New College Loan Repayment Law

I was reading a fairly fascinating article about college loan repayment today. There is a new law going into effect that limits the payments to 15% of your gross income. Then I started thinking about my school loans and am really thankful that I went to a state school and worked while I was there. I can't imagine having $80,000 in school loans and paying $800 a month. I guess it would be even more compounded for me as I'm now working in a field where my college degree doesn't do a whole lot. It has been good for many reasons outside of getting a job, but mostly unintended consequences. For example, I had some very anal professors that grilled me on grammar and spelling. Now I had been taught that previously, but these guys are what really cemented the 'there, their, and they're' as well as 'your and you're' grammar in my head.

Also, going to Oregon State has also allowed me to meet a lot of alumni and Beaver fans since I graduated. It's an instant bond and of course, who doesn't love a good football game on a fall Saturday??? There is no better time in the world than being around a bunch of good friends, eating good food, sipping on beverages, and watching college football. What's not to love?

I digress, if you'd like to see the article, or know more about it, go to: http://www.cnn.com/2009/US/06/24/college.loans/index.html

Unemployment

Well, this isn't exactly the chart that we want to be known for in Oregon. While I've seen a lot of indicators that things are on the upswing, this is still a big negative for the state. In talking to friends, family, and clients, this is definitely an important issue. There are a lot of people out there that are still worried about losing their job, and if they do this is what they have to look forward to. I think this also has a psychological effect for people that do have jobs. You get a lot of 'I'm just happy to have a job' out there. The problem I see with this is there doesn't seem to be as much job satisfaction. I'd love to see this number drop and start seeing people back to work.

However, I don't see this happening unless we start getting more corporations to come to Oregon, and Portland. This is where forward thinking leaders are needed. We need to offer the tax incentives of other states, and not get greedy in the short term. While I know budgets are tight, it's not the time to start taxing companies that provide jobs. Bring the companies in and the tax base will grow! It seems like a simple premise. More companies = more jobs = more people paying taxes. Is this not the way it works???

The problem I see is that doesn't seem to be the stance I see in the City of Portland. I have talked to accountants, community leaders, and small business owners and they all seem to agree. We need to be more business friendly. Give the business taxes a temporary break. Get businesses to start up again, and get people working!

Interest Rates

Well, I'm hoping it's not going to stay this way, but it looks like the days of sub 5% interest rates are going by the wayside. Over the last couple of weeks I've heard over and over that rates are going up up up! Not what I was looking forward to just as I was seeing the market pick up. Overall though, I am still hearing that they aren't bad. I still consider rates under 6% to be a great deal. I guess we were just getting a little spoiled with the really low 4.5%.

On another note, I am still seeing a lot of new construction that has special financing for under 4%. I know the condos I work at are offering 3.875% financing on the tower units. What makes the deal even better is that if you have to sell, they will give you that deal on the listing. So, if I am listing the house, we could offer 3.875% financing as incentive and you'd get it on the purchase of the condo. Not too shabby!

Inspecting Old Houses

This week I had an inspection of one of my listings that was built in 1930. As would be expected, the inspector found a lot of things that wouldn't be up to today's standards. However, just because it is not the way they do it today, does not mean it's not perfectly functional. A great example of this is the bathroom downstairs does not have a ceiling fan, it has a window. Very common for the 1930's. The inspector made a comment along the lines of: 'While it does have a window, it would be better if it had a ceiling fan as you're not going to want to open this window during the winter when it's cold outside. A ceiling fan will help to avoid a moisture problem.'

My train of thought is this: It's worked fine since 1930, what's wrong with it just having a window??? In speaking with my client, I explained that you could put a fan in but you'd have to cut holes in the ceiling, and to the outside for it to vent, and finally, you'd have to run power. This is perfectly feasible, but it's a double hung window. Just drop the top one down about an inch and you'll have ventilation.

I guess my overall thought process is just to use a little common sense. There are definitely some issues with buying old houses. You need to work with someone that can point those out to you. I would always recommend getting a home warranty on an older home so you are at least covered for the first year. However, like in life itself, DON'T SWEAT THE SMALL STUFF!

Missing out on deals

Wow, it's been a crazy couple of weeks for both my clients and myself. I'm seeing homes that have been on the market for months suddenly have multiple offers. I went out Wednesday with a client and we looked at a home in Happy Valley. She liked the home, and thought we'd take her husband through it. This is a new home that had been sitting on the market for months with no offer. I called today, and they got an offer in yesterday and the seller has already accepted it. This is not the first time I've run across this either!

It's just been crazy how much activity I've seen over the last 3 weeks or so. I went from having 1 offer on 1 of my listings to having 6 offers on 3 of my listings. One of my other listings has had more showings in the last 2 weeks than it had in the last 2 months. It's crazy out there, but I'm not complaining.

I think it's a couple of factors that are contributing to this. First off, it's the nice weather. We've had a beautiful run of blue skies which are coming unseasonably early. Secondly, Portland and Oregon are always a lot busier in the summer. People want to get their homes settled while the kids are out of school. If you buy early in the summer, you can be completely settled by the time the new year starts. Finally, I've also seen rates go up over the last couple of weeks. For people that thought they had an unlimited time frame, this was an indicator that it's time to move. If rates go up 1%, it's like a 10% increase in price on the monthly payment. So when rates go from a little over 4.5% to almost 5.5%, it's a big deal.

If you are at all on the fence, now is the time to jump.