Financial Advise

THAT'S THE $64,000 QUESTION....

Most people won't inherit millions of dollars, but according to the AARP, the median amount of today's inheritance is about $64,000. While that's not enough to provide financial security for life, it's still a lot of money and requires careful planning before deciding what to do with it. So therein lays the question — if you receive an inheritance — what should you do?

Step One...Do Nothing: Remember, this is an emotional time. You may have lost a loved one, you're receiving a sizable chunk of money, and your judgment may be clouded by emotion. Rather than make a decision you regret later, take some time to step back and think. In the meantime, put the money in a money market or savings account that will keep it safe, and allow you to access when you're ready.

Check the Tax Laws: Some inheritances are tax free, but some are subject to federal and state taxes. Make sure that you diligently record everything that you inherit and the date that you inherited it. Most important, seek advice from a tax professional before you decide what to do with the inheritance — you don't want to spend money that you don't actually have. And if you need a referral to a great tax pro — just get in touch with me.

Stick to Small Wishes: Many people dream of a vacation home or taking a luxury cruise around the world. Receiving an inheritance may make those dreams seem within reach. Often, however, they're not realistic for your overall lifestyle and budget. So keep the splurging to a small gift for you or your family. Keep the big picture in mind for the rest of the money.

Invest as Usual: Don't gamble your inheritance away on a high-risk investment that doesn't make sense. Instead of thinking of it as “found money” or looking for a big score, treat it like the rest of your investments. Work with a professional advisor to determine which options and risk-level make sense, based on your entire portfolio and future plans — and feel free to contact me for a referral to a great financial pro.

Remember, even a small inheritance deserves careful planning and consideration. This isn't a time to be swayed by emotions. Talk to a professional, make a plan, and stick to it. And if you'd like to talk about your own financial strategies and plans that might allow YOU to leave a great inheritance for your own heirs, just let me know. We can review your own debt structure and financial goals, and work with other great professionals to help make that dream a reality.

Clint Elliott

NewLine Home Mortgage

1400 NW Irving #108

Portland, Or 97209

888-488-5731 toll free

503-548-4014

503-808-9101

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Define "Improvement"

People seem to have the idea that if they put money into their home, they will certainly get it back. That is the right idea but you can't just make ANY improvement and assume it'll make money. In fact, some can actually decrease the value of your home. Money Magazine suggest putting your money in anything but...

Swimming Pools. Obviously states with a hot climate you can't find a house without one. But if you live someplace where a pool is not needed then buyers will completely avoid houses with a pool. If you live in Illinois or Oregon people only see the cost of insurance and maintenance for something you can only use 3 maybe 4 months out of the year. Parents with small kids are particularly wary.

Additions. This too has exceptions but for the most part home additions end up being eye sores. If you really need to add square footage, pay the extra for design that makes it look natural. It needs to seem as if it's always been there. You will get that money returned to you on the back end.

Trendy Finishes. As with clothes, some thing that is hot today people can be making fun of tomorrow. Although it's been said that custom wood paneling on your kitchen appliances to match your cabinets is a trend that should last a while. Generally though, when doing a renovation, sticking to classics is your best bet.

Jacuzzis. This one doesn't seem right but it turns out, not everyone loves giant tubs with jets. What everyone does love is a good shower. If you are throwing money at your bathroom try some of the new fancy shower heads.

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What Do You Want In A Home?

While it seems quite rational to assume buyers are clamoring after the "best" house leaving the others to beg for attention, it doesn't necessarily work that way. That is because not everyone is looking for the same things. In this survey they asked buyers about specific home features and then divided up these people by demographic categories. The features include Central Air, Garage (2 or more spaces), Walk-in Closet in Master Bedroom, Cable or Satellite TV Ready, High-speed Internet Access and Energy Efficient.

74% of buyers in general found Central Air to be the import making it the most attractive feature of the 6. Naturally 91% of the people in the South found it essential while only 41% of buyers in the Northeast.

In the West 66% of home seekers require a garage but in the Northeast, where a lot of people live in big city apartments, only 37%.

Walk-in closets are a very attractive feature now-a-days but more so with those buying brand new homes. People buying older homes are looking for the charm of old architecture, knowing that closets were not big back in the day.

The same goes with Cable or Satellite TV and High-speed Internet, of course people expect that in new homes today, it's a staple.

Homes that are Energy Efficient have become a bigger deal lately with gas prices as the are. Again, those who purchase new homes expect it and those who done this before. A first time buyer hasn't gone through the process of paying utility bills yet so it's the repeat buyers who understand the importance of Energy Efficiency.

Today's Buyer's Rep - November 2007 - Page 5

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Housing Market Will Recover

Experts are saying that the housing market will recover from it's current down turn, unfortunately it is going to get worse before it gets better. There is just too much inventory right now so when those homes start to sell off, in 2009, the market will start to perk back up. Therefore, 2008 is going to be a rough one.

Economist Jerry Johnson expects sales will be off 15 to 20 percent and the new housing construction 20 percent. People keep moving to Portland but job growth is plateauing. There is still extra inventory which will take quite some time to get rid of.

Expect to see a decline in house prices in 2008. If ever there was a time to consider a career other than real estate, now would be it. Yet economists still think we'll make it to 2009 without a recession.

Oregonian, Ryan Frank

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Portland Street Naming History

Before 1913 North Interstate Avenue was called North Patton Avenue after Matthew Patton. Matthew Patton's family owned land in the West Hills and North Portland but then the street was connected to a new bridge over the Columbia River. I guess the City Council felt that a name change was in order.

Once upon a time there were three cities called Portland, East Portland and Albina. In 1891 these cities were combined to make Portland forcing The Great Renaming. Over the years after Portland became one big city, Eastside Portlanders became resentful that their streets started with "east" while West Portland streets had no directional description. So in 1933 all the streets were given the N, NW, SW, SE and SW declaration.

German sounding names were changed during World War I, like Frederick which was named after Frederick the Great, King of Prussia. It was decided that it sounded better as Pershing in honor of the general who was leading the Americans.

MLK Jr. Blvd used to be Union Avenue but in 1989 Martin Luther King Junior needed to be recognized.

Part of Front Ave was changed to Naito Parkway the year Bill Naito died, 1996. Bill was a developer and civic leader whose company was on Naito Parkway along with the Japanese-American Historic Plaza.

Last year marked the death of Rosa Parks who has long been known as one of the great Civil Rights leaders. In her honor North Portland Boulevard was renamed Rosa Parks Way.

Source: Eugene Snyder's book, "Portland Street Names and Neighborhoods" for the early history

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October Market Report

October Residential Highlights

October’s statistics show similar patterns to September, as the number of transactions continue to drop and sale prices continue to see appreciation. The number of closed sales fell 25.5% and pending sales declined 22% However, the number of new listings dropped for the first time since February of 2006, decreasing 5.1% this month when comparing October of this year with October 2006. At the month’s rate of sales, the 15,567 active residential properties would last approximately 8.4 months.

Appreciation

Using the average sale prices for the twelve months that ended with October 2007 compared to the twelve months ending in October 2006, the average sale price appreciated 6.7% ($339,300 v. $318,100). Using the same formula, the median sale price also appreciated 7.3% ($287,500 v. $267,900).

Year-to-Date Trends

When comparing the period of January 2007 through October 2007 to the same time a year ago, pending sales have decreased 13.9% and closed sales declined 11.3%. New listings, on the other hand, are up 8.8%.

Affordability

After its lowest reported rate of 88% in July, affordability improved to 94% in September carried by lower interest rates and a lower median sales price. This means that a family living in the Portland Metro area making the median income ($63,800 per HUD) cannot afford to purchase a median priced home in the area ($283,500 in September). According to the NAR formula, a median income family can only afford 94% of a monthly mortgage payment with 20% down and a 30-year fixed rate (6.38%, according to Freddie Mac). For more information, see graph and notes on last page.

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No Slump in Salem Market!

SALEM, Oregon isn't the hippest town around but medium sized cities like Wenatchee, Washington and Provo-Orem, Utah still have quite active real estate markets. There are plenty of homes on the market and the prices haven't nose-dived like in much of the country. In fact housing prices are growing at double-digit rates according to a recent federal study.

Many of these towns are still showing population growth due to things like proximity to nature, main freeways and more major cities. Most of them were not even a part of the original housing boom so they didn't have any where to go but up. The Pacific Northwest in particular was slow to catch on to the extreme home appreciation which might be why it's not being hit as hard now.

"Fifteen out of 20 metropolitan areas with the highest rates of home appreciation in the country were in Washington, Idaho, Utah, Oregon, Colorado or New Mexico, according to the federal study, which looked at markets with at least 15,000 transactions over the last 10 years." Associated Press

Oregon itself had 10.77 percent growth in home prices while the whole country averaged only 0.5 percent. Salem alone reached 13.4 percent from the being of 2006 to the beginning of this year. The state capitol continues to see rising prices because it goes overlooked so there are still bargains to be found.

That's not to say that it can't or won't happen here too, we just won't be taking the brunt of the force. It's always best to be prepared because our market will be effected. If you have the resources and time to spare, now is the time to buy.

http://www.kgw.com/lifestyle/stories/kgw_071907_business_salem_housing.8f345382.html

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