Springfield Real Estate

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Will the FHA tighten home loan standards?

Perhaps. They’ve already boosted required down payment to 3.5% in the last year, but remain one of the easiest sources of home loan money. An article in yesterday’s WSJ said that current delinquencies on FHA loans were up from last year by about 1/2 to 7.8%.

FHA is required by Congress to maintain cash reserves of at least 2% of the loans it insures. Reserves were 6.4% in 2007, 3% last year, and is expected to be less than the required 2% when those numbers will be published this September 30.

So, what will happen? Maybe increased down payment. Maybe increased oversight and regulation at FHA and FHA loan originators. Maybe another bail out. But, probably not anything that will help people get loans.

Below is a house I recently sold that went FHA. Payments were a bit over 1K per month for this cool home. As I’ve said before, now is a great time to buy a house.

FHA-house

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July’s home sales were up

Home sales, in number of units sold, were up for the fourth straight month in July, According to the NAR. Increases for four months in a row hasn’t happened in five years. Nationwide, we’re on track to sell 5 1/4 million pre-existing houses this year. July’s increase over June’s, at 7.2%, was the largest in a decade.

 

Home sales popped up in July 2009

Home sales popped up in July 2009

 

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Houses prices in the West

The National Association of Realtors has a neat site where you can compare the prices of houses sold for different U.S. Metropolitan areas. It also lists average commute times; the value of that is a bit of a mystery to me, but it’s mildly interesting.

In the chart below, I show median single family house prices for some Western cities. The average price drop across the nation for second quarter 2009, compared to the same time period last year was 15.6%. All of the cities listed in California did worse. As did Nevada.

Oregon and Washington fared better than the national average. The average decline for the Oregon Cities was: Portland 14%, Eugene 12%, and Salem at 11 ½ %. While the decreases are notable, the bottom didn’t fall out in these markets. Conventional wisdom is that because the Willamette Valley didn’t see the run up in prices at market peak, we had less of a correction at market bottom.

Median house prices of selected western cities. Q2: 2009.

Median house prices of selected western cities. Q2: 2009.

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Owning vs. Renting

Most people intuitively know that it’s better to own a house instead of renting a place. The NAR recently looked at the data and found that the net worth of home owners exceeds that of renters by a factor of 50 to 1, with the main difference being home equity. 50:1 – wow.

There are still plenty of affordable good buys out there. This house was in a quiet neighborhood and was in the 160’s. It’s been remodeled and is on a large lot, and subsequently sold.

If you’d like information on affordable homes in Eugene Springfield, give me a call at 517-6543.

Another affordable house in Eugene Springfield.

Another affordable house in Eugene Springfield.

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Eugene Springfield Housing Inventory

I looked at housing supply by area for Eugene Springfield. A six month supply is said to be a balanced market. Less than 6 is a seller’s market, and greater than 6 is a buyer’s market. Areas with modestly priced housing stock that are closer to town are doing the best. The original data came from June 2009 rmls. My analysis is below.

June 2009 Housing Inventory

June 2009 Housing Inventory

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Housing in Eugene More Affordable

3727 Megan: 156K.

3727 Megan: 156K.

Houses have come down in price and are becoming increasingly affordable. The house below was a listing of ours. It’s at 3727 Megan Way in Eugene, Oregon. It’s 2 bed, 1 bath and 8 years old. Now here’s the best part: It was listed at only 149K. Principal and interest should be about $800 per month. So, it’s very affordable.

If you’d like information on affordable housing, give me a call at 517-6543.

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Home Building Increases

Housing starts are up Nationwide and in the West, improving for over the last three months. Single family starts, nationwide, jumped over 14% from last month to 470,000 annually in June, 2009. This was the biggest monthly gain in 4 years, according to the WSJ. Home building in Eugene is improving, but is not brisk. If you’re wanting to build a house, now is a great time to do so.

Annualized Housing Starts Continue to improve in 2009

Annualized Housing Starts Continue to improve in 2009

Nationwide (top) and Western (bottom) housing starts.

Nationwide (top) and Western (bottom) housing starts.

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Eugene Entry Level Houses Strong

As my colleague Jared Helton pointed out in response to my last post, he expects the market for Eugene Springfield houses priced at 225K or less to remain strong through the end of the year. I think he’s right on the money; this is the market segment that has shown the most life this year. Granted, our predictions are only 5 months out, but that’s a lot these days.

Here’s an example of the type of house you can get for the money. It was a short sale (or pre-foreclosure), 2,300 square feet, nearly new, and I had it listed at 229K, or under $100/s.f. That’s a good deal in any market, and it sold quickly.

If you’d like to know about the good deals in Eugene Springfield give me a call at 517-6543.

Short Sale priced at under $100/s.f.

Short Sale priced at under $100/s.f.

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House Prices Trending Up

Have we reached the bottom of house prices? Market peaks and troughs can only be seen in retrospect, but the pundits are saying we’re at the bottom. For the last 3 months, median housing prices nationally, in the Western region and in Lane County have risen. If the trend continues, we were at the bottom this spring.

The drop in median prices for the last year was much more muted in Lane county than either the nation or western region. Compare 6.6% (Lane County) vs. 15.4% (US) vs. 20.8% (Western region). The western region’s big drop was because places like California, Nevada and Arizona are part of the statistics, and they were hammered in price.

Are we likely to see huge rates of appreciation? Not anytime soon. There is still too much unemployment in the area and sales of distressed properties (namely short sales and foreclosures) will continue. I expect the market to stay flat at least until the end of the year.

 

Median House Prices up for Last 3 Months

Median House Prices up for Last 3 Months

median-price-drop, last 12 months

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Home Mortgage Rates up in June 2009.

One thing I track is interest rates on home mortgages, which have ticked up recently. In general, the lower the rates, the more your house is worth and vice versa. Average interest rate, as reported by the Federal Reserve was 5.42% in June 2009, which is the highest it’s been since November 2008.

A broker friend of mine in Milwaukee says the interest rise has actually stimulated his market because his customers think the end of the low prices may be in sight.
int-rate-june-2009

monthly-pymt-june