Real estate brokers talk potential changes in rates for investment property purchases | News
Two real estate brokers weigh-in on the current Cannon Beach market.
“I think the new story is what Fannie/Freddie just announced about the change in rates to second homes and investment homes,” said Maryann Sinkler, broker for Realty ONE Group Prestige in Cannon Beach. “Given that our market is exactly that, if these changes are implemented, it could really have an impact here!”
“Fannie Mae and Freddie Mac are being required to lower the percentage of their portfolio taken up by second homes and investment property financing,” Sinkler told The Gazette.
“I just received another email from a lender saying that Fannie Mae and Freddie Mac are limiting the number of second home and investment property loans they take on, effective immediately,” she said. “My assumption based on that, is we’ll see a rate increase on those types of purchases. The lenders I work with are saying it’s possible qualifying for these types of loans may become a little more difficult.”
Cheryl Johnson, broker for Realty ONE Group Prestige, said: “When rates increase it absolutely impacts the ability of buyers to purchase as their purchasing power goes down. In spite of the increase in rates for 2nd home buyers, with inventory at record lows, I anticipate demand to continue to outpace supply in Cannon Beach as well as the entire North Coast for the foreseeable future. It’s a seller’s market.”
Both brokers discuss the low housing inventory.
“Lack of inventory isn’t a new story, but it is definitely our reality at the moment!” Sinkler said. “I’m personally selling more land as people have run out of homes to purchase. I have several new listings ‘getting ready’ to come to market and have been wondering if everyone else does too – if so, maybe the market will change in the next few months, depending on how many buyers are in queue..”
Johnson said people are “flocking to the Oregon Coast” to buy property.
“People are moving in from all over…most from (the) western US such as California, Idaho, Montana, Nevada, Arizona,” she said.
“We are seeing a lot of people that now have the ability to work remotely and perhaps commute to Portland once a week rather than having to go into a Portland office on a daily basis, or people who fly out as needed for work but otherwise based at home,” she added.
She said Cannon Beach is a place where few buy out of necessity. “In general jobs don’t drive people to buy real estate in Cannon Beach.”
She said low interest rates, builders’ inability to keep up with demand for new housing and COVID-19’s effect on the home construction industry have all contributed to the low inventory of homes for sale.
“The other thing that is happening is locals that want to sell yet stay local are holding off,” she said. “Maybe they want to upgrade or downsize or simply move from Tolovana closer to downtown Cannon Beach. If they plan to stay local and without assurance of being able to secure a replacement property, they (may) avoid putting their place up for sale rather they sit tight in a holding pattern waiting for more inventory to appear.
“We are also seeing more off-market real estate activity through local connections and word of mouth — properties that never make it to the MLS or properties that are already under contract by the time they officially hit the MLS. This is where a well-connected local agent can be indispensable working behind the scenes finding properties that are not publicly for sale.
“Like Maryann has observed, people are more open to buying land or contracting with a builder to buy the land and future home as a package. There has never been a better time for new construction, although land is hard to come by in Cannon Beach. Buyers are finding more options outside of Cannon Beach both north and south of Cannon Beach. Even if the completion date for that new home is 6-9 months in the future, it is an opportunity for buyers to lock in the price now.
“My background is in new construction. I am a resource for buyers who are interested in learning about new construction in the works, even before ground is broken on the North Coast. By the time something is nearing completion, it may be too late. For buyers that need to sell in order to buy, new construction might be the answer. With a solid game plan and cooperation from a builder, it can be done in a properly timed coordinated effort.”
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