Nick Krautter

The city along with state and federal agencies have a created a new program called the Neighborhood Stabilization Program. With federal and state Neighborhood Stabilization Program funding, the program will help homebuyers purchase a home of their own by providing them a silent second mortgage of up to $50,000 for down payment, closing costs and home repairs. This new money is not yet available but the expectation is that by October these loans will be available to buyers.

The secondary loan does not accrue interest and does not require monthly payments. The program does have a declining five-year share of appreciation provision to encourage longer-term ownership and requires the borrowers to occupy the homes for the life of the loan.

Eligible properties are limited to foreclosed properties in specific target areas located in Fairview, Portland, and Troutdale
MAP HERE

Program details HERE

www.sellpdx.com

This morning on my guest spot as the real estate expert on KXL-AM I spoke about my instinct that there is a coming storm for first time buyers or anyone buying in the under $300,000 price range.

1. I think the first time home buyer tax credit will NOT be extended. Right now you have to be in title by December 1st, 2009 [that's this year folks!]. Considering loans are taking longer to fund you're looking at 45 days on average from acceptance to closing. That math means that you need to find your place by the first week or October - that's coming up very quickly.

2. Inventory under $300,000 and especially under $250,000 is already around 2 months in Portland. For perspective, 2 months of inventory is an absolute sellers market and this is the amount of inventory we had at the height of the real estate hysteria. So if you want to know what it's like to be a first time buyer think back to multiple offers on the first weekend. It just happened to 3 of my clients in the last week. I'm very comfortable with multiple offers and I can almost always help my clients win them if they really want the home.

3. Interest rates this time last year were roughly 6.5%, right now they're 5.4% - that means you have 10% more buying power right now. Interest rates will not likely go any lower but they certainly can go up. For every one percent interest rates go up you lose 10% of your buying power.

We are in the midst of an unbelievable time of opportunity. If you or anyone you know is thinking of buying please let me know so I can help you find a home before this opportunity passes.

www.sellpdx.com

The USDA loan program is a fantastic option for buyers in rural areas that allows 102% financing. Last week the USDA added 9 areas to their list of qualified locations. There are income limits but the rates are competitive.

Newly eligible areas: Altamont, Coos Bay, Cornelius, Forest Grove, Klamath Falls, North Bend, Roseburg, Wilsonville, and Woodburn

Previously these communities were improperly classified as ineligible, on the basis they were "too large in population or not rural in character". The Acting State Director has determined these nine communities to be eligible rural areas based upon our review findings and recommendations.

Eligibilty map and address look-up. [the map is not yet updated to included the above areas but is otherwise accurate]

FIRST TIME HOME BUYERS SEMINAR

Hosted by Nick Krautter of Keller Williams Realty, James Adair of Mortgage Trust and Grant Folske of RF Associates LLC.

If you've been thinking about buying a home for the first time and don't know where to start then don't miss this seminar. Did you know that qualified first time buyers can now use their $8,000 tax credit as a downpayment??? More info here

When: Saturday May 23rd from 11-1pm.
Where: 700 NE Multnomah 3rd Floor

James, Grant and I will be talking about:

- The home buying process

- The benefits of home ownership,

- Tax credits

- Getting a loan

- And much more

Please click here to RSVP

Don't miss a great opportunity to learn from local experts about buying a home. Refreshments and snacks will be provided.

With all the news about the economy and residential real estate I'm sure many people are wondering what is happening with commercial real estate. Commercial is broken up into different sectors: Office, Retail, Industrial, Multifamily.

First the good news:
Multifamily: Peaked in 2008 locally with investors able to get low interest rates and sellers being able to sell at a low CAP rate and therefore a high sales price. This sector is still strong but investors are looking for higher CAP rates and therefore lower prices since rents are flat now.

Industrial: Is experiencing more vacancy due to continued off-shoring of manufacturing jobs and less consumption at home.

Office: locally is hanging in right under 13% vacancy which is keeping things in a range many would describe as balanced. That being said, many land lords are more likely to negotiate the rate and terms of leases and some are having to hold rates even if they have scheduled bumps.

Retail: This is the most visable sector and also one of the harder hit areas. With consumers spending less on everything many non-essential retailers had to shut their doors in 2008 and 2009. This opens an opportunity for new businesses with lower lease rates and better terms.

The bad news: A little something called Maturity Defaults. What is a Maturity Default you ask? The problem is that unlike home loans which are generally fixed for 30 years commercial loans are usually amortized for 30 years but DUE in 5-10 years. This means that you need to refinance every 5-10 years and with lending getting tighter, vacancy going up, business revenue down this is creating a problem. We are going to have many cases of businesses nad investors that paid on time, have equity and are not going to be able to get a new loan. This issue is called a "Maturity Default." For a fantastic article with graphs and info check out Bill Connerly's blog Businomics.