My favorite local real estate economist, Mathew Gardner, just released his 1st quarter report for Oregon and SW Washington. I truly appreciate how he can take a complex picture and present it in an understandable and tidy format.
Some of his highlights:
- Oregon added 43,700 new jobs over the past 12 months.
- First quarter home sales dropped 0.8% compared to the same period last year.
- Average home prices in the region rose 9.9% year-over year.
- Washington County led the region with the shortest average days on market of 36. Clatsop and Tillamook Counties were last averaging 159 days on market.
Click on the following link to read this informative piece and see how the real estate economy is impacting your specific area.
As Alex and I continue to help buyers navigate the current market, we get a lot of questions on why the market is so skewed towards sellers. Inventory has been historically low in Portland for almost three years. “Months of inventory” is a statistic that divides active listings at the end of a given month by the number of home sales in that month, effectively showing how long it would take for that month’s inventory to sell. 4-6 months of inventory is considered balanced, with anything above that being slanted towards buyers and anything below that slanted towards sellers. The Portland Metro area has been below two months since March of 2015. Home buyers during this time period have experienced the results of this firsthand: multiple offers, homes selling above list price, needing to tour homes the same day they go on the market. While we are seeing these pressures alleviate a little – July through October 2017 were a shade above 2 months inventory before the numbers dipped below 2 in November – inventory is still remarkably low. Why? The following factors are responsible for these conditions:
- The “chicken and egg” problem of prospective sellers also wanting to buy in the Portland market but being loathe to enter the competitive fray of homebuying.
- Long-time homeowners have enjoyed the market’s recent appreciation and have no interest in cashing out. In addition, the Baby Boomer generation is working later into their lives, removing the traditional warm-weather relocation sales.
- Many homeowners have remodeled to fit their needs rather than sell outright and purchase a new home.
- The lack of new construction, stemming from an increase in material costs and the difficulty in procuring buildable land in Portland, means the inventory is dependent on the resale market.
- Increased life expectancy and the aforementioned remodels mean sellers are living in their homes longer.
- Sellers who have purchased at record low interest rates over the last decade are reluctant to give that up.
- Portland’s buyer demand remains extremely high.
Will we see these conditions alleviate any time soon? Inventory is expected to loosen, but only slightly. As prices begin to level off, sellers who are looking for the “right time” to sell may think 2018 is the right time, particularly as rising interest rates begin to shrink their available buyer pool. Other factors may be more difficult to ameliorate. If you do have any questions on how this impacts your specific situation, please don’t hesitate to give us a call or email. We’d be happy to discuss!
We wanted to share living503.com, a relocation service from WFG National Title that delineates the Portland and Vancouver metro areas into neighborhood and suburb parcels and provides information about each segment of the cities. For example, there is a dedicated webpage for each of Portland’s 5 quadrants, and each page has subsections covering neighborhoods, amenities, and schools.
Beyond the area and neighborhood information, the website also contains tourism guides for the Pacific Northwest’s various amenities – such as wine country and the coast – along with helpful links to Portland market stats, Trimet info, and even weather reports.
If you have any friends or family that are considering relocating to the Portland area, feel free to pass this along! We think it’s a helpful supplement for anyone eyeing the area.
As we move further away from the holiday season, the real estate market has started to grind back into full gear. We have already received several calls from buyers and sellers looking to capitalize on this momentum. If the new year has prompted thoughts of buying our selling, we thought this Washington Post aggregation of real estate forecasts for 2018 would be of use. The full article can be found HERE, and we’ve summarized the main points below:
- Most real estate economists are still expecting appreciation, but at a slowed rate from the rapid price increases of the last several years. Continued low inventory will drive prices upward. That being said, there is an anticipation (see HERE) that the new tax bill may slow the increase in housing costs; however, this may only occur in certain price brackets.
- Part of the reason for a potential slowdown in the market appreciation is the looming increase in mortgage rates. The Mortgage Bankers Association is predicting increased volatility in rates, with 2018 rates increasing to 4.5% from 4.0% in 2017. There is an expectation that rates may eventually plateau around 5.0%. That being said, the prediction of a rate increase has been bandied around for several years, so this is far from set in stone.
If you have any questions on how these potential changes impact your buying or selling power, give us a call! We’d be happy to treat you to coffee and answer any questions you may have.
I often work with clients who, at least in passing, consider purchasing a “fixer” as their home. The advantages are obvious ones: cheaper entry price and a chance to make the home their own. However, fixing up a home can be a costly and time-consuming process without proper preparation. I’ve found a great article I wanted to share with you that highlights important steps to take as you fix up a home. Click HERE for the article; I’ve also summarized the points below:
- Be realistic about the project’s scope. Know your own limits, both in terms of finances and patience.
- Set a budget (and stick to it!).
- Make sure the communication channels between architects, contractors, subcontractors, and yourself remain open, and use them frequently. There are seldom pleasant surprises during a rehab project.
- Find the right contractors and architects. I’m certainly happy to provide recommendations!
- Know the building association and neighbors.
- Know the permitting process. Again, I am happy to provide recommendations here!
- Even though you’re building your dream house, understand the process itself may not always be a dream.
Remember, I’m here to help! Don’t hesitate to contact me if you need recommendations, value analysis, or other input!
The Oregonian’s real estate section (see HERE for article) has noted what agents are seeing at the ground level: market times are rising while the housing inventory remains low. Market conditions are still beneficial for sellers, as the low housing supply and rising prices make for a strong sellers’ market. However, the apex of the buying frenzy may already be over; as the article observes, “where two years ago a home might have…attracted 7 or 8 offers, it might now get 2 or 3.”
This decreased competitiveness on the buying side may encourage certain sellers to list their homes. Sellers who also want to purchase in the Portland area may have been hesitant to put their homes on the market, fearing a quick sale on their home but no available houses to purchase upon their closing. While the low inventory and high prices still provide great conditions for these sellers, the reduced competition of the Portland market gives their purchase a softer landing.
In the last few months I’ve successfully helped several clients with this exact situation: selling their home and then immediately purchasing a new one in the Portland Metro Area. If you have any question on how these shifting market conditions impact your real estate situation, please don’t hesitate to reach out to me. I would love to assist!
Fall in Portland is here! The beginning of autumn is the perfect time to check for home maintenance issues. The weather is mild and the sun still sets late in the day. Here is my checklist – learned over the course of many home inspections! – that I use to check for defects on my home:
- Notepad in hand, I check my roof for moss and wavy roof tiles. I look at the chimney and check for cracks in the mortar, and I make sure the gutters and downspouts are free of debris. If you feel uncomfortable on the roof, feel free to ask me for a qualified professional referral.
- If your roof needs any cleaning, I would recommend using a professional roofer. Roofs can be surprisingly delicate, so please reach out to me if you need a roofer recommendation.
- While on the roof, I check for overhanging branches from nearby trees that may cause harm in the event of a windstorm.
- I then walk the perimeter of my home to look for peeling paint or windows in need of re-caulking.
- After this, I look at any decking to check for rotting. I follow this up to look for cracks in the foundation and driveway.
I keep a lengthy list of contractors on hand should you need a recommendation. Don’t hesitate to reach out! I’m always here for your Portland Real Estate needs.
Portland’s famous International Rose Test Garden is turning 100 this summer! Perched gently on the West Hills with sweeping views of downtown PDX and Mt. Hood, the garden contains 650 rose varieties spread over 4.5 acres. Per the article from PDX Monthly (found here), there will be a centennial celebration this Saturday, August 26th, from 11 am to 8:30 pm. Free cupcakes and Trimet tickets are available!
In addition, I highly recommend watching the 8 minute video found here if you are interested in learning more about how the Rose Test Garden prepares throughout the winter for its spring and summer visitors. The amount of foresight is truly impressive!
The Portland real estate market has been one of the hottest housing market’s in the nation over the last five years, seeing double digit appreciation in value year-over-year since January 2012. However, the May 2017 Case Shiller report showed an 8.89% appreciation for the previous 12 months. When comparing this to the 9.24% for the previous month and 12.47% appreciation from the last year, this suggests the Portland market may finally be plateauing. This has been borne out “in the trenches”, as we are seeing increasing market times, more price reductions, and more available inventory in even the hottest neighborhoods.
Could this be nothing more than a summer lull? It very well could be, as Portland often sees a slower market between July 4th and Labor Day. However, given the rise in interest rates – limiting buyer purchasing power – and the unsustainable rise of the market in the last few years, it is worth monitoring in case this is a more substantial shift.
What does this mean for buyers and sellers? Buyers may find themselves able to compete more easily on the market, and to have the time to view houses without feeling like they only have hours to do so. Sellers will still be coming from a position of strength, but the days of 20 offers on a listing may be gone.
If you have any questions on how this impacts your own real estate situation, feel free to reach out! I would be happy to chat any time.
As we head into the heart of spring and local temperatures finally on the rise, our local real estate market is heating up, as well (not that it ever cooled off). Portland area Realtors have been praying for more listings to hit the market to help make the prospect of selling one’s home and having them find another suitable property a little easier. Well, March did see a large increase in listings of 3,604 compared to February’s 2,521. However, the pace of sales jumped, as well, with accepted offers of 3,043 up from February’s number of 2,369, as 28.5% increase. The median sales price for the Greater Portland market for the past 12 months shows a 12.2% increase over the previous twelve month period.
How do these numbers translate in practical terms for home buyers and sellers in the area? For many buyers, they are continuing to face competing offer situations for desirable homes in desirable locations. It’s not uncommon to see some homes selling for 10% or more over their list price, and terms very favorable for the seller. For sellers, the challenge of being able to identify their next home and get under contract still exists. Often times, “rent back” times are negotiated to assist with the process, but many are finding temporary housing, to allow more flexibility and provide more leverage in writing an offer that is not tied to the contingency of their home selling/recording.
To help you navigate this challenging market, be sure to have these conversations with your trusted Realtor. Of course, if you don’t currently have one, or simply would like to discuss your real estate questions, please feel more thane welcome to contact me.
For more details on our local market, view the latest RMLS Market Action Report