Real Estate Update

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The Issue With Affordability

By Annette Sievert

Three times in the last week I was called by potentially new buyer clients, all three had pre approvals from lenders or mortgage brokers and in all three cases I asked them to get a new pre approval from a knowledgeable local lender who I

deeply trust. After submitting documents to the local lender, all three were not preapproved for anywhere near what they thought they could buy for.

Besides the heartache and disappointment this caused it is also damaging. In one case the buyer will not be able to move here after already accepting a new position in Corvallis because there simply are no properties in their price range in Corvallis and even if something acceptable came up, the ensuing guaranteed bidding war will drive up the price so far that they would be out.

We see this too often, even buyers with a good down payment and the ability to go up to $500000 have trouble finding a good property with enough space for their family and a backyard that is more than a postage stamp.

A sales contingency, means a buyer has to sell a house first, before being able to close on a new one, is often the kiss of death. Even cash may not give you an advantage. Cash purchases have made up 20% of all purchases since January 1st 2021 in all of Benton County. For Corvallis 25% of purchases were all cash in the same period and this is a growing trend. According to Shadowstats.com, we have 11% inflation in the US and all these stimuli and spending, spending, spending of money that was

created out of nothing will accelerate inflation. People are purchasing hard assets, driving prices up and unfortunately leaving a lot of buyers behind.

If you want to buy and cannot afford Corvallis prices, there is the option to go to Albany, still affordable in a lot of areas of town. Philomath can offer some alternatives. Salem, though a bit of a hike, might work, as would often Independence and Monmouth.

I also get the question if building would be an alternative. Unfortunately it often is not. While buying a house from a builder eliminates the competition and bidding war issues, building yourself can be an incalculable risk especially on tight finances. Unless you are within city limits, well and septic need to be installed and nobody can guarantee that your well drilling will lead to a productive well. Wetlands and protected vegetation can make it difficult to install a leach field for septic and find enough space for the reserve field. Material prices have shot up and good builders are booked out many months in advance. So the dream of the barn type house on 3 acres 10 min from town for $300,000 is not going to be reality.

None of this is great news but as we so often say, it is what it is. I sincerely hope your dream will still come true!

Annette

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Ask Annette, at Coldwell Banker Valley Brokers in Corvallis 541-207-5551