Nick Krautter

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.

There are a lot of good deals, government incentives, and low interest rates out there. So what are the top five things you need to know when buying a home?
1. There are a ton of homes available, how do you narrow the search?
- Make your top 5 list: price?, location?, size?, number of beds/baths?, schools?
2. Can you still get a loan?
- Yes, there are still loans but credit is important, with FHA you only need 3.5% down – Get preapproved by your bank or mortgage broker. Lending is one of the most volatile parts of the process so make sure you have a current pre-approval even if you got one a few months ago.
3. What is the best way to look for homes?
- Set up an online search, , interview realtors [You can skip this part by just calling me 503.901.8100], look at your favorites in person with your realtor.
4. What kind of offer should you make?
- Make a fair offer, under $300,000 is very competitive right now and many homes have multiple offers, $300,000-$500,000 is less competitive, over $500,000 usually has more room to negotiate. Keep in mind that most homes sell for 95-97% of list price.
5. What do you do once the offer is accepted?
a. Have your inspections: home, sewer, oil tank search/samples, radon.
b. Negotiate any repairs or credits
c. Appraisal
d. Sign, Close and move in!
For my detailed buyers guide just click here or call me

Here are my top 5 tips to sell your house in 2009.

1. Condition: Your home has to look good from the street and make sure the entry to your home is spotless. Even with a limited budget you can clean up and de-clutter your home.
2. Price: depending on where you live the market is flat or down. You need to price in front of your competition.
3. Marketing: Listings with video and photo tours get 40% more views. All my listings have HD video tours. Make sure the home is featured on listing syndicators and on blogs and in the RMLS. Open houses and Brokers opens are a great way to get people in the door and get good feedback.
4. Availabilty: Vacant is the easiest to show, Call 1st makes sense if you still live in the home, Appointment Only will mean less showings so only do this if you have to.
5. Willingness to Negotiate: First time buyers are going to need help with closing costs and will want all the appliances. Don't kill a deal over a washer and dryer.

Getting real: If you want to sell for a price that isn't realistic in this market then you need to rent out your home or stay put for a while but make sure you're getting the opinion of a realtor before you make that choice.

When you want the best info on the market here in Portland the PSU Quarterly Report is the place to go. Skip to page 48 for the residential report or read the whole thing.

Report Here