According to RMLS, "market activity in August showed forward progress compared to August of last year but a decline in activity from last month". Pending sales are up city-wide to a tune of 13% and closed sales 4% compared to August of 2008. This is highly driven by the low interest rates that are still available and the $8000.00 tax credit for First-Time Buyers. Houses at price points below $350K are overwhelmingly competing in a Seller's Market. Yes, you heard me correctly...a Seller's Market. Buyers are plentiful at these price points, prices are as low as they will go, and sellers are receiving multiple offers on properties if they are priced near the average sold sales price in the area. This phenomenon is occurring across the board in NE, SE, SW, NW, N Portland, Lake Oswego and Beaverton.
The Average Sales Price on properties, however, has dropped 10% in Portland since August of last year. This is still leading to longer market times for properties and sellers that are just slightly overpriced. There is just too much inventory on the market for a buyer to overpay.
On a positive note, we are finally seeing the Average Sales Price of properties increase on a month to month basis. We had a 2.7% increase in Average Sales Price throughout the city since July. We have reached the bottom in my opinion, but it will be a long, slow ride until we are seeing prices from even a few years ago. Economists are predicting a flat market (pricing) throughout 2010 and a cautious increase in housing prices by the third or fourth quarter.
January’s stats just came out, and it’s not surprising that things are slow in the market. Despite the fantastic buyer’s market that we are experiencing, we are missing one important ingredient: Buyers! That statement is not entirely accurate, because the market seems to be picking up. Now, we have a lot of inventory and not enough buyers. Last month, we had an increase in the number of pending sales (52% vs. December), yet we had over 120% increase in new listings. Therefore, our inventory has increased, despite the increase in “prospective” buyers. And, of the 4196 pending sales, only 732 (or less than 1 in 6) actually closed. This is a significant number...what happened?
Loans are harder to come by and people are worried about losing jobs. It’s as simple as that. At a time when traditional buyers should be able to purchase a home, they just can’t find the loan or the job security to do it. We will continue to see small percentages of closed homes while consumer confidence is low and while banks are afraid of lending.
On a positive note, we aren’t hurting as much as most of the country. MSNBC again rated Portland, OR as one of the top 5 Real Estate Markets in the country along with San Diego, Washington DC, New York, and Charlotte.
If the bailout works, and lenders free up credit, I would expect to see a higher percentage of these pending sales close. This would, of course, lower our inventory and make sellers a lot happier
Folks, it is a wonderful time to buy a home in Portland, OR. Whether it is your first home, second home, or even an investment property, you will rarely find a market better than our current market. Interest rates are in the 5% range for 30-yr fixed loans, prices have dropped, and there are a lot of homes on the market.
According to RMLS, we have 14.1 months of inventory at our current rate of sales, and sales have fallen by over 30% from December 2007 to December 2008. This means that sellers must be very competitive in their pricing, and the condition of the home must be ideal. I see many sellers that have homes sitting on the market because they aren't prepared to price competitively or make changes to the condition of their home. So in a sense, the inventory number of 14.1 is misleading because some of these homes just aren't in the game. We have an interesting dilemma from my perspective. Buyers have a fantastic position in the market, but are tentative because of the current economic situation. Sellers want to sell, but some can't adjust prices because they might end up losing any equity that they have in their home. The best way to sell is to get your home in great condition, and price it near or below comparable properties. It simply has to be the most enticing home on the block!
As of right now, only West Portland has seen an increase in home prices (1.9%) from the last 12 months compared to the previous 12 months (December 2006 to 2007), and I am confident that will disappear next month. So what do we do? Well... if you sell high, you are going to buy high. Conversely, if you sell low, you are going to buy low. There are still plenty of opportunities and strategies to do well in this market, you just need to look at the numbers and get the right advice!
This last week we have had some difficult weather here in Portland, Or. It's pretty well-known that we have a lot of precipitation, but its generally not the white, fluffy kind. We got about 10-12 inches of snow, depending on where you live in town. I live in SE, near Hawthorne, and we had about a foot. I can imagine that King's Heights or Forest Heights had it much worse, and I'm currently working with clients on a purchase in Lake Oswego, so I know they had some dangerous roads.
The point, however, is that there are certain responsibilities that are unknown for residents of the city, and the inclement weather highlighted those responsibilities. There was actually an Oregonian article the other day referencing the fact that residents are responsible for shoveling their sidewalks and/or keeping their walkways clear. Any person that were to slip on the sidewalk, would have grounds for a lawsuit if the owner had not fulfilled their responsibility of clearing the walk with in 4 days of the event.
Another reason that I write this post is that residents need to be aware of city regulations concerning trees and debris on their walkways. I have plenty of questions regarding this when my buyers are looking at homes. We have plenty of beautiful, old trees in the city, and sometimes their roots can grow under the sidewalks and "lift" the concrete. This is the responsibility of the homeowner, and may be an expense in the future, either legally or through repair costs.
Last year around this time I posted about the "wine press" that has just ended here in Oregon. For those of you that like wine, you've definitely heard of Napa and Sonoma. However, the Willamette Valley has been producing wonderful wines for a few decades now. Surrounding the sleepy town of Dundee, there
are a few sporadic neighborhoods and plenty of grapes. Every Fall, these grapes are harvested and pressed into juice to be stored and produced into top quality wines. Pinot Noir is the most celebrated grape in the Willamette Valley, but the winemakers here are growing plenty of other varietals. The "press" is what the winemakers call this time of year, and they are raging about this years harvest.
Visiting the town of Dundee and the many vineyards is easy. Most vineyards have tasting rooms where you can taste, often for free. This isn't like Sonoma or Napa, where you spend a pretty penny to taste. Most tastings are free or minimal in cost. Real Estate has heated up in the last few years in this area because of its proximity to Portland (45 minutes). People are buying farms or land with the intent to spend some time relaxing, or even to test their hands at growing grapes.
Living in Portland...one hour to the mountain, one and a half hours to the beach, 45 minutes to fantastic wine!
Serving Portland, Oregon and the surrounding communities including Milwaukie, Oregon City, West Linn, Lake Oswego, Beaverton, Tigard, and Hillsboro. Investors, First-Time Buyers or experienced buyers
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