The Rent or Buy Enigma

To rent or buy? question sometimes answers itself—especially when the requisite down payment amount isn’t available. Other Portland Metro area residents have to wrestle with a very important decision that simply doesn’t have a one-size-fits-all solution, any more than does a what car is best? question.

Factors that make it complicated have to do with how predictable many other facets of their future are: how long do they know they will be living in the northwest; how reliable is their income stream; how stable is the size of their family, and—an associated issue—how important will the quality of neighborhood grade, middle, and/or public high school be…and when?

Once you are convinced that there is no simple answer to the rent or buy question, it becomes much easier to dismiss some of the mythology that passes as common sense when it comes to the decision. Chief among the myths is the one that has renting being more economical because of the associated costs that go with homeownership—

Taxes! Maintenance! Insurance! Put them all together, pile them on top of the monthly mortgage payment, and there’s no way it isn’t cheaper to rent!

That idea is sometimes bolstered by taking pencil to paper. If the immediate monthly expense does come out in favor of renting, it’s probably why the myth endures (even though some other “common sense” has it that owning your Portland Metro area home is the smart way to go).

What’s the unbiased bottom line when it comes to dollars and sense? Is the answer to rent or buy dependent on speculation—that local real estate values need to continually grow? If everything else is equal—if the emotional and prestige aspects of homeownership are set aside—why isn’t it financially more prudent to risk nothing, and just rent?

The answer that’s most comprehensive was recently cited by media financial guru Dave Ramsey, who is most well-known for counselling against debt. With that as his philosophical touchstone, you’d expect that the last thing he’d recommend would be signing on to a debt the size of a typical mortgage. Yet the opposite is true. Among other reasons, the asset value of the underlying property soon balances out against the liability of the debt, so it’s not troubling. But that’s not the real answer to his coming down on the side of owning over renting.

Ramsey’s reasoning is simple enough: the key lies in inflation. When you measure this month’s cost of homeownership versus the monthly rental for a comparable local home, the two might be almost equal—or even cheaper for the rental. But that’s only this month. Thinking ahead a year or two…or more realistically, seven, or 10, or 15 years, inflation can be counted on to add significantly to what the renter will pay. The homeowner’s costs are much more stable. Ramsey says that a renter would pay 38% more over the next seven years than would someone who buys today. He quotes Zillow’s finding that between the years 2000-2014, the cost of renting grew twice as quickly as did household incomes. Currently, rent costs nearly 30% of a typical renter’s income.

The financial part of the rent or buy decision is another area where my clients benefit from up-to-the moment market knowledge…and why a call to our office always results in valuable information!    

Craig Reger Group

503.893.2022

We sell more because we do more.

July Maintenance Checklist

In addition to our Independence, the Fourth of July also marks a sort of mid-year pause. Families with kids have by now shuffled them into summertime activities. All graduates have graduated; the gardens have all been started (and some parts of it, even harvested!). This used to be the season for television series reruns, resulting in measurably less TV-watching; but cable programmers have obliterated that notion—and this year, the Rio Olympics will draw much attention back indoors.

But for the most part, the beginning of July marks OTY: the undeniably Outdoor Time of Year. It’s the sunny, healthy time of year; time to get out of the kitchen and see how much outdoor cooking can get done. It just feels healthier—even if there are just as many calories in a burger cooked outdoors as in the kitchen.

For northwest homeowners who have been telling themselves they would get around to the annual home maintenance chores pretty soon, it’s also the time of year when they are uncomfortably within visual range of many the details that call out for some quality maintaining. A sagging gate that really should be reinforced; paving stones that tree roots are slowly but surely upending—they may not demand attention in December, but—let’s face it—it’s already July!!!

The outdoor features most in need of attention are different for every Portland Metro area home, but here is a universal maintenance checklist culled from some of the items that commonly deserve attention. They may not be precisely those that warrant your ministrations, but may serve to jog your memory about the ones that make up your own maintenance checklist:

Deck & Patio – when the weather’s clear, it’s prime time for staining (it usually is an annual task—no matter what the label on the can promised).

Pots & Planters —new ones and old ones deserve “feet” beneath them…or any solution that facilitates draining. The surface beneath will benefit—and likely need less attention of its own later on.

Mold — it’s really easy to deal with if it isn’t allowed to accumulate for years. The products that make eradication easy can be found at all local hardware stores.

Drainage — while you’re out in the yard attending to everything else, keep your eyes open for evidence of runoff where it doesn’t belong. Trace it back to the source: if it’s just the beginning of a drainage issue, dealing with it early can save a lot of expensive grief later on.

Windows — pests frequently enter through cracks and openings that develop around window frames. You may need a ladder to be able to spot what’s developing on top, but if needed, a little caulk will keep your home’s “envelope” intact.

A/C — every kind of air conditioner needs to have its filter cleaned or replaced to prevent needless strain on the fan motor. If not July—when?

It feels good to have an annual look-see at how your home is standing up to the wear and tear that the past year has rendered. Once any issues have been dealt with, the rest of the summer will be that much more enjoyable. And on the very practical side, if and when you decide to hand your local home off to a new owner, the financial rewards for having kept it in prime condition over the years will be measurable. We’ll be here in the meantime—standing by to answer any and all questions about our area’s real estate market!

Craig Reger Group

503.893.2022

We sell more because we do more.

House Sitting is a Real Calling

Midway through the Portland Metro area real estate’s busy selling season also finds us at the beginning of many a homeowner’s personal vacation season. For those whose homes are on the market, one of the benefits of having a close working relationship with their Portland real estate agent means that they can take off for their out-of-town holiday without having to worry about losing prospective buyers. If my clients instruct me to continue showings in their absence, it’s no problem; likewise, if they’d prefer to hold off until their return, the showing schedule is juggled accordingly.

When a house sitter is part of the picture, it’s a low-stress showing situation, as well. Good house sitters keep their client’s property in order on a day-to-day basis anyway, so with the agreed-upon advance scheduling, showings can proceed as usual. It’s especially nice when the local homeowner returns to find good news on the real estate front!

There are two truisms about leaving your most valuable asset—your home—in the care of any house sitter.

The first is to select the sitter wisely. It’s usually best to go with a neighborhood favorite: someone who is local to Portland, who comes highly recommended by neighbors, and who views house sitting as a professional calling. That doesn’t mean he or she should necessarily be a full-time house sitter (many great sitters have other jobs). It does mean that, since it is at least a part-time occupation, he or she has a reputation to preserve. Cousin Mark or Aunt Mildred might be more than competent enough to do the job, but if it seems to them more like an imposition rather than a calling, the results can be less than top-notch.

The second necessity for getting a satisfactory (and safe) house sitting result after a first-rate house sitter has been recruited is to provide the raw materials that allow them to do their best job. In the house-sitting realm those raw materials consist of good information: the vital information that you usually take for granted, but which is necessary to oversee the proper functioning of the property. The information should be made available in a carefully assembled and written list. Some (not all) of the items you gather could include your on-the-go contact information at each destination; alternative contact persons; names and phone numbers of any service persons scheduled to be working on the property; emergency numbers for the local maintenance professionals you rely on for things like plumbing emergencies; and—at the top of the page, right after “911”—the Portland emergency numbers for police and fire departments. Elsewhere, near the TV and other electronics, it’s also considerate to write out in explicit detail how to turn them on. As we all know, in today’s world, that can require a page or two…

When your property’s operations/emergency list is complete, be sure to reserve some time to go over the items with your house sitter—before Getaway Day, when the schedule can easily grow too hectic to do the briefing properly. And if your house really is currently on the market, include your real estate agent’s contact information— which we hope is ours!

Craig Reger Group

503.893.2022

We sell more because we do more.

Brexit Shock Effect on Interest Rates

By the end of last week, homeowners who keep an eye on mortgage rates had a remarkably clear view of what the future is likely to bring. “Brexit” had all but sealed the deal.

Part of the reason for the resurgence in the local real estate market has been the phenomenon of the northwest’s historically low mortgage interest rates. Following 2015’s first rate hike in nine years (and the promise that two or three more were in store for 2016), across the nation, financial commentators foresaw the expected gradual rise in mortgage interest rates to act as a moderating influence on home sales activity. In other words, a market that would slowly grow a bit tighter.

As recently as April, that had been the common wisdom. That changed. Those who factor mortgage interest rates into their own decision about buying and selling Portland property were doubtless pleased when, last month, some bad news about employment rates triggered good news about the all-but-certain Federal Reserve interest rate hike: it was going to be delayed.

The delay was expected to last for months, but probably not much longer. Then came last week—and Brexit.

For anyone whose vacations allowed them to remain blissfully unaware of world affairs, “Brexit” was the name given to an election Great Britain held to determine whether or not to remain in the European Union. When the votes came in, the decision was to leave. Exit. This was so completely unexpected that the bottom dropped out of world stock exchanges. Convinced that Brexit would fail, traders had bolstered markets in the days leading up to the vote. Japan’s stock market tumbled 7.9%. Theirs was the most dramatic, but here in the U.S., the Dow fell 3.4%. The British pound dropped; the dollar rose.

The reason local mortgage interest rates could be affected by a distant overseas political event is due to the currency ramifications. When the dollar is seen as more stable than others, it rises in value. That causes U.S. products sold overseas to become more expensive, producing a drag on the economy. Since growth might falter if the Fed were to add the additional burden of higher interest rates, it seems all but certain that mortgage interest rates will remain where they are for longer than had been assumed. Possibly, for far longer.

The Wall Street Journal pointed out that “central banks will bolster growth by easing policies and, in the case of the Federal Reserve, delaying potential rate increases.” Forbes headlined “Brexit Makes That Federal Reserve Rate Rise Recede into The Future;” they predicted a future of “near zero interest rates…far longer than expected.” London’s Financial Times went even further, suggesting “the possibility of the Fed reversing last December’s quarter-point rise.” On Friday, The Washington Post noted that U.S. mortgage interest rates “already hit rock bottom this year…nearly a three-year low.” They quoted one analyst’s post-Brexit observation: “If you’re a borrower, don’t wait to lock your rate as this opportunity may not last long.”

The Brexit phenomenon is certainly not reason enough for anyone to buy or sell a home—but when the decision is already in the works, current Portland Metro Area mortgage interest rates can’t help but make the prospects more attractive. Call us if you are interested in further investigating just how rewarding today’s market can be!

Craig Reger Group

503.893.2022

We sell more because we do more.

Listing Photo Misfires

One good way our clients get a head start from the word “go!” is the amount of attention their local listing receives. Since that listing is by far the most prominent display piece their property will be presenting to the world of potential buyers, it has to be first-rate. The details must be presented in clear and unambiguous language, laid out with the information buyers consider important right at the top. Most important of all is how the data is illustrated. If there is ever a place where top-notch photography will pay off, this is it!

That’s why it’s astonishing when you come across listings in the northwest where the shots appear to have been taken with casual abandon. You seldom see those when a property is represented by a licensed agent—or if you do, it’s probably the result of a client’s sudden need to sell quickly—in which case the offending specimens are usually swiftly replaced by professional substitutes.

What are the most common amateur photography slip-ups that can’t help but harm a property’s impact? Here are five that seem to lead the pack:

  1. Flash. Even most smartphone cameras have flash capability for dark scenes. The problems with that kind of flash is that, since the light provided is right next to the lens, everything that’s illuminated looks flat—it erases the depth that shadows provide. Also, things that are closest to the camera are bright, those distant are darker—making for all the appeal of a crime scene photo. As if that weren’t enough, reflective objects like mirrors and glass reflect the glare of the flash. Professionals use multiple “slaved” flashes deflected off walls and ceilings—an entirely different matter!
  2. Illumination. Most local listings are more inviting when they serve to emphasize a property’s open, spacious qualities. There are exceptions, but most of the time that means bright and light. Rooms look their best when their natural light is only subtly augmented by additional photo lighting. Photo lights introduce unnatural shadows unless they are skillfully placed…but when that’s accomplished, the result is a bright, clean, color-balanced shot.
  3. Selection. When a listing photo portrays an area that isn’t obvious—when a shot doesn’t “explain itself”—the result is confusion for the viewer. More than one or two close-ups of architectural details without a clear indication of where they are found don’t help tell the listing’s “story.”
  4. Focal length. Most “normal” lenses aren’t well suited for listing photography. Wide angle shots are almost always more appropriate. They provide more information by showing a greater area—which also conveys a more spacious feeling.
  5. Clutter. Experienced listing photographers know how the viewer’s eye is attracted to details which are out of place. The personal bric-a-brac that’s part of daily living can be a show-stopper in listing photography. Amateurs leave clutter in; professionals seek to remove it before every shot!

A superb Portland listing is one that features photos that tell a story beautifully and accurately. It’s really the opening act of a presentation which—hopefully—ends with a deed conveyed and front door key presented. I hope you’ll call us when it’s time to get your show on the road!

Craig Reger Group

503.893.2022

We sell more because we do more.

 

Capitalize on Energy Savings

It’s been a welcome relief for northwest homeowners as the Bad Old Days of the energy crisis recede from memory. $4+-a-gallon gasoline, huge electric, propane and fuel oil bills that were the subject of national outrage have faded from the headlines. We’re now busy attending to the current challenges of daily living—and OPEC’s machinations aren’t front and center!

But for those Portland Metro area homeowners more attuned to what’s likely to be headed our way sooner or later, now is as good a time as any to prepare for the next spate of energy price surprises. And there are many new products—some in development, some already on the market—that soon could put a serious dent in the damage tomorrow’s energy bills might wreak.

Some of the interesting innovations:

  • Bladeless Fans. These are already out there—the weird-looking magnifying-glass-shaped electric fans that suck hot air in through the base and push a steady stream of air out via an impeller. The no-blades design promises to make them safer, and eventually less of an energy-eater.
  • Smart Thermostats. The best new ones connect to home systems and display how much energy is being used (and how much it’s costing). Being able to see the dollars and cents result of every temperature-setting decision, these “smart” thermostats can’t help but result in measurable energy savings.  
  • Flooring Upgrades. Who isn’t attracted to the warmth of hardwood floors? That never changes, but when it comes to the cost factor, they can’t match the energy savings of radiant heat. Unlike older versions of radiant flooring, the new products like Warmboard don’t require running tubes in concrete to circulate hot water. Radiant solutions were already 25% more efficient than forced air—the newer systems allow greater control and lower water temperatures.
  • Sprinkler Controllers. Water bills can be eyebrow-raisers anytime—but if you’ve ever found yourself rushing outside during a rainstorm to figure out how to stop your automatic lawn sprinkling system from adding to the flood, that situation needn’t reoccur. The newest “smart” systems take weather, sprinkler type—even growing conditions—into account. As an extra, mobile apps allow you to supervise from afar.
  • Solar Shingles. They’re not yet at the price point of traditional solar panels (who would have thought that bolt-on solar panels would ever become “traditional”?)—but they are quicker to install and have the advantage of maintaining the traditional rooflines. They are becoming the renewable energy solution with curb appeal!

Investments in home renovations that give local homeowners energy savings are investments that pay off twice: right now, as the monthly operating costs are realized; and later, when those advanced features make the property more attractive to buyers. If that “later” is also a time when a future energy crunch is on everybody’s minds, it can be an important selling feature.

That would also be prime time to give us a call!

Craig Reger Group

503.893.2022

We sell more because we do more.

Homes for Sale? Think Food!

It’s interesting to look into how many ways the universe of food —be it restaurants, markets, cooking, gardening or eating—intersects with the world of real estate. The connections are many and important. That’s true from the moment a future Portland Metro Area homeowner begins to look into the current crop of local homes for sale.

We commonly think about residential real estate predominantly in terms of shelter. The listed homes for sale are vying to become the roof over our head; the place where the family will be blissfully protected from the elements. But since it will also be the place where we prepare our meals, store the groceries, and experience the holiday celebrations and feasts that will be remembered forever as key moments in our family’s life together.

Food is central to all these things—it’s why homes for sale that can claim superior kitchens have a clear advantage over those with cramped layouts or dated appliances. The popularity of formal dining rooms may be waning, but the importance of the kitchen has never been more pronounced. Interestingly, large, showy kitchens don’t always get the highest marks from experienced family head chefs. For some, a more compact layout that creates an efficient “work triangle” (the imaginary line connecting cook top, sink, and refrigerator) can win favor by saving steps—and time. In any case, most Americans think of the kitchen as the house’s nerve center around which family life revolves. And in summertime, when the action moves outside, an extra advantage goes to the homes for sale that have patios or decks that look ideal for outdoor grilling.

It is also true that for even the most dedicated amateur chefs, hectic workday schedules can mean that cookery of any kind is forced into becoming a strictly weekend pursuit. For those whose professional lives make that an unavoidable reality, a property’s proximity to quality local dining outlets can be a major selling point. One way alert homeowners take advantage of that is by preparing a list of their favorite local eateries—or even by prominently displaying a collection of current take-out menus from nearby restaurants.

When you think about it, it makes good sense to take a look at the ways homes for sale in Portland can make the food connection part of their marketing approach. Call us for a rundown of some of the other lifestyle elements that we can use to demonstrate to prospective buyers how readily your property can fit into their vision of what a treasured home should be.

Craig Reger Group

503.893.2022

We sell more because we do more.

Why People Use a Buyer’s Agent

A mega-proportion of serious Portland house hunters ultimately decide it makes the most sense to team up with a real estate professional to get the job done. Portland buyers may begin the process of finding and buying their next home on their own, checking through the online listings or driving target neighborhoods to check out the “For Sale” signs—but the NAR® reports that 9 out of 10 of U.S. buyers will eventually use a real estate agent in their search process.

The most obvious motivation for that is because the buyer’s agent’s fee is paid from the seller’s proceeds. That alone could explain a 90% level of popularity. When you can benefit from a professional’s services at no cost to yourself, northwest house hunters would have to think long and hard to come up with what the downside could possibly be. To run down the arguments that could explain how 10% might decide to pass up the buyer’s agent service, I looked for the most common arguments against the grain.

Here are the Top Four, presented in no particular order. (Since I definitely do have a dog in this fight, I’ve also included some counterarguments):

  1. Distrust. Something for nothing? A free lunch? Common sense teaches the same lesson, always and forever: THERE’S NO SUCH THING AS A FREE LUNCH! (Counter: the service is not free: the seller pays).
  2. Independent Spirit. Some people know that they work and think better when they take sole responsibility. They may have been misled by “experts” too many times—may regret not relying upon their own instincts. After all, Americans are mavericks by nature: they are at their best using their own native ingenuity to solve problems. (Counter: a substantial portion of the process of purchasing a home in Portland requires mastering technical legal and timing requirements. Although a buyer can take the time to learn about all of them, since their buyer’s agent has already handled them successfully many times, it’s wasted effort. IOW, this is a wheel that doesn’t need to be reinvented).
  3. Commitment. If asked to okay an agreement that spells out the ground rules for working with a buyer’s agent, it’s as if a commitment is being forced prematurely. After all, who knows for certain that the right Portland Metro house at the right price is even out there? It just feels like putting the cart before the horse. (Counter: this is never a commitment to buy—just an agreement for how the search and commission will be handled if a suitable home is found and purchased. The buyer can make sure the arrangement can be severed without penalty if the service is not satisfactory).
  4. Motivation. Since a buyer’s agent will profit from any sale—they’ll try to sell me anything. (Counter: Every buyer’s agent is legally and ethically duty-bound to represent their client’s interests—plus, since their entire career is utterly dependent on their reputation, their interests align).

Whenever I represent any buyer, my motivation is 100% that of helping them reach their desired outcome. Reaching that goal—finding the right Portland home, then negotiating and closing at the right price—is the way I keep the phone ringing. See for yourself by giving us a call!

Craig Reger Group

503.893.2022

We sell more because we do more.

One Tactic for House Flipping Success

Most house flipping veterans can look back on their successful projects and place them in either of two columns. Either they were intended to be quick flips—turnarounds where speed was a prime ingredient because of an original tactical decision—or they were not.

The quick flips depend on speedy, focused action in three of the four phases a house flipping project entails. In the opening phase— lining up the capital—speed is not important. Of course, nothing else will materialize unless financing for the property is obtainable when needed—but there is no timer ticking away. Once it is likely that funding will be obtainable, that’s when the clock starts.

Phase Two—finding, negotiating, and closing on a suitable property—is a real foot race. A quick flip only materializes after a suitable property has been identified. “Suitable” in this context means a home that can be made attractive in the Portland Area market without requiring extensive and time-consuming rehabilitation—cosmetically challenged, but not structurally unsound. If it is already on the market, it’s probable that the present owner’s circumstances make them disinclined to oversee any turnaround work themselves. The need for speed is apparent: since the current asking price has to be low enough to allow sufficient profit upon its resale, other interested parties will be interested once they get wind of the opportunity. This kind of qualified house at a sensible price is certain to find a ready buyer quickly.

During the next fixup phase, speed and agility is equally important. The work of repairing and renovating calls for fixing underlying mechanical issues, then making everything cosmetically inviting and immaculately clean. Time really IS money: not just the time a project takes, during which the investment capital can’t be allocated elsewhere—but also the house flipper’s time. It’s why many are themselves experienced contractors—and why most of the others have a deep contact list of those they can rely upon. When a turnaround effort drags on for month after month during which the project is consuming rather than producing, the bottom line suffers. A quick flip’s success can be measured by its final net profit divided by the number of weeks it took, purchase to sale.

The end phase of house flipping is the sale—which calls for expediency for the same reasons. If all else has proceeded as planned, speed here is likely for one simple reason. If the first three house flipping phases have been professionally executed, that means that a profitable sale can happen with an asking price that’s a touch beneath comparable Northwest properties. Nothing assures speedy success more than that!

Quick flips are not the only kind of house flipping, either. Some properties need a lot more tender (and time-consuming) care before they can be profitably returned to market. But for either kind of buying and selling, being able to rely on an experienced Portland Realtor® is a key asset. Whether your next real estate endeavor is in search of profit or simply a home that’s just right for your family, we hope to be answering your call!  

Craig Reger Group

503.893.2022

We sell more because we do more.

The Latest Real Estate Outlook

It wasn’t exactly huge news, but last week, the revised economic numbers showed improvement! When does that ever happen—when the final revisions come in, don’t they always seem to be in a downward direction? Yet Friday’s release from the Associated Press told a different story. Earlier reports of a slowing U.S. economy had been revised to show a year whose beginning “wasn’t quite as bad as first thought.” The reason was housing—which “got a bigger boost” than first reported.

This is all to suggest that the wider economic climate for local real estate—that is, for sellers and buyers midway through this year’s spring/summer selling season—is one that shows improvement (“slight improvement,” according to many—but we’ll take it). Fears of an economic stall seem to have vanished for the moment. Lacking was anything in the economic tidings that would suggest the Portland area’s real estate picture includes any storm clouds on (or even over) the horizon.

ITEM: Per the ABCNEWS site, economists are forecasting a rebound in the current quarter—to growth of around 2%. That was expected to improve as well: “In the second half of the year, economists are forecasting that growth will strengthen further to around 2.5%.

ITEM: In what is now the seventh anniversary of economic expansion, Reuters reported that U.S. new homes sales had notched an 8-year high. “New U.S. single-family home sales recorded their biggest gain in 24 years in April…as purchases increased broadly.”    

ITEM: Last Thursday, Mortgage News Daily reported mortgage rates the lowest in “more than a week.” For sharp-eyed northwest real estate watchers, this might have been puzzling, given that Freddie Mac had just announced that rate “rose rather sharply.” MND clarified the contradiction by explaining, “that’s to be expected given [Freddie Mac’s] report’s methodology…”

ITEM: U.S. News & World Report disagreed, siding with Freddie. But in a sunny sort of way: Mortgage rates “rose this week but remained at low levels that could entice purchasers amid the current home buying season.”

ITEM: Even if Freddie and U.S. News had been right, and home loan rates were on the rise, another respected real estate voice spoke up to suggest that even that could become good news for real estate. How so was elaborated in Yahoo! Finance’s interview with Toll Brothers Chairman Robert Toll, who turned most commonly held assumptions on their head:

“If the Fed goes up and the mortgage rates go up…it probably means price increases are coming soon, which spurs demand and spurs action.”

Summing up, it was, on balance, a quietly upbeat picture—one pointing to a future for local real estate clear of any rough patches in the immediate future. Given that there continue to be exceptional offerings in our market—and with home loan rates still being locked at terrific levels, for sure it’s an opportune time to give us a call!

Craig Reger Group

503.893.2022

We sell more because we do more.