pretty good about (their) finances.”
And thanks to the GOP tax legislation, which nearly doubles the standard deduction, we’ll see fewer people itemizing, says National Association of Home Builders Chief Economist Robert Dietz.
“The income effect of that is that most people are getting a tax cut- which should help (buyer) demand,” Dietz says.
All of these factors combined mean more buyers could be on the hunt, with more money in their pockets to shell out on a home for sale-possibly your!
- Millennials are ready to commit
Millennials, often crippled by student debt, have been especially hampered by rising interest rates and high home prices.
But the aforementioned conditions are ripe in 2018 for these first-time buyers to take the plunge, and experts predict that millennials will make up a vital part of the buyer pool over the coming year: Millennials could account for 43% of home buyers taking out a mortgage in 2018 ( a 3% year-over-year increase), according to realtor.com data.
“As people move into their 30s, they’re looking to move from renting to homeownership,” Dietz says. “And we predict that trend will continue even more this year.”
More home buyers flooding the market can only mean good things for sellers-at all price points.
Article courtesy of realtor.com Holly Amaya
WHAT’S THE SCORE?
BEGINNING ON JANUARY 1, 2018,
Sellers of single-family homes in Portland, Oregon are
required to obtain and disclose a Home Energy
Report estimating the energy-related use,
associated costs, and cost-effective solutions to
improve the home’s efficiency
The city of Portland Home Energy Score ordinance will take effect on January 1, 2018, requiring sellers of single-family homes to disclose a Home Energy Report and Score at time of listing. Portland City Council unanimously adopted the policy (Portland City Code Chapter 17.108) in December 2016. In advance of the policy taking effect, the City of Portland Home Energy Score website is now live at www.pdxhes.com
For sellers, the website explains the necessary actions for completing the requirement and answers questions about logistics, how to get a home assessed and how to improve scores. Buyers are guided through the Home Energy Report and are prompted to wrap energy improvement projects into financing. Real-estate professionals can learn how to make the new policy work effortlessly for their clients and how to post scores online. Builders can find information about how to obtain a score based on construction plans and possible exemptions and waivers. The website is also a place to find out how to become a Home Energy Assessor.
For more information, visit www.pdxhes.com
Information courtesy of The City of Portland
A lot, according to environmental psychologist Sally Augustin of Design With Science. She took us on a tour of the color wheel to get her insight on what each exterior door color might indicate about a homeowner’s characteristics. So in addition to deciding which shades work best with your exterior color palette, think about the statement you want your front door to make.
Dreaming of painting your front door purple? Prepare to feel like royalty: Shades of violet are “linked to sophistication” Augustin says, and visitors will expect the same attention to luxury in your interiors.
This bright, affordable shade can mean different things when used as an exterior door color, depending on the quality of your home. (No, not all colors cost the same-and orange tends to be one of the cheapest.)
For most homes, an orange door can send the message that “I’m cheap or weird,” Augustin says. But paired with tasteful home accents inside, an orange door might just be the perfect touch for your one-of-a-kind style.
If you’re lucky enough to own a high-end home, “you transcend that message”, Augustin says, citing the luxury brand Hermes trademark orange.
“When it’s clearly expensive, you can do whatever you want”
What does the most common of all front door colors say about you? You might be a neat freak, or just really into modern Scandinavian design. The least neutral of the neutrals, white indicates sterility, cleanliness, and simplicity. On the flip side, it can also say “this homeowner is way too obsessed with cleaning her baseboards,” and might make visitors nervous about making a mess.
Looking to stand out on your block? This bold shade certainly makes an impression as an exterior door color. Yellow is liked to optimism and extraversion. Guests will expect sunny rooms and cheerful décor inside. Don’t splash it everywhere, though-it looks best as a spot of color against a darker home. If you cover the whole house, it can indicate irrationality and anxiety.
Looking for visitors? Try painting your front door a bright blue, which is linked to calmness and trust.
“If you were knocking on a blue door and you have time to ponder a second, you might come to the conclusion that the homeowners were more likely trustworthy” Augustin says.
Green is one of the best selling front door colors (in Britain, at least). Traditionally, the color indicates prosperity and wealth, but its natural appeal means you’re also serene and peaceful. Don’t be afraid to pick a vivid green though: Too neutral and you might seem bland.
What’s more stately than a solid black door? If you’re looking for a color that connotes seriousness, this one’s for you. This traditional color often seems formal, but you can add a playful tone with a modern black door against a colorful exterior. Covered with a shiny veneer, it’s definitely glamorous-and might make your home appear safer and well-protected.
Don’t want to paint? Unpainted wood “conveys a more relaxed atmosphere,” Augustin says, with a rustic appeal that’s both cozy and welcoming. But you’ll want to carefully consider whether the material makes sense in your neighborhood.
The Chinese design philosophy of feng shui considers red front doors lucky if they’re facing south or southwest. Even if your home faces another direction, Augustin says this conventional color is “often linked with things like action,” making dwellers seem like “real go-getters.” Want to seem vibrant and exciting without going too wild? This might be a good bet.
Some might see you as practical, but you risk going past practical into humorless with this plain, common front door color. Still determined? Try choosing a lighter shade, which is a warmer, softer alternative to black or wood; a darker shade will seem somber.
Article courtesy of Realtor.com Jamie Wiebe
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