The KEY

C R E AT E D I N C O O P E R AT I O N W I T H

Your Real Estate Questions Answerd by Local Industry Professionals and Leaders

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DECEMBER 2015

2 December 2015 - The Key

TABLE OF CONTENTS

A product of The Bulletin’s Special Projects Division, P.O. Box 6020, Bend, OR 97708.

All content is the property of The Bulletin/Western Communications Inc., and may not be reproduced without written permission. Printed by Northwest Web Press, www.northwestwebpress.com

Industry Professional SPOTLIGHTS The Real Estate Cycle.......................................................4

The Affordable Housing Crisis ....................................... 16

By Wendy Adkinson of Keller Williams Real Estate

By Kathy Oxborrow of Oxborrow Consulting

Boomerang Buyers...........................................................6

Bend’s Urban Growth Boundary ................................... 18

Answering Your Real Estate Questions The Key, a collaboration of The Bulletin Special Projects, Central Oregon Association of Realtors and Central Oregon Builders Association, unlocks answers to local real estate questions that linger for buyers and sellers, as well as the community at large. Industry professionals and business leaders come together to offer answers, guidance and tips to current and prospective homeowners.

By Tona Restine of Windermere Central Oregon Real Estate

By Rebecca Green of Cascade Sotheby’s International Realty

Changes in the Right Direction........................................7

The Housing and Rental Market Pendulum .................. 19

By Kevin Pangle of Evergreen Home Loans

By Kevin Restine of Plus Property Management and Tona Restine of Windemere Central Oregon Real Estate

Special Projects Photographer: Kevin Prieto Special Projects Editor: Kari Mauser Published: Saturday, Dec. 12, 2015

By Matt Garner of Harcourts The Garner Group Real Estate

Getting in the Market ...................................................... 8

By Kevin Pangle of Evergreen Home Loans

Realtors® Give an Edge in a Booming Market ............. 10

By Scott Halligan of Central Oregon Association of Realtors

New Construction Trends ..............................................12

Timing Your Home Purchase.........................................20

By Cindy King of RE/MAX Key Properties

Real Estate in the Digital Age ........................................22

By Erin Martin of Becky Breeze & Company

The Rental Conundrum................................................. 14

By Cindy King of RE/MAX Key Properties

December 2015 - The Key 3

By Wendy Adkinson of Keller Williams Real Estate

For The Bulletin Special Projects

the

Real Estate cycle

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4 December 2015 - The Key

While the local real estate market seems to be following a familiar pattern, there is no reason to call it another bubble.

R

eal estate is cyclical. Prices rise and fall, and the number of sales increase and decrease in cycles.

This is a result of many factors including the world economy, interest rates, the condition of the stock market, the economy, consumer confidence, etc.

Trying to predict accurately when the right factors will come together to generate a boom or bust real estate market is nearly impossible to do, but there are indicators that help give us some idea of what may be coming.

The last decline in the market in 2006 was so drastic that it was dubbed a “bubble,” likely because the real es-

tate market seemed to deflate suddenly like a bubble that was popped.

There were a number of factors in place that caused that particular decline to be more severe than most, and a primary factor was the lending practices at the time which allowed nearly anyone who fogged a mirror to obtain a mortgage loan. People were in over their heads from the day they closed escrow, and when the economy and jobs declined and prices fell they simply couldn’t continue to make their mortgage payments. So in addition to prices going down, we saw people walking away from their homes at

Median Sales Price

record levels, which created additional economic chaos.

If you look at the chart included here you can see that real estate prices in Bend are following a very similar pattern to what happened before the socalled “bubble.”

$350,000

ARE WE HEADED DOWN THE SAME ROAD AGAIN?

$300,000

The best predictors of what is to come lie in looking at the trends that occurred in the past. Real estate historically runs on a six- to eight- year up cycle between down cycles. Our market in Central Oregon began a slow recovery in 2011. Most of us, however, didn’t recognize it until 2012 because we can’t tell when we’re at the high or low point in the market until it’s in the past.

If the market began recovering in 2011, then history tells us we will see the next shift in the market in the next few years (six to eight years from the last downturn). There are some indicators we can rely on in recognizing that a decline is coming. These include inventory of available properties increasing, multiple offers decreasing, and the length of time it takes to sell increasing.

ARE WE SEEING ANY OF THOSE THINGS OCCURRING TODAY? Right now inventory throughout Central Oregon is at an all-time low. There is less than three months of inventory in most price ranges and less than two in others. We are still seeing plenty of multiple offers, and average time to sell stays very low. So no predictors of a downward shift are apparent in most price ranges and housing sales are still very strong. In the higher price ranges (more than $600,000) we are beginning to see some of the negative indicators I mentioned above: more price reductions, longer time on the market and less multiple offers. Perhaps these are the first signs of the next shift. It will take some time to know for sure.

WHAT WILL KEEP THE NEXT SHIFT FROM BEING AS SUBSTANTIAL AS THE LAST? WHAT WILL PREVENT ANOTHER BUBBLE EFFECT? We’re smarter today than we were 10 years ago, and so are the lenders. We don’t tend to overextend ourselves like we were willing to do then. Getting a mortgage loan in today’s market is much more challenging and loans are only available to those who actually qualify, those people who have a real, verifiable income and who can contin-

Bend Area Residential Under 1 Acre

$250,000

$200,000

$150,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Thru Oct

“Trying to predict accurately when the right factors will come together to generate a boom or bust real estate market is nearly impossible to do, but there are indicators that help give us some idea of what may be coming.” ue to make their payments. We also have some factors unique to Central Oregon that will likely have a positive impact our real estate market. These include the availability (or lack thereof) of buildable land, and the impact a 4-year university will have on our economy and housing market. Factor in the expected population increase as a result of the college and the delay in obtaining buildable land and we could come through the next housing shift in Central Oregon better than expected.

Housing prices are driven by demand, and when the population increases and available housing doesn’t, well, even when the market shifts, we’re more likely to see a leveling off of pricing versus a steep decline.

We probably will not look back on the next real estate market shift as another bubble that burst, but rather as an inevitability in what will forever be a cyclical market. My advice is to try not to spend too much time worrying about wheth-

er we’re in a boom or bust, a bubble or stable market, but instead make good real estate buying and selling decisions based on what makes sense for you, your family and your lifestyle.

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December 2015 - The Key 5

By Tona Restine of Windermere Central Oregon Real Estate

For The Bulletin Special Projects

BOOMERANG BUYERS Homeownership is possible, even after short sale or foreclosure.

T

here is a relatively new term floating around the real estate industry. The term is “boomerang buyer” and it applies to many home buyers in the Central Oregon marketplace.

The Associated Press recently published an article relating the story of a Florida homeowner who worked in the mortgage industry. She had just purchased her dream home, her forever home, when the mortgage industry took the (now infamous) unprecedented downward turn. Her income, which had once been in the six figures dropped

6 December 2015 - The Key

practically overnight to $38,000 and as you can imagine, with such a dramatic decrease in income, sustaining her once affordable lifestyle became virtually impossible. She tells the story of holding on for so long that she exhausted her savings account and STILL there was no recovery in site. So, in spite of everything she knew to be right and true, out of necessity she stopped making her mortgage payments and eventually had to sell her beloved dream home on a short sale.

This story has been lived by countless

Central Oregonians. Like so many other markets, we too were experiencing record high home values and unbelievable (unstainable) appreciation rates. It seemed to many that we were impervious to anything but robust growth in our property values.

When the “housing bubble” burst it seemed to burst immediately and tragically. We saw affluent, professional, highly respected individuals lose not only their investments, credit worthiness and borrowing power, but far more importantly, they also lost their HOMES and all that being a homeowner meant to them.

Out of necessity, these individuals entered the rental housing market in droves, creating the need for increased rental properties, driving up the price of rentals and bringing about the lowest rental vacancy rates in recent history.

Fast forward to 2015 after a few years’ recovery time and a much more stable real estate market, we see those same individuals who experienced dramatic loss in property and credit worthiness re-entering the home buying market. These boomerang buyers have weathered the storm so to speak. Many of them have done the work to repair their credit and are once again experiencing the benefits of home ownership!

As a real estate broker, coming alongside a boomerang buyer and helping them become a homeowner again is perhaps even more rewarding than the satisfaction we experience when helping a first-time home buyer. The profound sense of accomplishment felt by these buyers is absolutely contagious, and it is indeed a privilege for any broker to have a role in this process.

Many boomerang buyers are purchasing smaller homes in an effort to avoid the free-falling sense of vulnerability they experienced during the downturn.

I see this as a healthy, conservative approach, a desire to “right size” their lives

and live below or certainly well within their means. Losing a home to a short sale or foreclosure for the vast majority of consumers was exceptionally painful and something they hope to never experience again. Hence the desire for financial security and stability at nearly any cost.

The seasoning period to obtain a mortgage after short sale or foreclosure varies depending on the type of loan you are applying for and the type of loss you experienced. On average we are seeing the boomerang buyer able to qualify again three to five years after the loss. I highly recommend seeking the counsel of a reputable, LOCAL lender prior to beginning the home buying process to ensure your success in this arena. These seasoned professionals are well versed in the lending process following such an event and will guide you each step of the way.

The vast majority of clients we see who re-enter the home buying market after a short sale or foreclosure do so with great trepidation coupled with great excitement. The boomerang buyers we work with are generally changed by the experience. If you are a boomerang buyer, the time could be right for you to own a home again. Seek the services of a local lender and Realtor. … A new beginning is possible!

TONA RESTINE’S background in Real Estate spans nearly 20 years. She is currently the co-owner of Windermere Central Oregon Real Estate which has seen phenomenal growth under her leadership. Tona is a hands-on leader with a strong sense of commitment and dedication to the Brokers she serves. She believes in empowering others to achieve their personal goals through training, coaching and personal support. Serving others with excellence has been a foundation of Tona’s career; she and her team are “Re-Defining Excellence in the Real Estate Industry!”

By Kevin Pangle of Evergreen Home Loans

For The Bulletin Special Projects

Changes in the Right Direction The mortgage industry has implemented additional measures and guidelines in the attempt to do everything possible to avoid the same mistakes made prior to 2006.

T

he requirement of loan officers to be licensed and then to complete continuing education courses annually was a huge step in the right direction. The Nationwide Mortgage Licensing System Unique Identifier (NMLS ID) is the number permanently assigned by the Nationwide Mortgage Licensing System & Registry to each company, branch and individual that maintains a single account on the NMLS. The NMLS Unique Identifier improves supervision and transparency in the residential mortgage markets by providing regulators, the industry and the public with a tool that tracks companies and individuals across state lines and over time. The unique identifier also allows consumers and the industry to easily track specific originators’ histories and qualifications through the NMLS Consumer Access system.

With NMLS tracking, consumers can make better decisions when searching for a mortgage lender.

PROPERTY FLIPPING With the fast appreciation that came about in 2005-2006, investors bought properties and then turned them for a quick profit in just a few days, which increased their value each time. Guidelines have been put into place that require a property to be “seasoned” – owned by the same owner for a minimum of 90 days – before it can be financed by a buyer with certain loan programs. This guideline has eliminated the majority of rapid property flipping.

Another change no longer allows lenders and Realtors to talk to appraisers regarding values on any one property prior to or during the appraisal period. Before the change, there were documented instances where a lender and/or Realtor would work closely with an appraiser to reach a predetermined

value for a variety of reasons. Of course, many of those instances were investigated and those found guilty of mortgage fraud faced severe penalties.

ABILITY TO REPAY (ATR) This is probably the biggest change that has occurred. Every loan on a residential property now requires the lender to comply with federal regulations, which have been designed to determine whether the consumer has the ability to repay a loan. This has done away with stated income loans, no income/ no asset loans, no ratio loans and no doc loans. Frankly, these products are what significantly contributed to the demise of the housing market. There are no longer loans where borrowers can avoid providing documentation to support their income and assets. Mainstream loans must meet FNMA/FHLMC/ FHA/VA/USDA guidelines for income and asset documentation.

For loan products outside of those, there are very rigid and specific guidelines for the documentation that must be provided by the borrower. For loans that are not through these government entities, there is a specific list of documentation that must be provided and analyzed for each loan; this is referred to as Appendix Q of ATR and spells out everything you must provide to document income, assets, credit, etc. when you are doing a loan that is outside of FNMA/FHLMC/FHA/VA/USDA. Also born out of ATR is the Qualified Mortgage (QM), which further protects consumers by limiting the debt-to-income ratio (DTI) that lenders approve and also by limiting the points and fees that a borrower can pay. While every loan does not have to be a QM loan, the vast majority of the market only wants to provide QM financing since it provides the lender with a safe harbor

against any allegations that they have provided the borrower with a loan they cannot afford.

TIGHTER MORTGAGE INSURANCE REQUIREMENTS Prior to the mortgage crisis, borrowers could find financing with no mortgage insurance (MI) on some loan programs with less than a 20 percent down payment. However, lenders now require adequate mortgage insurance for loans with less than a 20 percent down payment. MI companies tightened up their requirements based on each loan program and, in some cases, program premiums increased as well. FHA increased both its upfront and annual MI, which now runs for the life of the loan.

TRID TILA-RESPA Integrated Disclosure (TRID) was born from the desire to give the borrower more information about their loan, to include the total monthly payment and total funds to close in an easy-to-read format. Compared to the previous Good Faith Estimate (GFE), which was lacking those components, this is a benefit to the consumer. Then

you have the new tolerances that hold the lender even more responsible for providing closing cost quotes so that borrowers cannot have additional costs sprung on them at the end. This is further accentuated by the fact that the borrowers now have to review the Closing Disclosure (CD) statement at least 3 days before they sign the final loan documents.

Mortgages are still obtainable. In fact, mortgage applications are at an eight-year high. The borrower now just has to demonstrate their ability to repay the loan with the proper documentation. Lenders are striving to better communicate with the consumer regarding their mortgage terms while providing a mortgage the customer can afford.

During the past 26 years, KEVIN PANGLE (NMLS #89521) assisted thousands of Central Oregonians in finding their dream homes and acquiring investment properties or second homes. His reputation is built on quality service for clients and friends. Evergreen Home Loans (NML#89511/ML 3213-10) is highly respected by local real estate offices, title companies and local banks.

Mara Stein, Principal Broker Certified EcoBroker®. S.R.E.S.

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December 2015 - The Key 7

By Kevin Prangle of Evergreen Home Loans

For The Bulletin Special Projects

GETTING IN THE

MARKET Follow these tips to improve your credit score.

L

enders analyze your credit scores to determine whether or not financing is available.

Creditors want to determine how much of a risk you are, in other words, how likely you are to repay the money they loan you.

Credit scores help them do that, and the higher your score, the less risk they feel you’ll be.

Most credit score increases take place over time and require an ongoing effort from you. Credit reports take into account many things, here are the five areas of your credit report you should focus on: • Payment History • Balances Owed • Length of Your Credit History • Types of Credit Used • New Credit

in driving down your score.

If you have past-due bills now, get current and stay that way.

• Contact your creditors as soon as you know you will have a problem paying bills on time. Try to work out a payment arrangement and negotiate with them to keep at least a portion of the late notations off of your credit reports.

If your situation is serious, see a legitimate, nonprofit credit counselor. Avoid the scam artists who promise a quick reversal of your credit problems.

•

KEEP DEBT TO A MINIMUM

PAYMENT HISTORY •

Always pay your bills on time.

Late payments play a major role

•

•

Keep your credit card balances low. High balances drive your scores down.

Pay off debt, don’t move it around. Owing the same amounts, but having fewer open accounts, can lower your score

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•

YOUR CREDIT HISTORY •

Time is the only thing that can improve this aspect of your scores, manage it wisely: — Don’t open several new accounts in a short period, especially if your credit history is less than three years. Adding accounts too rapidly sends up a red flag that you might not be able to handle your credit responsibly.

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•

if you max out the accounts involved.

Don’t close unused accounts, because a zero balance might help your score.

Don’t open new accounts that you don’t need as a quickie approach to altering your debt-tocredit-limit ratios. That can lower your score.

•

Several credit inquiries during a short period may lower your credit scores.

Credit scoring software usually recognizes when you are shopping for a single loan within a short period of time, such as a home loan. If multiple inquiries are necessary, have them pulled as closely together as possible.

Do try to open a few new accounts if you’ve had credit problems in the past. Pay them on time and don’t max out your credit limits.

TYPES OF CREDIT YOU USE •

A mixture of credit cards and installment loans, loans with fixed payments, can help raise your score if you manage the credit cards responsibly.

• Having many installment loans can lower your scores since payments remain the same until balances are paid in full.

• Don’t open new accounts just to have several accounts or to attempt a better mix of credit.

Lenders will pull your credit report in the beginning and again at closing.

If your scores have dropped during the process, you may no longer qualify for the rate or loan that was underwritten and the lender may come back with a higher rate or worse, a decline. If you have good credit and know your score, the loan officer can give you an idea of what he or she can offer based on what you state. But do not expect them to stand by their quote if your scores are lower when they pull your credit.

During the past 26 years, KEVIN PANGLE (NMLS #89521) assisted thousands of Central Oregonians in finding their dream homes and acquiring investment properties or second homes. His reputation is built on quality service for clients and friends. Evergreen Home Loans (NML#89511/ML 3213-10) is highly respected by local real estate offices, title companies and local banks.

December 2015 - The Key 9

By Scott Halligan president of Central Oregon Association of REALTORS速

For The Bulletin Special Projects

REALTORS速

GIVE AN EDGE IN A BOOMING MARKET S

ince 2001 the number of home buyers using a real estate agent has risen from 69 percent to 87 percent in 2015 according to the National Association of Realtors速 and 89 percent of sellers used a real estate agent.

While technology is changing the real estate industry, 87 percent of buyers still used an agent to search for a home, while 57 percent used a website or app.

Purchasing a home is one of the biggest financial decisions most Americans will ever make and in a market where transactions are increasingly complex, a Realtor is critical to bringing together all the pieces of the process.

A real estate agent is going to be at the center of any transaction. Their experience and the expertise of the brokerage they work for will benefit buyers

10 December 2015 - The Key

and sellers. Most people view the real estate agent as the individual that shows properties, but their role goes much deeper than that. An agent can: 1.

2.

3.

4.

5.

6.

Save you money Give you an unbiased opinion Provide a depth of marketing opportunities Coordinate contracts and paperwork Negotiate on your behalf Provide you up-to-date information on the market 7. Help prepare your home for showings 8. Set the right price for your listing or offer 9. Have the time to dedicate to your transaction 10. Maintain the timeline to ensure your transaction stays on track

Nationally in 2014, the average for sale by owner property sold for $39,000 less than homes sold by a real estate agent (2015 NAR Profile of Home Buyers and Sellers). Not using an agent has real financial costs, in addition to the emotional costs a transaction can cause.

Further, buyers and sellers have the opportunity to not just use a real estate agent, but to use a licensed Realtor. A Realtor is a licensed agent or broker that is a member of the National Association of Realtors速 (NAR). As a NAR member they are held to a higher ethical standard than non-members. NAR membership separates Realtors from real estate agents who do not subscribe to a code of ethics or have access to the educational, business and market information advantages of their Realtor counterparts.

All members of the Central Oregon Association of Realtors (COAR) are members of NAR. COAR provides our members and the community a variety of benefits.

1. COAR implements the Code of Ethics by providing Ethics education and enforcing the code of ethics through arbitration, mediation and grievance services.

2. COAR owns and operates the Multiple Listing Service of Central Oregon (MLSCO). MLSCO provides our members with the opportunity to market listings, search for listings and pull the most accurate neighborhood statistics. Additionally, the public can search for listings or members at coar.com.

3. COAR provides our members educational opportunities so they have the latest information, consumer trends and changes to the industry.

4. COAR advocates on behalf of home buyers and sellers to protect private property rights and to ease the costs of buying and selling a home.

5. COAR also coordinates charitable giving to the community as well as volunteer events for our members to participate in to give back to the communities where they work and live.

COAR also maintains local market statistics, which at the end of the third quarter indicated a steady rise in housing prices — the median sold prices and the number of homes sold have increased in almost every market over 2014: -Bend: Median sold price is $327,500, a 12 percent increase. The total number of sold homes is up 9 percent.

-Redmond: Median sold price is $221,000, an 11 percent increase. The total number of sold homes is up 8 percent.

-Sisters: Median sold price is $330,000, a 20 percent increase. The total number of sold homes is up 3 percent.

-Crook County: Median sold price $193,921, a 15 percent increase. The total number of sold homes is up 18 percent.

-Jefferson County: Median sold price is $127,437, which is flat compared to 2014. The total number of sold homes is up 15 percent.

-Sunriver: Median sold price is $421,376, a 3 percent increase. The total number of sold homes is up 25 percent.

-LaPine: Median sold price is $189,608, a 12 percent increase. The total number of sold homes is up 17 percent.

For information on the Code of Ethics, local market statistics, to search for properties or members please visit www.coar.com.

The CENTRAL OREGON ASSOCIATION OF REALTORS (COAR) is your voice for real estate in Central Oregon. COAR is a trade association serving the professional needs of its 1,500+ members. In addition, COAR is dedicated to enhancing and protecting the real estate industry. COAR believes we can build better communities by supporting quality growth, seeking sustainable economies and housing opportunities while protecting a property owner’s ability to own, use, buy and sell property. www.coar.com

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December 2015 - The Key 11

By Matt Garner of Harcourts The Garner Group Real Estate

For The Bulletin Special Projects

NEW CONSTRUCTION

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12 December 2015 - The Key

conomic, social and environmental considerations are said to be pushing the size of new homes downward. However, national statistics show the average size in the third quarter of this year — 2,653 square feet — was not far from record territory.

The small home trend is real, but not to the extent that it exerts a significant influence on national figures. The Census Bureau, after all, paints with a broad brush,and records history.

The single-family average peaked in 2007 at 2,521 square feet before entering a short period of decline concurrent with the recession.

The graph line meandered up and down but remained above 2,300 square feet before taking off again.

Since 2001 the average square footage has held fast in the 2,600s and 2,700s.

Increasingly, the market appears to be segmented into big (traditional), small (including cottages and cluster homes around 700 to 1,000 square feet) and really small (socalled “tiny homes” with size measured in the low hundreds of square feet.) Many tiny homes are towable and registered as recreational vehicles, thus are not included in housing statistics.

That “in between” segment resonates strongly with a number of Bend home buyers, and agrees with the Bend lifestyle.

Alan Mascord Design Associates Inc., the wide-reaching house plan

service, sees a wave of demand for smaller homes already developing.

“A changing economic climate, coupled with increasing concern for the environment, has launched a new trend: the small house movement,” according to a Mascord infographic titled “The Rise of Small House Plans.”

Among reasons cited: aging in place. Americans aged 55 to 59 were surveyed with 28 percent declaring they would like a smaller home. Also on the list were environmental consciousness, energy costs and growth of single-person households.

Fortune magazine (May 13, 2015) observed “the two market segments indicating the most interest in smaller homes are millenials, who either don’t want or can’t afford a mortgage in a place they want to live, and boomers who are downsizing for retirement and want to be released from the golden handcuffs required to pay for and maintain a large home. As a result, product manufacturers at all price points are ramping up to meet this tiny, small and micro-unit demand.”

From the on-line journal freshome.com: “People are realizing that high-end luxury and style can be achieved in even the smallest of spaces. Designers have responded to the small housing movement, showing us that luxury can be achieved in the smallest of houses.”

Bend has been an incubator for

the small home movement. One such project, The Commons at NorthWest Crossing, is a secluded cluster neighborhood of individually-owned, traditional-style cottages facing a landscaped common area. Sizes range from 793 to 999 square feet.

Homes are characterized by compact floor plans, high-end finishes, vaulted ceilings and energy-saving features. They pack all the design attributes of an upscale family home into a small package. As a result, prices per square foot are largely on the high side of $400.

Nine of the 14 homes platted have been sold or are under contract. The mixture of buyers is diverse. Singles and couples, retired or working toward retirement, in some cases downsizing. Buyers will put two of the homes on the longterm rental market and one will be an artist’s studio. Buyers come from Bend, California, Colorado and Washington state.

“Bottom line, our buyer is primarily a 50s something, retired or close to retired woman who wants small yet comfortable, safe living,” said co-listing agent Alison Mata.

The downsizing trend can be seen in phase two of Monterey Mews, detached condominium homes near College Way in Northwest Bend. Still on the drawing board, homes will range from 934 to 1,324 square feet.

And there may be another cottage project in NorthWest Crossing coming in 2016, according to West Bend Property Co., the neighborhood’s developer.

Judging from experience in Bend, the small house concept is here to stay. Buyers are looking beyond basic shelter requirements and agree that big is not necessarily better.

This generation of cottage homes is compact and classy. A cube van will carry more stuff, but wouldn’t you rather drive a Mercedes?

MATT GARNER has been a licensed real estate Broker with Harcourts The Garner Group Real Estate since 2005. A native Oregonian, Matt has been in Central Oregon since 1991. He lives in Bend with wife Lindsey and their two children.

Windermere... Redefining the Standard of Excellence in the Real Estate Industry.

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Lawnae Hunter CRB, CRS, GRI, Principal Broker, Co-Owner

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www.windermerecentraloregon.com December 2015 - The Key 13

By Cindy King of RE/MAX Key Properties

For The Bulletin Special Projects

The Rental Conundrum

As Bend continues to draw new residents, including OSU-Cascades students, the question looms — where will they all live?

W

e read almost daily about the shortage of rentals in Bend and it’s really true.

We have a housing shortage that will not be going away anytime soon.

It’s best to understand it and move forward with plans, ideas and ways to work with what we have and promote more housing within any type of future development we have coming our way (insert OSU-Cascades here).

Yes Virginia, it is lack of supply.

People can point fingers all day long

to blame greedy developers or to the “rich” people moving here from other areas ruining our town. Some people point and scream at shortterm rentals running amok and ruining our city. Get ready for some serious growth challenges and city-wide changes that are here right now. That big red arrow on the map? We Are Here. All of the growth our city government and local business strive for in order to have a robust economy includes people moving here. Where are they going to live?

Your Northwest real estate experts for over 80 years.

“It’s about the difference we can make in our clients’ lives.”

In the Old Mill Marketplace DOWNLOAD OUR MOBILE APP: JLSAPP.COM 541-317-0123 ∙ 50 SW B OND S T ., S UITE 1 ∙ B END , OR 97702 14 December 2015 - The Key

Briefly, each city in Oregon is required to provide a 20-year supply of land for all land-uses – not just for housing, but for commercial, industrial use and the like. We are into the 8th (?) year with our fingers crossed the State will approve the Plan re-submitted in 2016. Based on our own UGB Remand Project we need a total of 17,000+ housing units by 2028. Comparing two scenarios that seem to have made the cut these citywide projections still reflect a shortage of 2,500 – 4,500 units. Even these most optimistic projections do not solve the problem. Why is that OK? Affordable housing and government-assistance rentals require tenants to meet state and federal income requirements, yet median incomes have fallen annually since 2012. Lower incomes require lower requirements for assistance because the percentage stays the same. Increased housing costs (lack of supply) exacerbate the problem immensely. The median income in Deschutes County has dropped 11 percent since 2012. Because percentages tend to not say much the real number here is $7,700, or $641.66 per month. That makes a huge difference in affording rent if you have $640 less per month to pay for housing. Could you do it?

We have a four-year university coming our way with the estimation of providing housing for 3,400 of its 5,000 students. Does staff need housing as well? I’m just thinking outloud. Creating space and livability for this project is going to carry the most weight in changes of how our city grows. I credit a Student Housing Memo from March 16, 2015 for the following tidbits of information: Bill Bernardy, Chair of the OSU-Cascade

Housing Task Force submitted some of the following suggestions for recommendations and findings to the City Council, Central Westside Taskforce and Bend Planning Commission.

They have projected housing needs for 3,400 out-of-town students in a city with a near-zero rental vacancy rate. It went from 5,000 to 3,400 because the difference are students who live here already.

Based on this memo, it is projected that OSU plans on providing 300 beds in 2016; by 2020 it is suggested they house an additional 1,000 students on campus in working with private developers to create housing within a half a mile of the campus. By 2025 it is suggested they house an additional 800 students on campus and provide another 1,325 upper-classmen in university-affiliated student housing within this same half mile of the campus. Zoning changes, new city policies (weekend enforcement of parking on approved surfaces only), OSU-Cascades expanded partnerships with the community will all come into play in how Bend can absorb this additional population surge by 2025. This memo states that there will be few impacts on existing westside neighborhoods and minimal impacts on traffic. Does this add up?

Years 2013 and 2014 resulted in more than 1,450 total single-family dwelling permits being issued by the City of Bend. These, combined with a handful of multi-unit developments are helping provide more housing for more people, but at the rate of projected growth, we simply will run out of land to build. Look for infill projects, zoning changes, perhaps height changes to allow development to go up instead of out. I will touch

on what a permit fee in Bend costs: just shy of $24,000 per single family dwelling unit. Those greedy developers pay hundreds of thousands of dollars in permit fees to build apartment complexes which provide much needed housing for our community members. I met a developer who paid above $1,800,000 in permit fees for the apartment complex he is excited to build. It’s not cheap to develop in Bend – maybe our fees are too high?

Could that play a role in lack of rental housing? A sidewalk permit fee in Bend is more than $600; in Redmond it is around $40. Hmmm… .

Let’s dream that our UGB proposal is approved in 2016. That would be great; however, due to zoning changes, land-use applications and legal appeals against development by contiguous property owners who don’t agree with changes, realistically we will be about four years away from shovel-ready dirt. What that means is another four years of tightened supply, increased land costs and less

affordability for everyone. I wish it was a rental bubble but there is no bubble here.

Welcome to Bend. We may no longer be the quiet little town in Central Oregon, but that’s OK. We have a bright future ahead and by combining our energies, knowledge and data we can continue to be a destination city with quality schools, family-wage jobs and abundant natural resources that surround us.

CINDY KING has lived in C.O. since 1978 and has been a full time Realtor since 1996. Cindy has helped over 800 families with their real estate goals both with buying, selling & investing. From 2002-2005 Cindy served on the board and was President of the Central Oregon Association of Realtors in 2005. She has been an instructor for the association & has served on the Professional Standards Committee, as well as various committees within the association. Her 11 year old son Nathan aspires to be a chef and they both enjoy skiing, reading and computer games (well, he likes computer games more than she!).

December 2015 - The Key 15

By Kathy Oxborrow of Oxborrow Consulting

the

For The Bulletin Special Projects

Affordable HOUSING Crisis

The public and the private sectors, along with philanthropic efforts, are coming together to find creative approaches and answers to the complicated housing puzzle in Central Oregon and throughout the state.

B

end is not the only community in Oregon where civic leaders and public officials are scratching their heads in search of solutions to the lack of affordable housing.

“Affordable housing is the number one topic around the state,” said Kenny LaPoint with Oregon Housing and Community Services, the state agency charged with providing stable and affordable housing.

As LaPoint travels around Oregon he said it’s in the forefront of every conversation. “Every interest group wants to hear what’s going on to address the housing crisis.”

Rising residential rents in Bend and escalating home prices are affecting all income levels, but high housing costs are particularly acute for low-income people. Some reports put the Bend residential vacancy rate at less than one percent. According to LaPoint the vacancy rate in many Oregon communities hovers at less than two percent.

“Bend was the precursor of what was about to happen to the rest of the state,” LaPoint said referring to the rapid rise in 16 December 2015 - The Key

rents shutting out many families from the rental market.

The Oregon Housing Alliance compiles data for each Oregon county. It reports that in Deschutes County the average annual income needed to rent a two-bedroom apartment is $32,120. A Redmond bank teller’s average annual income is $26,776. In Crook County an annual income of $27,120 is necessary to secure a two-bedroom residence. A fast food cook makes $20,650 a year in Prineville. To rent a two-bedroom apartment In Jefferson County, an annual income of $25,480 is required. A Madras home health aide’s yearly wages are $22,585.

There are many players in the affordable housing field and they all contribute a piece to the extremely complicated puzzle of creating housing in Oregon. Those entities include foundations, nonprofits, government, banks and private developers.

PHILANTHROPIC EFFORTS Meyer Memorial Trust is leading the philanthropic effort to find creative approaches to the housing crisis in Oregon.

“We can’t build our way out of this crisis,” said Doug Stamm the CEO of Meyer.

Instead, he said Meyer is taking a multipronged approach. It will restructure its grants and loan programs plus convene cross-sector groups to brainstorm ideas for removing barriers to building more affordable housing as well as ways to preserve existing housing stock. When Meyer convenes these groups it will promote their findings and ensure that their reports and best practices are effectively shared across the state.

“This is part of our intentional effort to be much more ingrained in the field than just as a grant maker,” explained Stamm.

Oregon Community Foundation’s Kathleen Cornett, VP of programs, said her organization is very supportive of Meyer’s efforts and is looking to it “for the bigger picture” in finding solutions to housing issues in Oregon.

Cornett said OCF will continue to be part of the solution by providing funding to organizations that build affordable housing, such as Habitat for Humanity, in addition to giving capacity-building grants to groups to increase organization-

al effectiveness.

For one of Meyer’s cross-sector pursuits, it convened individuals from public and private organizations to examine key factors affecting the cost of developing affordable housing. In a follow up to the report issued by the group, Meyer has just released a Request for Proposals (RFP) for grants up to $150,000 to test new cost-efficient approaches to providing more affordable housing in Oregon.

“When we think of our housing investments more generally,” added Candy Solovjovs, director of programs for Meyer, “we are very aware that different communities have different challenges related to affordable housing and Portland and Central Oregon have different pressing issues and we want to design something that meets the needs statewide and allows innovations and support throughout Oregon.”

Under Meyer’s Affordable Housing Initiative, which has three broad goals, it has committed $15 million through 2019 to find answers to Oregon’s housing crisis.

The first goal of Meyer’s initiative, “Strengthening the Foundation,” builds

on its previous investments by preserving existing federally rent-subsidized units and rural owner-occupied manufactured homes.

“Fostering Innovation” is the second goal. Meyer will fund efforts that promote cost efficiencies when creating or preserving housing units. It will also support endeavors that promote strategic coordination between housing and other critical service systems and work to expand access to private-market units.

In addition to the current RFP for cost-efficient approaches, Meyer just released the names of nine organizations that received a total of about $900,000 to promote “systems alignment strategies” aimed at better connecting housing and other services/systems to help low-income families and individuals thrive.

Goal three is “Securing the Future.”

Through advocacy grants, Meyer is encouraging development of resources and policies that will expand affordable housing. It believes that these advocacy efforts will lead to changes in the systems and practices that impede affordable housing development.

Housing Works, Central Oregon’s Housing Authority, received an advocacy grant to produce a video about the housing crisis in our area.

“It’s excellent and very informative,” said Solovjovs about the video. “It explains what some of the drivers are that have contributed to the housing shortage in Central Oregon.” (The video can be found on YouTube https://youtu.be/tk3FBwGxees.)

In addition to its Affordable Housing Initiative investments, Meyer will dedicate more grant dollars to strengthen the capacity and reach of Oregon nonprofits working to address the affordable housing crisis.

PUBLIC-SECTOR CONTRIBUTIONS The City of Bend stands out when it comes to innovative solutions for developing affordable housing. In 2006, the Bend City Council passed the Affordable Housing Fee Ordinance requiring developers to pay a fee of one-third of one percent of permit valuation. That amount was reduced to one-fifth of one percent in 2011 during the Great Recession. Money in the fund is loaned to private and public housing developers at interest rates between zero and 2.5 percent to build affordable housing.

“The council is looking at revising the fee back up to one-third,” said Jim Long, the city’s affordable housing manager.

After Bend approved the fee ordinance, the Oregon Legislature preempted other

municipalities from enacting similar measures. No one interviewed for this story speculated about why Oregon Legislators restricted other cities from offering this innovative financing mechanism, but it is obvious who that decision has benefited — developers.

Long said Bend’s Affordable Housing Fund has helped organizations when they compete for tax credits at the state level.

“When nonprofits show up with this, it demonstrates a local funding commitment, which makes their application score so much higher,” Long said.

The federal government allocates tax credits at two levels, four percent and nine percent, to states based on their population, and the competition for those coveted tax credits by affordable housing developers is fierce. Banks then invest in housing projects to secure the tax credits. This is how the majority of affordable housing projects are financed.

“If you get a nine percent tax credit through the state, you’re golden,” said Tom Kemper, executive director at Housing Works. “That will fund 60 to 70 percent of your costs.”

Kemper said developing affordable housing is all about financing. “You can only build what you can finance. If you are charging Bend market rents at $1,200 for a two-bedroom apartment, it’s easy to make a deal work,” he added. “But if you’re only charging $600, it’s really hard to make a deal work.”

Bend’s Affordable Housing Fund has leveraged $62.6 million in state and federal dollars and more than $14.2 million in private equity according to Long. It has helped fund 615 units that include 76 single-family homes and 539 multi-family units.

This June after much debate, the Bend City Council voted to exempt affordable housing projects from its system development charges (SDCs), the fees imposed on developers to fund infrastructure costs associated with new buildings. Revenue from SDCs can be used for water and road construction, plus parks and recreation programs and projects.

The Bend Park and Recreation District Board denied a request to waive its SDCs to builders of affordable housing in June.

“The board is very concerned about our community’s need for affordable housing, but its members had questions and concerns regarding how the funds would be allocated to make a meaningful impact and they see the problem as an issue much broader than just housing services for low-income people,” said Don Horton, the executive director of the BPRD. The Bend City Council awarded $750,000

of the one million it authorized in SDC exemptions to five affordable housing projects that will produce 163 units. The remaining $250,000 will be allocated later.

“A SDC can add $16,000 per door to a housing unit,” said Kemper. “Before the city approved the waivers, a 100-unit project we were developing blew up because those fees added $1.6 million to the cost of the project.”

Presently, Housing Works has six housing projects at various stages of development. When completed, 180 units of affordable housing will be added in Central Oregon. Housing Works received SDC waivers for 53 units of the 163 awarded by the city.

Bend also recently increased the allowable density on multi-family construction from 22 units to 33 units per acre to spur affordable housing development.

PRIVATE-SECTOR INNOVATION Tom Kemper wants to bring Portland-based private developer Rob Justus and his group, Home First Development (HFD), to Central Oregon. HFD’s model can construct housing for $75,000 to $80,000 per unit, while government-funded housing projects cost around $210,000 per unit. The model does not rely on any type of government support. It doesn’t use tax credits or government loans. So how does HFD build housing at such a reduced cost?

Understanding Justus’ background offers a clue to how HFD’s model was born.

With a masters degree in theology, Justus’ first job was as a youth pastor taking people to soup kitchens. He later founded JOIN, a Portland nonprofit serving homeless youth. The motto, “where there’s a will, there’s a way,” fits Justus perfectly.

Dave Carboneau, one of Justus’ partners at HFD who had served on JOIN’s board, told him creating affordable housing was basically a math question.

“When Dave was a Portland General Electric executive he’d been involved in financing power plants and other complicated projects,” said Justus. “He’s a math wiz.”

The prevailing way developers get paid is by charging a percentage of the total project cost.

“Nobody on our projects get paid by a percentage,” Justus emphasized. “We charge a flat fee. In our view, there’s an incentive to drive up the cost when you charge a percentage.”

Justus said they approach their projects using three levels of affordability. The first is to build in an affordable way. All of their apartments look the same. HFD standardizes its building material and uses the same doors and windows on all

its projects. Some construction supplies are purchased from Portland Habilitation Center (PHC) Northwest, a nonprofit that offers training and job opportunities for people with disabilities. Buying products from PHC helps keep costs lower too.

Second, HFD uses durable material like Corian windowsills and granite counter tops reducing operation and maintenance costs.

“We build with an eye to the long term to keep our costs down,” Justus said.

And third, HFD keeps tenants’ costs low. It does that by constructing housing that uses less water and energy. All HFD projects meet high-energy efficiency standards decreasing utility bills.

“Because our overall costs for our projects are less, which means our overall debt service is less, we can keep our rents down,” Justus explained.

The partners built their first project, a 47-apartment complex in 2010.

“We did it with our own money to prove the model and that we could hit the price point,” said Justus.

HFD has built four projects and three are underway, all of which are for nonprofit organizations or churches. When current construction is completed, Portland will have 320 affordable housing units produced using the HFD model.

“The model we’ve developed lends itself well for rural communities,” Justus added, “because land is the variable and it costs less in rural areas than in Portland.”

It’s clear that solutions to Oregon’s housing crisis can only be solved when all the players make their individual contributions in their own unique way. Those contributions appear to be underway.

It will help us all to heed Justus’ plea if we want to solve the affordable housing crisis in Oregon: “Anyone who is committed to helping low-income people has be open to being creative and always asking the question, ‘How do we get better?’ We get caught up in doing things the same way. We need to bring a sense of ingenuity to the work because there are too many people suffering in our state. At the end of the day it needs to be about the people not our systems or our programs.”

KATHY OXBORROW, a fifA former Portland public affairs TV producer, provides opinion research, facilitation, planning and writing services for businesses and nonprofits. She grew up on a Nevada cattle ranch and moved to Bend drawn by its outdoor amenities. Her website is oxborrowconsulting.com.

December 2015 - The Key 17

By Rebecca Green of Cascade Sotheby’s International Realty

For The Bulletin Special Projects

Bend’s Urban Growth Boundary Central Oregon has long been a favored destination. It is revered by retirees and young families alike. It offers spectacular outdoor pursuits, an active local economy, a vibrant entrepreneurial spirit, good healthcare and an affordability not found in many parts of the United States and in particular the Pacific Northwest. How will Bend respond to anticipated growth? How will the local real estate market be affected? Is this affordability a thing of the past?

“T

he Urban Growth Boundary” — This term gets thrown about in all circles, among those who understand and those who think they understand as well as between those who are wondering what in the world it even really means.

It was Governor Tom McCall who, along with farmers, land owners and environmentalists, who led the crusade against urban sprawl to create governmental guidelines to protect the natural

18 December 2015 - The Key

beauty that abounds in Oregon. This endeavor continues to define Oregon and remains one of the leading factors in its glory as well as popularity.

In 1973, Oregon became the first in the United States to adopt measures for land preservation and protection against random expansion and hence, the Urban Growth Boundary was born.

Oregon’s UGB regulations require that all cities in the state maintain a 20-year supply of land for housing and

employment. Should a city see reason to expand these boundaries, a demonstration of need must be presented to the state. The proposal for change must clearly show that, based on existing population as well as projected growth, current boundaries will not meet that 20-year required supply.

The city of Bend began its campaign for expansion back in 2004 and although moving toward approval, has yet to gain it.

Today, the city of Bend has three different approaches outlined to expand the line around the city that was previously set out as the Urban Growth Boundary. Each of the three UGB boundary scenarios would add approximately 2,000 acres of land for future expansion which would be designed to meet housing, employment and other land needs.

Through the process, the city and the community have called for “complete communities” with a mix of housing options, consideration of jobs, services and parks. Many factors still need to be addressed such as housing affordability, walkability components, access and convenience but through thoughtful planning and considerate execution this expansion could provide a respite for many in Bend and those seeking to relocate.

Over the years, home values in Bend have skyrocketed to incredible heights, then plummeted to lows that were discussed nationwide. Bend experienced one of the most drastic booms and busts during the last recession. As the real estate community eagerly awaits the state’s decision on the city’s UGB plans, there is no doubt that there is a desire for home values to increase at a more sustainable rate and no doubt

that there is a need for more building as inventory levels remain relatively low in many price points in Bend.

There is also a need for the development of varied housing types from mixed use to multi-family, to live-work opportunities and affordable housing.

According to the National Association of Realtors, it is these types of cities, with diversity in housing opportunities that have the most vibrant real estate economies.

Although more inventory is needed and it seems inevitable that Bend’s population will continue to grow, there is a common denominator among real estate professionals, community respondents and the city that the very fabric of what appeals to so many in Bend must remain in focus — green space, easy access to outdoor splendors, trails and parks.

Urban growth in the real estate community evokes thoughts of well-planned development to meet the needs of buyers, while valuing the desire of sellers for healthy retention on existing values.

The three plans currently under consideration in Bend for the extension of the UGB, seem to address all of these aspects.

REBECCA GREEN is a natural fit for Director of Marketing for Cascade Sotheby’s International Realty as she has extensive real estate experience, having earned recognition as being in the top 2% of real estate professionals in the country, then going on to PR, marketing, design and branding for several International clients. She is a seasoned high end real estate professional who understands and fully utilizes the Sotheby’s International Realty’s vision of excellence.

By Kevin Restine of Plus Property Management and Tona Restine of Windermere

For The Bulletin Special Projects

THE HOUSING AND RENTAL MARKET PENDULUM

A

s the housing market ebbs and flows, we see cycles that are simultaneously advantageous as well as quite concerning, depending on your personal perspective.

During the boom years, when Central Oregonians seemed untouchable in terms of real estate values, we lived large! Our homes were large, our cars were large, and most importantly, the appreciation value in our homes, our EQUITY was large! So many Americans couldn’t imagine that those happy, glory days would ever end, but end they did — for some with a bang, and for others with a whimper. For many Central Oregonians in particular, the faint echo of that whimper can still be heard today.

While record numbers of Americans were experiencing the “great american dream” of homeownership, some were unable or unprepared to sustain that dream. Many economists believe that when home ownership exceeded 65 percent, the writing was “on the wall” of the bubble, so to speak, and our glance back through recent history confirms that those economic predictions, though dire, were in fact accurate.

Ironically, during this same time period, investment property owners were having to supplement their investments each month to cover their mortgages, taxes, insurance and utilities because

rents were low and vacancy rates were high.

When the housing bubble burst, many of the homeowners who lost their properties to short sale or foreclosure were forced (some for the first time in decades) to re-enter the rental housing market.

The cycle began to turn again. The investment property owner found vacancy rates decreasing while rents gradually increased, as the supply struggled to keep up with the demand of former homeowners who by necessity had to seek housing in the rental pool.

The once “normal” rental vacancy rate of 4.5 percent in Central Oregon plunged dramatically to less than 1 percent, creating an unbalanced market.

Prospective tenants found themselves in direct competition with multitudes of other prospective tenants for a limited supply of housing. The pendulum managed to find its way to the opposite extreme.

Gradually, with the passage of time we are seeing “boomerang buyers” (buyers who are re-entering the home market following a short sale or foreclosure) re-establishing themselves as credit-worthy buyers. These buyers managed to maintain employment and rebuild borrowing power through the lender-required seasoning period.

Once again, the pendulum starts to

swing as these buyers are able to purchase a home again.

The exultant exodus of boomerang bwuyers from the rental market has created a ripple of change in vacancy rates.

So … fast forward to fall 2015 and you will see much higher vacancy rates and rents that are inching downward in certain price points. As these buyers have returned to the home-buying market, we see single family homes, especially in the upper end, staying on the rental market for a longer period of time.

Another factor that has driven up the vacancy rates is the low interest rates we have seen for the last several years.

As the pendulum has swung, many po-

tential buyers who have restored or maintained their credit worthiness are finding that the low interest rates, coupled with favorable loan programs have created the ability and incentive for them to buy a home for a payment that is very similar to what they may already be paying in rent!

How quickly the pendulum swings and how far it will go remains to be seen, but the one constant we can count on is change. Regardless of this changing housing market, solid credit worthiness and a strong financial position will always further your path to success.

KEVIN RESTINE joined PLUS Property Management, LLC in 2007 as General Manager. He has earned a reputation of fairness, professionalism and honesty.

Finding the delicate balance of protecting the owner’s property investment, while providing the tenant a place of quiet enjoyment to call home is the benchmark standard of excellence that Kevin and his team seek to meet. Under Kevin’s leadership PLUS Property Management has grown into one of the largest residential management companies in Central Oregon. His easy going nature and sense of humor, coupled with his work ethic, dedication and loyalty have earned respect from colleagues and competitors alike

TONA RESINE’S background in Real Estate spans nearly 20 years.

She is currently the co-owner of Windermere Central Oregon Real Estate which has seen phenomenal growth under her leadership. Tona is a hands on leader with a strong sense of commitment and dedication to the Brokers she serves. She believes in empowering others to achieve their personal goals through training, coaching and personal support. Serving others with excellence has been a foundation of Tona’s career; she and her team are “Re-Defining Excellence in the Real Estate Industry!”

December 2015 - The Key 19

By Cindy King of RE/MAX Key Properties

For The Bulletin Special Projects

TIMING YOUR

HOME

PURCHASE When it comes to buying a home, consider whether or not it makes sense for you right now.

T

here are two rules in real estate (actually three): 1) Location-Location-Location; and 2) Timing; and 3) Buy Low and Sell High. I’m going to skip Rules 1 and 3 for another day and get right to timing. I want to provide you some tips to consider and questions to ponder that will help you with your timing.

When big real estate companies or online banks (i.e. Quicken Loans) start running ads on TV telling you “NOW IS THE TIME TO BUY A HOUSE!” please feel free to stop and ask why? Is now the right time for me to buy a house?”

“How do I know and who should I talk to?” Most likely they want you to get a loan from THEM because the timing is GOOD FOR THEM. It may not be good for you.

First and foremost, do you have any money? Real money in the bank and a fairly predictable income stream? If not, you can rest assured the timing is not right for you. You do not even have to read the rest of this article. Save it for later or hand it to a friend who is talking home ownership. It is wise to have about 5 percent of your home cost in savings all the time so you can weather those unexpected storms. On

20 December 2015 - The Key

It is wise to have about 5 percent of your home cost in savings all the time so you can weather those unexpected storms. a $300,000 house that is $15,000 in savings. This is just your savings account, not the down-payment or closing cost funds.

If you have some money in the bank start asking trusted professionals if you have enough. Ask your favorite Realtor who has knowledge of the market. Ask your CPA or accountant about your finances and your long-term track record of taxes, savings, employer history, etc. Please don’t ask Uncle Bob from Texas about buying a house in Central Oregon. He just doesn’t know about the market here. His wife or girlfriend doesn’t either. The trick is to ask someone who will be honest with you about your situation. After all, the timing is about YOU, not the market.

Professional Realtors will not pressure you into looking at houses starting that afternoon. We want to share knowledge, data and ideas with you

so you can best analyze your situation.

We do not want to sell you a house you cannot afford. We live in the same town as you. We don’t want our tires slashed while shopping at the grocery store.

If you meet with me I will suggest you then meet with a qualified lender. If you haven’t worked with a lender or know who to call, your Realtor will have several options for you. We like to fit our clients’ needs with lenders who we feel can do the best job for you. You can also talk with your local banker if you are comfortable and confident in the product(s) they have to offer.

Once you select a lender to analyze your financial situation they can show

you exactly what your monthly costs are going to be for your loan – principal, interest, taxes and insurance. Also known as PITI – and it is a pity for you if you go in blind not understanding these figures.

A professional lender could care less if you get a loan. They want YOU to know your situation and educate you about the process. (They don’t want their tires slashed either.) An unprofessional lender will “hmmmm” and “hawwww” over the details and answer your concerns with “Oh, that’s no problem!” If they are vague in their answers and try and get you to sign disclosure forms, find a reason to end the meeting. You have to wash your

Once you select a lender to analyze your financial situation they can show you exactly what your monthly costs are going to be for your loan – principal, interest, taxes and insurance.

Also known as PITI – and it is a pity for you if you go in blind not understanding these figures. hair. You have to go grocery shopping clear across town. You need to see your proctologist. Run away.

As a side note some banks offer incentives to help you with financing, like waiving your appraisal fee of $650 or lowering your rate a point. A smart borrower knows these fees are not waived, they are worked into your total cost of the loan. A free appraisal does not a quality lender make. Nothing is free in the lending world, except for valid advice!

“But all my friends are buying houses! I feel like I need to buy one too or I’ll miss the market!” Do your best to not allow fear of loss motivate you to get yourself into a pickle. If you cannot make your mortgage payments your friends aren’t going to feel sorry for you and write that check.

Real estate is individual in nature.

Yes we all want the top location, the best price and to buy low and sell high. Investing in a home is more than that. Home is a respite from the sometimes crazy world we live in. It gives you a home base for you, your family and maybe your friends who fall on hard times. You can cook fun meals or burn bad meals, paint walls, remodel

Your Eagle Crest Expert

and do whatever without asking your Landlord first. You can keep it as clean or as messy as you want – no one will say anything about it until your mom comes to visit. Here’s the tip: find your vacuum and place it in the living room.

Answer the door and say “I was just about to start cleaning! Would you rather go to dinner right now or help me clean?”

CINDY KING has lived in C.O. since 1978 and has been a full time Realtor since 1996. Cindy has helped over 800 families with their real estate goals both with buying, selling & investing. From 2002-2005 Cindy served on the board and was President of the Central Oregon Association of Realtors in 2005. She has been an instructor for the association & has served on the Professional Standards Committee, as well as various committees within the association. Her 11 year old son Nathan aspires to be a chef and they both enjoy skiing, reading and computer games (well, he likes computer games more than she!).

Lynn Johns

Principal Broker

ABR, GRI, RSPS, SRES, GREEN Licensed in the State of Oregon

Direct: (541) 408-2944

View listings online: www.lynnjohns.com

P.O. Box 1626 • 735 SW 9th St. • Redmond, OR 97756 December 2015 - The Key 21

By Erin Martin of Becky Breeze & Company

for The Bulletin Special Projects

Real Estate in the DIGITAL AGE There’s no aspect of our lives today that are not touched by the digital revolution, and real estate is no exception.

F

ifty years ago, it was customary for a potential homebuyer to open a Sunday paper and peruse the ads for suitable family homes before hopping in the car to take a leisurely drive around town, visiting open houses.

22 December 2015 - The Key

On Monday, Dad would call the family Realtor and begin the calculated process of finding a new home, signifying a transition that would occur about five times total throughout his life.

Today, a similar homebuyer also

peruses the newspaper, searching for and noting the ads for builders and homes that match his family’s needs.

Then he turns on his tablet to look up the sale properties online, to get more details.

He may also sort through an auto-feed of additional listings before texting back his Realtor, who quickly makes appointments to view the homes.

The Realtor begins researching comparables and performing due diligence while engaging his lender who stands at-the-ready to provide pre-approval; he begins packing for one of the 11 moves he will make in his lifetime.

We are living in a digital revolution, and residential real estate is a prime example. To demonstrate this, let’s begin with some statistics, courtesy of a study by the National Association

of Realtors, released in 2015.

In 1964, 40 percent of homebuyers cited newspaper ads as a primary source to finding a new home and 61 percent worked with a real estate agent that they knew for support during the transaction.

Today, 43 percent of homebuyers also research properties online, and 87 percent work with a real estate agent to help them through the process.

Broken down by age, the number of home shoppers who take what they find in the newspaper and then engage online includes 95 percent of millennial, 84 percent of baby boom, and 60 percent of greatest generation buyers today.

Here is where it gets interesting: During this home research process, 48 percent of homebuyers used a mobile device (i.e. phone or tablet)

and 36 percent of the time, that mobile device helped conduct research from their residence(s).

Gone are the days when a new homebuyer will invest precious time on a leisurely Sunday drive to view a home that may not be a good fit – homebuyers are coming to the table prepared, informed, and eager to execute. This makes sense, given that current homebuyers will now engage in twice as many transactions during their lifetime as their grandparents did.

Socially, it could be said that this is part of our instant gratification culture; no longer must we wait decades to “cash in” on our equity, or enjoy the benefits of our upward mobility.

Practically, it could be said that this is a factor of our rushed and harried lives; we need low-maintenance homes that are ever closer to work, school, or activities so that we can maximize our precious time together.

But while the digital revolution has

It seems that more information leads to more choice, but ultimately can also create a stressful quagmire wherein homebuyers believe a “more perfect” Real Estate opportunity could be illuminated with every browser refresh.

At what point does the data, which is meant to serve us, begin to own us? made information more available to homebuyers, it has also exacerbated the concept of FOMO (Fear of Missing Out).

Among homebuyers in 2014 who did not perform digital research (just the clients, not their Realtors) during their home purchase process, the median search period was four weeks, and included a tour of four homes before writing on offer. Those numbers double when clients add personal online research to the formula – averaging 10 weeks and including a median of 10 house tours before finding a new home.

It seems that more information leads to more choice, but ultimately can also create a stressful quagmire wherein homebuyers believe a “more perfect” real estate opportunity could be illuminated with every browser refresh. At what point does the data, which is meant to serve us, begin to own us?

The truth is that a smart Real Estate opportunity is unique to everyone — it is a nuanced and detailed algorithm of financing, features, layout, location, timing and so much more.

So, too, is the nature of the relationship between Realtor and Client

— trust, tenure, values, style, skill, medium, and momentum are all involved.

Technology is an asset to both Realtors and clients in that it streamlines information, communication, and transaction processes. But in the end, at its core, a residential Real Estate transaction is about finding a new place to call home, and that is something we should never entrust to a machine.

ERIN MARTIN is driven by a mission to provide high-quality Real Estate service to hardworking Central Oregonians. Erin works tirelessly to connect people that matter with property they love. A University of Oregon alumna with a decade of business marketing experience which moved her to Chicago, New York, and San Francisco, she followed her heart back home to Bend and joined the Real Estate community in 2012. Erin and her husband have two young boys and an active Pacific Northwest lifestyle.

December 2015 - The Key 23

24 December 2015 - The Key