Hillsboro Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Sept. 17, 2019

Home Prices Increase in Every Price Range

 

Home Prices Increase in Every Price Range | MyKCM

CoreLogic’s Home Price Index (HPI) Report revealed,

National home prices increased 3.6% year over year in July 2019 and are forecast to increase 5.4% from July 2019 to July 2020.

They also analyzed four individual home-price tiers, showing the increase in each.

Here’s the breakdown:

Home Prices Increase in Every Price Range | MyKCM To clarify the methodology, CoreLogic explains,

“The four price tiers are based on the median sale price and are as follows: homes priced at 75% or less of the median (low price), homes priced between 75% and 100% of the median (low-to-middle price), homes priced between 100% and 125% of the median (middle-to-moderate price) and homes priced greater than 125% of the median (high price).” 

What does this mean if you’re selling?

Price appreciation can differ depending on your price range. If you’re a homeowner thinking of selling, let’s get together to find out how much your home is increasing in value, so you can price it competitively for today’s market.

Posted in Market Updates
Sept. 16, 2019

Things to Avoid After Applying for a Mortgage

 

Things to Avoid After Applying for a Mortgage | MyKCM

Congratulations! You’ve found a home to buy and have applied for a mortgage! You're undoubtedly excited about the opportunity to decorate your new home, but before you make any large purchases, move your money around, or make any big-time life changes, consult your loan officer – someone who will be able to tell you how your decisions will impact your home loan.

Below is a list of Things You Shouldn’t Do After Applying for a Mortgage. Some may seem obvious, but some may not.

1. Don’t Change Jobs or the Way You Are Paid at Your Job. Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.

2. Don’t Deposit Cash into Your Bank Accounts. Lenders need to source your money, and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

3. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios…higher ratios make for riskier loans…and sometimes qualified borrowers no longer qualify.

4. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payments against you.

5. Don’t Change Bank Accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer any money, talk to your loan officer.

6. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t Close Any Credit Accounts. Many clients erroneously believe that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants in your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.

Sept. 12, 2019

What Is the Probability That Home Values Sink?

What Is the Probability That Home Values Sink?| MyKCM

With the current uncertainty about the economy triggered by a potential trade war, some people are waiting to purchase their first home or move-up to their dream house because they think or hope home prices will drop over the next few years. However, the experts disagree with this perspective.

Here is a table showing the predicted levels of appreciation from six major housing sources:What Is the Probability That Home Values Sink?| MyKCMAs we can see, every source believes home prices will continue to appreciate (albeit at lower levels than we have seen over the last several years). But, not one source is calling for residential real estate values to depreciate.

Additionally, ARCH Mortgage Insurance Company in their current Housing and Mortgage Market Review revealed their latest ARCH Risk Index, which estimates the probability of home prices being lower in two years. There was not one state that even had a moderate probability of home prices lowering. In fact, 34 of the 50 states had a minimal probability.What Is the Probability That Home Values Sink?| MyKCM

Bottom Line

Those waiting for prices to fall before purchasing a home should realize that the probability of that happening anytime soon is very low. With mortgage rates already at near historic lows, now may be the time to act.

Posted in Market Updates
Aug. 24, 2019

A Latte a Day Keeps Homeownership Away [INFOGRAPHIC]

A Latte a Day Keeps Homeownership Away [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The pumpkin spice latte is launching soon, so you may be tempted to spend your extra cash on a daily caffeine fix, but that small expense can add up to a big number – fast!
  • Saving for a down payment takes a little discipline, so limiting your extra purchases (like a latte a day from your favorite coffee shop) will help you get there faster.
  • Depending on where you live, putting away just a small amount each day will get you to the average down payment you may need for homeownership faster than you think.
July 24, 2019

What Experts are Saying About the Current Housing Market

What Experts are Saying About the Current Housing Market | MyKCM

We’re halfway through the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the experts predict for the second half of 2019.

Here’s what some have to say:

Danielle Hale, Chief Economist at realtor.com

“Lower mortgage rates, higher wages and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”

“Our outlook implies 4% growth for the remaining months of the year, predicated on…more supply than last year, the decline in mortgage rates, moderating home price appreciation and improving affordability.”

Lawrence Yun, Chief Economist at NAR

“Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in at these rates.”

Doug Duncan, Chief Economist for Fannie Mae

“Moderating home price appreciation and attractive mortgage rates continue to support affordability, particularly as home builders are now paying more attention to the entry-level portion of the housing market.”

Kaycee Miller in a Realtor Magazine article

“At the moment, some observers suggest the housing market is indeed headed for a slowdown. But no need to panic — experts say the financial and economic factors that were in play during the big crash a decade ago don’t exist today.”

Bottom Line

The housing market will be stronger for the rest of 2019. If you’d like to know more about your specific market, let’s get together to chat about what’s happening in our area.

Posted in Market Updates
June 25, 2019

The Pros and Cons of Heated Flooring

Heated Floors

While you might be considering adding heated flooring to your new home, there are a lot of questions to ask before you put your money into this luxury feature. If you’re looking for another level of comfort in your home, it’s a great option—but it does come with a hefty price tag. Here’s what you need to know:

Pros 

  • Durable and reliable. This method of heating lasts longer than a regular home furnace—with proper care it can last up to 35 years.
  • Comfortable. There’s no better feeling than a warm floor on a cold day, especially when you first get out of the shower. No one enjoys stepping on cold tile, so bathrooms are particularly popular options for heated flooring.
  • Saves you money in the long term. Since radiant floor heating warms from the floor up, you’ll be able to set your thermostat at a lower temperature to feel just as warm.
  • Quiet. Because it does not require a blower, there is no extra noise produced when running it.
  • Distributes heat evenly and consistently throughout each room.
  • Better for allergy sufferers, since traditional central air heating pushes dust, dirt and pollen through the vents and around your home.
  • Customizable. Electric floor heating allows for the option of only having heated flooring in certain rooms—so you can customize where you want it.
  • Hidden, so your home has more space and less unattractive radiators.
  • Versatile. Can be installed under any flooring.
  • Profitable. Increases the value of your home.

Cons

  • Costly. Installation will cost more than replacing a furnace, and hydronic systems are more expensive than electric.
  • Not ideal for older homes as you will have to tear out existing flooring in order to install them. Wait until it’s time for a remodel before considering it.
  • Repairs are costly. Because the system is under the floor, this also means repairs to the system are more costly as well. Since heating elements are out of sight, it can be hard to find the problem area.
  • Slower to warm up the house than traditional heating. Especially true for water heating, which can take a few hours to circulate enough hot water to warm the home (but since they retain heat well, this allows for use in off peak hours, saving your utility bills).
Posted in Home Improvement
June 24, 2019

Stop Wondering What Your Budget Is & Get Pre-Approved!

Stop Wondering What Your Budget Is & Get Pre-Approved! | MyKCM

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

Our preferred lender is Brian Merritt at Minuteman Mortgage.  Learn more about our lender of choice on their website here: https://www.myoregonloan.com/bmerritt/

June 20, 2019

How to Adjust When Having Your Parents Move in





Many adults have their parents move in with them because of seniors’ declining health or financial considerations. Living with your elderly parents can be a rewarding but stressful experience, especially if you have a spouse and children, and expectations aren’t clearly communicated at the outset.

Benefits of Having Parents Move in
Senior citizens who have health problems or are at risk of falling are often much safer living with family members than alone. Having your elderly parents move in can also help the family avoid the financial burden of paying for assisted living or a nursing home. If you have young children, they and their grandparents can have opportunities to spend time together daily and forge strong bonds.

Potential Problems and How to Avoid Them
If one or both of your parents have medical issues, talk to their doctors so you understand their current and possible future needs. Be realistic about your family’s ability to care for senior citizens with serious health problems. If you can’t handle things yourselves, hire an in-home aide to care for a parent or to give you and other family members a break. If a loved one might need to move into a nursing home in the future, begin to explore your options. It could take months or years for a slot to open up. You don’t want to realize down the road that you can no longer care for a parent in your home and struggle to find other arrangements.

Be aware that your parents may resent their loss of independence or feel like a burden, especially if their health continues to decline after moving in. You also might expect them to babysit, cook or clean. Even if they’re willing, they may not be able to take on as much responsibility as you’d like. Be realistic about how much your parents can do. Look for ways to make them feel like they’re contributing to the family without making them feel overwhelmed.

Discuss issues such as how much time family members should spend together, how much privacy each person needs, how much noise is acceptable, and when and where meals should be eaten. Don’t be afraid to establish firm boundaries. As much as you love your parents, you have the right to set the rules in your own home.

If you have any concerns, discuss them. Don’t sweep things under the rug and hope they’ll get better. Different people may simply have different expectations, and you might be able to work things out with a brief conversation and avoid tension.

Discuss All Aspects of Living Together Openly and Honestly
Blending several generations in one household is a major adjustment for everyone. Be sure that you are up to the challenge of caring for elderly parents, get help if necessary and discuss any issues that arise. People often harbor resentment because of differing expectations that were never clearly communicated. Address any problems that come up directly and quickly to avoid conflict.

Posted in Lifestyle Tips
June 19, 2019

What You Need to Know About Private Mortgage Insurance (PMI)

 

What You Need to Know About Private Mortgage Insurance (PMI) | MyKCM

Whether it is your first time or your fifth, it is always important to know all the facts when it comes to buying a home. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It's a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 13%. For first-time buyers, that number dropped to 7%, while repeat buyers put down 16% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:What You Need to Know About Private Mortgage Insurance (PMI) | MyKCMThe larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It's no doubt an added cost, but it's enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family.

Posted in Reasons to Buy
June 17, 2019

5 Reasons to Sell Your House This Summer

 

5 Reasons to Sell Your House This Summer | MyKCM

Here are 5 compelling reasons listing your home for sale this summer makes sense.

1. Demand Is Strong

The latest Buyer Traffic Index  from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other for the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply needed for a normal housing market. This means that, in most of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, the average number of years a homeowner stayed in his or her home was six, but that number has hovered between nine and ten years since 2011. Many homeowners have a pent-up desire to move, as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners are granted the freedom to move.

Many homeowners were reluctant to list their home over the last couple of years for fear that they would not find a home to move in to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you to decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. Buyers know exactly what they can afford before home shopping. This makes the entire selling process much faster and simpler. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 43 days. (Last numbers available.)

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has created a buyer’s market. This means that if you are planning on selling a starter or trade-up home, it will sell quickly, AND you’ll be able to find a premium home to call your own!

According to CoreLogic, prices are projected to appreciate by 4.8% over the next year. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to start living the life you desire.

That is what is truly important.