What's Really Going On in the Portland Market?

The Market Report – What’s Really Happening in the Portland Metro Housing Market?

The May 2007 Market Action report, courtesy of the RMLS, recently came out with some interesting facts and tidbits. As most of you have heard, suspected or simply guessed, the market has cooled. I know, I know, ground breaking stuff, right? We all know the market has cooled, but it had to. The Portland market ran so hot for so long it simply had to slow down and catch its breath. I, personally, don’t think this is such a bad thing. While home owners clearly enjoyed the nearly 20% appreciation rates we saw for the past couple years, it was obvious that those numbers could not sustain.

However, while much of the nation is suffering through a depressed real estate market, the Portland market continues to chug along with double digit appreciation rates. Granted, the 20% days are gone…for now, but most savvy investors are thrilled to get a 10% return on their borrowed money. Where else are you going to get somebody, much less a bank, to lend you a few hundred thousand dollars to make a 10% return on investment? I guarantee nobody’s lining up to lend you money to play the stocks with.

In any case, the following are the facts and my supporting opinions. The number of new listings is way up. That, coupled with the fact that it’s taking longer for properties to sell, means that our inventory is also up. At the current rate of sale, we would run out of available listings in 4.5 months, assuming no new listings went on the market in that time. Compare that to the 2.3 months and 1.6 months of inventory Portland Metro had in the prior two years, and it is easy to deduce that the market has turned. While 2005 and much of 2006 were true sellers’ markets, 2007 has fluctuated in and out of being a buyers’ market and a balanced market. If I was to simply look at inventory, I would tell you we’re enjoying a balanced market. However, when I take into account the fact that average days on market, or how long it takes for a listing to sell, has gone way up and the number of new listings, I do believe we’re in a classic buyers’ market. Now this isn’t as strong of a buyers’ market as it was a sellers’ market two years ago, but it is, in my opinion, a very good time to be a buyer.

Look at the facts, inventory is up, interest rates are still very low (though they have risen), days on market is up and add that to the number of stale listings (properties that have been on the market for a long time) and an uneasy feeling sweeping through the minds of sellers, and it all equates to a great time to be a buyer. I know I’m working with some very happy buyers.
Of course, nothing exists in a vacuum, so there are sections of the market, be it location or price point, that are much more competitive. As you know, I work with quite a few first time home buyers who generally want to live in close-in SE/NE Portland and, for the most part, are in the 250K to 300K price range. Well, it’s still pretty competitive within those parameters. I’ve actually seen multiple offer situations at times. Having said that, my clients have all found wonderful and affordable homes within their price ranges and in their locations of choice. So a good Realtor will still secure you an excellent property.

In many cases, we’re finding buyers’ incentives, such as “free” home warranties. So if you’ve been scared off by The Oregonian’s “the sky is falling attitude”, don’t be. Portland Metro, including the suburbs, is doing just fine.

With everything going on in the lending/finance industry right now, please find a good mortgage broker. I work with an amazing one in Vince Kingston, but I do have other referrals if you need them. Please stay away from any out-of-state or online lenders that you don’t have a personal relationship with. The decision and purchase is just too important to be handled by a stranger that you can’t physically meet.

APPRECIATION RATES:
Portland Metro (as a whole) – 10.1%
N Portland – 11.5%
NE Portland – 9.4%
SE Portland – 11.5%
Lake Oswego/West Linn - 13.3%
Gresham – 16.15
Milwaukie/Clackamas – 11.2%

Home Buying 101 – Demystifying the Home Buying Process is still going strong. Vince and I have been doing it every other Monday evening for just over two years. We’ve probably met a couple hundred people and have helped many dozen people realize their home ownership dreams. If you know anyone who might benefit from the informal workshop, please have them contact me. Also, we’re branching out and heading for the big time. After a long conversation with a corporate HR manager, who will go unnamed, we were convinced that Buyer 101 would be a great value added service for HR managers to provide their employees. So we’re moving up in the world and offering to hold the class, for free, for small and mid-sized companies all over town. We’re happy to hold them at the lunch hour or we’ll work around any schedule you need. If any of you would be willing to introduce me, via email, phone, however, to your HR manager, president, company owner, operations manager, etc., I would greatly appreciate it. The numbers show that employees who own homes are much more likely to stay with their current company and work their way up the ladder. We see our services as something a company can provide their employees…at no cost. So please let me know if you can help.
Also, outside of the home buying workshop, I survive 100% on referrals. I believe in giving my all to every client and I hope in so doing, that they will, in turn, refer me to their friends, family and colleagues. If you can give my name and info to three people, I would forever be in your debt. I am not a part-time Realtor; this is what I do for a living. I take it very seriously and have put a lot of time into learning and growing. As many of you know, I am now a principal broker and I hire, train and mentor new agents. I’m currently working on getting my “green” designation, as well as my “technology expert” designation. I continue to grow as a Realtor in the hopes that I can better serve you and your referrals in the future.

Thank you in advance.

Market Action report: http://www.rmlsweb.com/temp%2Fdocuments%2F1500-1699%20Market%20Action%20and%20Statistics%20Menu%2F1505%20Market%20Action%20-%20May%202007.pdf

Cheers!
Jesse

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