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We Are In The Midst Of A Change In The Housing Market

Monday, August 29, 2022
by Galand Haas

Good Monday Morning!

It is very easy to see that we are in the midst of a major change in the housing market, both here locally in the Eugene and Springfield area and across the nation. You can see more "For Sale" signs up, the signs remaining up for much longer, price reductions on homes for sale and just less buyer interest. Homes that would have gone on the market two months ago and had multiple offers and sold in just a few days are now sitting. This is the beginning of what I beleive will be a major shift in the national housing market. A shift that is now just in it's infancy. Many economists predict that in certain markets, home prices could decline as mcuh as 20%. Why is this happening when we have a huge shortage of houses both locally and nationally. Inflation is the primary culprit. With inflation rates of over 8% for months now, everything is costing more. The Feds only tool against rising inflation is to raise interest rates. This has a direct effect of mortgage rates.  In the Spring of this year, we saw mortgage interest rates as low as 2.5%. Now mortgage rates have doubled that. You take higher mortgage rates and throw that into a housing market with inflated home prices and housing affordability suddenly goes out the window. All is not lost yet. Inflation needs to be brought under control. If this happens, then we will see the stabilizing of the housing market with home affordability returning. The problem is that if the government continues to put the cap on energy production, continues out of control spending and continues its current economic policies, inflation will continue to roar and the national housing market will continue its downward trend. The next several months may tell the story as to where we are heading as a nation with our housing market.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

5427 Royal Ave, Eugene, OR 

Price: $1,500,000    Beds: 4    Baths: 3.0    SqFt: 3218

One of a kind property. This close-in home and property has an 80' X 120' riding arena with 8 stalls, 24' X 40' small barn and tac room with 3 stalls, 40' X 100' barn with 10 stalls and 600 sq.ft. apartment. Arena and apartment building are Butler b...View this property >> 

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Mortgage Rates Seem Stable As Home Inventory Rises

Monday, August 22, 2022
by Galand Haas

Good Monday Morning!

The Real Estate market here in the Eugene and Springfield area and across the country continues to shift.  In most market areas home sale are slumping and inventories are rising.  Mortgage rates seem to be fairly stable at this time and even though they are higher than this same time period a year ago, they remain well below the 30 year average rate.  I think that this is a golden opportinity for home buyers.  The days of multiple offers and low inventory of homes for sale has certainly come to and end.  The time to act is now as inflation continues to roar and mortgage rate hikes are a certainty in future months.  Here is an article from "Realtor.com" that talks about our current national housing market.

The numbers: U.S. existing-home sales fell 5.9% to a seasonally adjusted annual rate of 4.81 million in July, the National Association of Realtors said Wednesday.

This is the sixth straight monthly decline.

The sales number matched what economists polled by the Wall Street Journal were expecting.

his is the weakest level of sales since May 2020 at the end of the recession caused by the pandemic. Excluding the recession, the level of sales activity was lowest since November 2015.

Compared with July 2021, home sales were down 20.2%.

Key details: Prices moderated in July. The median price for an existing home fell to $403,800, up 10.8% from July 2021. That was the slowest annual pace of increase since July 2020.

The number of homes on the market rose 4.8% to 1.31 million units in July.

Expressed in terms of the months-supply metric, there was a 3.3-month supply of homes for sale in July, up from 3 months in June. Before the pandemic, a four-month supply was more the norm.

It is still a tight market. Homes remained on the market only for 14 days on average. Pre-pandemic, the average time for homes to remain on the market was a month.

Sales declined across all regions of the country. The West saw a “dramatic decline” in sales from a year ago of 30%.

All-cash transactions made up 24% of all transactions, down slightly from June. About 29% of homes were sold to first-time home buyers, down slightly from 30% in the prior month.

Big picture: The decline in home sales comes as mortgage rates have doubled and recession fears spook buyers.

Perhaps a silver lining is the pendulum is slowly swinging to the prospective home buyer’s side.

Sellers are upping incentives to entice apprehensive buyers, worried about a looming recession.

To be clear, homes are still expensive. Borrowing costs are elevated, with the average contract rate for a 30-year fixed-rate mortgage at 5.45%, according to the Mortgage Bankers Association. And even though Yun said last month that he expects price appreciation to slow to 5% by the end of the year, prices are still out of reach for many first-time buyers.

Builders are calling the current situation a “housing recession,” and new construction of homes has started to fall. Builders expressed gloominess in an August survey, signaling that construction will continue to slow. Both will likely put pressure on the pipeline of new homes hitting the market in the future.

What the realtors said: In the month of June, “affordability has plunged to the lowest level in 30 years,” Lawrence Yun, chief economist at the NAR, said during a call.

“We are in a housing recession,” Yun said, only “in terms of sales and housing starts.” homeowners are still in a really “comfortable” position as home price growth continues.

He added that he believes it is “possible that mortgage rates have already peaked” which would provide some relief for prospective buyers.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

375 72nd Place, Springfield, OR 

Price: $450,000    Beds: 3    Baths: 2.0    SqFt: 1656

Beautiful one level home, cul de sac location on large beautifully landscaped lot. Newer roof and heat pump. Spacious living room with fireplace, dining area, family room, covered patio and huge fenced backyard. This home has been extremely well mai...View this property >> 

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The Housing Market Slows As Home Prices Continue To Rise

Monday, August 15, 2022
by Galand Haas

Good Monday Morning!

The numbers are in for home sales in the Eugene and Springfield area for July of 2022.  The numbers show that the market is beginning to show some real signs of change.  The number of new home listings is down, the number of new home sales is down, time on the market in increasing and the inventory of homes for sale is creeping upwards.  The interesting thing is that even with the home market slow down, home prices continue to rise.  This is caused by a situation called stagflation, where home price inflation hits as the market slows.  Right now the overall economy of our area and the nation is having the largest effect on our housing market as mortgage interest rates have actually relaxed some over the past several weeks.  All indications are that the slowing trend in the housing market will continue both nationally and locally.  Remember though, with each different kind of market, some opportunities disapear as new ones come into play.  Here is the report on home sales in Lane County for July of 2022.

New listings (571) decreased 6.7% from the 612 listed in July 2021, and decreased 9.7% from the 632 listed in June 2022.

Pending sales (452) decreased 12.7% from the 518 offers accepted in July 2021, and increased 2.7% from the 440 offers accepted in June 2022.

Closed sales (396) decreased 20.6% from the 499 closings in July 2021, and decreased 14.8% from the 465 closings in June 2022.

Inventory and Market Time

Inventory increased to 1.6 months in July. Total market time increased to 22 days.

Year-To-Date Summary

Comparing the first seven months of 2022 to the same period in 2021, new listings (3,635) increased 0.3%, pending sales (2,930) decreased 5.5%, and closed sales (2,724) decreased 2.8%.

Average and Median Sale Prices

Comparing 2022 to 2021 through July, the average sale price has increased 13.0% from $422,000 to $476,900. In the same comparison, the median sale price has increased 11.5% from $390,000 to $435,000.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

1553 Linwood Street, Eugene, OR 

Price: $599,000    Beds: 7    Baths: 5.0    SqFt: 3100

Great potential for live in owner/manager. Unique property with five separate living units. large covered patio and deck areas. 2 car garage, rv parking with rv hookup and dump, irrigation well. Updates and construction are fully permitted. This ho...View this property >> 

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There Is A Window Of Opportunity For Home Buyers Right Now!!

Monday, August 8, 2022
by Galand Haas

Good Monday Morning!

There is a window of opportunity for home buyers right now that is most likley going to be short lived.  This window is mortgage interest rates that have dropped below 5% at the same time that we have a much softer housing market both nationally and here in the Eugene and Springfield area.  Locally, demand for housing has dropped off and the number of homes currently on the market has increased. The inventory of homes for sale currently is only something that home buyers dreamed about several months ago.  Yes, this window won't be here long because the Fed has already announced further rate hikes in the midst of attempting to slow the worst inflation in over 40 years.  Mortgage rates unfortunately will soon be heading back up. So if you are considering a home purchase, now is the time to take action.  Here is an article from "Realtor.com that speaks to the current national housing market".

Mortgage rates dropped to their lowest level since April, offering a reprieve to prospective home buyers who have been hit this year with higher rates and surging prices.

The average rate on a 30-year fixed-rate mortgage is 4.99% this week, down from 5.30% a week earlier, according to a survey by mortgage giant Freddie Mac published Thursday. Though rates remain well above their levels from a year ago, they have fallen swiftly in recent weeks from their 13-year high of 5.81% in June.

Mortgage rates and other measures of the cost of borrowing tend to rise and fall with expectations about the trajectory of the economy. Recently, fears that the U.S. is heading into a downturn have lowered expectations of the pace of rate rises.

Until the past few weeks, rising mortgage rates had been a key factor driving up the cost of home buying this year, adding hundreds of dollars or more to buyers’ monthly payments. That, on top of double-digit home-price growth, has helped drive buyers out of the market in recent months.

Sales of previously owned homes fell for a fifth straight month in June, according to the most recent data from the National Association of Realtors.

Elevated mortgage rates are one of the most direct effects on consumers from the Federal Reserve’s campaign to combat inflation. The central bank lifted its key policy rate by 0.75 percentage point last month, its second straight increase of that size, putting the benchmark policy rate in a range between 2.25% and 2.5%.

Those rates drive up borrowing costs for both companies and everyday Americans, making the cost of financing big-ticket purchases more expensive. While the Fed’s interest-rate increases are aimed in part at capping recent surges in the cost of housing, higher mortgage rates make it unlikely that prospective buyers who are using mortgages will get a bargain.

Mortgage rates are tied closely to the 10-year U.S. Treasury yield, which tends to move in tandem with expectations for the Fed’s benchmark rate. On Monday, the 10-year yield slipped to its lowest level since April. It rose Tuesday and Wednesday.

Still, rapid changes in mortgage rates are likely to continue as economists debate whether to be more concerned about inflation or a recession.

The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment,” said Sam Khater, Freddie Mac’s chief economist, in a statement.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

Lot 23 Abigail Lane, Eugene, OR 

Price: $110,000    Acres: 0.14    Zoning: R-1

Build your dream home on this South Eugene Lot with beautiful sweeping views of trees, the valley and city. Home plans to take advantage of this amazing lot are available with the purchase. This beautiful upscale neighborhood is a short distance fro...View this property >> 

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Prices And Rates Are Both Down, Good News For Buyers

Monday, August 1, 2022
by Galand Haas

Good Monday Morning!

As inflation continues to roar, a bright spot is that mortgage interest rates have fallen even further.  This is a good indication that inflation is hitting the national housing market as home sales continue to decline for the fifth straight month.  The good news for home buyers right now is that prices have slumped and mortgage rates have dropped.  This is giving home buyers what will most likely be a small window of opportunity to jump into the market with lower housing costs and better interest rates.  How long this trend will last is anyones guess.  My suggestion is that if you are thinking about purchasing a home this year, don't wait.  This opportunity may not be with us for long.  Here is an article from "Realtor.com" that discusses this current situation.

Mortgage rates fell after rising for two straight weeks, another indication that recession concerns are impacting the U.S. housing market.

The average rate on a 30-year fixed-rate mortgage dropped to 5.3%, mortgage-finance giant Freddie Mac said Thursday. That is down from 5.54% last week and below the 13-year high of 5.81% recorded in June. At the beginning of the year, rates on America’s most common home loan hovered around 3.2%.

The 5.3% rate was recorded before the Federal Reserve’s announcement Wednesday that it would raise its benchmark rate by 0.75 percentage point. While mortgage rates don’t automatically move when the Fed raises rates, they are heavily influenced by it. Mortgage rates are tied closely to the 10-year U.S. Treasury yield, which tends to move in tandem with expectations for the Fed’s benchmark rate.

Over the past week, investors have piled into U.S. Treasurys, often seen as a haven during times of economic uncertainty. This week, the yield on the benchmark 10-year Treasury fell to its lowest level since April. Yields fall when prices rise.

The U.S. economy shrank for the second quarter in a row, the Commerce Department said Thursday. Gross domestic product from residential investment, including the construction of single and multifamily homes and remodeling, fell 14%. This category accounts for between 3% and 5% of GDP, according to the National Association of Home Builders.

“Housing tends to lead the rest of the economy, and we expect that pattern will hold this cycle as well,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.

Rising mortgage rates and continued double-digit price growth have made buying a home even less affordable, slowing the housing market in recent months. The median American household needed $2,398 to cover mortgage payments on a median-priced home in May, according to the Federal Reserve Bank of Atlanta. That is a 25% increase from $1,916 in January.

Sales of existing homes have fallen for five straight months, according to the National Association of Realtors.

We expect that this slower pace will remain through the summer, but buyers could return later this year if the Fed’s plans are better understood by the market and lead to less rate volatility,” Mr. Fratantoni said.

Have An Awesome Week!

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

THIS WEEKS HOT HOME LISTING!

1553 Linwood Street, Eugene, OR 

Price: $625,000    Beds: 7    Baths: 2.0    Sq Ft: 3100

Great potential for live in owner/manager. Unique property with seven separate living units. large covered patio and deck areas. 2 car garage, rv parking with rv hookup and dump, irrigation well. Updates and construction are fully permitted. This ho...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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