Karen Church

Karen Church with RE/MAX Integrity of Lane County in Eugene, Oregon wants to share with you the impact of interest rates on buyers:

Everyone Wants a Lower Price, But What About the Impact of Interest Rates?

When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It's important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price.

Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing.

That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest.

Interest Rate Complacency
The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.

But buyers shouldn't be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!

Markets are Unforgiving
The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.

For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.

If your clients are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, they could lose the war in terms of monthly payments and overall affordability. With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.

Clock is Ticking on Free Money
If you have clients who are planning on purchasing their first home this year, be sure to let them know that they need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today's market, this could impact a lot of your clients.

If you have questions about this update, give Ron Smith of Precision Funding a call. (541-284-8036). He can show you how waiting for the lowest price could really cost your clients more in the long run.

Realtor Karen Church of RE/MAX Integriy post blog response to yesterday's blog on public education and the strenth of character of our teachers. Contact her at www.eugenehomesgal.com in Eugene, Oregon.

Thanks for the comments

Submitted by cgill on Fri, 05/22/2009 - 04:50.

Karen, I'm with you all the way. I did not mean to imply otherwise. I was trying to say that we should not take these concessions for granted. I did not communicate it well. In our state educators are continually asked to do more with less...and they continually try. You are right, there has to be a limit.

I have been making regular contacts with legislators regarding this issue. SB-441 is part of the answer. If it goes through it will help to reduce some of the requirements schools and teachers face during the down turn. The fact is that none of us will really want to provide less for our kids. Even though we are with a reduced school year and more crowded classes and, and, and...

You are also right about our state. All states are facing difficult economic times, but as I have looked around only Oregon and California discuss things like shortened school years. And we are in a state with some of the largest class sizes and shortest school year already.

A very difficult situation. Thanks for your comments. And, I am sorry that I made it sound like next year should be business as usual.

• reply

Humbled by our Fine Staff

Submitted by Karen (not verified) on Thu, 05/21/2009 - 09:39.

Again, teachers step up to help Oregon kids. There is no question in my mind as to the character of teachers in this district. Many are my friends and many were my co-workers and peers. In the history of Bethel, I have watched and been a part of these constant sacrifices that we as teachers have made over the years to continue to support Bethel kids.

The teachers of this district, and of our state, have been asked time and time again to take a pay freeze, cut our wages, donate time, give back time, come in evenings, attend meetings, pay for classroom supplies, and give back items that have been hard won at the table of negotiations. The amazing thing is that teachers have again made all these sacrifices in the name of what is "best for kids".

I have watched my friends cry over conflict created at the negotiations table to get contractual language that benefits them in the classroom. They have fought for what is right for their peers. These same people then have turned around and helped pass bond measures and supported district events that were in the best interest of Bethel kids.

My question is when does the state pick up the slack and support teachers and truly care about "what is best for kids"? If education is so important, then why are cuts being made to this "important" system? The one thing that all kids of this country have to do is go to school. When then is it not a priority? Other states don't fund their schools like we here in Oregon do. Why do we not change and do what is really "Best for Kids"?

I don't believe that there are many educators that don't believe that early intervention in education would cut down the number of inmates in our prisons? Or how about Talented and Gifted Programs (TAG) for our highly intelligent kids? TAG pullout went by the wayside years ago after Measure 5 cuts. Never to return. Yes, lots of special education programs, but how about emotional interventions and parental education for our troubled youth and special programs for our highly intellectual?

I would like to see Oregon in the forefront of education, not constantly taking a back seat to states who are far more financially superior than us. We should strive to be #1...is there less in life? Isn't that what is best for kids?

The character of Bethel teachers has never been in question, nor will it ever in my mind. Teachers are a special breed of individuals. One would have to be to constantly be giving, giving, giving, to other's children... your children... at the sacrifice of their pay wages and putting food on their own tables when possibly the other contributing financial person in the family may be without a job.

What would encourage teachers to go into this profession in Oregon except their compassion for kids? Many of these recent college graduates and first year teachers will be without jobs in the upcoming years. Will they stay in this profession? Will they leave the state to give their talents to students and developing higher test scores in another state? This district is taking 11 days off the school calendar, asking teachers to take a 6% pay cut, and then asking them to work one day for free. What other job asks for free work?

Yes, the teachers again stepped up to do "what is best for kids". Did they have the choice? No, but will they do it, yes. You stated that "The low was having to ask a group of hardworking individuals...people who come in early, work late, plan on the weekends, pour their hearts into their work...asking these people to do the same job for less money, fewer benefits, and fewer resources." Do the same for less? Now that is really asking a lot.

The question really is "At what point can we not maintain status quo?" Now is as good as time as any.

• reply

Oregon Realtor Karen Church of RE/MAX Integrity supports Bethel School District's teachers here in Eugene, Oregon. Lane County has some of the finest teachers in the state. These hard working dedicated groups of professionals are there for Oregon's children. Your "Go To" Gal at www.eugenehomesgal.com is also a licensed teacher in Oregon and believes in "What is best for Kids". Read on....

Humbled By Our Fine Staff by Superintendent Colt Gill

05-21-2009

I was emotionally touched yesterday by the actions of our teachers. I'm so proud to work for a group of people who are willing to put so much on the table to support our community's kids. You can read about the concessions our teachers made on the front page of the website (center column).

I just want to say a word about the character of a group of people that unanimously make a decision like that. This is a staff that is facing sharp cuts even with the sacrifices they have taken on. This is a group that knows the meaning of community. They are willing to pull together when times are tough, to try to make things good for our kids and to try to save jobs for our community.

Yesterday marked a high and a low for my 19-year career in education. The low was having to ask a group of hardworking individuals...people who come in early, work late, plan on the weekends, pour their hearts into their work...asking these people to do the same job for less money, fewer benefits, and fewer resources. Our economy put me in a situation where I had to ask if they would be willing, it did not feel good for me...it had to be painful for them. That is a low.

The high came from their answer, their unanimous answer. For the kids, for this community, they are willing to do it. This is no surprise, but it is worthy of great praise and should not be taken for granted. It is a gift to the community, one that cannot be repaid. This is a special place...I am honored to work with these people who are so dedicated to our joint mission.

Karen's Response:

Again, teachers step up to help Oregon kids. There is no question in my mind as to the character of teachers in this district. Many are my friends and many were my co-workers and peers. In the history of Bethel, I have watched and been a part of these constant sacrifices that we as teachers have made over the years to continue to support Bethel kids.

The teachers of this district, and of our state, have been asked time and time again to take a pay freeze, cut our wages, donate time, give back time, come in evenings, attend meetings, pay for classroom supplies, and give back items that have been hard won at the table of negotiations. The amazing thing is that teachers have again made all these sacrifices in the name of what is "best for kids".

I have watched my friends cry over conflict created at the negotiations table to get contractual language that benefits them in the classroom. They have fought for what is right for their peers. These same people then have turned around and helped pass bond measures and supported district events that were in the best interest of Bethel kids.

My question is when does the state pick up the slack and support teachers and truly care about "what is best for kids"? If education is so important, then why are cuts being made to this "important" system? The one thing that all kids of this country have to do is go to school. When then is it not a priority? Other states don't fund their schools like we here in Oregon do. Why do we not change and do what is really "Best for Kids"?

I don't believe that there are many educators that don't believe that early intervention in education would cut down the number of inmates in our prisons? Or how about Talented and Gifted Programs (TAG) for our highly intelligent kids? TAG pullout went by the wayside years ago after Measure 5 cuts. Never to return. Yes, lots of special education programs, but how about emotional interventions and parental education for our troubled youth and special programs for our highly intellectual?

I would like to see Oregon in the forefront of education, not constantly taking a back seat to states who are far more financially superior than us. We should strive to be #1...is there less in life? Isn't that what is best for kids?

The character of Bethel teachers has never been in question, nor will it ever in my mind. Teachers are a special breed of individuals. One would have to be to constantly be giving, giving, giving, to other's children... your children... at the sacrifice of their pay wages and putting food on their own tables when possibly the other contributing financial person in the family may be without a job.

What would encourage teachers to go into this profession in Oregon except their compassion for kids? Many of these recent college graduates and first year teachers will be without jobs in the upcoming years. Will they stay in this profession? Will they leave the state to give their talents to students and developing higher test scores in another state? This district is taking 11 days off the school calendar, asking teachers to take a 6% pay cut, and then asking them to work one day for free. What other job asks for free work?

Yes, the teachers again stepped up to do "what is best for kids". Did they have the choice? No, but will they do it, yes. You stated that "The low was having to ask a group of hardworking individuals...people who come in early, work late, plan on the weekends, pour their hearts into their work...asking these people to do the same job for less money, fewer benefits, and fewer resources." Do the same for less? Now that is really asking a lot.

The question really is "At what point can we not maintain status quo?" Now is as good as time as any.

FYI: This blog was queued for moderation by Bethel School District site administrators and will only be published on their website after approval... now that is really saying a lot.

Karen Church, www.eugenehomesgal.com, here in Lane County Oregon supports changing up your Eugene home space. Whether you are getting ready to sell, buy, or are just sick of that living room arrangement, don't be afraid to "change it up".

First, take a look at how much furniture you have in the room. Too much, too little, or just right? How about your lighting? Bright, dim, or just right? What do you use the room for? Entertaining, reading, socializing with the family? Once you have the answers to these questions, then get a friend, and begin.

Begin by getting rid of all the clutter. Move it out! Sick of that sofa? Move it out! Take the remaining furniture and rearrange it. Borrow a lamp from another room, add an end table, and bring in some baskets for all those magazines. Create a new space out of the old one.

Not sure how to begin, then get the help of a stager. For a minimal fee, the stager will come out and help. She/He may even be willing to go on a shopping spree with you to pick out items that will accent the room that you are recreating. This could be a fun learning experience and you may gain a new friend in the process.

Take before and after pictures to remind yourself of how much you have accomplished. Most importantly, have fun!