Join Joe and Makayla in this episode of Off The Record as they give you the lowdown on the latest market update for March 2023. From the surprising rise in new construction to the ever-changing rates, Joe and Makayla break down the top news and main influencers in the real estate industry. They also share valuable tips for tracking live rates and getting the best deal on FHA loans. Whether you're a seasoned investor or a first-time homebuyer, this episode is packed with valuable insights and practical tips to help you make informed decisions in today's market.
Highlights:
New construction boom: 00:00
Find out why new construction is the talk of the town and why you need to act fast if you're considering it as an option.
Rates, rates, rates: 4:14
Joe and Makayla discuss the ever-changing landscape of interest rates and how it affects your homebuying decisions. Plus, Joe reveals a secret resource for tracking the latest rates.
FHA loans to the rescue: 7:37
Discover how FHA loans can offer you a sweet deal with rates below 5% and loan limits for the Portland Metro area.
Market Movers: 9:03
Understand the driving forces shaping the current real estate market and how they can impact your buying or selling decisions.
Navigating the Real Estate Market: 15:01
Joe and Makayla share their wealth of knowledge and experience to help you make informed decisions when buying or selling a home.
Links
www.livportland.com/off-the-record/march2023market-update
www.vantagemortgagegroup.com/getrates
Get connected with Joe, Makayla and the LivPortland team and be in the know about all things real estate! Follow us on Facebook, Instagram, and Twitter for expert advice, market updates, and exclusive content.
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00;00;08;18 - 00;00;20;25
Joe
Welcome to off the record Talking real estate with Joe and Makayla. If you're interested in the Portland Metro Oregon real estate market and want the unvarnished inside scoop, you've come to the right place. Thanks for giving us a listen.
00;00;21;29 - 00;00;32;16
Makayla
Welcome to this episode of Off the Record. Today, we are going to give you a market update as of March 23rd, 2023. Joe, what do you have for us?
00;00;32;22 - 00;01;07;07
Joe
Wow, we've got a lot of stuff going on in the real estate industry. And today we're going to talk about top news. What's going on? What's our top top news feature? We also have rates and some good news on rates, which is always kind of pleasant, right? Actually, after the past nine months or so. And then main influencers, what is influencing our market right now?
And then we have a little segment called What Should I Do if You're Buying a Home? Here's some things to think about. If you're thinking about selling a home, here are some things to think about based upon some of the information that we have from today.
00;01;07;11 - 00;01;07;23
Makayla
Love it.
00;01;07;29 - 00;01;10;08
Joe
Yeah. So there you go. Should we happen to top news?
00;01;10;15 - 00;01;12;22
Makayla
Yes. Okay.
00;01;15;15 - 00;01;27;02
Joe
Top news is new construction right now. New construction is up for the third month in a row in, like, forever right now. I'm serious. Since, like, 2008.
00;01;27;13 - 00;01;29;02
Makayla
Why? What do you think? The changes?
00;01;29;08 - 00;02;23;14
Joe
Well, it's taken a long, long time. The build cycle is much longer. You got to find the land, buy the land, get all the infrastructure in permits, all that sort of stuff before you even start talking about what you're going to put on the property. Right. So it takes forever. And that is finally catching up where we have more homes coming out of the ground as they say, than we have in a long, long time.
And with inventory so low, people are turning towards new construction to see if that's a good fit for them. And newsflash, you should probably act fast because builders are seeing that, and prices are starting to go up. They had been coming down, right? We were seeing 1 to 2% down or more in some areas. But builders are starting to ramp back up with their pricing.
I'm sure you're seeing that. I mean, you read a lot last week, right?
00;02;23;15 - 00;02;36;09
Makayla
Yeah, I think it's happening sooner than we expected it to. But they're very firm on their pricing. And yeah, you know, something that you think you could afford or you know maybe it's a different story now.
00;02;36;09 - 00;03;10;22
Joe
We are just now getting even with the 52 year average for new houses completed going all the way back to 2008, isn't that crazy? So they started keeping this information, these statistics, 52 years ago, and we are just now getting back to the average number of homes hitting the market. So from 2008, the big downturn, the crash, the big enchilada to now, it's taken that the building industry, the new construction industry that long to get back to average.
00;03;11;01 - 00;03;11;19
Makayla
That's wild.
00;03;11;22 - 00;03;51;17
Joe
Isn't that crazy? But that's our big news right now, because with more of those coming out and being available, it's taking a little bit of pressure off of the inventory issues that we're having right now. And we can talk about that a little bit more here in a moment. I do want to mention, though, that we have a fantastic podcast on buying new homes, buying a new construction home.
Right. So, check us out wherever you get your pods. And if you're interested in finding out more about buying a new construction home, be sure to catch our podcast because it's very informational. And you were spectacular on it, by the way.
00;03;48;00 - 00;03;51;17
Makayla
Well, thank you.
00;03;51;17 - 00;04;04;24
Joe
But we will also have graphs and information on Livportland.com/March23Update. So you can go to that page on our website and we will have a lot of the graphics and different things that we talk about in this update.
00;04;05;05 - 00;04;07;17
Makayla
Awesome. So there you go. We'll put it on Instagram too.
00;04;07;19 - 00;04;09;07
Joe
You will be putting it on Instagram.
00;04;09;07 - 00;04;09;19
Makayla
Yes.
00;04;10;05 - 00;04;13;17
Joe
Yes, yes. On all of our socials, I would imagine.
00;04;14;00 - 00;04;14;15
Makayla
Of course.
00;04;14;27 - 00;04;36;16
Joe
So let's move to new constructions, the talk of the town right now. But what about rates? What do you think about rates? Tell me what of the clients you're working with right now. How many of them are rate sensitive? Are how many people that you're talking to are not doing something because of where rates are, where they perceive rates are at?
00;04;36;22 - 00;05;01;24
Makayla
I would say 75%. Really? Yeah. Wow. I think the scary thing too, is that rates change by the day. And since that's so unknown to people, timing or the interest rates are with finding their perfect home can be difficult. So it makes sense. But luckily we've been seeing them come down a little bit, so it's been a lot easier.
00;05;02;04 - 00;05;04;05
Joe
Yeah, it's very volatile right now, isn't it?
00;05;05;00 - 00;05;08;10
Makayla
Yeah, that wasn't the word that I was wanting to use, but yeah.
00;05;08;28 - 00;05;32;05
Joe
Well and volatile is up and down so and it's that makes it difficult. The other thing is we live in a media world where car crashes and horrible things sell and skyrocketing interest rates were a big story. But now that rates are coming back down and in some cases very affordable, that's just not as big a story, you know?
00;05;32;05 - 00;05;48;21
Makayla
Right.So and the lack of knowledge around the subject leaves people in the unknown, too. I can't tell you how many people told me that they're going to wait to buy until rates come back below 3%, which right, unfortunately likely won't happen ever again.
00;05;48;21 - 00;07;07;09
Joe
So before we get too much further into rates, I want to point out a resource that I think people should know about, and that is the Vantage Mortgage Live rate tracker. I love that thing. I know it's so cool to be able to go on to their website, pop in some information. You can put, you know, all sorts of different your down payment, your credit, what type of home you're buying, all sorts of different stuff, including if you're a veteran, you know, they have VA specific and it'll spit out what the current rates are for the information that you just put in there.
And it's really, really cool. It will show without a buy them with a buy down, all that type of stuff. But as of today, March 23rd, the 30 year conventional is right around 6% for PAR. Okay, should I explain what PAR means? Yes. So listener PAR means the interest rate that you will get without paying any money. So that's like their best rate that they'll give you.
Right. PAR right now is right around 6% which yeah, that's okay. It's not the three or 4% that we were seeing, you know, last summer or anything like that. But it's still not that far off. And with about $6500 in buy down, you can get that down to 5.75.
00;07;07;09 - 00;07;11;17
Makayla
Which is great. I mean that's average wouldn't you say, are better than average.
00;07;11;17 - 00;07;33;17
Joe
Right. And buy buy down a lot of times the bi down as rolled in from like if you're buying a home for 500,000 you can make them an offer for 510,000 and say here's your offer for 510,000, but we'd like to have $10,000 paid back to us at closing for our closing costs and prepaid. And if we want to buy down our rate.
00;07;33;25 - 00;07;34;04
Makayla
Right.
00;07;34;18 - 00;07;36;19
Joe
And a lot of buyers will do that right now.
00;07;36;19 - 00;07;37;13
Makayla
It's a smart move.
00;07;37;19 - 00;07;42;10
Joe
Yeah. What I really want to focus on is where the FHA rates are right now.
00;07;42;11 - 00;07;45;12
Makayla
I hadn't seen that until just now. Wow. Good news.
00;07;45;12 - 00;07;46;01
Joe
Good news.
00;07;46;08 - 00;07;47;11
Makayla
Is that from the rooftops.
00;07;47;12 - 00;08;36;28
Joe
FHA is even better at around 5.4% for PAR, you believe that? And with about a $7,000 by down, you can get down under 5%. Hello, people. 4.99. You kidding me? I'll take that. So with FHA loan limits at 672 750 for the Portland Metro area that is those are some great rates. So FHA if you don't know about it FHA, you got to ask your lender or ask Makayla and I know how that works.
FHA is a great program. It's just federally funded. It's federally insured. You know, money. If you don't have 20% down, there will be a mortgage premium that you have to pay. But there's different ways that you can structure that as well. And the loan limits are up to 672.
00;08;37;10 - 00;08;38;01
Makayla
That's wild.
00;08;38;07 - 00;09;01;23
Joe
Which is nuts. Yeah. So that's the good news about rates today. You know, $10,000 on an FHA could get you, you know, maybe in the 4.8, 4.9, somewhere in there, which is a fantastic rate. So if you have questions about that, reach out to us, reach out to your lender, reach out to whichever professional you work with. Have them answer some of your questions for you.
00;09;03;14 - 00;09;10;03
Makayla
Hey. Okay. Switching gears a little bit, I think it could be helpful to talk about what the main influencers are in the market right now.
00;09;10;23 - 00;09;35;09
Joe
Yeah, so there's always a couple of different factors that really push or drive the marketplace in one direction or another. And right now I don't feel like it's interest rates, even though you have a lot of people that you're saying are making decisions based on rates, do you think if they knew that they could get under five, that that would maybe change their decision making?
00;09;35;10 - 00;09;45;03
Makayla
Absolutely. Yeah. It's just the education piece. Yeah. Like you said, waiting for the media crazy storm to fizzle out before we can reeducate people about what's actually going on.
00;09;45;04 - 00;10;28;22
Joe
Right. So let's take rates out of it for a second. That's definitely an influencer. But I want to talk about inventory and jobs. Let's start with jobs. So jobs are it's a personal decision. It's a point of confidence. If you feel good about your job, then yeah, you probably feel good about buying a home. If that's something that you or your family needs, If you don't feel good about your job and you don't like where your industry or whatever is going, typically you're not going to make big decisions right on that.
So and I think right now there's a lot of just uncertainty with some people in their jobs, you know, and where they're at. I saw that Amazon's laying off 9000 people. Yeah.
00;10;29;01 - 00;10;29;12
Makayla
Yeah.
00;10;29;24 - 00;10;38;05
Joe
And even if you feel secure in your job when you read that Amazon's laying off 9000 people, that gives you some uncertainty, right?
00;10;38;13 - 00;10;39;06
Makayla
Absolutely.
00;10;39;07 - 00;11;33;09
Joe
So I think right now that is a big driver influencing the real estate market is jobs and the confidence around jobs. Here's one of the things I want to add, though. If you're confident in your job, you feel good about that and you need to buy a home or you're thinking about selling your home so you can move up to a bigger home, explore more, find out more.
Because it starts with how you feel about your career in those type of things. If you feel good about that, feel good about taking next steps and finding out more, and interviewing professionals, mortgage brokers, real estate professionals, that type of thing. So that's that's the job. Side inventory is something that, you know, I think people have kind of got the idea, oh yeah, we don't have a lot of homes on the
And right now it went down to 1.9. I think it was 2.4 last month, if I remember right.
00;11;33;10 - 00;11;35;15
Makayla
Yeah. And then and now we're at 1.9
00;11;35;15 - 00;12;13;02
Joe
Now we're at 1.9. And for viewer out there, our listener out there, 1.9 months of inventory means that if no more homes hit the market within 1.9 months, all of our inventory would be gone and there'd be nothing to buy. Just as a measuring stick, a reminder that 4 to 6 months inventory is a healthy market, right? So with anything there's pros and cons, there's winter when winners and losers with 1.99 months of inventory, the winners are the sellers
Yeah, they're the ones that are on the market where we can say just that.
00;12;13;02 - 00;12;28;04
Makayla
That doesn't mean that the buyers are losing. They're just there's less opportunity out there. So you got to keep an eye out, really refine and know exactly what you want. So if you do see something that you like, we need to get out there on day one or day two of it going live.
00;12;28;04 - 00;13;11;24
Joe
That's a good point. And I'm glad you mention that because it doesn't mean that you can't get that done. In fact, there's more buyers out there right now who have a home to sell than I've seen in a long time. Because think about it, in the past two or three years, were you able to get a contingent offer accepted?
No. Sellers wouldn't know. Come on. They're not going to look at that. Right. That's not the case anymore. So there's more buyers out there who want to move up from the home they have now to a new home that fits their their lifestyle or their family or whatever. Their situation is better. It's amazing. The big number that I want to share with you, Makayla, is that we are still 47% lower in inventory than we were before the pandemic.
00;13;11;26 - 00;13;12;20
Makayla
That's crazy.
00;13;13;00 - 00;14;24;09
Joe
I know it's almost half. So if there were 100,000 homes on the market pre-pandemic, there's only 50,000 now. Right. And it's not that we have that many less buyers in the marketplace. We have less, but not that amount, not 50% less. So it's created real problems, which I have to plug the real estate and mortgage professionals out there that are experienced and know what they're doing like you are because having strategies around, you know, how do you succeed in that type of marketplace is tough.
Most brokers have not seen these type of situations before or haven't had the time to strategize around what is it going to take to get that done other than just throwing offers out there or hoping and praying that you're first in line or whatever? I mean, we do a lot of seller representation and we see a lot of those buyers agents who are just so shocked when they don't get the offer accepted.
And it's like, you should have asked more questions. You maybe you should have thought about doing things a little bit differently or getting a little bit more creative or addressing sellers needs or the options that they need to have addressed. Right.
00;14;25;02 - 00;14;32;11
Makayla
Or they're offering so much, you know, their offer just comes to the top, not necessarily in price, but terms and conditions.
00;14;32;13 - 00;14;59;22
Joe
It's not always price. What sellers will accept. We've had a had sellers recently who have not gone with the highest priced offer because the terms and conditions of another offer were better and extreme, you know, sizable better. So it's not always about price, it's about what type of package you can put together and what can your broker do for you to find those advantages and communicate with the other broker to figure out how that all comes together.
Don't you agree?
00;14;59;22 - 00;15;00;25
Makayla Yes. Yeah.
00;15;01;26 - 00;15;17;08
Joe
So let's talk about what you should do. What should I do? Right? What should I do? I got that. I got one of those phone calls today, and it's always fun talking to past clients. But he literally I had just written my notes out on this like an hour before, and he was like, Yeah, what should I do?
00;15;17;08 - 00;15;44;00
Joe
And I was like, Oh my gosh, it's fits right in.
Yeah, yeah. And, you know, based on the information that we have today for buyers, if you're secure in your job and you want to buy a new home, you want to own a new home or get a home that fits your lifestyle better, now is the time, right? Rates may come down, but there's a lot of people saying we're kind of, you know, 4, 4.5, 5 is kind of where it's going to be for a while.
00;15;44;00 - 00;15;47;01
Makayla
Yeah, and that's still really great. Good Lord. I mean.
00;15;47;08 - 00;16;26;07
Joe
When I started 28 years ago, anything under ten was considered good, right? Can you imagine? No, no, it's horrible. But, you know, I say now is the time, not because of interest rates. I say now is the time. Because as a buyer, you know, prices are going to come back up. So right now, prices have come down with quite a few homes and it's honestly not as competitive as it was over the last two or three years.
So you got lower prices, less competition. You just need to find a professional to work with who can ask the right questions, you know, find out what strategies work best for you, and then really engage and make it happen for you, don't you think?
00;16;26;11 - 00;16;46;29
Makayla
Yeah, I agree. And because there is such low inventory like we talked about, I think starting the process sooner than later definitely doesn't hurt. I hate when people get to the point where they have a month to make a decision on a home. There might not be anything that they like in that month, you know, that comes on the market.
So the longer you can have to shop, I think the better.
00;16;47;07 - 00;17;50;28
Joe
Yeah, absolutely. So what do I do if I have a house to sell and I want to get a bigger house or, you know, you're what we call a move up buyer. So for the first time in a long, long time, sellers are accepting contingencies right? So if you need to sell your home, it's okay to go out and look at other homes and even make offers on other homes.
Right. There's a lot of sellers that are doing that right now. And you can get the home you want, not having to do these egregious bridge loans or some of the different things that people were doing before it's available and out there. And there's other strategies as well. You know, we can time things up with the sale of your home to make it work so that your buy and sell.
You don't have to do two moves. There are some really good strategies that we've worked with our clients on to make that happen. So if you're someone that's looking to buy but you have to sell, holy smokes, this really is a good time for you. And I know it sounds self-serving.
00;17;51;06 - 00;17;52;07
Makayla
Now is a great time.
00;17;52;07 - 00;18;17;22
Joe
That was a great time. But when it was over seven, that probably wasn't a great time, Right? And inventory was still so low. But rates have come down. A lot of things are in your favor. You know, there's still some headwinds as far as inventory and everything, but getting that plan in place is is critical. All right. Well, that is our market update for March 23rd, 2023.
00;18;17;28 - 00;18;45;16
Joe
Just a reminder, Makayla, that you can go to LivPortland.com/March23Update and all of the information that we have talked about here and a lot more, some national graphs and the national information but also the local information on our inventory and interest rates. We'll also have the link for Vantage Mortgage Live Rate Tracker so that you can pop that into your bookmarks and use that.
00;18;45;16 -00;19;20;26
Makayla
Good stuff. I think that was very informational. Thank you for sharing all that, Joe. And remember, if you're still wondering if buying or selling is the right option for you this year, it never hurts to chat with somebody about that. You know, go to your trusted realtor if you have one, and we can even connect you with a mortgage broker.
We have a couple in our back pocket that we know they can trust. And it never hurts to run through all of the numbers with these things. You don't have to dive right into it and it doesn't waste our time to really look into this for you. So if that could be helpful to you, please don't hesitate to reach out.
00;19;20;27 - 00;20;01;27
Joe
It's what we do, right? We definitely have three mortgage brokers that are among the three best in the business. I'm so happy and excited to be working with those guys. They are fantastic and all of them are selfless. They're just, Hey, what can we do to help? You know?. And if they can't find the right program for or they don't offer the right program, they'll point you in the right direction.
And sometimes it means sending people to a credit union or whatever the case might be. But it's a pretty cool thing when you can trust referring someone over to a mortgage broker and knowing that they're going to be taken care of. So reach out to us. We can share their information and we'll go from there. Thanks, everyone, for joining.
See you next time on the market update.
00;20;02;08 - 00;20;19;00
Makayla
Thank you. Thanks for joining us today. If you're interested in finding out more about Joe, myself or the LivPortland team, you can go to Livportland.com. Thanks for giving us a listen and see you next time on the Off the Record podcast.
