A quick review of 97223 and 97224 Real Estate Market Data for the month of November 2018.

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David brings us a historic look at Portland home values year over year.

Selling costs: “You can deduct any costs associated with selling the home—including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville Center, NY.

Home improvements and repairs: Some renovations done to make a home more marketable for resale may be eligible for a tax break. “If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” says Zimmelman.

Property taxes: You can deduct the amount you paid in property taxes for the time you owned the home. This has been capped at $10,000 in total deductions, starting in 2018, however.

Mortgage interest: You can deduct the interest on your mortgage for the amount of time you owned the home. Starting in 2018, new homeowners and sellers can deduct the interest on up to $750,000 of mortgage debt. Homeowners who had a mortgage prior to Dec. 15, 2017, can continue to deduct up to $1 million under the old law, Zimmelman says.

And don’t forget a tax exclusion still available to home sellers on capital gains. Capital gains are your profits from selling a home. Those profits are taxed as income, but you can exclude up to $250,000 of the capital gains from the sale if you’re single and up to $500,000 if filing as a married couple. To be eligible, you must have lived in your home at least two of the past five years.

Source: “5 Sweet Tax Deductions When Selling a Home: Did You Take Them All?” realtor.com® (March 8, 2018)

The report, which is based on a survey NAR mailed out to a random, though geographically weighted, sample of 145,800 recent home buyers last year, was released Wednesday. The respondents had to have purchased a home between July 2016 and June 2017, and provided information about their experiences during that 12-month period. Learn more about the survey here.

The study confirms trends that have been developing over the past few years, such as low inventory, rising prices, and the long-awaited entrance of millennials into the housing market.

“REALTORS® throughout the country have noticed both the notable upturn in buyer interest from young adults over the past year and the mounting frustration once they begin actively searching for a home to buy,” says NAR Chief Economist Lawrence Yun. “Prices keep rising for the limited number of listings on the market they can afford, which is creating stark competition, speedy price growth, and the need to save more in order to buy.”

However, the report also turned up a few unexpected data points. Here are five tidbits from the report that might surprise you.

Millennials’ first steps aren’t what you’d imagine. The stereotype that younger buyers are more likely than their older counterparts to head straight to the internet to initiate the home buying journey isn’t necessarily borne out in the data. While 40 percent of buyers aged 37 years and younger listed their first step in process as “looked online for properties for sale,” that same metric was 46 percent for ages 38 to 52 and 48 percent for ages 53 to 71. Fifteen percent of millennial buyers said their first move was to call a real estate agent.

Tech expectations may be flipping. While you might be planning on beefing up the tech offerings for your listings or creating your own brokerage app to appeal to millennials, such infrastructure might be more important to older buyers. Of all the age groups the Generational Trends study surveyed, virtual tours were most important to buyers between the age of 53 and 71. Only 43 percent of millennials ranked virtual tours as “very useful” in their home search, making them the least interested of all generations in the study. And older buyers are increasingly relying on mobile; more buyers age 63 to 71 found their agent through a mobile app than any other group. Finally, only 42 percent of millennials ranked technology as a very important skill for an agent to possess, lower than all other age groups.

A holding trend? Following years of move-up buyers mostly staying put, it seems those who bought homes between July 2016 and June 2017 are planning to stay even longer. Their expected tenure in homes has increased three full years from last year’s results, to a median of 15 years. Of course, this varies with age: For buyers 37 years and younger, the expected length of time in the home they’ve just bought is only 10 years, compared to 20 years for buyers aged 53 to 62.

Diversity permeates older groups, too: The 38 to 52 age group turned out to be the most racially diverse group of home buyers in 2017, with the most respondents of any group choosing ethnicities other than White/Caucasian. Also, the study found only 4 percent of buyers 37 and younger identified as gay, lesbian, or bisexual, while that number was 5 percent for buyers aged 38 to 62.

Millennials less mobile? The notion that young people are more willing to take a chance and move to a brand-new area doesn’t seem to hold up in the data. Buyers age 63 to 71 actually moved the farthest, typically choosing a new home at a median distance of 30 miles from their previous residence. For buyers age 37 and younger, the median was 10 miles.

—Meg White, REALTOR® Magazine

The bulk of buyers’ down payments came from their personal savings, but a fraction also came from the sales proceeds of a previous residence or assistance from family or friends. Among first-time buyers, 61 percent made an average down payment of zero percent to 6 percent, according to the November 2017 REALTORS® Confidence Index Survey.

Source: “61 Percent of First-Time Buyers Made a Low Downpayment in November 2017,” National Association of REALTORS® Economists’ Outlook blog (Jan. 2, 2018)

Mortgage rates typically follow the Treasury yield. The federal funds rate sets the stage for the path mortgages will take. The Mortgage Bankers Association forecasts that mortgage rates will go up, but will stay below 5 percent.

“The Federal Reserve has begun reducing its holdings of Treasury securities and mortgage-backed securities, and this will put additional, modest upward pressure on mortgage rates,” said the MBA’s Chief Economist Mike Fratantoni. “We expect that the 10-year Treasury rate will stay below 3 percent through the end of 2018, and 30-year mortgage rates will stay below 5 percent.”

According to the MBA’s predictions, rates will increase to 4.6 percent in 2018, 5 percent in 2019, and 5.3 percent in 2020. The National Association of REALTORS® predicts rates to end the year at 4.5 percent, while realtor.com® expects mortgage rates to average 4.6 percent throughout the year and hit 5 percent by the year’s end.

Source: “Mortgage rates to increase past 4.5% in 2018,” HousingWire (January 3, 2018)

In Fannie Mae’s latest Home Purchase Sentiment Index, the share of respondents who say now is a good time to buy a home increased 7 percentage points from October to November. The share of respondents who say now is a good time to sell a home rose 4 percentage points and is up 21 percentage points year over year. Americans also expressed a greater sense of job security, which tends to bode well for housing in the long-term. Overall, Fannie Mae’s housing index in November neared its all-time high, which was set in September.

“These results are consistent with our expectation that the housing market will continue its modest expansion going forward,” says Doug Duncan, Fannie Mae’s chief economist. However, Duncan cautions that “next month’s survey should offer the public a first look at the influence that potential tax reform may have on consumers’ views toward housing and the broader economy.”

Here is a snapshot of Fannie Mae’s 2017 Home Purchase Sentiment Index results from November, based on a survey of about 1,000 consumers on their home buying and selling attitudes.

• 29 percent: The net share of Americans who say it is a good time to buy a home, a 7 percentage point increase month over month. The uptick also erased last month’s 6 percentage point decrease.
• 34 percent: The net percentage of those who say it is a good time to sell a home rose by 4 percentage points.
• 46 percent: The net share of Americans who say that home prices will rise increased 6 percentage points in November.
• 74 percent: The net share of Americans who say they are not concerned about losing their job increased 4 percentage points.
• 14 percent: The net share of Americans who say their household income is significantly higher than it was 12 months ago, which remains unchanged from October.

Source: Fannie Mae

Some home buyers are drawn to the smallest home on the block. A new survey by Houzz, a home remodeling and design website, sought to find out why these homeowners prefer residences that are often 1,000 square feet or less.

Homeowners of small homes say relaxing and keeping the space clean is “easy” in a small home, according to the survey, which was based on 216 respondents who say they live in a small home.

Homeowners also say there are many layout and decor options to utilize to make your home not feel so small. The most popular characteristics of small home interiors are lots of natural light and easy access to the outdoors, according to respondents.

The outdoor space is important—thirty percent of respondents said they renovate outdoor space to extend the size of their living area.

Also, 26 percent say they created an open floor plan in their small home to maximize the space within it.

However, the most difficult aspects of owning a small home, according to respondents, are having enough storage, hosting visitors, and having enough space for crafts and cooking projects.

Source: “2017 U.S. Houzz Small Home Trends,” Houzz (Dec. 6, 2017)

Engineered hardwood floors are made up of layers: the top and bottom layers are natural wood, but the middle contains a core of plywood. It’s known to be a more quick, fuss-free installation than solid hardwood.

Hardwood has become the most popular flooring in new-home kitchens, according to Home Innovation Research Labs. Hardwood floors—both solid and engineered—have increased from 11 percent of all flooring in new single-family homes to 31 percent over the past 12 years.

Other flooring types are decreasing in popularity. For example, ceramic tile has posted a slower growth rate from 15 percent to 21 percent over the last 12 years.

Hardwood flooring represents 65 percent of all flooring installed in new-home dining rooms, half of all flooring in living rooms, and about 45 percent of all flooring installed in kitchens, BUILDER reports on the study.

Hardwood of all types has grown in popularity in all areas of the home, except for the bedroom and bathroom. Carpeting remains the champ in bedrooms.

Source: “Engineered Hardwood Is Top Flooring Pick,” BUILDER (Dec. 6, 2017)