What to expect in Real Estate for 2017
2017 is turning into one of the strongest sellers markets in recent history in the Pacific Northwest and across the county. The inventory is low in the Vancouver area, and the buyers are ready and qualified! This is great news for sellers because it means that the competition will be prepared to buy the home with solid financing, or cash in some cases. Gone are the days of easy to get home loans for unqualified buyers. Home prices have been steadily and evenly rising for the past few years and that is expected to continue through 2017. If you are thinking about selling your home in Clark County or the Portland Metro area, spring and summer are the best times. People have been waiting for that rainy gloomy weather to end, and everything is full bloom in the northwest – making your home look even more amazing!
What about Interest Rates?
Interest rates are on the rise, and they are expected to continue rising at slow and steady rates. However, the rate for a 30 year loan is still historically low. Even as rates rise, they will continue to be affordable for quite some time. Buyers are trying to secure these amazing rates while we still have them, but mortgages aren’t going to become expensive overnight. This rise is expected to be slow and steady for the next several years. Locking in a rate as soon as possible however is still the best solution. If you have a $300,000 mortgage – a one percent raise in interest rates will cost you about $1600 a year more in interest alone. Over the course of the loan, this is significant – so low rates are a major reason the current market is so competitive. For specific questions about the mortgage market, you can contact our preferred lender for a free consultation!
Can you Sell my Home Quickly?
In most cases, we ask our sellers to be prepared when listing their homes in today’s fast market. They may sell very quickly – usually within a week or less if priced appropriately. You should have a plan as to where you will go next and how long you expect you will need to transition. The good news is that in a sellers market, buyers are more likely to negotiate rent-back with you when the deal is made. This means that you are allowed to stay in the home for a certain period of time after closing. You will need this time to close on your next property, pack and move etc. Rent-back is a very common request, but in a sellers market – it’s almost a given. A good real estate agent will make sure to request this in the listing so that there are no surprises. Homes in Camas, WA are moving the quickest in the area due to high demand for the Camas School District still. Beaverton, OR is a close second due to all the work available in the Beaverton area.
Will Home Prices Crash Again Like Last Time?
The current demand driving this sellers market is low inventory. During the 2007-2008 market crash, bad loans were driving the prices up and leaving the homeowners underwater. If you ask anybody buying a home right now, they will tell you that getting financed was not as easy as in previous markets. You will need a solid job history, good credit and cash on hand to qualify. Some of the loans being given out in 2006-2007 did not even bother to check pay-stubs. They had no idea whether their buyers were qualified, and most didn’t care. Today’s market is flooded with buyers who have cash in hand. You can’t default on a mortgage if you don’t have one. Not to mention, walking away from a home is difficult to do when you invested $30,000+ of your own hard-earned dollars into securing it. We do expect home prices to stall for a little while once inventory numbers improve. But a “hold tight” in the industry is normal and a good sign. Just like any investment, it’s only when you have continuous long-term losses that you can’t recover. No losses are expected.
What Impact are Investors Having?
Investors, just like everyone else, are having to navigate their way through this full-price market. The difference is that many of them have cash on hand, and that gives them less competition. With house prices rising, and competition looming around every corner – home appraisals are an area of concern. Just because someone offers to pay $10,000 over the asking price, doesn’t mean that’s the current value of the home for sale. Cash buyers often skip appraisals (because they are saving money by not financing the purchase anyway) – which makes their offers very appealing to sellers. There are however fewer investors in the market right now due to the full price status of the current market. It’s always a good time to buy real estate with cash – and the current rental market is appealing for investors. However, paying full price for an investment is drawing fewer first-time investors to the table. Everyone is waiting for that smokin’ deal they could have had three or four years ago – that no longer exists today.
What can I Expect When Making an Offer on a Home?
The housing market has never seen a fall like it did between 2007-2012. So this recovery is taking a lot of people by surprise. Prices today, with inflation included, are still slightly below their 2006 peak. Inventory however is dramatically lower – and that is causing quite a frenzy. People are waiting for homes to hit the market, and when they do – they move quickly and competitively. To ensure that they get the home, and don’t have to spend weeks waiting for another property they like to come onto the market – people are submitting their highest and best, and selling prices are typically over asking. You can expect a well priced home in a decent neighborhood to have more than one offer in most cases. Offering below the asking price and attaching conditions to your offers will only hurt your changes of getting the property. However, you should stay within your budget and offer only what you are comfortable paying. It’s very easy to get swept up in the excitement. We always tell people prior to submitting an offer, decide what is most important to you – and we will guide you. We will research the property to see what the actual current value is, so that you aren’t having to submit blind offers with uncertain consequences. Having a good buyers agent to help you through the process is invaluable. A buyers agents primary commission is also paid by the sellers, not the buyer – so having their representation in a purchase is just extra protection for you!