Are Interest Rates Going To Rise??

I've been reading a lot of articles lately that are speculating on what interest rates are going to do. I actually watch this very closely as a Realtor, as the affordability of housing changes greatly as rates vary. Where it really comes into play is when I'm working with a buyer and they are qualified up to say $350,000. Suddenly rates spike up and now they only qualify for $300,000. It only takes about 1 percent in rate to make this happen. So the homes we've been looking at are now out of my buyer's price range and we are back at square one.

That being said, the general feeling I get is that rates aren't going to spike up drastically but they will tick up. One article I got from Mike Popnoe of Strategy 7 said:

THEY SAY THAT MARCH COMES IN LIKE A LION AND GOES OUT LIKE A LAMB... But this year, the exact reverse is true when it comes to home loan rates - for quite a few reasons, including the end of the Federal Reserve acting as a large buyer of Mortgage Backed Securities (MBS). The "demand" created by their fifteen-month program has helped Bond prices stay high and home loan rates stay low.

But the Fed's MBS purchase program will end on March 31st. The Fed has confirmed this several times, including during last week's testimony by Fed Chairman Ben Bernanke. What's more, the Fed will likely change sides entirely, and actually become a seller of MBS, since their balance sheet hangs heavy with MBS holdings. However, once the Fed begins selling MBS and puts more supply into the market - at the same time as entirely removing their past demand as buyers - this will pressure Bond prices lower and push home loan rates higher.

If this in fact is true, it is all the more reason to act quickly. I think home prices are at or near their bottom, depending on the location, and the rates will outweigh the drop in home value. You just need to do your rate calculation and figure out what you can afford. As always, if you have questions I'm happy to answer them or point you to a good loan officer.

3125 SW 187th Ave - Video Blog

I was holding an open house earlier today and decided to a video blog about my listing at 3125 SW 187th Ave, Beaveton, OR.

Portland #2 'Time Saving City in U.S.'

According to Adam Bluestein, of RealSimple.com, Portland is the number 2 time saving city in the United States.  Of course my first question when I saw the article was, 'What exactly does that mean, and how do you judge it?'.  Well, here are the criteria he used when judging cities for the study:

To assess which places help you make the most of your precious hours, we sorted through reams of data on dozens of large American cities, ranked each on various criteria in five categories (see below) on a scale of 1 to 5, and added up those categories to get an overall score.

Category 1: Getting around --Includes average commute, walkability, traffic congestion, airport on-time performance.

Category 2: Health and safety --Includes average wait to get a doctor's appointment, physicians per capita, response times of emergency medical services.

Category 3: Information and technology -- Includes broadband and wireless availability, bookstores and libraries per capita, helpful resources such as 311 hotlines.

Category 4: Green time-savers -- Includes recycling access and cost, number of farmers' markets and community gardens, bike friendliness.

Category 5: Lifestyle -- Includes number of personal trainers and organizers, restaurants offering takeout per capita, miscellaneous time-saving services.

 Portland finished right behind Seattle, and this is how Portland was graded out:

Portland, Oregon -- Score: 21.5 -- Population: 557,706

It's no hassle getting around this town, whether by bike or on the nation's fourth-largest light-rail system. There are few airport delays, and speedy emergency services translate to one of the highest cardiac-arrest survival rates.

And finding lunch is easy, with about 450 gourmet food carts around the city. "I could hit 100 carts in an hour," says Brett Burmeister, who runs Foodcartsportland.com. "It takes less than five minutes to get a cheap, amazing lunch."

Getting around: 4.5
Health and safety: 4.5
Information and technology: 4
Green time-savers: 4.5
Lifestyle: 4

While I will agree that Seattle has more technology and more hot spots, I disagree with the overall grade.  I think more weight should have been put on the 'Getting Around' category.  I have wasted countless hours sitting in Seattle traffic.  Every time I try to get somewhere in Seattle I seem to lose at least an hour sitting on the freeways.  There just isn't a way around, and the traffic is never ending!  I guess that's when you pull over and hit one of the coffee shops with free wifi. 

Either way, I still see this as a positive representation of Portland.  The more people I have visiting, the more I appreciate our city.  If we keep getting these 60 degree days in February and March, we may just have a mass migration to the great gray northwest!  

To see the entire article, click here: http://www.cnn.com/2010/LIVING/wayoflife/03/15/rs.top.time.saving.cities/index.html?hpt=T2

$8000 First Time Home Buyer Tax Credit Ending

Last November I saw a lot of momentum coming from the $8000 first time home buyer tax credit. However, as it was extended to homes under contract by April 30th of this year, and it doesn't seem to have the same sort of buzz.  I think this is due, in part, to the fact that many of the people that were on the fence already jumped and got in before the original November '09 deadline.  Also, I think people just don't have all of the information.  One key to the extension is a $6500 credit for current home owners.  According to the IRS:

'The new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.' -IRS.gov

The key thing to note is that there are a finite number of days to take advantage of this.  If you are going to buy a home, and get the tax credit, you need to be under contract by April 30, 2010 and it has to close by June 30, 2010.  This means you have about 6 weeks to find a home and another 2 months to get it closed.

If you'd like more info on the extension go to the IRS website: http://www.irs.gov/newsroom/article/0,,id=215791,00.html.  

If you have any additional questions, I'm always here to help.

John Ross Condo Auction

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Well, another bank has decided to auction off condo units in Portland.  The John Ross building is following Atwater Place's lead and selling 50 of the remaining 80 units.  I can see both the good and the bad of this.  I do feel sorry for the homeowners that were early adopters of the John Ross and the south waterfront district.  This will set a new low bar for the values of the condos.  The whole project has been hit very hard by the downturn in the market.  However, I do think some poor planning has also hindered the sales and acceptance of the south waterfront project.

In my opinion, there are 3 major problems with this development in general.  First, there is very little parking outside of the 1 or maybe 2 spots an owner gets with their unit.  Secondly, it is not an easy place to get in and out of.  Access is only onto Macadam and often seems to be more difficult in comparison to other parts of the city.  Finally, and this is the complaint I've hard most, is that there isn't a grocery store or enough commercial space.  Most people that embrace condo living want to be able to park their car and walk to get their needed items.  You can jump on the street car, but it takes a 30 mins or more to get very far into town. If you compare it to the pearl district, which has thrived because it is full of shops, restaurants, bars, and most importantly, 2 grocery stores, it's a tough sale.  In the south waterfront, you have a couple of restaurants, a coffee shop, a mini mart, and that's about it.

That being said, there is opportunity for the south waterfront to be a thriving community in time.  I just look at it as a longer hold than other condo buildings.  If you can get in cheap enough, though, it could be well worth it.  You look at price per square foot and make a decision.  The other drawback to the John Ross building is that it is not located on the water like Atwater Place or the Meriwether.  There are still river views but it just depends on the unit and the floor in the building.  In my opinion, I don't like the finishes quite as well either.  The Atwater Place building is quite stunning and the Meriwether is pretty nice as well.  One thing I have realized after touring most of the condo buildings in Portland, is that it all comes down to personal taste.  There is a style to the elliptical building, and it may be just want you're looking for. 

In looking at the auction, here are a couple of things to note.  First, you just have to be educated if you are going in there.  Make sure you go in with a Realtor that is familiar with the project.  I went to the Atwater Place auction and most of the units were bid up to nearly market value or above.  Out of the 41 units they were auctioning I felt as though there were 5-6 units that were values when it was all said and done.  In my case, instructed my clients to pass on the units they had hoped to bid on.  In many cases, you could have had the same deal just by negotiating with the developer prior to the auction.  If you want to see the list of condos up for auction and more info, click here.  If you have any questions or would like more information on the building simply give me a call or shoot me an e-mail.  I'm always here to help.   

Aaron Stelle
Real Estate Broker
Licensed in OR & WA, CDPE, e-PRO
2009 RE / MAX 100% Club
RE / MAX equity group, inc.  
Direct:   503.495.3264
Fax:      503.495.5124
E-mail:  aaronstelle@gmail.com
Web:     www.aaronstelle.com

Multiple Offers After Months of Listing

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Over the years of being in the real estate business, there are 2 things that drive me crazy.  The first is the fact that every time you try to schedule a vacation, activity goes up 10 fold.  Literally you could have almost nothing going on for days, weeks, or even months, and suddenly you schedule a vacation and clients are coming out of the woodwork.  The second is the phenomena where a house will sit on the market for weeks or months with no offers then suddenly there are multiple offers inside of 24-48 hours.

I still haven't been able to explain why either of these things happen, but I have a hypothesis on the second one.  Most of the time when I call to schedule an appointment to get a client into a house my first question is, 'Is the home still available?'  That's fairly logical right?   Under most circumstances the other agent says yes and invites me to show the home to my clients.  However if the other agent makes me aware that the home is available, but there is another offer coming in or already in, then I will keep the home on the list and make my clients aware of the situation.  At this point I think 1 of 2 things happens.  First, I believe it might be the spirit of competition that gets people going.  They don't want to lose out on this home to someone else.  Also, the thought that 'if someone else is willing to make an offer on this home, it must be worth while' seems to plant itself in people's heads. 

Secondly, there is a general thought out there that homes are sitting so you can take a long as you want to make a decision.  Once a client misses out on a house, or starts seeing that homes really are moving, the urgency steps up a notch.  Suddenly, they don't want to miss out on this opportunity.  Either way, it still never ceases to amaze me how it works out.  Maybe one of these days I'll have the magic answer, but until then, I'll just continue to speculate and be driven crazy.     

Todai - Brilliant Marketing!

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As my birthday was approaching, I got that inevitable call from my brother, 'So your birthday is coming up, want to hit Todai?'  This little question got me thinking.  How many places out there go to the lengths that Todai Japanese Sushi and Seafood Buffet does to get you to come in on your birthday?  Furthermore, why don't more businesses try this strategy?  Now I know a lot of places out there do offer some sort of deal, but the first words you hear every time you walk in to Todai is, 'Any birthdays?'.  In case you have never been there then your first question is, 'Why, what happens on your birthday?'  If you have been there, it's a simple reminder to show up on your special day.  For those of you that don't  know, you get one free entry to the buffet on your birthday.

I look at it this way though.  The restriction is that you have to have at least 1 paying customer with you in order to qualify.  In today's case, I had 7 other friends that decided to join us.  How many places out there wouldn't offer a bring 7 get 1 free coupon?  On top of that, people usually go out of their way to join you on your birthday, so there are almost always decent sized groups.  It's so simple and yet so BRILLIANT!!!

Now as for the food, I would not say it isn't anything spectacular.  If you have never tried sushi, it's a great way to try a little of everything without ordering it separately.  It's also nice because it's a buffet so if you decide you don't like it there are all kinds of other hot dishes to eat.  As far as sushi goes, I would say it is average at best.  If you want top quality, I can recommend a half dozen places that I think are better.  However, if you just want to eat a little of everything, this is your place!  Plus you can have a crepe when you're done!  How often do you get that at sushi???  It's like being in Vegas.

Overall, I think it's a great place to meet up with friends on your birthday.  I definitely wouldn't make it your romantic anniversary dinner, though!  Now the one problem I still haven't been able to solve, is how to get out there without eating entirely too much.  All you can eat and restraint just don't seem to go together!