Leonard Cohen – “Hallelujah”
May 2012 Portland Metro Real Estate Update!!
Hallelujah!! x2 might I add!! Not only do we have sunshine in the greater Portland metro area but we are having some kind of frenzy in our real estate world. We’ve been watching this progress through March and April. The continued shortage of “good inventory”, pricing diminished by the last few years of financial unrest, the obvious resurgence of faith in our local economy combined with the low, low interest rates have pulled home buyers back into the marketplace. This is producing many multiple offer situations with well-priced, good-condition, staged properties in desired locations. Example: close-in southeast neighborhood..my buyer is one of 20 offers and makes a cash offer, $7k over sales price and we weren’t even in the top 3!!!??? So, of course, our RMLS statistics (Residential Multiple Listing Service) shows definite improvements over this time last year in both pending and closed sales. In fact, with the exception of March and April of 2010, which were impacted by deadlines for the “First-Time Homebuyer Tax Credit”, the number of pending sales is higher than any month since August 2007!! And, remember if you look at the historical stats for the Portland metro area, March 2007 was supposedly the height of our local market. We are now down to 4.7 months of inventory, which puts us in a “modified sellers’ market”. Why do I say modified? Well, because it’s all about value to today’s buyer. So, it’s CRAZY but not yet “certifiably” crazy. In other words, it’s still all about price! I can’t emphasize it enough. If you think I’m kidding, ask yourself (with the low inventory) why your house hasn’t sold??? I can tell you it’s NOT because there are not buyers out there. It’s because you’re not yet priced to tantalize the motivated (but, not yet “certifiably” crazy) buyer!! No one wants the hear the truth, but there it is!!! This is not just happening in the Portland market, a recent Bloomberg report shows that 1/2 of US cities have seen price appreciation as the real estate market stabilizes. All of this demands continued faith in our economy (and that Greece and the Euro doesn’t take us to our knees…remember it IS a “world economy” now!).
SELLERS: What does this mean for sellers? There ARE buyers and, actually, quite a few of them out there. Do the absolute best you can to get your house as “show-ready” as possible (and I am SO sympathetic). If you are in an equity position to sell, then don’t get greedy. This is a competitive sport and price accordingly. I never like to leave $$$ on the table and I try, try, try to squeeze every cent out of the possibilities. However, you need to try to react quickly to the lack of offers. The home sitting on the market does NOT increase your chances for “success”!! My first training broker (in 1985) told me that the longer the house sits on the market the more the ultimate sales price is compromised. And, all I can say is my years of experience corroborates this tidbit!!! If you think there’s some marketing magic…I’m here to tell you there is not (although, your property does need to be everywhere on the web). It’s plain and simple: price and exposure!
BUYERS: What does this mean for buyers? Yikes! All I can say is that if the banks would lend me more money, I would buy more properties!!! Most of my reading lends me to believe that the interest rates will continue to be low for awhile (some say till 2014). However, my 27 years in this business makes me know that interest rates can change quickly and leave you in the dust. But, I would be less concerned about interest rates right now and more concerned about inventory and pricing. Because if the inventory continues to be as low as it is now, pricing will be forced up. It’s “supply and demand” and it’s pretty simple!! If you want to buy at the “bottom of the market”, you could be too late. But, I’d get in there!!!
INVESTORS: What does this mean for investors? More of the same. It’s still a challenge to get financing if you own more than 4 properties. It can be done, but could mean a higher interest rate or larger down-payment. So, that makes finding a “cash-flow” property more of a challenge but not impossible! If you’ve yet to diversify your financial portfolio and have less than 4 properties, I would just think about it! Talk to your CPA or accountant, talk to your mortgage broker or lender and talk to your real estate agent. Talk is cheap (sometimes free). It could be a great fit for building wealth and passive income for retirement.
Selected by Portland Magazine as a 2011 and 2012 Five Star Realtor