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When Will The Eugene & Springfield Market Begin To Slow

Monday, February 28, 2022
by Galand Haas

Good Monday Morning!

The question is, will the national housing slump hit the Eugene and Springfield area soon?  So far, our area seems to continue on a roll for housing sales and home inventories remain extremely tight. Rising mortgage interest rates will certainly begin to take a toll and any future increases are going to slow our housing market.  So far, the Fed has refused to begin any true cycle of rate increses, but they are just kicking the can down the road.  New inflation numbers are hitting 40 year highs and this means only one thing, higher interest rates. Look for the Eugene and Springfield area to follow suit with the remainder of the nation soon.  Here is an article from "Realtor.com" that talks about the current national housing market.

The numbers: U.S. pending home sales fell a sharp 5.7% in January, according to a monthly index released by the National Association of Realtors on Friday. 

Economists polled by the Wall Street Journal expected pending home sales to rise 1%.

This is the third straight monthly decline in the index for pending home sales, which captures transactions where a contract has been signed, but the home sale has not yet closed.

Key details: Year over year, pending home sales were down 9.5%.

The West was the only region to see an increase in activity in January. All of the regions posted declines in activity compared with 12 months ago levels.

Big picture: In general, economists think 2022 will be a tough year for housing. They didn’t expect the wheels to start shaking on the sector so early in the year.

The Federal Reserve’s sharp pivot towards a steady pace of interest rate hikes, higher inflation, and continuing lack of supply seem to be causing investors to pull back.

On the other hand, existing home sales surprised to the upside this month.

Looking ahead: “The clear signal from today’s report is that February is likely to see a substantially slower sales rate for existing homes than the 6.5 million unit pace reported for January,” said Josh Shapiro, chief U.S. economist at MFR Inc.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

39140 Dexter Road Space 73, Dexter, OR 

Price: $35,900    Beds: 2    Baths: 1.0    Sq Ft: 672

Location! Location! Wonderfully maintained and updated home with beautiful views of Dexter Lake! This community rarely has homes on the market! Newly resurfaced roof, flooring, paint, ductless heat pump, electrical panel. All you need to do is move...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

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Demand For Housing Remains Strong

Monday, February 21, 2022
by Galand Haas

Good Monday Morning!

Even though mortgage interest rates have increased over the past several weeks, the demand for housing remains strong.  As I have been stating for some time now, if you are thinking about selling your home this year or in the future, don't wait.  Right now the demand for housing is as strong as I have ever seen it and this may last for several months.  Buyers are panic buying as they fully understand that mortgage interest rates are on the verge of some hefty increases.  Inflation numbers are not backing down and the Fed has one way to go and that is to increase rates.  So far the Fed has just kicked the can down the road, but the reality is that soon they will be forced to act. For buyers, I would also suggest that you try to purchase a home now.  The process of buying now could be tough due to competition, but just hang in there.  You will be very happy that you made your move now.  Here is an article that talks about our current national housing market.

Homebuyers flocked to what little inventory existed in January, with existing-home sales rising 6.7% from the prior month to a seasonally adjusted annual rate of 6.5 million. 

January sales fell 2.3% from a year earlier, though the median existing-home price rose 15.4% annually to $350,000, according to the Friday report from the National Association of Realtors.

The supply of homes for sale fell to a record low, down 16.5% from a year ago. There were just 860,000 homes for sale at the end of January, according to the report. That translates to just 1.6 months of supply; a healthy market generally has between four and six months of supply. 

“Buyers were likely anticipating further rate increases and locking in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, NAR’s chief economist.

Indeed, January saw the strongest pace of existing-home sales in a year, even though home prices increased 1.8% from December and mortgage rates shot up 30 basis points. 

Homes priced between $100,000 and $250,000 were down 23% from January 2021, while sales of homes priced between $750,000 and $1 million rose 33%. Sales of homes priced above $1 million were up 39%. Homes went under contract in just 19 days on average, down from 21 a year ago.

“While the 6.7 percent sales growth in January was good news, the drop in for-sale inventory to an all-time low at 860,000 units is a cause for concern,” said Joel Kan, the Mortgage Bankers Association’s AVP of economic and industry forecasting. “There were more listings at the higher end of the market and the median sales price increased for the third straight month, suggesting fewer entry-level and less expensive options, making home-purchase conditions more difficult for first-time buyers. Their share of sales dropped to 27% compared to 33% a year earlier.”

While homebuilders are getting closer to delivering new homes, they remain stymied by ongoing global supply chain issues. Homebuilders are still struggling to obtain lumber, windows and appliances. Garage doors are taking months to arrive, delaying closings.

The good news is there are several directions from which more supply may come, said Matthew Speakman, an economist at Zillow. 

“From new construction, from an aging Boomer population choosing to downsize and list their homes, from people feeling more confident listing as pandemic fears subside and/or from those sellers looking to capitalize on huge gains in equity over the past few years,” he said. “The other good news is that even despite very limited selection, buyers are finding ways to get deals done, keeping sales volume elevated heading into the spring shopping season.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

1826 Adelman Loop, Eugene, OR 

Price: $500,000    Beds: 4    Baths: 2.5    Sq Ft: 2522

This home has a great floor plan with very wide hallways, staircase and high vault ceilings. Large master bedroom on the main level with dining area and large kitchen with counter. 3 bedrooms upstairs with with a bonus room area. This home sits on o...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

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Rates Are Up, Is It Still A Good Time to Buy?

Monday, February 14, 2022
by Galand Haas

Good Monday Morning!

Conditions in the Real Estate world are changing and changing fast.  Mortgage interest rates are up and they most likely will increase even further.  Is this still a good time to buy or sell a home?  My answer is, Yes! Mortgage rates are up, but this is just the beginiing.  Our high inflation rates will eventually lead the Fed to taking action and begin raising rates.  Even though rates are up at this time, historically, they remain very low.  We may not see rates at the level we have them at now for years. For this reason, I am very pro buying now.  Also, during inflationary times, investment in Real Estate is by far the most solid place to have your money invested.  In regards to selling a home now, it is also a great time.  Inventories of homes for sale remain historically low and demand remains high.  Home value increases may taper in the coming months, so right now the opportunity for a top dollar sale is still very possible.  The coming months will see further change and the market you see today will not be the market of Spring and Summer.  My advice is don't wait to buy or sell a home. The following is an article from Realtor.com that talks about the current housing market nationally.

Surging mortgage rates are making the prospect of buying a home even more expensive for Americans—many of whom have already grown weary about the state of the housing market.

The 30-year fixed-rate mortgage averaged 3.69% for the week ending Feb. 10, up 14 basis points from the previous week, Freddie Mac reported Thursday. It’s the highest level for the benchmark mortgage rate since January 2020, before the COVID-19 pandemic had officially reached U.S. shores.

The 15-year fixed-rate mortgage, meanwhile, rose 16 basis points to an average of 2.93%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 2.8%, up nine basis points from the previous week.

“The normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic,” Sam Khater, Freddie Mac’s chief economist, said in the report. “Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on home buyer demand.”

There’s already evidence that Americans have soured on the prospect of buying a home. A new survey from Fannie Maeshowed that in January only 25% of respondents believe that now is a good time to buy a home, representing a record low since the mortgage giant began tracking the data. Meanwhile, 69% of people said it was a good time to sell a home.

“Younger consumers—more so than other groups—expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism,” Doug Duncan, chief economist for Fannie Mae, said in the report, noting that young Americans’ “sense of optimism around their personal financial situation declined.”

“All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed,” Duncan added.

Rising interest rates are another source of pessimism for these buyers. According to Fannie Mae, more than half of the survey respondents (58%) said they expect mortgage rates to rise in the next 12 months, in line with economist’ expectations.

‘With millennials and Gen Z forming households at faster rates, new home construction would have to triple the rate of home completions to close the gap in five to six years.’
– George Ratiu, manager of economic research at Realtor.com

As Americans consider the prospect of higher rates, some are attempting to take action—but finding major obstacles lie in their path. “Real-estate markets are caught in a lopsided dynamic with many buyers eager to find the right home before rates rise even higher, but very few available homes for sale as a result of almost a decade and a half of underbuilding,” said George Ratiu, manager of economic research at Realtor.com.

According to Ratiu, the housing shortage has surpassed 5.8 million homes as of the end of 2021. “With millennials and Gen Z forming households at faster rates, new home construction would have to triple the rate of home completions to close the gap in five to six years,” he said.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

1826 Adelman Loop, Eugene, OR 

Price: $500,000    Beds: 4    Baths: 2.5    Sq Ft: 2522

This home has a great floor plan with very wide hallways, staircase and high vault ceilings. Large master bedroom on the main level with dining area and large kitchen with counter. 3 bedrooms upstairs with with a bonus room area. This home sits on o...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

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Could Higher Interest Rates Change The Amount Of Inventory In Our Market?

Monday, February 7, 2022
by Galand Haas

Good Monday Morning!

With about two weeks of inventory of homes for sale in the Eugene and Springfield area, home buyers are struggling to find homes to purchase.  This situation does not seem to be easing at this time and it is creating an very strong market for home sellers with multiple buyers and offers being the norm.  Could the slight increase in mortgage interest rates begin changing this situation?  The answer to this is most likely it will not at this time.  If mortgage rates begin to tick up even higher, then you will see fewer buyers out there and the inventory of homes could begin to rise.  My suggestion is for home buyers to hang in there.  Even though rates jumped slightly, they are going higher in the near furture and will not be dropping again as many think.  For home sellers, if you are going to sell your home this year, don't wait.  You are at the top of the market and waiting will only cost you money.  Here is an article from a national Real Estate publication that speaks to our current housing market situation.

Homes are selling even faster than they were at this time last year as buyers continue to compete in the housing market. Housing inventories are lower as well, down 28% from a year ago. In December 2021, the National Association of REALTORS® reported that existing homes for sale fell to an all-time low.

With fewer listings of homes last week, buyer interest again outpaced homes available, writes Danielle Hale, realtor.com®’s chief economist, in a weekly analysis posted at the site.

“With fewer homes for sale now than this time last year, homes are selling faster and successful buyers have to move quickly,” Hale writes.

Seventy-nine percent of homes sold in December 2021 were on the market for less than a month, according to the National Association of REALTORS®. Properties typically remained on the market for just 19 days in December.

As rents rise at a double-digit pace, renters are looking to homeownership for the safety net of a steady mortgage and hopes of long-term appreciation. Mortgage rates that remain under 4% are also an incentive.

However, the fear of rising rates has driven a “rush on new-home sales as buyers try to sign contracts to lock-in rates and beat further cost increases,” Hale says.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3311 Ginkgo Way, Eugene, OR 

Price: $399,900    Beds: 3    Baths: 2.0    Sq Ft: 1417

Meticulously maintained two owner ranch style home in a quiet Santa Clara neighborhood. Newer roof, forced air w/ heat pump & vinyl windows. Corner 1/4 acre lot w/ screened in covered patio, two storage sheds, sprinklers, an irrigation well & RV par...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

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Haas Real Estate Team
Keller Williams Realty Eugene and Springfield
2645 Suzanne Way Suite 2A
Eugene OR 97408
Direct: (541) 349-2620
Fax: 541-687-6411
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