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Tax time is right around the corner and you know what that means… Time to file that first extension! [Extension Form]

I also wanted to give you a heads up on a few things in relation to taxes and your home or investment property - Owning a home gives you access to all kinds of great deductions, deferrals, and exemptions. Please see a CPA to learn how these concepts apply to your situation as I am not giving any tax advice in this article.

The first big deduction is your home mortgage interest deduction - this is one of the big reasons given to own over renting. Also, recently they made a change and MI (Mortgage Insurance) is sometime deductable as well. [Home Mortgage Interest Deduction Form]

One of my favorites is depreciation of investment property, this means you get to tell the government that you are losing money due to a building getting older when in most cases its actually getting more valuable. This one can be particularly tricky and if you’re have trouble sleeping you can read all about it here: [Depreciation Info]

Probably the biggest tax break you will ever get is the exemption of capital gains on the sale of your primary residence. Basically, if you lived in your home for 2 of the last five years you get off the hook for capital gains up to $250k if single or $500k if married. Learn more in 36 riveting pages: [Selling Your Home Tax Info]

And last but not least are tax deffered exchanges of business and investment property know as a 1031 exchange. This allows you to sell an investment property and then put all the money and debt (or more) into another like-kind property (real estate in the USA used for investment or buisness) and defer the capital gains until a later date. Interesting factoid: the 1031, also know as a Starker Exchange was changed from a simultaneous event to one in which you have time to find replacement property by an Oregonian named TJ Starker[IRS Section 1031]

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A month ago when the numbers showed that Portland Metro had almost 13 months of inventory I broke it down to the close-in neighborhoods and showed that we still have a balanced market. A couple days ago news came out that inventory has Dropped back to 10.4 months and the number of closed sales are way up over January - 28% more to be exact.

A couple more surprises… Median price is up 5.5% over last February …. Interest rates are going up very rapidly … Stated income loans are about to disappear in the next two weeks. Economists are starting to say buy now and that we might be at, or very close to the bottom. I don’t have a crystal ball but there are some amazing deals out there and they won’t last forever.

Here’s an example of the cost of waiting: Let’s say that you were able to make the payment on a $400,000 loan at 5.2% which = $1733/mo in interest [rates were at this point a month or so ago] Rates are at 6.2% and rising right now. That means the same monthly payment of $1733/mo in interest now only buys you $335,000 - that means you just might have lost $65,000 in buying power. Prices aren’t falling in Portland and even in areas where they are you still lose by waiting if interest rates go up. Here is the best explanation of how this works.

A great article about over-priced / under-priced markets and why to buy now.

Now - Don’t give up just yet. I think it is a great time to buy and you should feel good about getting in the game. The strength of the market will hopefully mean you will do well by buying and holding your home or investment property. Another thing is that rising interest rates signal a healthier econmony which means we’ll be making more and have better job security.

Popularity: 43% [?]

If you’ve met me in person I’ve likely told you the story about my first sale ever in real estate. With my license freshly in hand I went out and bought a home for myself as my first transaction. I remember how excited and scared I was in making the offer, negotiating, and signing the papers to close the deal. I remember waking up a couple days after moving in and how elated I was to own my own home!

Last week I refi’d to take advantage of the low rates and was reminded of what it’s like to go through a transaction personally. I had questions about different charges, I was nervous about the appraisal, I wanted to know when the money would show up and when the credits for pre-paids would come back to me.

I think that buying my home first made me more aware of the excitement and fears all buyers have when they are buying a home. Recently, going through a refi I was able to experience first hand again all the excitement of making money by owning property but also the fear that something might go wrong.

So if you’re thinking of buying or selling you know that I’m aware of how you’re feeling and I’m here to make the process go as smoothly as possible.

Popularity: 44% [?]

With the National market in flux and certain segments of our local market slowing, buyers are looking for ways to save money and sellers are looking for a way to get out of trouble. Those two goals sometimes intersect with something called a short sale. A short sale is where a Lender agrees to let a seller sell their home for less than what is owed on the property. That is the basic idea but the reality is more complicated and the process often times takes quite a bit longer than a traditional 30 day close.

I have spoken with quite a few agents who handle short sales and bank owned properties and the consensus has been that in Portland you don’t really get a great deal and it takes in many cases 5 months to close. This is because Oregon is very under-represented when compared to the rest of the country in foreclosures and other distressed types of sales and this means that those properties often sell for close to market value. On the flip side I have clients that have bought properties for much less than market value. I think it has much more to do with the amount of inventory that bank currently holds versus the specific market.

The bottom line is that you need to talk with a Real Estate Attorney, a CPA, and an experience Realtor before you decide to enter into a short sale.

For more detailed info check out these two articles:
Selling a Short Sale
Buying a Short Sale

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You might have heard the news - it will be on the TV tonight and I wanted to point out the small print that will likely be overlooked by much of the media.

For 20 years the Case/Shiller index has tracked the rise and fall of the housing market nationally. Of the 20 areas they look at all were down except 3 - some like Miami are down as much as 17%. Three areas went up: Charlotte, N.C., 2.3%; Portland, Ore., 1.2%; and Seattle, at 0.5%.

Read the entire article here: CNN/Money

Popularity: 44% [?]

I want to share two new tools that I think are going to become widely used by both buyers and investors.

1. Google Street View : This amazing new tool allows to walk around a neighborhood or an entire city virtually. Many of my clients are using this to further explore areas before viewing homes.

2. Zilpy.com : This great new site allows you to see what homes or apartments are renting for in any given neighborhood. This is great if you’re planning on buying a rental or keeping your home and turning it into a rental. I also suggest you look at Craigslist to see what your competition as a rentor or landlord is going to be.

Popularity: 43% [?]

I read an article this morning from one of my favorite columnists, Carol Lloyd, who writes a weekly column called “Surreal Estate.” In the column she talks about a recent study asking children and adults what their “dream” home was.

The results?: A place with Love, Family, Good neighborhoods and Good schools topped the list. Little mention was made of Appliances, Appreciation or Square footage.

I think this article is a great reminder of why we buy homes… To have a place of our own, one we can make special. A place where we make memories, play our music, and make our families and our future.

You can read the entire column here: Surreal Estate

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Well - In a word, YES.

We have had a resoundingly crummy week here in Portland and it has definitely affected the number of people that are getting out there and looking at houses. We’ve also had a very small amount of new listings hit the market in December which means there really isn’t much class A inventory to look at right now. If you have a unique or nice close-in home you’d likely be pleasantly surprised by the speed of the market for good homes right now.

So back to the issue of what you can do about the weather:

1. LIGHT: In the winter it’s dark - add as much light as possible to your home. You can paint dark rooms with brighter and warmer colors. I recently installed new lights in my kitchen and it made a HUGE difference in the feel of the room at a very low cost. If your home is vacant make sure there are lights on timers for agents bringing people by after work in the dark.

2. WARMTH: Leave the heat on! It is a very good feeling to come in out of the cold… not out of the cold into a different cold. People will not spend time or think favorably about a cold house.

3. DOORMATS: I do not like having to take off my shoes to show a house. I recommend doormats at all outside doors both inside and outside. People are generally very considerate so don’t make them wear those little blue bootie things.

A couple little changes can make a big difference and that will help you sell your home faster. Now, come on everyone with very nice houses in close-in PDX - people want to buy your home but you have to get on the market first!

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The new Portland Report is here! James and I were trying to get this out before the holiday but life and work intervened so here we are. Watch and enjoy the Lost Holiday Episode!

Watch Here - Portland Report

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Hello Everybody!

I just got back from some R&R in Jamaica and NYC and let me tell you, it’s great to be home in Portland! I am going to share some awesome news for everyone here in PDX and anyone thinking about moving to the greatest little city on the West Coast.

NEW MARKET:

The Oregonian finally referenced some local data and it looks great! Oregonian Article We’re in the top 5 markets in the country and were recently named the #1 place to invest in Multi-Family investment property. Why? We still have appreciation and a low rate of foreclosure Nationally speaking. We win on multi-family because of 3 things. 1. Alot of apartments have been turned into condos. 2. We haven’t built enough new apartments. 3. People love Portland and are still moving here.

Nationally there are good numbers too - we’re still selling alot of homes:
2002-2004 - 4.7 million sold on average per year
2005 - 7.1 [boom year]
2006 - 6.5 [boom year]
2007 - 5.7 [bad year ?????]
2008 - 5.7 [projected]

This shows pretty well that we’re doing fine and people are still buying and selling homes.

I have had 4 listings go pending in the last week - 2 with multiple offers!!!

Here is some great info on remodeling costs vs. returns.

NEW RULES:

You love Oregon and Oregon loves your money. Just to prove this they’ve added a new tax witholding law for out of state sellers. Basically the state is trying to make sure that out of state people and corporations pay their fair share of state capital gains. There are exemptions so I am attaching the law and the new forms for you here: Non-resident withholding law

NEW INTEREST RATES:

This is great news for everyone! Mortgage interest rates have fallen dramatically in the last few months. Last week they dipped down to 5.25% for a 30 year fixed. The new lower rates allow people to borrow more and keep the same monthly payment. It’s a great time to refi and a great time to buy. Another tidbit that just hit the news today is the rumor the the Jumbo loan limit might soon be $730,000 almost double the current $417,000. This means that you can borrow more and not pay a rate penalty for going over the conforming limit thereby saving you lots of $$. This will have more of an effect on higher priced markets but is great news for anyone thinking of moving up.

Popularity: 63% [?]