If the Great Recession has damaged your credit score like so many of us, getting a home mortgage has been nearly impossible. But—Wells Fargo recently changed their policies to allow people with credit scores as low as 500 to get loans or home mortgages.
Although—to minimize risk—they’re requiring a higher down payment for those of us who are credit-challenged.
Will the other three big lenders (US Bank, Chase and Bank of America) follow suit? While it’s too early to tell—my guess is yes.
Loosening credit: 1 down and 3 to go
Work has now started that will fill one of Eugene’s notorious downtown holes. Lane Community College has begun construction on a new downtown facility—costing $53 million before completion late next year.
Hopefully this will be but a start towards a more vibrant downtown. We’re not likely to get back to what we once were—in times gone by when downtown was a hub of all activities, from shopping and entertainment to business.
Still, LCC’s project is a good start.
Looking into big holes, the Craigs enjoy one of their hobbies.
Buying local is not a new concept for Eugene and Springfield residents. But—it’s not always so easy. On a recent ABC news story, they experimented by eliminating all non-U.S. produced items from a typical house. Hardly anything was left.
However, they were able to replace the items with domestically produced products. What’s the lesson? It is said that if each of us spent a mere $3.33 per year on American-made products 10,000 jobs would be created.
Of course, when you need services such as a realtor, choosing local is an easier option.
How many local jobs are supplied by Coca-Cola?
According to a recent WSJ article, most mortgage modifications don’t work. Less than 2% of the projected allotment of $75 billion for the HAMP program has actually been spent to help homeowners avoid foreclosure.
Nationwide, 6.7 million homes were lost to foreclosure or short sale in the decade ending in 2010. Half again as many are projected to meet the same fate in the next 3 years. If projections are accurate, that should keep it a buyer’s market through 2013.
The number of distressed properties in Eugene and Springfield isn’t exactly known—but they are common and I do a lot of them. Rejection from the HAMP program was about 3 of every 4 participants in the western states, including Oregon. If mortgage modification doesn’t work, a short sale may be a good option for you.
Most mortgage modificatins don't work.
The destruction from the recent earthquake in Japan and in Christchurch, New Zealand is a reminder of how vulnerable we all can be. All construction and engineering is a balance between risk management and economics. It’s possible to build a structure that will essentially never fall down. However, that would be very expensive—and affording the building is the real key.
The possibility of an earthquake in Lane County is there—we live in the Cascadia Subduction Zone, which is known to be seismically active. So what can you do? Local building codes have continued to become more stringent and therefore more earthquake resistant so new structures will fare better if an earthquake does happen. Plus, earthquake insurance is available.
What do most of us do? Ignore the risk.
Will building codes keep earthquake aftermath in Lane County from looking like this?
Experts are saying the prices for houses are close to the bottom—meaning price increases are just around the corner. And, houses are becoming increasingly affordable. Nationally, house prices are less than two-years’ salary. In Lane County, though they’re still higher than that.
However home ownership is part of the American Dream and the net worth of home owners is some 40-times greater than renters.
Is home ownership in your dreams?
Remodeling and renovating is another area of the market in Eugene and Springfield that fell on hard times during the Great Recession. We have bottomed-out though—and business is improving.
While home improvements don’t return dollar for dollar on resale, they still make sense if you plan to stay in the house for a period of time.
Rebuilding the housing market brick by brick.
The logging and wood products industries are recovering, but slowly. Both are significant sources of employment in Lane County. Additionally, the housing market is the chief source of demand for wood products. Construction of more single-family houses is what’s needed, but building of such homes is at low levels around Eugene Springfield—and nationwide.
Before more new home building can start up, the inventory of existing homes for sale needs to decrease. In the meantime, it’s a great time to buy.
According to recent market statistics released by RMLS, it’s still a buyer’s market for real estate in Lane County. February 2011 showed another month of a soft market.
• Typical sales price about 200K. (Median: 192K, Mean: 214K).
• About 1 year’s inventory on the market. Figures greater than 6 months indicate a buyer’s market.
• Time on the market from listing to sale: close to ½ year. This increase could be due to the larger number of distressed properties on the market, which often take longer to sell.
• Median house price in Eugene Springfield was 159K, falling to values not seen in seven years.
It’s a good time to buy, and things are still selling. Contact me if you’re interested in buying or selling real estate in Eugene.
Continued downward pressure on Lane County real estate in February 2011
New home construction fell to an all time low in February 2011, with an annualized national number of building permits at 517K. In Eugene Springfield new residential building is very slow right now. New building permits issued in January were reported to be 27, down 13% from January 2010. 466 building permits were issued in Eugene Springfield for all of last year.
Distressed properties are often cheaper than replacement cost, and there’s a lot of inventory of all types of houses to be sold; until both of those change, I don’t expect new house building to pick up much.
It’s still a great time to buy, though. Prices are down in Eugene Springfield and there are some great values.
There are fewer homes being built in Eugene Springfield in 2011