Real Estate Information, Corvallis Oregon Real Estate, Sue Long's Blog

Q: We're buying our first home.  What are the biggest mistakes people make?

A: Looking at homes you can't really afford.  Talk to a lender and start smaller to be a little conservative realizing utility costs, taxes and repairs are inevitable.  Another mistake is not planning for your future.  With economic issues down the road it is likely people will own homes longer and thus planning for at least 10 years of ownership is prudent.  Trying to time the market is the latest potential mistake.  With interest rates this low, your monthly payment will be so much less, it is a good investment and waiting may cost you dearly.  Study the market and find a great real estate agent to negotiate for you.  Call with any of your real estate needs.   Sue Long 766-0262

HAPPY NEW YEAR!!!

Think about "New Year’s Resolutions"

While the origin of New Year’s resolutions goes back as far as 153 B.C., in modern day times, they usually evoke feelings of guilt. Most verbs associated with resolutions are restrictive in nature, including “to quit, stop, lose, reduce or eliminate.” The implication is that you need to improve, fix or repair something that’s broke or not complete. By its very nature, people see New Year’s resolutions as a difficult exercise at best, requiring discipline, determination and willpower…which are not exactly energizing words. As a result, most people “make” the resolutions January 1, and usually begin to “break” them by February 1 as their commitment fades and enthusiasm for attainment wanes. Case in point: The extreme increase in traffic at a health club the beginning of the year, which quickly subsides as the weeks and months progress.

Well here’s an idea: This year, consider creating New Year’s “reVolutions,” transformational actions that will lead to breakthrough results. New Year’s reVolutions can energize and invigorate by the thought of “what’s possible.” By definition, which one of the below would inspire you to get out of bed January 1?

- A resolution - a solution, accommodation or settling of a problem

- A reVolution - a drastic and far reaching change in ways of thinking and behaving

New Year’s revolutions are personal and broader in scope than the traditional resolutions. The framing of your revolutions requires stepping back and deciding what do you want to be as opposed to what you need to do. If someone were to introduce you to a large crowd recognizing you for your accomplishments, what would you want your bio to say? Are you on track to be that person? If not, what actionable steps can you take today that will help you get there tomorrow?

What are we waiting for?  History tells us that the people that do well are those that don't listen to the media, and don't join the collective "people think".  They are the contrarians who do what others are not doing.  Buying stocks when others are scared of the market gets them a great deal.  People like Buffet who avoid the frenzy of hi tech stocks when others run them up beyond value and get stung, teach us the better way to behave. 

Now look at the real estate market across the country: Global Insight, an economic and financial analysis forecasting firm's current housing statistics indicate that the US housing market as a whole is undervalued by 3.8%. They analyzed 330 metropolitan areas in the US and found that 241 metro areas experienced price declines in the 3rd quarter of 2008.  The markets that were the hardent hit were in areas that were the most overvalued 3 years ago.  This study represented 78% of all existing housing units in the US.

Low interest rates and increased affordability make today's market a buyer's dream!

Christmas is so wonderful because it reminds us all about love and giving.  The picture of the newborn baby Jesus stirs up all the feelings of tenderness, joy and love in its purest form.  Lets keep the spirit of neighborly love alive all year round...

Wonder how this low interest rate affects you?  For every 1% change in interest rate, you can buy 10% more home with a 30 year mortgage.  That means since the beginning of November  where we have experienced nearly 2% interest rate drop here in Oregon, you can buy nearly 20% more house.  So If you were looking for a  $200,000 home, you can now shop for a $240,000 home!!  Same monthly payment as before too!  Talk about a great deal...  Time to make your move and buy the home you've wanted.  You may be wanting a great deal, and trying to time the market, but this may be more impactful.  It may even stimulate buying enough that we have already hit bottom---who knows? Your real expert in the Willamette Valley can help you find the best deal.  Give me a call 766-0272.

Based upon the number of homes sold in the past 3 months in 3 price ranges (during Sept 1-Dec 1), we can guess how fast we will sell the total inventory of homes presently being offered in MLS.  Here is the calculated number of months to sell or absorb the inventory of all the homes for sale now:

City Homes                  Corvallis                        Albany

$ 200-300,000               6 months                    12 months

$ 300-500,000               13 months                  12.5 months

$ 500-750,000               13.5 months               10.5 months

 There are many reasons that investing in real estate in college towns makes sense.  There is a continuous supply of students and visiting professors as renters.  There are better job markets due to the educational level of the  residents.  Retirees are attracted to the cultural and sporting events.  The quality of life may be higher for the above reasons, reducing crime making schools more accountable as well as visitors streaming to events making customers prevalent for the businesses there.  The quality of life attracts more people to set up their telecommuting and other  businesses.  In the end, you have far more certainty weighing in on the side of keeping vacancies to a minimum.

As the national as well as local economies here in Benton and Linn Counties decline, businesses are forced to tighten their belts to weather the storm.  One of the best ways is to decrease payroll costs or release some of their labor force.  How do these newly jobless make their mortgage and car payments?

It just isn’t going to happen except for the disciplined few who saved up a lot for a “rainy day”.  These are few and far between as the sunny economy of previous years made for more personal indulgence and less imagining of the gloomy days ahead.  Few saved and now there are very few government programs designed to bail out the increasing numbers of people faced with this crisis to the tune of 1.2 million homes in foreclosure during the second quarter of this year.  In June, 45.5% of the foreclosures were due to jobs lost or the loss of income. That's an increase from 36.3% in 2006.

It may be better for government spending to create more jobs rather than just giving money to consumers. 

Wonder how the market is doing for new real estate construction these days in our local Linn and Benton County markets?  Let's compare the past 12 months to the 12 months prior and see!

12 Months Prior to:  Benton 10/07 - Benton 10/08 - Linn 10/07 - Linn 10/08

Units Sold                   167                 113                     403                286

Avg Sales Price        $338,119          $348,557           $221,396        $221,715

Avg Square Footage   2079                2249                   1696             1715

Avg Cost per Sq Ft     $163                 $155                   $131             $129

Avg Days on Market    160                   199                    175               160

Currently Active Listings 134                98                     300               235

As you can see the numbers are much larger for numbers of units sold and active in Linn County.  There have been virtually no new construction going on since this spring.  Much of the inventory is being sold so the numbers are down from last year on currently active.  The average days on market has understandably gone up over the past year.  The cost per sq ft has come down in both counties.  Total numbers of sales has declined most markedly in the past year.  This is due to financing changes and market skiddishness.  As prices decline, and interest rates still being in the 6% arena, this is a most attractive scenario for investment.

Ready for the latest?

Throughout our MLS (includes Salem) our average home sales prices are down 3.5% yr to date from 2007 yr to date.  October's closed sales are down by 25% in number of sales and down yr to date by 33%

In Benton County the average sales price is $303,000 and in Linn County it is $194,302 (1.1% down in Benton from 2007 and negligible change in Linn County)

In both counties the % sale to list price is 94.1%

In Benton County the days on market is 131, whereas in Linn it is 145

In Benton County the average dollar per sq ft is 159 compared to 126 in Linn County 

We are not suffereing like many areas across the country!