Shining a Light on Mutual Aid /  by Lee McKnight

Mutual aid is a framework for communities to band together to meet the needs of their neighbors while working to understand and dismantle the root causes of those unmet needs. This age-old practice flourished and drew increased attention as the COVID-19 pandemic exposed and widened the holes in our institutional social safety nets. 

These networks of kinship and care are distinct from other forms of charity like non-profits or foundations because of their commitment to minimizing barriers (like paperwork and judgment) for those in need, collectively resolving the root causes of inequality, and working within the constraints of the community's skills and resources. Throughout the year, we will highlight forms of mutual aid that are alive and well in our community. 

Please let us know about the mutual aid networks that you support or have supported you>>

This month we're highlighting the efforts of Portland Mutual Aid Network, which began in the summer of 2020, to support the houseless/unsheltered community living downtown who were displaced and upended by the Police Bureau's attacks on protestors. 

Volunteers spoke directly with community members to find out what they needed and responded by gathering and distributing requested supplies (shelter, food, personal hygiene). The work of this non-hierarchical group continues because members of our community continue to live with unmet needs.

Learn more about getting involved with or donating to Portland Mutual Aid here>>


Connectivity Concerns? /  by Lee McKnight

Great news, we now have access to Broadband Reports for listings within RMLS.

Though internet serivce is not a feature likely to make or break a real estate deal, understanding your vendor and capacity options up front will save you the time and frustration that go with hunting and pecking to figure out what's available to you.

Data included in our reports can tell us whether specific internet providers have listed an address as one they can service (and potentially the speed and pricing they offer), and also tell us which providers have confirmed service in your census block. 

Please reach out if you have questions about broadband access in your area>>

Changes to Conventional Mortgage Pricing! /  by Lee McKnight

Last week we got an important heads-up from local lender Aaron Nawrocki, at Capital M Lending, about changes that Fannie Mae and Freddie Mac are making in their approach to pricing conventional mortgage loans. These adjustments will be implemented in the next several months. For starters, there will be new pricing tiers for higher credit scores > 760 and > 780 (meaning higher rates for buyers with lower scores) and a pricing adjustment for debt/income ratios over 40% (meaning higher rates for buyers that have higher debt/income ratios). 

There is also good news on the lending front. Both the FHA and VA announced this week that they would lower lending costs in the next 45 days. FHA is lowering mortgage insurance premiums, and VA is reducing funding fees.

Like Aaron, we believe that education and communication are incredibly important throughout all stages of the home-buying process; lending is no exception. So this seems like the ideal time to reiterate that we highly recommend talking to a skilled lending professional early and often. Buyers who develop these relationships are more likely to get the best terms possible for their unique situation and avoid unpleasant surprises in their lending journey. They also learn a lot and feel more confident as a result. 

Do not hesitate to reach out to us if you have questions about your financing status>>

What Is Happening in The Market? /  by Lee McKnight

You can imagine that I am getting this question pretty much on the daily. There is no short answer to this question, as the effects of market conditions vary widely based on area, price range, and type of inventory, but there is no doubt that there has been a dramatic shift since the end of July. Affordability (or lack of affordability) is still our biggest obstacle due to rising interest rates and low inventory. As interest rates rose, the cost of homes did not fall commensurate with this new factor. So while prices have stalled out a bit, buyers' average monthly mortgage payment today is significantly higher. If you figure that the average home price was $586,600 last January, and is now $532,900, a buyer with 20% down is now paying approximately $600 a month more for the same house. This is based just on the increase in interest rates from 3.0% to 6.5%

With all that news, plenty of buyers in the market still want and/or need to buy a home. So while they are dealing with sticker shock, they are out there bidding on homes and sometimes seeing competition for the good ones. When homes are exceptional and/or priced well, they sell quickly.  The Buyers in today's market are understandably looking for value; when they see it, they move swiftly and sometimes aggressively.

The chart above, from one of my favorite online data sources (FRED), puts the current interest rate environment in perspective by tracking the level of 30-year fixed-rate mortgage interest rates since 1971. Periods of recessions are overlaid in grey. What it tells me is, historically speaking, we are still in a relatively low-interest rate period, but the rise was dramatic, and the market has not had time to shift.  With the lack of inventory to satisfy the steady demand, I don't see prices having to "make up" for this shift, so we are left with buyers today spending more of their income on housing.  And while home sales are down 41% over last January, I expect to see that pick up as the "new reality" has already sunk in for most folks, and they still want to make that dream of owning a home a reality.

In this analysis of larger market trends, it is crucial to remember that real estate is all about micro-markets. The realities of the market will manifest differently for a condo in the Northwest and an oversized lot in Lents, so if you are considering buying or selling and you have questions, please reach out; we're always happy to talk specifics.

Natural Gas Is Feeling The Heat /  by Lee McKnight

The internet is aflame with articles about the risk of indoor appliances that run on natural gas. Gas stoves are under scrutiny for the general health risks posed by exposure to toxins released during combustion, the potential for toxins to leak out when appliances are off, alleged specific health risks to children, and overall pollutants they release that contribute to climate change. 

Multnomah County Public Health released its review of the evidence connecting gas stoves to poor indoor air quality. Regional news outlets have recently reported on gas stove research and the future of natural gas in the state of Oregon. If you have specific concerns about the alleged impacts of gas stoves on children with asthma, read this piece by economist Emily Oster, where she unpacks the data (her area of expertise is health economics and statistical methods) circulating on this topic.

Switching from natural gas to electric for any appliance is an involved project that will likely include upgrades to your electrical panel. This New York Times piece (potential paywall) outlines things to consider before committing to gas appliances and offers links to information about qualifying for economic incentives for electric appliances. 

As usual, we are always here to talk these things through if you have questions>>