The new year has seen a notable uptick in buyer activity, with the low mortgage rates being the primary motivator for homebuyers to enter the market. Inventory in the Portland Metro area, however, has remained quite low, particularly with regard to detached single-family homes. The high demand and persistently low supply has meant the continued prevalence of multiple offer situations on well-priced listings, which means that many buyers have felt it’s difficult to find a “deal.”
Rarely, however, buyers might encounter a listing where the price is so low that it seems like a deal is finally available. Unfortunately, this is a strategy by a handful of listing agents to attract a disproportionate amount of attention to their listing and potentially pick up a few buyers as a byproduct of the auction-like chaos this low pricing can create. While this strategy is advantageous for a listing agent, it’s often a disservice to everyone else. Their sellers have to sift through dozens of offers before arriving at the offer that nets them the appropriate value (which they would have received, with far less fuss, from a more accurate list price); buyers’ agents struggle to carve out private tours for their buyers to view the home due to the overwhelming interest; and buyers themselves are the most disadvantaged, as they have to contend with a tide of competing buyers and are often discouraged by their low odds in this offer environment.
All that is to say: if you see a list price that seems too good to be true, it probably is! Do keep in mind that this an uncommon pricing strategy, and there are good houses available for buyers of all profiles; however, I have had to work with a few buyers through the offer process on these underpriced listings, so it’s something where I wanted to provide any counsel I can. If you have any questions about a home’s value – or appropriate listing strategy – feel free to reach out! I am happy to provide any and all advice I can.
With the beginning of 2019 showing signs that we may begin to see a well needed increase in listing inventory, the year wrapped up with some of our tightest inventory numbers we’ve seen since March 2018. What’s driving these low numbers? Well, we had fewer new listings the last quarter of 2019, combined with first time buyer jumping in to take advantage of the incredibly low interest rates. If the first few weeks of 2020 are any indicator, the entry-level market is going to continue to stay hyperactive in the immediate months ahead. On a good note, appreciation is projected to continue at a healthy 1-2.5% annual growth for the coming 12 months, with the lower end seeing greater appreciation, and luxury market and condo markets seeing some flattening or price corrections. See the latest statistics HERE.
With tax season upon us, if you, friends, or family have questions about the local real estate market and where we are headed, I’d be more than happy to provide helpful insights and advice!
One lesser-known mandatory element of any home sale is having smoke alarms and carbon monoxide detectors fully compliant with local codes. We’ve included the link to the Oregon Fire Marshal page on smoke alarm and CO detector requirements below. To summarize: smoke detectors are to be installed on each level of the house and in every sleeping room. Carbon monoxide detectors are to be installed on each level of a home that contains a bedroom, either within each bedroom or within 15 feet outside every bedroom door.
A home inspector will “call out” – e.g., identify the need for updating and correction – a smoke alarm or CO detector older than 10 years. If your alarms are older than that recommendation, it is something to be cognizant of should you want your alarms to remain compatible with current codes.
An additional recommendation is to pursue the installation of 10 year lithium batteries within your alarms. At this point they are very affordable – under $10 – and their longevity negates the need to deal with frequently beeping smoke alarms!
See HERE for the aforementioned link to the fire marshal page, and we hope you have a happy New Year!
It’s November, which means it’s time for Oregon residents to get their property tax bills for the year. When I assist buyers in finding a house, they often notice property tax discrepancies in otherwise-comparable properties, which can sometimes be the differentiating factor in making a decision on a home. Since it’s the season for property taxes, I thought it might be helpful to pull back the curtain a little on how the tax assessor calculates property taxes.
If you are in Multnomah County, these two articles – delving into how the tax bill is calculated (HERE) and frequently asked questions (HERE) – have been illuminating for me in terms of parsing through some of the idiosyncrasies of the Multnomah County tax code. Clackamas County has this online PDF as a useful resource (HERE), while Washington County’s main site is HERE.
For all three counties, Oregon’s Measure 5 (passed in 1990) and Measure 50 (passed in 1997) have been the two main legislative apparatuses that have influenced the state tax code. Measure 5 caps property tax calculation for real market value by $15 for every $1000 the home is worth. Measure 50 established “maximum assessed value” by setting its baseline of a home’s 1995 real market value less 10% (for every home built before 1995) and capping increases for maximum assessed value at 3% per year. Homes newer than 1995 have their value calculated by the city assessor, using their formula, but retain the 3% increase. Please keep in mind the 3% cap does not include local bonds and initiatives that may be passed by voters.
There are exceptions for that 3% increase, and some of these are especially germane to buyers and sellers. These exceptions include:
- New construction or additions of more than $10,000 in a year or $25,000 over five years.
- Remodeling or rehabilitation for the same amounts as the above item.
- Partitions or rezoning.
- Discovery of omitted property (this is especially notable for buyers who may be thinking of purchasing a home with unpermitted work, as an appraisal can turn up omitted property).
- Disqualification from past exemptions.
I tried to streamline this as best I could, but the tax code does remain extremely hard to parse. If you have any questions or input, let me know, and hopefully we can discover the answers together!
The end of October is already ushering in winter temperatures, with overnight lows forecasted to fall at or below freezing for several evenings this week. To combat freezing temperatures, preemptively winterizing external plumbing can help avoid frozen pipes.
Hose bibs are the most universal outdoor plumbing element and can be winterized by disconnecting hoses, turning off water supply to the individual hose bibs, and draining the remaining water in the pipes by running the faucets until the water flow ceases. Insulation sleeves can also be placed over the hose bibs to provide additional protection.
Sprinkler systems also require winterization. Conceptually, this is a similar process to the hose bibs, as the first step is to shut off the water supply to the irrigation system and drain and water left over in the pipes. It’s also worth noting what sort of automatic controls the sprinkler system has set up so you can temporarily disable them while the sprinklers are winterized.
If you’re leaving your home vacant for an extended period of time during the winter, it’s important in that instance to perform winterization on interior plumbing by shutting off water to the home, emptying out existing water in the pipes, and adding antifreeze to any water that is unable to be fully drained, e.g in a toilet bowl/tank.
We hope these tips help avoid any burst or frozen pipes as we move into the holidays!
With rates staying low and propping up purchasing power and affordability, we are seeing a lot of first time homebuyers entering the marketplace. As real estate agents, we’ve made a concerted effort to walk first time buyers through the purchasing process, but it’s also important for those new homeowners to be prepared for the actual ownership portion of the process. With that in mind, we’ve included a few tips below for new homeowners.
- Know where all your utility shut-offs are. If there’s a leak in the plumbing system or gas appliances, it’s important to know where the utility can be shut off the offending system and get a professional technician to address the issue.
- Make sure all utilities are in your name as of the closing date and auto-pay has been set up wherever possible. If you are curious as to your utility providers, the escrow company you used should know that information. Portlandmaps.com, if you are in the City of Portland, also has said info.
- Find the periodic maintenance projects specific to your home and make sure those are addressed regularly. Some homes have gutters that need recurrent cleaning to prevent water from building up and potentially entering the crawlspace or basement. Others have siding joints that require occasional caulking to ensure they are secured against the weather. Usually, your home inspection report will have made note of these items, but inspectors can also come to a house and provide a “punch list” of items.
There are a myriad of responsibilities involved in home ownership, but this is a good start and we hope it’s helpful!
As of Tuesday 10/1, Multnomah County’s seasonal wood smoke restrictions have taken effect. These restrictions forbid homes and businesses from burning wood on days with already-poor air quality, and these limitations will last for the next six months.
The ordinance was passed in February 2018 and is meant to counteract the deleterious effects wood-burning particles can have on air quality. There are exemptions for low-income families, households whose only heat source is a wood-burning stove/fireplace, and homes and restaurants that use wood to cook.
Last year had two no-burn days on the schedule and no fines were issued to offending households – although warning letters were dispensed by the county – but this year Multnomah County seems more intent on leveraging these prescribed fines.
The entire article on this subject can be found HERE, while the county’s website for daily air quality is located HERE. I love a good fire during the colder months, so I’ll certainly be keeping an eye on their updates!
Every month the RMLS publishes its Market Action, which highlight’s the previous month’s real estate trends and compares them with year-over-year trends. The full report can be found HERE. For March 2019, the trends display a cooler market than in March 2018, but a warmer market when compared to the previous months. While months inventory has risen since March 2018, it has fallen to start the new year, indicating homes still moving rapidly. Appreciation over the last 12 months has seen a 3.9% increase in median sales price.
This data seems to reinforce the anecdotal impression that we are hitting more of a “plateau” in the market following the last five years of torrid growth. That being said, with rates still low and people still moving to Portland, there is little expectation of the market declining; rather, appreciation is instead forecasted to continue at a slower rate.
Feel free to ask any for any additional info or data if you have questions!
Matthew Gardner, Windermere’s Chief Economist, has published his report reviewing market conditions and trends from the fourth quarter of 2018. The full report can be found HERE; in it, Matt mentions that job growth has continued, if at a slightly slower rate. Similarly, home prices have also continued to appreciate, albeit at a slower rate than over the past few years, and fourth quarter activity waned in comparison to the fourth quarter of 2017. These marginal slowdowns represent what is being termed a “rebalancing” of the market, as the Portland Metro area resets a little following the explosive growth of the last few years. Matt still has faith in the strength of the region’s housing market and is still terming it a “seller’s market”, although not as strong of one as it has been in the previous years.
As an anecdotal addendum to this report, the first month and a half of 2019 has been, if anything, hotter than we expected it to be based on the 2018 trends. We are still seeing multiple offers on well-priced listings, and rates have stayed low. It’s been a fun start to the year for us!
After the real estate market’s 2018 stats have been fully processed, the Portland Business Journal publishes a pair of slideshows. The first is the hottest neighborhoods in the Portland Metro area, which identifies the top 25 zip codes that had the most home sales in 2018. The other slideshow ranks the top 25 zip codes in terms of median sales price. Feel free to take a look at the links below and let me know what you think! There are some interesting results in both slideshows, and the relative lack of overlap between the two slideshows seems to be a reflection of how a lot of buyers are coping with the affordability issues we see in some of the Metro Area’s more established neighborhoods.