SEPTEMBER / OCTOBER 2021 NEWSLETTER
|
|
|
|
Patti Williamson
Principal Broker Owner / GRI
|
If you have questions or are ready to buy or sell, don't hesitate to reach out!
503.932.1267
|
|
Letter from the Editor, Local Market Update |
The fall selling and buying season is upon us, September was a blip and October is behaving the same, almost over while November fast approaches. I have been in the thick of transactions working through negotiations for my buyers and sellers, so getting a market update out had to become a priority, you need to know whats happening in the local trenches.
September 2021 was another record breaker, per Willamette Valley MLS, highest number of closed sales in the month of September since before 2015 AND biggest month overall since before 2015. September followed suit with the high volume trend as the months of March, April, June, July and August were also leading months since before 2015. Good news is more listing inventory continues in 2021 as compared to 2020, the uptick in Listings consistently as compared to 2020 has contributed to larger sales volume.
A fascinating notable in the midst of the market frenzy, a shift almost abruptly felt and noticeable early September and continued into early October, Active listing were sitting on the market and not going under contract as quickly as the previous months. In response to that, sellers, started reducing list prices to entice buyer activity, something we have not seen in some time. Traditionally, October is a month that buyers have an opportunity to purchase a home not at top dollar, so the timing of some of those price reductions as sellers are more eager to sell, was to buyers benefit. Most recently I have been able to successfully negotiate for my buyers seller paid closing costs, inspection repairs, sellers more agreeable to taking contingency terms and less off of list price.
Still remain the norm, competing offers on entry level homes and homes that are “turn key”. Another local market surprise, luxury homes $1 million dollars and higher price points, many of the luxury homes are selling quickly and with multiple offers, my buyers have had to come in well above the list and desirable terms. Lastly, the appraisals, the majority of my transactions the appraisals are coming in on time AND at or above purchase price. I am hearing of and just recently few of my transactions experiencing increase in delays of appraisals, the AMC are not able to get appraisers to take the appraisal assignment, too much work load. Lenders are paying higher prices to entice appraisers to take the order. So I will be Keeping an eye on that.
Right now, for my clients, buyers are wanting to buy to take advantage of the low interest rates with an opportunity to pay what they consider a more reasonable price and sellers that need to sell, because life is still happening. Bottom line, I am so grateful to have the opportunity to serve my clients well, and always working to be the exceptional professional and expert my clients deserve.
|
|
FHFA: Desktop Appraisals to Become a Permanent Option |
The Federal Housing Finance Agency will accept appraisals conducted remotely—without the physical presence of an appraiser—starting in early 2022 for qualifying Fannie Mae– or Freddie Mac–backed mortgages. The government-sponsored enterprises will use public records, including listings and tax appraisals, to process desktop appraisals for purchase loans.
Sandra Thompson, acting director of the FHFA, made the announcement on Monday during the Mortgage Banker Association’s annual conference in San Diego.
The change will allow banks and mortgage lenders to use desktop appraisals in place of traditional ones. Desktop appraisals had first been announced as a temporary option at the start of the pandemic.
“What was one of the temporary flexibilities will now become an established option for originating enterprise loans,” Thompson announced at the MBA conference. “Both enterprises will incorporate desktop appraisals into their [selling] guides for many new purchase models starting in 2022.”
The appraisal industry has faced high demand and a shortage of appraisers during the hot housing market. Desktop appraisals have been one method the industry has turned to in keeping transactions on track.
Thompson also announced on Monday that the FHFA would expand eligibility requirements for its RefiNow and Refi Possible refinance programs, which are aimed at helping low-income borrowers refinance into lower mortgage rates. It would also remove some restrictions for financing and closing costs.
“Expanding eligibility for low- and moderate-income families to refinance their mortgage and lower their monthly payments, together with leveraging desktop appraisals to reduce inefficiencies in the mortgage process, are meaningful steps toward overcoming barriers to affordable and sustainable homeownership,” Thompson said in a statement. “FHFA will continue to act purposefully in dialogue with its stakeholders to minimize market disruption and ensure its regulated entities operate in a safe and sound manner.”
|
|
Important Distinction: Homes Are Less Affordable, Not Unaffordable
It’s impossible to research the subject of buying a home without coming across a headline declaring that the fall in home affordability is a crisis. However, when we add context to the most recent affordability statistics, we soon realize that, though homes are less affordable than they have been over the last few years, they are more affordable than they historically have been.
Black Knight, a premier provider of data and analytics for the mortgage industry, just released their latest Monthly Mortgage Monitor which includes a new analysis of the affordability situation. Here’s what the report reveals:
“The monthly payment required to purchase the average priced home with a 20% down 30-year fixed rate mortgage increased by nearly 20% (+$210) over the first nine months of 2021, . . . It now requires 21.6% of the median household income to make the monthly mortgage payment on the average home purchase, the least affordable housing has been since 30-year rates rose to nearly 5% back in late 2018.”
Basically, the report shows that homes are less affordable today than at any other time in the last three years. However, in a previous report earlier this year, Black Knight calculated that the percentage of the median household income to make the monthly mortgage payment on the average home purchase over the last 25 years was 23.6% (see graph below):
|
|
Today’s payment-to-income ratio is more affordable than the average over the last 25 years. Given that context, we can see that American households still have the same ability to be homeowners as their parents did 20 years ago.
This confirms the recent analysis of ATTOM Data resources where Todd Teta, Chief Product and Technology Officer, explains:
“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why.”
Bottom Line
It’s true that it’s less affordable to buy a home today than it has been the last few years. However, it’s more affordable to buy today than the average over the last 25 years. In other words, homes are less affordable, but they’re not unaffordable. That’s an important distinction.
|
|
Home Sales Jump as Buyers Aim to Beat Rising Rates
Existing-home sales rebounded in September as buyers may have felt a sense of pressure as mortgage rates started to inch up. Existing-home sales rose by 7% in September compared to August. All major regions of the country posted increases last month, the National Association of REALTORS® reported Thursday.
“Some improvement in supply during prior months helped nudge up sales in September,” says Lawrence Yun, NAR’s chief economist. “Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.” The 30-year fixed-rate mortgage averaged 2.90% in September, but rates are rising.
Despite last month’s uptick, total existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—were down by 2.3% in September compared to a year ago.
Home prices continue to rise as inventories remain constrained. Housing inventory is down 13% compared to a year ago. Unsold inventory is at a 2.4-month supply at the current sales pace, NAR reports.
But a turnaround could be coming. “As mortgage forbearance programs end, and as home builders ramp up production—despite the supply-chain material issues—we are likely to see more homes on the market as soon as 2022,” Yun says.
Here’s a closer look at NAR’s latest existing-home sales report:
Home prices: The median existing-home price for all housing types in September was $352,800, up 13.3% compared to a year ago. Prices rose in every region last month.
Days on the market: Eighty-six percent of homes sold in September were on the market for less than a month. Properties typically remained on the market for 17 days last month, down from 21 days a year ago.
First-time buyers: First-time buyers comprised 28% of sales in September, down from 31% in September 2020. “First-time buyers are hit particularly hard by the historically high home prices as they largely do not have the savings required to buy a home or equity to offset such a purchase,” Yun says.
All-cash sales: All-cash transactions made up 23% of transactions in September, up from 18% in September 2020. Individual investors or second-home buyers, who account for the bulk of cash sales, purchased 13% of homes in September, up from 12% in September 2020.
Regional Breakdown
Here’s how existing-home sales fared across the country in September:
Northeast: Existing-home sales increased by 5.5% last month, posting an annual rate of 770,000, an 8.3% increase compared to a year ago. Median price: $387,200, up 9.2% from a year ago.
Midwest: Existing-home sales increased by 5.1% to an annual rate of 1.44 million in September, a 2.7% drop from a year ago. Median price: $265,300, up 9.1% from a year ago.
South: Existing-home sales rose 8.6% in September, reaching an annual rate of 2.77 million, unchanged from a year ago. Median price: $307,500, a 14.8% rise from one year ago.
West: Existing-home sales increased by 6.5%, registering an annual rate of 1.31 million in September, down 3% compared to a year ago. Median price: $506,300, up 8.3% from September 2020.
|
|
Follow me on Instagram and Facebook for updates
on listings and trends, and be sure to check out the website
for recent build and remodel projects!
|
|
Licensed in the State of Oregon since 1997 |
|
|
|
|
|
|
