Weekly Real Estate Market Update

According to the Federal Reserve’s Flow of Funds report released This Week in Real Estate the value of U.S. owner-occupied homes increased to a record of $29.2 trillion in the third quarter of 2019. Home values rise as mortgage rates remain low. Fannie Mae believes the average fixed rate in 2020 will probably be 3.6% and if so, will be the lowest annual average ever recorded in Freddie Mac records going back to 1973. Below are a few highlights from the first full week of 2020…

U.S. Home Values Rise to Record $29.2 Trillion, Fed Says. The value of all U.S. owner-occupied homes increased to a record $29.2 trillion in the third quarter, according to a Federal Reserve report known as the Flow of Funds. That was a gain of 4.2% from a year earlier, the slowest annualized increase since 2012. The collective value of U.S. homes is now 21% higher than the bubble peak reached in 2006. The Fed’s tally of home values for all U.S. residential real estate, whether occupied by homeowners or not, was $32.9 trillion, the report said.

Full Story…  https://www.housingwire.com/articles/u-s-home-values-rise-to-record-fed-says/

* U.S. Mortgage Debt Hits a Record $15.8 Trillion. Outstanding U.S. mortgage debt rose to $15.8 trillion in the third quarter of 2019, according to the Federal Reserve. The biggest chunk of debt was held on homes, at $11.1 trillion, followed by commercial, with $3 trillion of loans, multifamily at $1.6 trillion and farms at $254.1 billion, according to the Fed data. Mortgage debt is rising as U.S. real estate values gain. Low mortgage rates boost real estate prices, and hence the volume of loans, because cheaper financing means buyers qualify for higher-balance mortgages and can bid more for properties they want. The average fixed rate probably will be 3.6% in 2020, which would be the lowest annual average ever recorded in Freddie Mac records going back to 1973.

Full Story…  https://www.housingwire.com/articles/u-s-mortgage-debt-hits-a-record-15-8-trillion/

* Homebuying Sentiment Up Sharply From 2018. Fannie Mae’s Home Purchase Sentiment Index (HPSI) finished out the year with little change from November to December, but with a strong increase over the December 2018 version. “The continued strength in the HPSI attests to the intention among consumers to purchase homes. This is consistent with the Fannie Mae forecast for 2020,” said Doug Duncan, Senior Vice President and Chief Economist. “The HPSI hit and remained near an all-time high in 2019, driven by the 16-percentage point year-over-year increase in the share of consumers believing it is a good time to buy. The HPSI’s strength supports our prediction of a healthy housing market in 2020, as well as consumers’ appetite and ability to absorb the expected increase in entry-level inventory.”

Full Story… http://www.mortgagenewsdaily.com/01072020_national_housing_survey.asp

Going out of Town?

You may want to add THIS to your pre-travel checklist to keep your home protected.

When you head out of town on vacation, you probably take several steps to make sure your home isn’t broken into while you’re away, from leaving lights on to pausing your newspaper delivery.

But did you know that your home is at a greater risk of damage from water leaks than fire and theft when you’re away? According to property and casualty insurance company Chubb, the time between when a leak occurs and when it is discovered is the single greatest factor in determining the amount of damage, making leaks that occur while you’re away much more damaging in terms of both cost and severity.

The time between when a leak occurs and when it is discovered is the single greatest factor in determining the amount of damage.

Chubb, Insurance Company

In the past 10 years, the frequency of sudden pipe bursts has nearly doubled. In 2015, water damage accounted for nearly half of all property damage, according to the Insurance Information Institute. A study from Chubb finds that, despite the fact that 91 percent of homeowners rate themselves as “vigilant” or “doing an okay job” at preventative home maintenance, and that close to half (45 percent) have or know someone who has experienced a water leak in the past two years, only 18 percent have installed a water-leak detection device.  

Of all homeowners, high-net-worth individuals are particularly at risk. When compared against other income segments, for instance, high-net-worth individuals are the most likely (55 percent) to report being “vigilant” about conducting preventative maintenance, yet are the least likely (26 percent ) to rank internal water leaks as their top home-related concern. High-net-worth homeowners are also the income group least likely to periodically inspect appliance hoses (33 percent compared to 61 percent of middle class homeowners, the most of any income group), a frequent cause of internal water leaks.   

While there are a number of steps homeowners can take to mitigate the risk, Chubb recommends that when they go through their pre-departure process of locking doors and windows, identifying a neighbor to keep an eye on their home, and ensuring some lights are left on, that homeowners also add shutting off the water main to the checklist.

Additional findings from the survey include:

– The majority of homeowners (63 percent) cite the threat of relocating for an extended period of time (between one month and a year) as their first or second most potentially concerning water damage-related event.

– A quarter of all homeowners have never had their appliances inspected, despite being the surest way to prevent a leak from occurring.

– Many homeowners also cited the loss of irreplaceable items (59 percent) and repairing structural damage (46 percent) as the top most potentially concerning water damage-related events.

– The majority of homeowners are unfamiliar with the most common sources of internal water leaks, with close to half (49 percent) identifying the water heater as the most likely source (independent analyses indicate plumbing supply systems pose the greatest risk).

Closing & Escrow 101

Buying and/or Selling a home can be a confusing process. There are lots of moving parts and lots of terms you may or may not fully understand… Escrow, Title Insurance, Preliminary Title Report… to name a few. To help you better understand the process, I’m sitting down with industry experts to breakdown the process for you. This week on Real Estate 101 we’re discussing closing and escrow with Janette Tims, an escrow officer at Western Title and Escrow in Eugene, Oregon.

What is Escrow?

Escrow is the process in which buyers and sellers of a piece of property establish terms and conditions for the transfer of ownership of the property. These terms and conditions are given to a third party known as the escrow holder. In turn, the escrow holder has the responsibility of seeing that the terms of the escrow are carried out. The escrow is an independent neutral account and the vehicle by which the mutual instructions of all parties to the transaction are compiled with.

What is Title Insurance

The purchase of a home is often the single largest investment people will make in a lifetime; therefore, the importance of fully protecting such an investment cannot be over stressed. Title insurance is protection which assures that the rights and interests to the property are as expected, that the transfer of ownership is smoothly completed and that the new owner receives protection from future claims against the property. It is the most effective, most accepted and least expensive way to protect property ownership rights.

What is a Preliminary Title Report

Before issuing a policy of title insurance, the title company must review the numerous public records concerning the property being sold and financed. The purpose of this title search is to identify and clear all problems before the new owner takes title or the lender loans money. The research helps determine if there are any rights or claims that may have an impact upon the title such as unpaid taxes, unsatisfied mortgages, judgements, tax liens against the current or past owners, easements, restrictions and court actions. These recorded defects, liens and encumbrances are reported in a preliminary report to applicable parties.

If you are thinking about buying or selling, be sure to build a team you can trust. People who will communicate clearly and keep the transaction on track, as well as, a team who will keep your best interests in mind. Excellent customer service is at the HEART of what I do. If you don’t have a lender, I’m happy to recommend several to choose from whom I trust and do business with regularly.

5 Tips for Staging Your Home During the Holidays

Tis the season to bring out the decorations and hang the festive lights. If your home is on the market, however, there are a few considerations to keep in mind this time of year. While it’s certainly okay to embrace the holiday spirit, the key is to do so in a way that feels luxurious. Here are a few tips for decorating your home in a way that’s sure to please any potential buyers.

Keep it Simple
“Less is more” is one of the golden rules of staging and that certainly rings true during the holidays. It’s essential not to go over the top with extravagant decorations and lighting displays, as that can be overwhelming. Instead, try going for an understated feel that’s festive and inviting without being too personalized. Remember, it’s important that your home feels appealing to as many high-end homebuyers as possible.

Holiday Curb Appeal
Greeting guests with some holiday cheer at your front door is always encouraged. If you’re the house on the block that takes pride in an elaborate display each year, you might want to rein it in this time because a simple lighting arrangement and wreath will do the trick.

Tasteful Touches
You can create a cozy ambience throughout your home with just a few touches, like a bowl of pinecones in the foyer, a garland around your banister and stockings hanging from the mantle. The dining room table can be a fun place to create a holiday centerpiece that buyers can envision themselves gathering around.

Seasonal Scents
In addition to candles and essential oils, there are other ways to capture the most alluring seasonal scents in your home, such as making your own pomander with cloves and oranges or boiling a pot of cinnamon sticks and orange peels on the stove.

Maintain Balance
When you’re decorating, it’s important to do so in a way that complements your interiors. Keep a sense of space and harmony by using colors that go well with your current palette and a tree that’s well-portioned to the size of the room.

VA, Conventional, FHA, USDA? Which Loan is Right For You?

Whether you’re a first time buyer or a seasoned home buyer, there are several loan options available. I chat with local lender Todd Zimmerman of Finance of America to breakdown the details of some of the more popular loans including FHA, USDA, VA and Conventional loans. Let’s take a quick look!

Call, text, email or contact me on my website and I’ll be happy to help you start your home search. I work with some of the best lenders in the area to make sure you’re taken care of every step of the way. Excellent customer service is at the HEART of what I do!

541-579-9213 / aimeehartwig@bhhsrep.com / aimeehartwigrealestate.com

How to Start the Lending Process

Starting the lending process is the first step to owning a home. Did you know you can buy a home with NO MONEY DOWN? Did you know that starting the lending process is FREE?

I enlist the help of an experienced lender to explain the basics of lending and common misconceptions about the home buying process.

Send me an email, text or give me a call and I will be happy to answer all of your real estate questions and recommend some of my most trusted lenders to get you on the path to homeownership.

aimeehartwigrealestate.com / 541-579-9213 / aimeehartwig@bhhsrep.com

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Owning vs Renting

Emotional & Financial Benefits

Owning vs. Renting??? It’s a tough decision, especially if you’re a first time homebuyer. There’s no doubt that homeownership comes with strong emotional benefits. Homes are a place to feel secure, build a future and raise a family. Not to mention, the immense personal satisfaction that comes with homeownership.

Beyond the emotional benefits, there are strong financial reasons to buy a home.

  • A home generally builds equity over time through the combination of mortgage payments and appreciation.
  • A portion of your mortgage interest and real estate taxes are tax-deductible.
  • You may leverage your money – even though your down payment may be 20% of the home’s purchase price, you receive the full value of any appreciation.
  • In many markets, including ours, the cost of ownership can be less than renting.
  • You may strengthen your credit with your ongoing and timely mortgage payments.
  • You may pass on your home to your children.
  • And, as a homeowner, you are free to renovate, remodel, repair and repaint your property – you’re never dependent on a landlord to get the job done right.

A Cost Analysis

Western Title & Escrow in Eugene recently released a short graphic that compares the costs of renting to buying over a given amount of time.  

Photo courtesy of Western Title & Escrow, Eugene, OR

If you buy a $250,000 home with 10% down and an annual interest rate of 3.75%, in 2 years 6 months you will break even. Meaning you will have paid as much in rent as you would have to own the house. After that time, the benefit of ownership exceeds the benefit of renting through the financial gains made from tax deductions and by building equity through increased principal and appreciation.

If you are renting, NOW is the time to consider BUYING. I know the process can be a little scary for first-time buyers, but I’m happy to help you get started. I remember the first house I bought and at the time I didn’t think I would even qualify for a loan based on my income. I was wrong. It’s easier than you think and there are so many great loan options available now. Not to mention, mortgage rates are extremely low. The timing is perfect!

Give me a call, an email or drop me a message on social and I will be happy to recommend some of my favorite and most trusted lenders. Together we will walk you through the process. You have nothing to lose and EVERYTHING to GAIN!

I’m here to help and happy to do it!

541-579-9213 / aimeehartwig@bhhsrep.com / aimeehartwigrealestate.com