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When it comes to Return on Investment, there’s still no place like home.

Real Estate Tops Best Investment for Seventh Year Running

Anyone who has some money in the stock market these days has a pretty good idea of what it feels like to be rollercoaster mechanic. Up big time one day and down even lower the next.

If you’ve been losing sleep over your investment portfolio lately, you can take comfort in knowing that year after year, your best performing investment is actually right where your pillow and bed happen to be:  your home.

Every year, Gallup surveys thousands of Americans to reveal their choice for the best long-term investment from among stocks/mutual funds, gold, savings accounts/CDs, or bonds, real estate. For the seventh year in a row, real estate has come out on top.

According to Gallup:

 “Real estate remains the most favored investment to Americans, as has been the case since 2013, when the housing market was on the rebound. More than a third of Americans have named real estate as the top investment since 2016.”

This year’s results indicated 35% of Americans chose real estate, followed by stocks at 21%. The full results covering the last decade are shown in the chart below:

Bottom Line

Despite the many challenges and uncertainties our economy faces today, one thing is for sure. The belief of the American people in the stability of housing as a long-term investment remains stronger than ever.

For more information contact Duke Warner Realty and speak with one of our experienced real estate agents in Bend Oregon.

 

 

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Would You Buy a Home Without Stepping Foot Inside?

Technology is Helping Buyers Navigate the Home Search Process

Whether it’s out of necessity or out of convenience, more home buyers these days are taking advantage of technological developments to advance the homebuying process. While there is still no substitute for touring a home in person, a recent realtor.com survey revealed that today’s technological alternatives have improved to the point where many would consider purchasing the home in certain circumstances without seeing it in person.

Younger demographics and renters feel more comfortable moving sight unseen

While the majority of people still want to see a home in person before making a purchase, that sentiment is shifting. With access to accurate listing data, detailed photos, virtual and live video tours, 24% of people say they would be willing to buy a home without seeing it in person and 30% would be willing to rent one. With younger demographics generally being more active with video, those numbers rise to 29% willing to buy and 34% willing to rent

With increasing limitations around social interactions and open houses, buying and selling homes is becoming more difficult and agents are needing to adjust. According to Nate Johnson, CMO at realtor.com:

“As real estate agents and consumers seek out ways to safely complete these transactions, we believe that technology will become an even more imperative part of how we search for, buy and sell homes moving forward.”

Of course, accurate and detailed information about the listing and the neighborhood, and high-quality photos are always important to potential homebuyers. But when deciding on a new home without seeing it, 61% said they would insist on taking a virtual tour of the home, while 39% said they would settle for having the agent or landlord walk them through the property via video chat.

No matter how you look at it, times are changing rapidly in the real estate industry and realtors are adjusting quickly to the new order.

Some information provided by PRNewswire — Realtor.com, April 16, 2020.

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U.S. Home Ownership Rate Rises to Highest Point in Eight Years

The great American dream of home ownership is alive and well. The latest results of the Housing Vacancy Survey (HVS) provided by the U.S. Census Bureau shows how Americans place immense value in homeownership, and it is continuing to grow in the United States.

After declining to a 25-year low of 63.5% in 2016, the results indicate that the U.S. Homeownership rate increased to 65.3% for the first quarter of 2020, a level last seen in 2012.

With current social conditions, Homeownership will most likely reflect a whole new way of life that has puts a premium on spending time at home and having the security that comes that comes with having a safe place for our families to live. Add to that some of the most attractive home mortgage rates of all time, and it’s easy to see why the numbers should continue to grow for the foreseeable future. Yet they still have a long way to reach this century’s high point of 69.1% in late 2004

The Bottom Line

If you’re considering buying a home, there’s no better time to connect with a professional at Duke Warner Realty to set a plan that can help you get one step closer to achieving your dream.

Why is the rate increasing? The National Association of Home Builders (NAHB) explained:

“Strong owner household formation with around 2.7 million homeowners added in the first quarter has driven up the homeownership rate, especially under the decreasing mortgage interest rates and strong new home sales and existing home sales in the first two months before the COVID-19 pandemic hit the economy.”

The NAHB also emphasizes the year-over-year increase in each generational group:

“The homeownership rates among all age groups increased in the first quarter 2020. Households under 35, mostly first-time homebuyers, registered the largest gains, with the homeownership rate up 1.9 percentage points from a year ago. Households ages 35-44 experienced a 1.2 percentage points gain, followed by the 55-64 age group (a 0.9 percentage point increase), the 45-54 age group (a 0.8 percentage point gain), and the 65+ group age (up by 0.2 percentage point).” (See chart below):

 

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Topics to Address With Your Realtor

We understand that finding a realtor that understands exactly what you’re looking for in a property can be a challenge. Make sure you schedule a meeting and sit down with your broker, so that you do understand each other. It’s important to make a list of the features of a home that you can’t live without, that you would prefer, and things that you don’t want in your ideal home. Take the time to sit down and go over what they should know and what your top priorities are. If your broker understands your needs, wants and dislikes, they’re much more likely to find the perfect property for you, and not waste time showing listings that you’re not interested in.

Location, Location, Location

It can be easy to forget when house hunting, but where you buy a house in most areas determines where your kids go to school. If you have a preference over the schools in the area that you’re looking to buy in, it’s important to tell your broker that. Even if you don’t currently have kids, it’s still something important to consider.

If having easy access to amenities, like grocery stores, theaters, shopping, restaurants, etc. is important to you, your broker needs to know that. It’s important for your broker to understand whether you want to be within walking or driving distance from cultural centers like this. If this is a like, but not a requirement it could influence the listings your broker wants to show.

How is it Heated?

Something that can easily be forgotten when house hunting is how a home is heated. If the way a home is heated is something that truly matters, let your broker know. This may make a difference if you’re looking for properties in a colder or warmer climate. If you have a preferred method of heating, especially if it’s a deal breaker, tell your broker.  Be sure to check the heating system in place before you make an offer, or you could wind up with an expensive home to heat.

Design Layout for Ease & Comfort

Design and layout are important for many people when they are house hunting. If layout is a top priority, whether you have a specific need or you just prefer certain styles, your broker needs to know. They need to know if you want to look at split level homes, or if you only want to see single level homes. If you want an open floor plan, a formal dining room, etc. your broker can show you properties that pertain to your wants and needs, if they know what they are.

Sitting down with your agent and mapping out specifics will save you a lot of time. For example, if you only want to view urban homes, or stick to rural areas that fit your family’s needs, if a pool is a must, your agent needs to know. Consider your lifestyle, imagine yourself and your family in your day to day and decide what part of town works to best support the way you live. Giving your agent these insights will help narrow down your search and hone in on the perfect property to fit your needs.

Things to Consider

When discussing your price range with your agent, let them know which things you’re willing to pay more for and which things you are willing to sacrifice. If your budget doesn’t have any wiggle room, they should know this from the start. If they find you a home with everything that you want, but it’s out of your price range, your broker needs to know where you draw the line. Make a list of your wants, needs and ideals, so your broker understands what your goals and limits are for your home search. Reach out to the Duke Warner broker you trust most, and discuss what you want in a dream property or home. Feel free to give us a call at 541.382.8262 or check us out online at https://www.dukewarner.com/.

 

 

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How Much Do I Need to Make to Buy a House?

Purchasing a New Home? How to Figure Out the Salary You Need to Afford One

If you love Central Oregon, but don’t live here, you probably come here throughout the year to ski at Mt. Bachelor in the winter and swim in the Deschutes River during the summer. There are also many work and entertainment opportunities in Bend, Sunriver, La Pine, Sisters, Redmond and Prineville that relocating here in the near future is becoming a greater possibility. Is your salary enough to support finding the home of your dreams in Central Oregon? What factors should you take into consideration?

Home Affordability Relies on 3 Factors

You can’t just look at your salary and the home prices on the real estate market to figure out if you can afford to purchase a property. There are three factors that need to be analyzed to help you figure out the home price range that your salary can cover. You also want to have enough money left over so you can live within your means: housing payment ratio, mortgage payment ratio, and debt ratio.

Mortgage Payment Ratio

On average, you shouldn’t exceed your gross monthly salary by 28 percent when making your monthly mortgage payments. To figure out the maximum mortgage payment ratio, take your gross annual salary and divide this number by 12 months, then multiply this number by 0.28. For example, it you have a gross annual salary of $60,000, then your monthly gross salary is 5,000 (60,000 divide by 12) as your monthly mortgage payments are $1,400 (5,000 x 0.28).

Debt Ratio

You have to also take into account all the monthly and yearly debts, including your housing payments, to figure out your total debt payment ratio. You should include credit card payments, school loans, alimony, child support and car loans as debts. When you total up the number, your debt payments should be lower than 40 percent of your gross monthly salary.

Housing Payment Ratio

Your maximum housing payment ratio takes into account all your housing-related costs, such as home insurance, property taxes, association fees, and private mortgage insurance if you can’t put a down payment on the house that is larger than 20 percent of the home’s sales price. Your total housing payments per month should be lower than 32 percent of your monthly gross salary.

When looking at these three factors, you should not exceed these amounts when paying for a house or getting a mortgage loan. If you do, you may find yourself struggling financially to make all the necessary payments. Also, keep in mind that each mortgage company will have different qualification factors to figure out your debt-to-income ratio when you apply for a home mortgage. Basically, they are trying to figure out what existing debts you have to repay regularly and what debts you will be tacking on when buying your home. The mortgage company will then have a better understanding on whether you will repay your debts or end up defaulting on the mortgage loan.