Some quick updates on lending and real estate

While states are starting to talk about benchmarks needed to "open,  Portland's real estate market marches on.

Tracking lockbox "opens" can be an early indicator of a changing market.  That is, our electronic boxes allow tracking of how many times lockboxes were opened in a certain week.  Last week, in the Portland area, our lockbox opens were up almost 6% from the previous week.  hmm.

Anecdotally, there are plenty of reports of multiple offers, with listings selling after just a few days on the market.  Tracking pending sales in certain zip codes,  I can see houses switched to pending, in a broad price range.

That brings me to lending.  Lenders are moving pretty quickly to limit their exposure with regard to certain loan types.

 Lending on jumbo loans (in our area, loan amounts above $550,000) is being curtailed.  Some lenders are still offering these loans: mostly banks offering loans to existing customers.  In some cases, banks may be requiring a certain balance of funds on deposit.

Chase Bank is now requiring 20% down and a credit score of 700 or over ,for their conventional loans.  Before the advent of mortgage insurance, all home loans required 20% down.  Consider this a return to tradition.  Other lenders are still offering lower down payment options, and FHA and VA loans are still available.

Most all lenders are being pretty vigilant about employment verification; double checking through the escrow period and before funding the loan for closing.  In addition, some lenders are having employers complete a form with information about borrowers' prospect of future employment.

Get in touch if you have questions about your specific situation or property.

COVID-19 and housing preferences?

I've been thinking a lot about COVID-19 and distancing.  I live in a single family home, with a distinct front door entrance.  I easily control who enters.  My daughter lives in an apartment building with two secure, exterior entrances.  This means, she, the other residents and other residents' guests enter through those two doors.  There is one elevator, and two stairways.  From a germ exposure standpoint, were she staying there (she's staying with us), she'd be exposed much more than we would.

It seems that the density of living situations is playing a part in COVID-19 infections.  New York City is so dense, strict shelter in place rules aren't showing the same positive results as other places.  Similarly, with seemingly rampant cases, care facilities and nursing homes are struggling.  The assisted living place where my dad lives, was quick to keep residents in their apartments, and forbid outside visitors, but for essential personnel.  We're thankful this seems to be working.  But this is a place where all residents have their own distinct apartments.  Imagine working through this in a shared room environment.

As many of us think about "after" and "normal", I can't help but wonder if we'll see changes in housing preferences.  Do some folks realize working from home is great, if only they had a distinct home office?  Will people move to be closer to family, after having been unable to travel to be with family? Will people in shared living spaces want more control of their environment?

Will all off this influence housing amenities?  Buildings with secure entrances and elevators have been popular.  Will people now favor apartments and condominiums with distinct, outside entrances?  Will developers tout superior air handling capacity, mangers advertise aggressive cleaning protocol?  Will lobbies, roof decks and common rooms no longer be seen as desirable amenities?

As our journey to "after" is sure to be slow, possibly with some set backs, it may be years until we can look back to see changes to housing preferences.  That being said, has "stay home, stay safe" caused you to think about possible changes to your living situation (aside from I wish the fridge refilled itself and the laundry got magically done)?

More COVID-19 influenced thoughts

I last wrote about loan forbearance and kittens.

Since then quite a few folks have talked with their lenders, and gotten forbearance agreements for their mortgage payments.  But...many of the forbearance agreements, in the fine print, require re-payment of the full deferred amount at the end of the forbearance period.  This means, if you defer payments for three months, you'd have to pay those three months' payments after three months.  So unless you'll somehow come by that due balance all at once, I'd think twice before signing such an agreement.  It may still be worth contacting your lender to ask, but do read the fine print.

Currently, real estate activity is still permitted in both Oregon and Washington.  Open houses and brokers open houses are pretty taboo, and our multiple listing service has removed that data field, making it challenging to promote open houses.  This is as it should be.  Most offices have recommended  protocols in place for property showings including cleaning, booties, hand washing and social distancing.  Title companies are continuing to close transactions, and county recording offices are handling electronic recordings.

The City of Portland permit office is closed, so building permits, including those for sewer repair/replacement and radon mitigation systems are not available.  Multnomah County's in-person recording window is closed.  It's a challenge to get repairs completed prior to closing, and moving  companies either aren't working, or are very booked.

It sounds as though some loan programs geared toward first time and low income buyers, may be tightening their lending requirements.  Programs like FHA have traditionally allowed a buyer to have a lower down payment, lower credit score and higher debt level than conventional loans.  While these programs will remain more approachable than conventional loans, they will be requiring buyers to have an amount of financial strength.

A few blogs ago, I talked about ibuyers; Zillow, OpenDoor and others.  These companies can offer an easy button to sell your house quickly when timing or other circumstances make selling via traditional means untenable.  Now seems like a great time to use this service, if, for instance you need to sell for a job relocation, to lessen expenses during the pandemic etc.  Oh, but Zillow isn't buying right now, and I'm not sure about OpenDoor.

Who is working now, (carefully) are Realtors; licensed and doing business here in Portland.  We're taking plenty of precautions, with cleaning and distancing protocols in place.

And kittens!  What about kittens?!  Actually, today I'm thinking about puppies!

The folks at One Tail at a Time will soon have puppies available for adoption.  If a puppy seems like too much work (they are very busy creatures) One Tail at a Time has more mature dogs too.  You just might need a buddy...

Loan forebearance and kittens!

I hope you're all staying healthy, and surviving whatever version  of "social distancing" you are observing.

A few things, real estate related, to know.

It looks as though mortgages through Fannie Mae and Freddie Mac (the is about half of all US loans) will be eligible to have mortgage payments reduced or suspended for up to 12 months.  Don't just stop making your payments!  Contact your loan servicer to work out a plan.  I'm optimistic some lessons learned by lender in the 2007/2008 financial crisis will help implement this plan quickly.  Rumor has it, you won't have to submit a bunch of paperwork in triplicate.  I believe they are working for this process to be completed by phone.  You will, eventually, have to make these payments.  This is not loan forgiveness, just a break from having to pay if your income has been affected by COVID-19.

If you are a tenant, or housing provider in Multnomah County, the county is placing a moratorium on most residential evictions for the duration of the crisis.  In addition, tenants may pay partial or no rent, not be subject to late fees, and have up to six months to pay back the owed rent.  Non or partial payment of rent would not threaten their status as tenants in good standing.  Currently, the state of emergency declared by the county goes through April 8th, so this policy would just be for April rent. I expect the state of emergency will be extended.

Not so real estate related.  If you have been considering adding a pet to your family, now might be a great time.  With folks around the house MUCH more, your family would have plenty of time to help a new pet settle in.  Or, you might consider fostering for a local rescue group. Also, kitten season is here! this gorgeous mama will be ready to part with her kittens in May.  You can find out more through Animal Rescue and Care.

Lastly, people actually are transacting real estate.  Sincere efforts are being made by all involved to have "clean" showings, interest rates remain low and seemingly folks have more time to contemplate a move. Who knows, maybe being home bound has folks looking for more, or different space.  I am working, just with a bit more space between my clients and me.  If you'd like to look at houses, I'm glad to do so, but let's take our own cars.   Similarly, I'm glad to list your home, but will steer away from open houses.

A funny thing about Zillow

I put a new listing on the market last week; a nice mid-century classic in Northeast Portland, priced at $435,000.  At the time, the zestimate was $429,000 and change, and showed the value had increased $5000 in the previous 30 days (I should have snapped a picture).

Two days after the listing went live, the zestimate was $437,000 and change, and showed the property increasing in value by $13,000. in the previous 30 days.

Today:

This is the same house, over less than a week.

We're looking at offers tomorrow, and I expect we'll have at least four from which to choose.  Zillow can be a handy tool, sometimes, to gauge the general value of a property.  And clearly our pricing is right in the range, though I priced to comps, and didn't look at Zillow until it was listed.

I'll update once the sale closes, with the final selling price.

On-line reviews vs. personal recommendations

A marketing specialist I work with recently told me that people trust online reviews and much as personal recommendations.    This blew my mind, as I am a bit of a cynic when it comes to online reviews.  Oh, I read them, but always with a grain of salt.

This graphic from Bright Local shows trust in reviews, broken down by age group.

To me, personal recommendations, on the other hand, really matter.  And knowing who they come from affects the power I give the recommendation.    With online reviews, I usually have no idea who the reviewer is, which in itself, makes the review/recommemndatio less valuable, to me.

Generational generalizations are risky but...the above chart really does show generational differences.      Certainly, the 18-34 year olds have grown up with more of their lives online. Heck, I've been in business as long, or longer than they have been alive.

My business is primarily referral based.  That is, the majority of my clients come to me through personal recommendations.   I assume, once recommended, folks go look for me on-line, and that's where reviews come in to play.  I suppose its not personal recommendations vs. on-line reviews, but personal recommendations and on-line reviews.

How do you weigh personal recommendations vs. on-line reviews?  Does it bother you to be asked for a review?

Thinking about co-housing

The co-housing movement has been around quite awhile, having some relation to communes and other intentional communities.

Some co-housing communities are conceived of, and started by a group of people looking for some efficiencies in housing combined with a sense of community, and maybe a commonality such as religious belief, dietary choices or age based. Communal gathering areas, reservable guest quarters and community gardens can be some of the shared amenities.

This project started as retirement/ senior housing.

PDX Commons

Other co-housing communities are developed and built for the general public, with the developer obtaining the contraction financing ring, and bearing the financial risk.  Buyers then, get a conventional loan for the property they are buying (and buy-in to the community).

There are a few projects in the Portland area that have been built inconjunction  with Proud Ground, a local land trust.  Some of the homes are sold at market rate prices, while others are sold under the land trust model, whereby Proud Ground owns the land and builds affordable units.  Buyers then are only paying to buy the structure, not the land.  These projects have both affordable and market rate housing.  I love this model.

Here are a few of those:

Cully Grove

Cully Green

Some other projects:

Daybreak Co-housing in the Overlook neighborhood.

Adams Creek in Hood River  (still in development)

Cascadia Commons one of the areas older co-housing communities.

Financing and development guidelines have proved challenging over the years.   Who pays for the underlying land?  Do future owners get their own construction financing chiming?  How are common elements financed? Are these condominiums?  Private ownership?

I get the desire to live with like minded people, or folks with whom you have a common bond or passion.  It seems though that "like minded people" can also be code for excluding "undesirables"from the community.   There isn't a long jump to "whites only" or "wealthy people only", or "no kids", or "you must have kids."

That being said, some of my friends dream of intentional co-housing; animal rescue folks who want to live and care for animals together,  Reed College Alumni wanting multi-generational housing and engaging academic interaction etc.

Do you think about pooling resources with other folk to live a more efficient and intentional lifestyle?  Would the loss of a small amount of privacy and control bother you?

Some resources:
Co-Housing Association of America
BusinesInsiderArticle