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Local Market Activity for January 2017

by Galand Haas

Good Morning,

The January numbers are in for the Eugene and Springfield Real Estate market.  Our current trend continues with higher home prices and a very low inventory of homes on the market for sale.  Home prices are up over 8% over the past twelve months, which along with a slight bump in mortgage interest rates has made our local market the least affordable it has been in over three years.

Don't look for this trend to end quickly.  If you are wanting to purchase a home this year, you may have more difficulty finding that perfect home.  Many of the homes that we are currently finding for our buyers are homes that we have knowledge of before they hit the market.  If you are serious about purchasing a home this year, your best bet would be to contact us, so that we can determine what you are wanting to purchase and then work to find you that home.  It's harder, but we have been very successful at it.

 

January Residential Highlights

Lane County started the year a little cooler than last January. Closed sales (273) fared 5.0% better than in January 2016 (260) although falling 26.2% compared to last month in December 2016 (370).

Pending sales, at 318 for the month, ended 3.6% under the 330 offers accepted last January but were 27.7% ahead of last month in December 2016.

Similarly, new listings, at 320, ended 23.8% below last January (420) but showed a 48.8% increase from the 215 new listings offered last month in December 2016.

Inventory increased in Lane County to 2.1 months in January, with total market time decreasing by twelve days to end at 72 days.

Average and Median Sale Prices

Comparing the average price of homes in the twelve months ending January 31st of this year ($264,800) with the average price of homes sold in the twelve months ending January 2016 ($244,400) shows an increase of 8.3%. The same comparison of the median shows an increase of 7.7% over that same period.


Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

 

1004 Leopold

Price: $257,500    Beds: 4    Baths: 3    Half Baths: 1    Sq Ft: 2715

A beautiful & luxurious home built along a wonderful park. This spacious home includes 2 master suites (1 upstairs & 1 downstairs), large kitchen, formal dining, open living room with gas fireplace, an upstairs bonus & plenty of storage throughout. ...View Home for Sale>>


AND HERE'S YOUR MONDAY MORNING COFFEE!!

2017 Housing Forecast

by Galand Haas

Good Monday Morning!

Anyone who has been keeping in touch with either the local or national housing market trends knows that 2016 was a record year for home sales.  2017 is starting off totally different than the previous year, though.  There are many questions as to what kind of Real Estate market 2017 will turn out to be.  Here is an article from Realtor.com that talks about the direction that the 2017 housing market will most likely take.

The days of multiple bids and offers that are typically way higher than a home’s asking price—you know, that stuff that we now consider to be normal in the housing biz—aren’t expected to disappear anytime soon. But here’s the good news: Things aren’t expected to get too much worse in 2017 either.

Rising mortgage rates, as well as a dearth of affordable, existing homes (i.e., previously lived-in residences) on the market, are expected to lead to a smaller increase in sales in 2017, according to the latest quarterly survey from the National Association of Realtors®.

The survey was of nearly 2,800 U.S. households and conducted from October through early December.

Existing-home prices are expected to go up 4% in 2017, slowing down just a bit from 5% in 2016, according to NAR.The pace of sales is also expected to slow, rising just 2% in 2017, compared with 3.3% in 2016

All in all, 2016 is expected to be the best year for existing-home sales since the height of the housing boom in 2006.

The challenges ahead2017 will “be a year of growth in both sales and prices,” says Chief Economist Jonathan Smoke of realtor.com®. “But that growth will be slower than what we’ve seen over the last three years.”

Those higher mortgage rates have already driven monthly mortgage payments up 7% since the presidential election, Smoke says. And those bigger bills are expected to make it harder for wannabe homeowners, particularly first-time buyers, to qualify for loans.

That’s in addition to the low inventory of available homes on the market that they need to contend with. In November, there were 12% fewer new and existing homes for sale on realtor.com than the same month a year earlier.

Still, the majority of households surveyed still believe now is a good time to buy a home, But fewer renters are getting the buying bug these days. That’s because housing prices are continuing to go up, making affordability an ever bigger challenge, says Lawrence Yun, NAR’s chief economist.

“Younger households, renters, and those living in the costlier West region—where prices have soared in recent months—are the least optimistic about buying,” Yun said in a statement.

According to the survey, about three-quarters of current homeowners who are over 45, make more than $50,000 a year, and live in the Midwest or South were the most confident that now is the time to close on the homes of their dreams.

They are typically the most financially stable or live in the most affordable regions of the country.

But for everyone else, it’s not all doom and gloom. Lenders are beginning to make more loans to buyers with lower credit scores and down payments as well as higher debt-to-income ratios as a result of rising mortgage rates, says Smoke.

That’s because fewer homeowners are likely to refinance their mortgages now that rates have gone up. To make up for that loss in business, lenders have to issue more loans. And higher rates can net mortgage makers higher profits, he says.

“Lenders are getting more aggressive,” Smoke says. “Credit access already appears to be improving because of the rates.”

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

1615 Taney St

Price: $269,000    Beds: 4    Baths: 2    ス Baths: 1    Sq Ft: 1913

Brand new home! Great quality construction with plaster finished walls, maple hardwood & porcelain tile floor, hickory cabinets, granite counters, 9 ft ceiling, LED dimming lights, 3 skylights one of which opens. Great room layout with gas fireplace...View Home for Sale >>


AND HERE'S YOUR MONDAY MORNING COFFEE!!

5 Main Causes of Our Housing Shortage

by Galand Haas

Good Morning!

As I have been writing about in previous weeks posts, the inventory of homes for sale both in the U.S. market and here locally in the Eugene and Springfield market is at historic low levels.  In Eugene and Springfield, we remain at just 1.6 months of home inventory, second lowest in the nation.  A healthy Real Estate market will typically have around 6 months of inventory. This is a balanced market.  The following is an article from CNBC that talks about the national housing shortage and some of its causes.

House hunters out this spring will have to pound more and more pavement to find their home sweet home.

The number of for-sale listings fell again in December to the lowest level since 1999, according to the National Association of Realtors. There were just 1.65 million homes for sale at the end of December, which at the current sales pace would take only about 3 ½ months to exhaust. A normal, balanced market has about a six-month supply. This, as the busy spring market is already on the verge of starting. "To say early buyer demand is strong in early 2017 is an understatement — it is titanic. Redfin data shows that buyers are out touring in droves, ready to pounce on new listings that fit the bill," said Nela Richardson, chief economist at Redfin. "The only thing missing is homes for sale to satisfy demand because there just aren't a lot of homes available to buy right now. We are in a real estate black hole until those listings show up again."

In some local markets, the situation is more dire. The share of communities with supply at less than three months jumped from about 13 percent to more than 20 percent in the past year, according to a survey by Proteck Valuation Services, a real estate appraisal and analytics company. For example, in Dallas, the supply of homes for sale dropped by nearly 41 percent from December 2015 to December 2016.

"This means fierce competition for homes, where buyers that are able to act fast and pose less risk to the seller have the advantage. These 'favored' buyers would include those already pre-approved for a mortgage, those with larger cash down payments and those with no contingencies (like the sale of another home)," according to the Proteck report.

The shortage is being driven by surging demand and weak home construction. Single-family housing starts continue to rise, but very slowly each month. Builders are still operating at well below normal construction levels, and that doesn't even account for pent-up demand from the housing crisis and growing household formation.

"The homeownership rate is at a near 50-year low, and it could remain at this level," said Lawrence Yun, chief economist at the NAR. "I'm not sure if this is the trend that America wants."

"We are in a real estate black hole until those listings show up again." Nela Richardson, chief economist, Redfin

The older edge of the millennial generation is finally looking toward homeownership, but finding nothing but frustration in their neighborhoods.


Tight supply is pushing home prices past their peaks in some markets and well past income growth nationally. Mortgage rates were historically low in 2016, helping to offset the higher prices, but that is not the case this year. Rates are already up significantly since the election and are expected to continue higher. Only a few of the big volume home builders are putting resources into the starter home market.

"I continuously say that the industry and the first-time buyer need more homes priced below $250,000, but the high costs of lots, labor and regulations puts tight margins on this price point. In coming months we'll watch to see what influence the rise in rates had," said Peter Boockvar, chief market analyst at The Lindsey Group.

First-time buyers continue to make up less than a third of the sales market; historically they are usually at about 40 percent. Affordability is weakening, but mortgage credit availability also continues to be difficult.

As rates rise, fewer potential borrowers qualify for the strict debt-to-income levels lenders now require. Some are looking to the Trump administration to loosen regulations on lenders, but that could take time and is unlikely to happen before the spring season. The administration already froze a last-minute cut in the FHA insurance premium by the outgoing Obama administration, which might have opened the market to more homebuyers.

"Constrained inventory in many areas and climbing rents, home prices and mortgage rates means it's not getting any easier to be a first-time buyer," said Yun. "It'll take more entry-level supply, continued job gains and even stronger wage growth for first-timers to make up a greater share of the market."

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

1471 Barrington Ave

Price: $515,000    Beds: 5    Baths: 3    Sq Ft: 3756

Luxurious and grand! Great room with surround sound speakers, Brazilian cherry hardwood floor & gas fireplace. Huge theater/bonus room prewired for surround sound. Open kitchen with cherry stained cabinets, island, LED under & above cabinets & toe k...View Home for Sale >>


AND HERE'S YOUR MONDAY MORNING COFFEE!!

Eugene Oregon Ranks #2 For Lowest Housing Inventory In The Nation

by Galand Haas

Good Morning!

Is it a perfect storm situation now taking its grip on the Eugene and Springfield housing market? The overall market here is now as quiet as I have ever witnessed in my 27 years as an area Realtor.  Why would our market change from a blazing hot market to becoming this slow in just a few weeks? 

The answer is complicated, but it is primarily being fueled by the Eugene and Springfield area having the second lowest inventory of homes on the market in the entire United States.  Our home inventory rest at less that 1.7 months of active home inventory. This means that if no new homes hit the market, the current inventory would be exhausted within 1.7 months.  This creates a tough market for potential home buyers.  In our area, the hottest part of the market is median priced homes, which are typically the first time buyer homes.  There really is no inventory at this price level currently.  The majority of the active inventory is in the upper price ranges, where demand has slowed considerably.  On top of this, we have had around an 8% rise in home values in our area over the past 12 months and a rise in mortgage loan interest rates.  The combination of these two factors has made housing less affordable and pushed, even more, would be buyers into the median home price range, where there is no inventory.  Another factor that is fueling our problem is that in the Eugene and Springfield area, there are very few building lots.  The city and county's failure to expand urban growth boundaries has created a critical shortage of home building sites and virtually put a lid on new homes being built in the price ranges where there is demand.  The building lot shortage along with increased costs in permits, SDC's, etc. has pushed lot prices to all-time highs making it impossible to build new affordable housing in our area.  

Where our local market goes in 2017 remains up in the air.  The one thing that I will caution everyone about is that if you are expecting a repeat year like 2016, it is just not going to happen.  As long as home inventories in the median price ranges remain low, prices on these homes remain high and mortgage rates continue to climb, the market here will remain very quiet.

Have An Awesome Week!

THIS WEEK'S HOT HOME LISTING!

1499 Larkspur Avenue

Price: $180,000    Beds: 3    Baths: 1    Half Baths: 1    Sq Ft: 960

Charming, ranch-style home with modern feel and centrally located. Featuring rich hardwood floors, newer roof, countertops and vinyl windows. Other special features include a cozy living rm with wood-burning fireplace, a large bath, laundry area & c...View Home for Sale >>


AND HERE'S YOUR MONDAY MORNING COFFEE!!

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Photo of Galand Haas Team  Real Estate
Galand Haas Team
Keller Williams Realty Eugene and Springfield
2644 Suzanne Way
Eugene OR 97408
Direct: (541) 349-2620
Fax: 541-687-6411

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