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It is all doom and gloom, aces and eights in the economic picture including, of course, the real estate market. Never been worse? Not hardly. To highlight this and give us better perspective and some hope towards the future, I wanted to share something that was pointed out by Dennis Gartman, a well respected market analyst. Back in 1992, an article in Time Magazine included this passage: "The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many 'structural' burdens, as opposed to familiar 'cyclical' problems. The structural faults represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought; the debt hangover; the banking collapse; the real estate depression; the health care cost explosion and the runaway federal deficit." It's amazing how eerily similar the picture from 1992 compares to today. We all know that the period following 1992 included terrific growth and opportunities in the economy, stock market and housing. If history repeats itself, which it often does, this could point to much better days in the future with opportunities in the present. There is a light at the end of the tunnel and it isn't a train.... Thanks to Mark Long of Evergreen Home Loans in Bend, OR, for this insight. There is indeed light at the end of the tunnel. It's been a busy month!!!
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Looking at Bend OR homes for sale today on the Multiple Listing Tour were a few gems. Please contact me if you want to see photos and I will send them out immediately. In city homes, two homes were outstanding. One is on my favorite street in all of Bend, Drake Road. This is located within walking distance of downtown (just a few blocks) as well as the Deschutes River, which runs through town, and Drake Park, scene of countless festivals and activities. This 1928 home has been tastefully updated with a spacious master suite and sitting area as well as three other lovely bedrooms, finished basement with exercise room and a fabulous kitchen. Move in, chill the champagne and let the fun begin. The second city home is on Awbrey Butte with killer views of the Cascades, a homesite that is over 2 acres for totaly privacy and a magnificent home with understated elegance and lots of light. I loved the media room! This large home has 4 bedrooms, 3 1/2 baths and a great price. REALLY great. Call me for details and photos. The country homes are wonderful Central Oregon ranches and farms at their best all located in the popular Tumalo area. All with Cascade views, the homes range from $935,000 on about 40 acres to $2,950,000 on five acres with a lake, pond, barn, and a magnificent home with every room you would ever want for playing, relaxing and entertaining. My favorite home is $1,899,000 because the home is peaceful, mostly single level and elegant plus the horse facilities are excellent including an outdoor arena and six-stall barn. All these homes have irrigation rights for those green, green pastures. See these and other MLS listings in Bend, OR, on my website and then call me for more details and a personal tour.
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Occasionally -- maybe a couple of times a month at most -- I see a fabulous buy on a home on our Tuesday morning MLS tour of Bend real estate or our Wednesday morning office tour of homes and farms & ranches for Coldwell Banker Morris. This past week I saw THREE incredible deals, the kind of property you walk in and wonder, "WHO DO I KNOW FOR THIS WONDERFUL PLACE?" One of these homes is a custom home on 20 acres, the perfect Central Oregon ranch. One is a beautiful home with artist's studio on 2 1/2 acres. The third is a quality fairly new home with many upgrades in town with great Cascade views. First, picture a totally private single-level custom home high on a knoll with unlimited Cascade views amid 20 irrigated acres for livestock backing to public land for miles and miles of riding. All for the incredible price of less than $500,000. Next, you still want privacy but just few acres is perfect for you? The home has two separate wings, one for the master suite and office and the other with guest suites and media/family room, the artist's studio is your getaway, your office or your work room, and gardens surround the home affording that sought-after privacy. Located in a desireable neighborhood and bordering public land for miles of great walking or riding (horses are permitted), this is a great deal for about $550,000. A home in town with killer views is more your style and you still want a great deal? How about a custom Craftsman home with upgrades such as passive solar, granite counters in the kitchen, cherry flooring, solid core doors, two master suites, a bonus room and a 3-car garage, all for less than $350,000? Give me a call (541-408-6720) or email me at Lynne@LynneConnelley.com for more details, pictures and a private tour of any of these wonderful, well priced properties.
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A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply: (Actual reply from FHA): "Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin." Annoyed, the lawyer responded as follows (actual response): "Your letter regarding title in Case No. 189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France in 1803, the year of origin identified in our application. "For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. "The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus's expedition. "Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA. "I hope you find God's original claim to be satisfactory. Now may we have our damn loan?" The loan was immediately approved.
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Market statistics, in Bend and elsewhere, are pointing decidedly UP. The San Diego Union-Tribune on June 15 stated that their home prices, which had been falling at double-digit rates a year ago are now rising rapidly as upper end buyers find great bargains and investors re-enter the market attracted by value. The Bend market is no exception. Over the past 6 months, the percentage of our market that is short sales and bank owned properties has dropped 17%. That sector now represents less than half of the market. Bank owned homes are usually priced well, but there is stiff competition among buyers. The number of sales of all homes 2010 over 2009 has increased an average of 51.65% since January. The median sales price (half the market above, half below) of a residence in January of this year was $212,000 for seller owned and $177,500 for bank owned & short sales, but in June it had risen to $254,500 and decreased slightly to $175,000 for bank owned. In 2009 those figures were $233,750 in January, and it had dropped to $219,000 by June. So we are heading in the right direction. With interest rates at well under 5%, it is an attractive market indeed. And don’t forget to ask me about those zero to 3% down loans. Another interesting way to look at the market is that if you look at a chart of prices from 1997 to date and you figure a steady 3% appreciation it matches almost exactly the price increase from that purchase in 1997. In real estate investing over the long term, the only way to lose money is if you must sell. Adding in those tax benefits of home ownership, it’s an excellent investment long term.
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Not only are prices at low levels we could not even imagine two years ago, but this month I want to focus on a critical part of the homebuying process in any market: financing. We have been hearing that rates are at historic levels, but did you know what those levels are? How about 4.5% on a 30-year fixed loan for buyers with 20% down and good credit? Yes, that’s 4 ½%!!! Adjustable rate mortgages at 3 5/8%? 15-year loans at 3 7/8%? Yep! There are two special loan products that I do want to mention briefly. One is the Neighborhood Stabilization Program. This is a federal fund of $2.3 million available to assist homebuyers purchase bank owned (yes, only bank owned) homes. NSP provides a 0% second mortgage for up to 20% of the purchase price to qualifying borrowers in Deschutes, Crook and Jefferson counties. The second program is HomePath. This is for FannieMae and FreddieMac owned homes only, meaning they are bank owned, and the bank is Fannie or Freddie, quasi-governmental entities. In this program, you put down as little as 3% for owner occupied or 10% for investors, there is no mortgage insurance (MI adds to your monthly payment), no appraisal is required and the seller can contribute to your closing costs. The rates are slightly higher, but if you have less money for a downpayment, this could be the perfect program for you. And Fannie and Freddie homes are great deals. Please call me or email me if you want to find one of these great houses and/or want more information about either one of these loans. I have excellent mortgage brokers on my team who can quickly and completely prequalify you for that perfect loan. Yes, banks are indeed lending!
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Some good deals for sale in Bend? Yep! But there are a lot of NOT good deals as well. Tuesday's MLS tour included a small home that backs to a busy road, a new home overpriced by at least $50,000 and a home backing a busy road that is at least $200,000 overpriced! One would think in the current market that sellers would be realistic. On the other side of that coin, two homes stood out in beautiy, value and location. The first is a charming 1990s mini-ranch with incredible easterly views overlooking an idyllic setting of pastures, horses, fencing and ponds. It is single level and has a small but efficient barn and outbuildings. And it is priced under $500,000. A second buy was a total surprise. I never had a clue it was there it is so hidden. As you pass through a neighborhood of newer homes, tucked at the end of the road is a gem of a home on .4 of an acre that was built in 1990 and is light, cheery and charming with total privacy. The feeling is that of a sanctuary, a retreat. With four bedrooms and over 2,800 square feet, there is plenty of room for a family, guests or hobby rooms. And what a fabulous kitchen! The back patio maximizes this prime setting with planters, seating areas, the canal and a huge neighboring pond. Sipping a cool drink this summer will be a dream on that patio! The price of about $325,000 is excellent. Neither of these properties are short sales, so you can move right into that new Central Oregon home or ranch.
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The big news -- or almost news -- is that the USDA funding is still available and may continue into the near future uninterrupted. So what is USDA funding? The Dept of Agriculture offers loans for no downpayment (yes, 100% financing) in rural areas, and in Central Oregon that includes almost everything but Bend, and there are pockets in Bend that are eligible. There are income limits on that, but our concern has been that the money will be running out. Fiscal funding will begin again June 1, but now thanks to bills working their way through Congress the current funding may increase. Stay tuned for more information on this. If you have more questions about the Rural Development Loan Program, funded by USDA, please call me or email me and I will be sure to get you the details you would like on this or any Bend Oregon homes for sale, MLS listings in Bend or elsewhere in Central Oregon or -- my favorite -- farms and ranches. Better yet, Let's Go Riding!
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It will indeed be music to our collective ears as brokers, as sellers and as buyers when the era of short sales comes to an end. It has not reached that point yet, at least as I see Bend Oregon homes for sale this month, but there are good signs. Looking at the MLS listings which were on tour yesterday, April 20, of the approximate two dozen homes for sale, only one on tour was a short sale. ONE! Hurray! And there were some excellent buys. To name a few, a nearly new 3-bedroom home in downtown Bend can be purchased for about $250,000. Another downtown home is available for $225,000. A gorgeous 5,000 sq ft single-level log home in a fabulous neighborhood with hand scribed logs on nearly 3 acres is being offered in the mid $800,000 range, down over a half million dollars from its original listing. Bring your own horses! And in the category of Central Oregon ranches and farms, I saw on tour a magnificent ranch home on 6 acres in Tumalo with Cascade views PLUS an additional 2-bedroom guest home PLUS a perfect little barn with paddocks and RV storage -- all for $1,200,000, an excellent price. Also in a fabulous neighborhood for you and your horses is a lovely home with huge Cascade views on 2 1/3 acres in the mid $300,000 range. It not only backs to public land for riding and hiking but also has a cute guest home, a large shop and enclosed RV parking! For $350,000??? An incredible buy! And the best news of all? NO SHORT SALES!!! Ahhhhhhhhhhhhh, for the end of that era. Cheers! And please call me or email me if you want to see any of these great properties.
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Have you heard of the November 30, 2009, program by the Treasury Department called HAFA? It took effect this week on Monday, April 5, and its guidelines follow below. HAFA (Home Affordable Foreclosure Alternatives Program) is part of the fairly unsuccessful -- well, VERY unsuccessful -- HAMP program, Home Affordable Modification Program under which almost no one has been able to modify their mortgages. I think the odds are slightly better than being taken out for dinner by Richard Gere -- but only slightly. Get the picture? HAFA provides incentives in connection with a short sale or deed in lieu of foreclosure used to avoid foreclosure on a loan eligible for modificaiton under the HAMP program. The catch? Not all servicers participate in this program. And the catch for HAFA? Two main investors do NOT participate at this time, namely FannieMae and FreddieMac. HUGE problem since they are THE major real estate investors in the United States. Supposedly Fannie and Freddie will issue their own versions of HAFA in coming weeks. We'll see on that. There are 43 pages of guidelines in HAFA, designed to simplify and streamline the use of short sales and deeds in lieu of foreclosure. HAFA: Complements HAMP by providing a viable alternative for borrowers who are HAMP eligible but are unable to keep their home; Uses borrower financial and hardship information already collected in connection with consideration of a loan modification (Oh, sure -- you mean one department of the lender will be talking to another department? I will believe that when I see it.) Allows borrowers to receive pre-approved short sales terms before listing the property. Currently after many months of painful and frustrating negotiations by the sellers' broker and the bank and many lost documents and unsatisfying phone calls the bank may or may not send a letter approving the short sale, and the terms are always a guessing game. Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement. Are you listening, Chase? Requires borrowers to be fully released from future liability for the first mortgage debt. THIS IS HUGE, HUGE, HUGE, HUGE!!! DID I SAY HUGE? Uses standard processes, documents and timeframes/deadlines. Currently every lender and sometimes even different employees for the same lenders use varying forms and processes and timelines. Some can be as long as a year. Provides financial incentives for borrower relocation assistance, for servicers to cover some of their costs and for investors for allowing a atotal of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders. Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines.
See MakingHomeAffordable.gov for participating servicers. And good luck! Call me or email me with success stories, frustrations, questions or just to gripe! There are great deals in Central Oregon real estate, and maybe this program will unlock the door to the greatest deals of all, short sales. Ready, set, go!
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Every Tuesday Bend brokers have an opportunity to view Bend Oregon homes for sale. Today's tour focused on the northwest quadrant of town, certainly an area of beautiful homes. Today's tour had its share of beautiful homes, but huge values also exist. To review the homes I saw this morning, I will classify them as a great value, cool location, over-the-top gorgeous, and some have all three. Looking for a home with lots of wonderful spaces close in to town in the West Hills -- beautiful kitchen, cozy office, exquisite attention to detail, executive master suite, apartment unit on the second floor with skylights and views of trees and add a fabulous garage (no, the roadster does not stay!) -- and you have got an excellent buy in a lovely remodeled 50s home I saw priced in the $400,000 range. Vintage style downtown? You can have it complete with the old windows, lovely architectural details in doors and windows and a private yard with antique gates for under $550,000. Very homey and chic. Life on the river? Yep! Your choice of a condo or magnificent lodge style home with multiple fireplaces, media room and gourmet kitchen, all with the river practically running through it. The price range for these delectable homes you will never want to leave? Under $650,000 for the brand new condo (down about $300,000 from when they were first introduced to the market a couple of years ago) and the home is listed in the upper $1,000,000 range. And don't forget the home ON the river I previously blogged about which can be purchased for under $1,000,000 and is about 4,000 sq ft of carefree river living. And the tour was huge compared to recent months, so I see a supply of high end homes looking for bargain hunters like you! All this and I never got the chance to visit the Central Oregon farms and ranches that were on tour. To see these MLS listings in Bend or anywhere in Central Oregon, visit my website or give me a call.
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We brokers are fortunate in Central Oregon in that we have a MLS (Multiple Listing Service) tour of new listings every Tuesday in Bend and other days in other Central Oregon towns such as LaPine, Sisters, Redmond and Prineville. Our office tours our properties on Wednesdays. So I have the opportunity to see Bend Oregon homes for sale, MLS listings in Bend and ranches and farms when they come up for tours. Often in my blog I highlight what I see from those tours. This morning I rediscovered a wonderful neighborhood and saw a couple of lovely homes, but with almost no exception I thought everything I saw was overpriced. For instance, the fabulous neighborhood, that I have always loved, is off Pinebrook just minutes from downtown and the Old Mill District, but the lots are larger (the one I saw this morning is 1/3 acre) and there are huge ponderosa pines. This morning's tour, however, was of a very dated 1983 home that is about $50,000 overpriced. Not a good combination! One home is priced a bit high but is NOT a short sale -- hurray! -- and has been totally upgraded with new carpet, paint and flooring. Lovely and priced at $239,000. At under $199,000 it would be a great deal. It is actually within walking distance from the shops and restaurants of the Old Mill District. I saw a home that is a beautifully remodeled 1998 2-story with master on the main level, high ceilings, magnificent yard that backs to the River Trail system and a 3-car garage, but the price is about $100,000 high! At nearly $400,000 one could purchase a McMansion instead of this 2,100 sq ft home. It is beautiful, though. And finally, that McMansion. An almost new 3,500 sq ft home in the $400,000 range in a neighborhood with a pool is an outstanding buy. One out of four is not bad!!
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Touring homes for sale in Bend Oregon this week, one did not have to see many homes to see great deals. For instance? Here are a few. Close in to town, a home loaded with charm including a real brick fireplace and oak floors throughout the home, this adorable 1959 cottage can be purchased for $140,000. A 4 bedroom, 2 1/2 bath 2100 sq ft home for $169,000? Yep, it's true! Oh, and it is NEW! NOT A SHORT SALE, I saw a beautiful home in Oakview for about $200,000, 3 bedrooms, 2 1/2 baths, about 2 years old with a gracious, large back deck. There is even RV or extra vehicle parking! That's hard to find. And finally, also in the Oaktree area (near shopping and the medical center), if you are looking for a Craftsman home with 4 bedrooms and a great floor plan, over 2,500 sq ft for under $245,000, there is definitely a great home waiting for you. These MLS listings in Bend Oregon and excellent examples of value in today's market. And let me know if you are interested in seeing Central Oregon ranches and farms as well. A list can be custom designed for you and sent to your inbox. Although we have reduced inventory, it is still definitely a buyer's market.
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We all know that credit scores are important in our everyday lives from potential job to insurance to, of course, borrowing. Unless you have just emerged from the jumgles of Borneo (wherever the heck that is), this has become common knowledge. But how does your lender view these scores, and what is the range for taking out a great loan with excellent interest? The low end of the credit score range is about 500. If your score is hovering below 580, your dog can indeed probably get a loan easier than you can with better terms. If you are lucky, he will allow you to live out back in a cushy doghouse. I'm not too sure my dogs would give me that choice! Next, lenders view the range between 580 and 620 as a challenge for lending, and your rates will be higher, but you may be able to get out of your cushy doghouse and into your own home. Maybe. Between 620 and 680, lenders consider these scores to be low, but you and Fido will probably be able to obtain a loan, particularly if it is government backed, such as the Rural Development Loan or FHA. (se my previous blog on these types of loans) And finally, above 680 you will be eligible for conventional loans at good rates, especially if your scores are above 720. You will need 20% down payment. Conventional loans are the easiest to close. All that said, my attorney jokingly said recently, "600 may become the new 800," meaning that there are so many people with damaged credit that if the banks are ever going to lend money, there must be some consideration for the fact that recent credit hits should be offset by 20 or 30 years of perfect credit. Will this happen? It remains to be seen. Currently, the lenders are too shell shocked for leniency, but in the next couple of years these credit lapses will have to be considered. So if you are ready to tap into the gold that is real estate in Central Oregon, whether homes, investments or ranches, give me a call, and I will refer you to excellent mortgage brokers who will explain all of this in depth with you and diagnose what is best for you in your situation.
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Looking for a home in Bend or anywhere else in Central Oregon, whether a single-family home, investment property or farm or ranch? I am your resource for that. But to actually purchase that home, it takes the expertise of a great mortgage broker, and I have the best in the business on my team. Let me tell you how such an expert will work for you and get even the most complicated deal closed. I often used to say that one job I never could begin to do was that of a travel agent with all the schedules and combinations of details that could make or break a trip for a client. Very complicated and changing continually. These days, that complexity defines the very challenging job of a mortgage broker. And it changes almost hourly. This past week I was privileged to help a client purchase a home. Sound simple? Hardly. She is a single woman who works retail full time and was able to buy her first home. Yes, it was rewarding, but that purchase happened because she and I viewed many, many homes in Redmond over many weeks and because of the hard work of a member of my team who goes above and beyond to get my clients the best rate and the best deal for what is the most important purchase if their lives. Mark Worthington, branch manager for Directors Mortgage here in Bend, has always been my go-to guy for getting my clients great deals. Last August I met and began working with this particular client who I will call Anne. Anne purchased her new home, and we closed this past Monday, February 1 after five months of house hunting, offers on homes that did not work out and a lengthy loan process on two different homes, one of which we just closed on. In the end, Mark got a USDA-backed Rural Development Loan on a HUD home for Anne and closed it in 26 days. Incredible. And he even called in favors to have a few critical repairs done on the home so it would pass inspection. By the way, his file is over three inches thick! What is a Rural Development Loan? This is a loan for first-time homebuyers, is available for property outside the Metropolitan Statistical Area, which is outside the Urban Growth Boundary, has income limitations for the buyer and is a ZERO DOWN LOAN. Yes, they still exist. But there is LOTS of paperwork involved for closing. See my next blog for more information on FHA loans, USDA loans and credit scores for home purchases. Thanks, Anne, for sticking with this process. And thanks, Mark, for consistently and continually getting the best loans for my clients. Come visit with me and put a great team to work getting a great home or ranch for you.
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