2013 brought us a very active real estate market. The dearth of homes on the market led to a selling season of multiple offers, offers over list price and a prevalence of cash in the market place. It is estimated 30% of all residential real estate transactions, were cash transactions. A mere offer from a buyer pre-approved, with 20% down payment on a conventional loan was often not “enough” to win the house. Most buyers I worked with wrote at least three offers, good offers, before getting an offer accepted.
The fall brought us slightly rising interest rates, the government “shut down” and a bit of seasonal slowing.
A few issues we dealt with in 2013; radon is still an issue, for which most every buyer is testing in a transaction. In general, the installation of a mitigation system isn’t too spendy (under $2000), and in most cases, sellers do pay for radon mitigation. Though the supply of oil tanks is now limited, and we’ve been working our way through getting them all tested and decommissioned and documenting the decommissions. If you have an existing buried oil tank I encourage you to consider decommissioning it. Waiting for the tank to leak, while regulations around clean ups become more stringent is not a wise choice. If you have a decommissioned oil tank, hang onto that paperwork. Proof of the completed work is key.
Next year, we expect a healthy spring selling season; with seasonal slowing in the late summer and late fall. It is hoped, after the brisk market of 2013, more sellers will put their properties on the market. This will give buyers a bit more to choose from, easing the frenzied bidding wars. The Portland market saw an increase in value of 15% in 2013. I expect that rate of increase to ease, but remain positive. Buyers haven’t forgotten the crash, and even in a frenzy, need to see value in what they buy; location, condition, features, something.
While interest rates have bumped a bit from their low of last spring, they are still well under 5%. We expect interest rates to slowly rise. Rising rates are actually a sign of a healthy market, as we move away from rates kept artificially low by government to stimulate the economy. Remember, interest rates of 5 and 6 percent didn’t put much of a damper on the boom market of the mid 2000’s.
Mortgage lending has seen some changes. Good lenders have already instituted the stricter underwriting guidelines that are effective in 2014. While lending is still tight, there are new products that may make life easier. For folks who suffered a short sale or foreclosure, there is a program facilitating them getting home loans sooner than later. And, for folks buying in upper price ranges where loan amounts over $417,000 carried hefty fees and interest rates, we’re seeing some programs with costs competitive to conforming loans.
I am honored to help folks with some of the biggest decisions in their lives, and am humbled by the trust that is put in me. My business is based on referrals. I will always take good care of anyone you send my way. Be it selling or buying, or just curious, I’m always glad to answer questions and provide information.