How Options Views the Portland Area Real Estate Market This Summer

How Options Views the Portland Area Real Estate Market This Summer

At Options Financial Residential Mortgage, we’re always on the hunt for ways to improve the process of turning more and more people into homeowners. Part of our commitment involves weighing in on local markets, in the hope that with more information in hand, you’ll be better positioned to make your dream of homeownership a reality.

Summers are typically a very “hot” time of year for the real estate business. Days are bright and sunny, welcoming prospective buyers out into nice weather on weekend afternoons filled with open houses. The summer season combined with Portland’s trending location promises a very active market for homebuyers, heating up competition for a number of reasons.

Why Portland Real Estate Value and Demand Continues to Rise

With tons of excellent, high profile media coverage and a very strong reputation among younger generations just preparing to enter the market as homeowners, Portland is still a lauded destination for new businesses and new employees alike. Nationally, construction is only achieving approximately 60% of what the population growth demands and that doesn’t even account for the backlog of demand from the recession.

In addition, there is also a shortage of construction workers combined with increasing material costs that are adding to ever-rising price tags on new construction. On the flip side, mortgage rates are still low (historically speaking) but are moving upwards while lending practices are still smart and money is available for those who qualify.

Getting Into the Market in Portland: What to Know

Lots of first-time buyers are finding the market to be very competitive in Portland, which means that the value of getting pre-approved for financing and maintaining strong credit cannot be understated. As one might expect, entry-level homes (now priced up to $500K in Portland) are very competitive. In many places (Portland being no exception), entry-level housing is where the spur of the market always comes from.

But there are definitely some challenges facing home buyers:

  • First, the sub-$500K range is an area where the high demand of first-time homebuyers will face strong competition from investors, as well as cash buyers from out of state or out of the country.
  • Second, there’s the issue of tolerance. From our perspective, we are continually seeing price tags hit the upper level of tolerance for what buyers are able to pay. This is cooling the competition some and will likely impact the real estate market through the summer. Remember: many buyers will still buy (albeit begrudgingly in some cases), as waiting will only have the impact of higher prices later.
  • Third, land continues to be an issue. Tight urban growth boundaries in and around Portland continue to add to the pressure of land cost, which ultimately rolls into housing costs.
  • Last, the market for second purchase clients is impacting things, as well. Homes valued at above $500K are moving slower, but what these home buyers get for what they own (and owe) is not enough to make the bigger payment. Plus, all loans for more than $453,100 are considered jumbo loans, which have more strict requirements and sometimes, higher rates. Therefore, these owners are not selling their current homes, adding to a shortage of supply for the current demand of buyers.

So How Best to Prepare for First Time Homeownership in the PDX Area?

Given all of these pressing concerns, then, how does a buyer who truly wants to purchase their first home succeed in a market like this? For starters, each and every homebuyer has to make sure their financing is 100% ready to go.

If you’re a prospective homebuyer who is looking for a loan, then the following steps should make your offer more successful:

  • Complete your loan application and make certain that your loan officer has your file fully credit underwritten
  • Make sure your credit is clean and remains that way through the duration of your home search, as well as the buying process
  • If you’re planning to use a bridge loan, be sure to set it up now (this will allow you to use equity from your current home for your down payment)
  • Don’t let cosmetic concerns get in the way of making an offer on an otherwise solid home
  • Be prepared to make multiple offers before your offer is accepted – the days of finding something, falling in love with it, making an offer and getting the home are in the past for the vast majority of home buyers
  • Prepare to spend time looking – potentially several months
  • Prepare to allow the seller time to rent back the home before moving out – and sometimes for free, if the competition for a particular piece of property is stiff
  • Prepare to spend more money than you were planning to, or prepare to buy a smaller home than you hoped for – compromise in markets like PDX are key to finding success
  • Surround yourself with the proper team that will work with you through the potentially long process, and a team that empowers you with strategic options for your success.

Options Is Ready to Help When You’re Ready to Buy

If you’re ready to start looking for your Portland home, Options is here to help you through every step of the process. We have several special loan programs and trusted advisors who are ready to connect you with the resources you need to buy a home. At Options, we truly believe that homebuyers deserve all the assistance they can get.

With that in mind, we want to introduce you to a mortgage program that’s been around for decades: the Mortgage Credit Certificate, available through Options Financial. Much of the public remains unaware of the program, but taking advantage of it means potential money saving and tax credit benefits for you.

Many loan officers are also unaware of the savings that can be leveraged via the program for qualifying buyers. The Mortgage Credit Certificate requires special certification, which we have, and are able to provide to our clients. If you haven’t owned a home in the previous three years, you meet certain income and purchase price restrictions, and you plan to live in your new Portland-area home as your primary residence, you could qualify for substantial savings.

 

Learn more about the Mortgage Credit Certificate from Options Financial today.

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