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

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

You love the area of Central Oregon as you come here throughout the year to ski along Mt. Bachelor in the winter and swim at Steelhead Falls. 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. Yet do you make enough money to find 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 actually three factors that need to be analyzed to help you figure out the home price range that your salary can cover while still having 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.

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Buying A House When You Are 25: Start Saving Money Early

Buying A House When You Are 25: Start Saving Money Early

Owning a home when you are 25 years old? Sounds like an impossibility since you are just leaving a 4-year college at 21 and have a mountain of student debt to deal with while looking for a better-paying job where you can put your new degree to good use. Yet there are people across the country who are purchasing a house early in their lives. It takes hard work and perseverance, yet you can do it if you start saving early and have a plan of action in place. Here are several tips you can use to make your homeownership dreams come true.

Look into an IRA and 401K

It sounds strange to be thinking about retirement planning before getting a high school diploma. Yet many young adults are working part-time jobs at this age and have fewer debts that they have to worry about. So it is an ideal time for an 18-year-old to open an IRA and put away some money. Once they graduate and start a job, they can also begin placing money into a 401k that will give them even more financial stability in the future while they learn the importance of saving early and saving often.

Make Reasonable Sacrifices

You don’t really need to purchase the newest car, pay for the most expensive apartment, or eat the pricey takeout food every single day. There are expenses in your life that can be eliminated or lessened by the money choices we make. Getting an older car, taking public transportation, renting a smaller apartment, and limiting take-out food purchases can help you save more money that can be placed toward a future home purchase. Even simply saving $50 a month can allow you to have an extra $600 a year. Multiply this by 8 years, and you can effectively save up to $4,800 that can be placed toward the down payment of the house.

Buy a Home Within Your Means

One of the biggest problems is that people buy homes that they can’t financially afford. They want the most extravagant house they can get early in age as they believe it is the only house they will ever buy. Yet you have to understand how your salary, debts and home ownership costs can dictate the type of property that you can afford to purchase. Sometimes this means you have to cut back on your expectations and look for lower priced homes with less amenities, even fixer-uppers, to get the right house that fits within your means.

You can own a home as a young adult. By planning early, you can decide on the right path that leads to homeownership based on your particular financial circumstances.

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Surprise Home Showing? Get Your House Ready Quick With These Tips

Surprise Home Showing? Get Your House Ready Quick with These Tips

The phone rings as you pick it up to find your realtor on the other end. She has an interested buyer who wants to see the house as soon as possible. While you excitedly agree to let them come look at the house in ten minutes, you later realize that every room is in shambles. There is a mountain of dirty clothes in the laundry room, dirty pots in the sink and the dog just entered the living room as he is leaving dirty paw prints on the rugs. You need to get the house clean now. Here are several tips to get your home ready for the showing in a matter of minutes.

Open the Windows
Let in the fresh air so the house smells nice when the buyer shows up. This tactic is especially important if you have pets as you want the stale air to leave in case the new buyers might have pet allergies.

Let the Light In
Turn on the lights and open the drapes to let in as much light as possible. You also want to show people the gorgeous Central Oregon views from your home and the beautiful yard. These may be important buying points for the person who is interested in your home.

Hide the Clutter
You obviously won’t have time to get all the laundry done by the time the interested buyer and real estate agent shows up at the door. Yet you don’t have to leave the clutter in plain sight. Stow the clothes in the washer and dryer without turning them on, place the dishes in the dishwasher (or even the microwave if you don’t have a dishwasher), and place magazines into drawers.

Vacuum and Sweep

You might not have time to vacuum and sweep every floor based on the size of your house. Yet you should focus on the main living areas such as the dining room, living room, kitchen, and master bedroom. Get the spouse and kids in on the cleaning to cut down on the work you have to do.

Make the Bed
The real estate agent will show off the size of the bedrooms. So you can’t just shove all the clutter into the room and then shut the door. If you have to, place all the dirty laundry and things under the bed and then make the sheets. Drape a nice large blanket on top so nobody can see the mess lurking underneath.

Take out the Trash
While obviously the buyer isn’t going to be looking in your trash cans to see if they are kept immaculate, they will notice the food smells from last night’s dinner. Take out the trash so the house smells fresh and clean.

These tips can allow you to get the house ready for the showing in the fastest amount of time possible. Once you check off each item from the list, you can then leave for a bit knowing that when the real estate agent and buyer show up, they will see a wonderful house that is perfect for the buyer’s needs.

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June Real Estate Forecast Shows Changes for Buyers and Sellers During the Summer Months

June Real Estate Forecast Shows Changes for Buyers and Sellers During the Summer Months

Real estate in the Bend, OR and Central Oregon region has taken an interesting change as we move further into the month of June. Here at Duke Warner Realty, we have seen a mix of data this month that is a strong indication that the market is changing from the last 6 to 8 months. As the summer heats up, buyers and sellers should start paying special attention to the market and how it might affect their real estate decisions.

June Signals an Increase of Listings

During the past several months, inventory went down even while sales activity held on strong. As June rolls forward, we are seeing a steady and rapid increase to listings. This increase isn’t abnormal for this time of year as the warm summers will have buyers outside and looking for ideal neighborhoods to move into while sellers will be getting ready to relocate to other areas since the kids are out of school.

Another thing people should take note about is that real estate activity in Bend, Redmond, and Central Oregon remains very strong. We see this trend continuing throughout the summer.

Buyers May Becoming More Cautious

Here at Duke Warner Realty, our market research has shown that sellers are performing price reductions. There has also been a notable decrease in pendings as we enter June. These two circumstances could be indications that buyers are more cautious as we are topping out on prices, as they are taking a slower approach when making a purchase.

The categories of price reduction and pending data indicate real time market activity that we have mentioned before in our forecasts, while market history data relies on sales and days on market (DOM) data figures.

Sellers Need to Be Careful About Pricing

Due to buyers becoming more cautious about their purchases, sellers will need to carefully consider their asking prices for their homes. Inventory is growing, and sellers will have to deal with stiffer competition from other homeowners in the Bend, OR and Central Oregon region who are trying to attract buyers. Making the smart pricing choices will allow sellers to get the right bids for their properties without having their homes sit for too long on the MLS during the summer months.

By becoming knowledgeable about home prices and real estate inventory that is available, buyers and sellers can make the smart choices based on their real estate preferences and their budgets. If you are a seller looking to price your home in the Bend, OR market, or a buyer searching for the best property for your budget, rely on the market research provided by Duke Warner Realty. We analyze and gather comprehensive market data to help buyers and sellers throughout the Central Oregon region. Learn more about what Duke Warner Realty can do for your real estate needs by visiting our website at, calling us at (541) 382-8262, or browsing our Facebook page.

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May House Trends Show a Lag for Available Inventory, Yet Remain Strong For Sales Numbers

May House Trends Show a Lag for Available Inventory, Yet Remain Strong For Sales Numbers

As Spring slowly moves into early summer, house buyers hit the pavement looking for available homes in Bend, Oregon. Normally during this time of year, sellers will be cleaning out homes and packing things away as they will be slamming the market with available residential real estate. This trend has been the norm for years, and has been come to seen as the traditional mindset for sellers who want to get their properties noticed on the listings.

Yet surprisingly, this tradition isn’t the case this year. The Duke Warner Realty May Trend Report shows that instead of our inventory growing from February into May, it has been decreasing over several different price ranges. There has been a significant increase in buyer demand, but there simply aren’t enough listings to fill this demand. This decrease in available inventory has been consistent over the last 4 months.

Highest Price Category Has the Most Inventory

Interestingly enough, it is the highest price category of $625,100 and up that has seen the most inventory enter the Bend real estate market in May. To date, there were 154 active listings recorded on May 1st as it is up from the 120 active listings featured during the month of April. With such a large amount of inventory hitting this market segment, sellers should be careful with their pricing and pay close attention to the market to get their homes noticed and sold without having the property sit for too long.

When reviewing the active listings for the same time period, the price category of $325,100 to $425,000 has the second most active inventory of 82 listings. This figure has decreased from the April 1st to April 30th time period where there were 85 active listings.

The remaining price categories show similar lower inventory trends: 72 active listings for $225,100 to $325,000 price range; 51 active listings for $425,100 to $525,00 price range; 47 active listings for $525,100 to $625,000 price range; and 1 active listing for $125,000 to $225,000 range. While there was an increase in new listings, this increase has not had a significant impact on inventory.

Strong Sales Still Dominate in Bend

Yet the Bend, Oregon real estate market is still going on strong, which remains the dominate trend. The most desired price range for home buyers — in the $325k to $425k category — has shown incredible, overall strong pending sales throughout April. There are 86 pending sales in this price range. Taking a look at the overall totals, there were 323 pending sales when combining all price categories, as April outpaced every other month for the previous 10 years.

Final Analysis

The current May real estate trends are not typical for this time of year. We wouldn’t normally see such low inventory and high sales so early in the year as we would expect this to happen in the near future. Yet, overall, we continue to have a robust market activity that could change in the following weeks if more sellers decide to place their properties out on the market.

To keep track of the current real estate trends that are happening in Bend, Oregon, turn to Duke Warner Realty as we compile comprehensive market data that is available to home sellers and buyers. Find out what we can do for you when you are interested in buying or selling real estate by visiting, browsing our Facebook page, or calling us at (541) 382-8262.

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Why It is Better to Invest in Real Estate Than Gold

Why It is Better to Invest in Real Estate Than Gold

The facts don’t lie. Most Americans believe that real estate is a better long-term investment than gold.
This may come as a shock to some people who have placed their money into gold investments. Since buying gold is a money investment, people invest in it when hedging their portfolios whenever they expect the devaluation of the dollar based on negative economic impacts. Yet a recent Gallup Poll has shown that 35% of Americans believe real estate is the better investment to gold, as only 17% of people believe gold is the top investment to make in 2016.

Why Real Estate is Hot Right Now

Since the time of the housing market collapse in 2007 to 2009, home prices have rebounded significantly. From 2011 to 2016, the home sales have raised about $100,000, as people are rushing to get into this long-term investment. During the same time period, gold investments have significantly plummeted per ounce, causing people to abandon this investment avenue and look for other better opportunities. People are regaining their faith in real estate as the stock market’s volatility is forcing investors to be concerned.

Why Investing in Real Estate is the Better Move

There are also other immediate reasons on why investing in real estate is more appealing than gold when it comes to investment opportunities. When you purchase gold, there isn’t a discount as you pay the current price for it. On the flip side, a person only needs a small percentage, such as 10%, as a deposit for real estate property as you can skip the down payment for a single-family home purchase.

Many people also by real estate as an income property when renting. The potential cash flow can pay off the mortgage and allow a person to bring in significant earnings over a period a time. Then, in time, a person can sell the property or use the rental income to make additional real estate purchases.

Another aspect to consider is inflation when it comes to real estate versus gold investments. Gold values go up when paper money values decline, as the gain seen is usually nominal. When real estate values rise, it can be a significant gain as investors can reap in the earnings.

Invest Where it Makes Sense

As an investor, you have to understand your own portfolio, your income, and how you want to diversify to make the right choice for your investments. There are many reasons to consider real estate as the ideal area of where to place your money instead of buying into gold. One of the best things you can do if you are a first-time investor is to consider all the aspects of your financial situation and research the market as well as past trends. You may find that real estate investments have done well in the past. Back in 2002, 50% of people named real estate as a top investment. That figure is something to think about when it comes to making your money grow to your advantage.

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Know About the Neighborhood Features that Increase Property Values

Know About the Neighborhood Features that Increase Property Values

When looking to buy a home for yourself or dip your feet into the real estate world to become an investor, you will begin searching for the homes that have the best bang for your buck. Immediately, you will notice neighborhoods that stand out based on their property values that are situated next to other neighborhoods with similar homes that may have lower values. So you are left to scratch your head on what makes the one neighborhood different from the other.

Certain Neighborhood Features Affect Real Estate Prices

When purchasing real estate, there are many factors that influence the value of the home. The square footage and interior amenities will usually attract buyers, yet the neighborhood features will also have an impact on the pricing. Curb appeal, local schools and other amenities can instantly raise — or lower — values, which will end up affecting how much you pay for the property now as well as the future resale value when you place the home back on the market. Here are several neighborhood features that can control home prices:

Walkability and Public Transportation

Walkability in a neighborhood has become very appealing for potential home buyers. They want to live in a neighborhood where they can go out during the summer and walk a short distance to the park, local store, or restaurants. Even when desired conveniences are a little way off, having transportation other than their own vehicle is often desired by a wide range of people such as college students going to nearby classes and seniors going to social events or to the bank.

Great Schools

Families jump on purchasing homes in a great school district, especially when it is only a few miles away. Schools will instantly have a factor in home values, and have an influence on the type of demographic that are in the region. This circumstance is also something to keep in mind if you are renovating or building a new home that will eventually be sold in a few years. By appealing to families who want to send their children to the nearby school during the construction of the house’s interior features, you may have a greater chance of selling the property at the price you desire.

Neighborhood Amenities

Is there a public park or swimming pool nearby? Does it have entertainment venues, shopping plazas, movie theaters or grocery stores? Are there career opportunities in the area? All of these factors play in the types of property values in neighborhoods. While you may see a boost in prices, you also shouldn’t be surprised if there is a decrease in the home values based on the condition and age of the community amenities. It’s great to have access to a shopping plaza, yet neighborhood property values won’t rise if businesses aren’t interested in renting space there because the plaza hasn’t been maintained well.

There are many things throughout the neighborhood that has an influence on how property values increase, including the types of homes in the location, crime rates and education. Researching the characteristics of the neighborhood can allow you to have a greater understanding of real estate values in certain communities where you plan to purchase or sell a home.

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6 Rules To Successfully Invest in Real Estate

6 Rules To Successfully Invest in Real Estate

More people are interested in investing in real estate these days. Some may see this as an opportunity to make a career change that they can be passionate about. Other people turn to real estate investment as simply another way to diversify their portfolios. Then there are people who want to get into real estate investments to bring in secondary income streams. If you are interested in successfully investing in real estate, keep these 6 rules in mind so you can make the smart real estate choices that best fits your needs.

Seek Guidance

Getting guidance from other real estate investors and professionals will allow you to tap their knowledge and experience so you answer the door when the real estate opportunity knocks. Then you will be better prepared to make the right investments. Yet be cautious. There are people out there claiming to be successful investors who simply make their money from the books and classes that they get people to sign up to as you walk away no more knowledgeable as when you first began.

Know What You Want to Invest In

There are so many investment opportunities in real estate that it can almost feel overwhelming. Do you want to invest in single-family homes, luxury properties, commercial real estate, or rental properties? Do you plan to instantly flip and resale property, or hold on to it for a period of time? Research about the types of real estate investments that appeal to you, then create a plan of action on how you want to achieve your set goals.

Set Your Own Path

It’s easy to see a successful real estate investor and think that you will do the exact same thing they did to become wealthy. So you put in the same amount of time and investments, yet see less than stellar results. The one thing you have to keep in mind is that this real estate investor wasn’t afraid to go out and do their own thing, recognize and overcome the challenges, and persevere to reach such success. Remember it will be your hard work, research, decisions and investments that will make your investments a success.

Remember to Re-Invest

Successful investors don’t just use their money to light up their cigars on their yachts once they hit the big deals. They understand the importance of re-investing what they earned to bring in more profits. It’s great to celebrate the huge deals, yet spend the money wisely and within your current means. Always take a portion of the money to move on to bigger and better investment deals so you can have a larger bank account.

Anticipate Risks and Losses

You could do everything right with your real estate investments when suddenly the market tanks, sending you into a spiral of losses that can be hard to recover from to get back on your financial feet. Consider the risks and prepare for the worst to protect your portfolio investments so you don’t see your earnings take a significant nosedive.

Take Action

Some people will research and study the market looking for the right time to invest. They will sit idle while claiming they need more experience and knowledge. While it is fine to learn all that you can with real estate investing before making the plunge, don’t psych yourself out from making that first move. Eventually you have to commit your money and time, or you will continually be second-guessing yourself as great opportunities pass by. Even if you stumble the first few times, you can learn from the experience to become a better real estate investor.

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Energetic March Home Sales in Bend Lead to Tight Spring Market

When we think about Spring, we often talk about the saying that the month of March comes in like a lion and goes out like a lamb when it comes to the weather. Yet March also showed that the real estate market for single-family homes became fierce this year, as buyers are flooding the neighborhoods snatching up the available housing inventory.

Duke Warner Realty compiled data about the Bend real estate market and found something amazing. The market started with 2.3 months of available inventory in March, matching the same inventory levels as in June 2013 and is one of the lowest marks in this region for the last 10 years. For March 2016, there were 185 sales conducted at the closing table. This number was significantly higher than February which closed out at 125 sales and March 2015 that showed 164 sales.

Duke Warner CBN April Chart Final

Sellers are not matching the enthusiasm showed by buyers.

While buyers are ready to place their money down on the table for new homes, sellers aren’t rolling out to place the For Sale signs in windows. There were only 383 active home listings in February and March. These numbers are down from the 401 active listings that were available last year.

Buyers aren’t slowing down despite the low inventory numbers. At the end of March, there were 276 sales pending, which is close to the same number of pending sales for March of last year at 278. Only the sales figures in March 2013 showed more than 200 pending sales (209) for the last ten years.

Home prices are rising as inventory falls.

It doesn’t look like buyers will be slowing down with their home search as the weather improves. This circumstance leads to a tighter sales market with fewer active listings and an uptick in home prices. Looking back at March, this trend has already started.

March median sales prices ranged at $346,000, which was up from February’s median prices of $331,660. The first quarter of 2016 landed at $333,045 median sales prices, which is significantly up from 2015’s first quarter of $322,800.

Duke Warner Realty’s March report also shows 4 other striking real estate statistics:

1: Homes spent an average of 130 days on the market in March as this number is similar to March 2015 at 132 days. This figure is lower than February 2016’s figures of 142 days on the market.

2: Home inventory for prices at the $625,000 range and higher shows active listings of 120 available homes on April 1st. This larger inventory will allow buyers to shop and compare a variety of homes. Also in April, there were 85 active listings in the next desired price range of $325,000 to $425,000.

3: Buyers were aggressively looking for homes in the $225,100 to $325,000 price range as there were 69 sales out of 185 sales conducted in March. The next desired price range for buyers was $325,100 to $425,000 as 44 homes were sold.

4: In the Bend region, the home market for properties priced at $225,000 or lower was almost nonexistent. Only eight homes were sold in March as 5 new listings showed up on the market at that price.

Having such comprehensive market data available allows home sellers and buyers to make the right choices for listing and buying homes in Bend, Oregon. Learn more about what Duke Warner Realty can do to help you navigate the real estate market by calling us at (541) 382-8262, following our Facebook page, or visiting

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Video tour

The Consumer Financial Protection Bureau announced on Wednesday a proposal to delay the effective date of the TILA-RESPA Integrated Disclosure rule until Oct. 1.

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