“Things Can Only Get Better” – Dream
JULY 2012 PORTLAND METRO REAL ESTATE UPDATE!!
We are enjoying our usual “best weather on the planet” for summertime (almost) anywhere on the planet!!! And, we are enjoying positive real estate activity as well! Every measure of local real estate activity is UP, UP, UP when comparing June 2012 with June 2011. It would now take only 3.9 months to absorb the existing housing inventory in the greater Portland Metro area. The unsold inventory dropped again in June to the lowest it has been since March 2007 (which just happens to be the height of our local market according to RMLS/Residential Multiple Listing Service stats) when the inventory was at 3.8 months. We ended last year with 5.3 months and began 2012 with 7 months (typical slow-down right after the holidays). The median sales price rose 8.6% when comparing June 2012 with the same month in 2011. This is the 3rd consecutive month in 2012 that the median home price has risen. There were also 2,244 closed offers, which represents the highest number of closed sales since August 2007 (when there were 2,554 closings).
BUYERS: so, what does this mean for buyers? Yikes!! Buying real estate has become a competitive sport again! Get prepared as well-priced, good condition homes in preferred locations will get multiple offers. If you are willing to do a bit of work, you may have more luck not competing with the masses. You simply have to try to construct the very best offer you can, while still protecting your rights as a buyer. The low interest rates (we hit 3.5% this week for a 30-yr fixed conventional financing, even lower for other products) have motivated a lot of side-liners to get in the game. There’s also just a general “I feel better about the economy” vibe that’s encouraging buyers back into the marketplace. Housing affordability is at an all-time high!
SELLERS: so, what does this mean for sellers? It really has and has NOT changed. There are definitely motivated buyers out in droves, but they are quickly educated about value. If they perceive your pricing to be competitive, you will likely receive multiple offers. If your home is overpriced, it will sit. Of course, the higher the price point the less buyers that can afford your property so that changes the dynamic a bit. Under $400k: moving very quickly. $400k-$600k: also moving in popular areas. And, it slows incrementally from there, only due to a smaller pool of buyers that can afford. Again, pricing REALLY matters, no matter where your price tier might fall. I’m composing a blog post about appraisals and how re-finance appraisals differ from market value, so stay tuned. This is an issue I have serious concerns about.
INVESTORS: so, what does this mean for investors? See the buyer section. Those investors with some extra cash, that want an opportunity to diversify their financial portfolios and have the ability to qualify for a mortgage for a piece of investment real estate (don’t assume you can’t until you speak with a mortgage broker), they’re also out in droves! Again, expect multiple offer situations if the property is priced to cash flow. As an investment property buyer (which I have been for the last 4 consecutive years) you simply have to establish a strategy and think of it as a business (don’t get too attached and stick with your game plan). That being said, if you really want “in” in high-demand areas you might have to constantly re-think your strategy and expectations.
Selected by Portland Magazine as a 2011 and 2012 Five Star Realtor