I suppose the best news for January’s Market Action Report is the Affordability Index which factors in many issues related to purchasing real estate (inventory, interest rates, prices, etc.). Likely not a surprise, we have the most affordable conditions since the Index was begun in 2003. A median income can currently purchase significantly more than the median price of a home; 66% more.
Solds and Pending Sales are about the same level as last year when we had a good start to a bad year, but this year we are doing so without the artificial support of the Federal Tax Credit program. Unfortunately, our prices continue to fall. Instead of prices being on average where they were in mid-2005, we are now back to mid 2004 levels. Inventory is high with the Portland average at 11.3 months to sell the current properties at the current rate of sales. In our area the numbers are higher: Yamhill County is an astounding 17.5 months and Washington County averages 13 months.
Anecdotally, we have seen 3 very busy months with increased buyer activity including offers or ‘almost offers’. It takes a long time for buyers to make decisions to buy, the transactions are grueling and lengthy, and the risk of a sale-fail is still high. But buyers who can buy, still a small number, seem ready to buy. My opinion is that the interest rate which increased a full percentage point since early December is responsible for kicking them into gear.
Predictions for the housing market for the coming year are full spectrum. There are more positive reports about the economy than we have seen in well over 3 years, but there are serious concerns enough to fill anybody’s fear tank. We have a tough year ahead but one I think will move us all in the right direction. The lending industry, the financial industry, and the housing industry have, we trust, been chastened to return to proven fundamentals for protecting and building value. If it is time for you to buy or to sell, we promise to apply the lessons learned and to help you make the wisest of decisions for your future. See also the attached first article of a series on Lessons We Have Learned Through the Tough Times.
RandyRandy McCreith, Principal Broker Bella Casa Real Estate Group Cell: 503-310-9147 Fax: 866-281-6653 Randy@TheBellaCasaGroup.com