Friends and Clients:
This December report and the year end summary for 2012, is coming to you quite late. After experiencing a too quiet November and December, January began with a high volume of calls, showings, and offers for us. A personal introduction to a heart stent also complicated my life, capping 5 years of nothing but work, endless stress, and terribly unhealthy living (like gaining 40+ pounds). I think the time has come for a healthier lifestyle and a better housing market! 2013 might be the right time!
Year End Summary:
December’s report caps a very good year (relatively) in the greater Portland area including Yamhill County. The most affordable conditions on record, with interest rates in the low 3% range for 30 year fixed loans, and prices off their highs by 30-50%, finally got buyers buying and broke the logjam of sellers who were trapped in their homes. Inventory ended the year at a 3.6 month supply (down from a 20 month supply at one point) and this constitutes a ‘seller’s market’. Multiple offers and true price appreciation is the highlight of this. Pending sales were up 16.2% over 2011, and closed sales were up 19.1%. ‘Days on Market’ (DOM) dropped by 21.5% in 2012.
We have to be careful when comparing the epicenter of activity in a central densely populated area like Portland with the most suburban county represented in this report. Our numbers are also very good but some of the dynamics are quite different. Yamhill County is experiencing similarly improved numbers showing 16% increases in pending and closed sales over last year and an average sales price rise of 8.3% over 2011. The more reliable median sales price increase is 3.89%. Our inventory is good at 6.9 months but that is almost double Portland’s average. Our time on the market remains high at an average of 207 days and this is actually substantially higher than December 2011 when it was 180 days. We continue to follow Portland’s progress, but at a distance.
Has My Property Value Increased?
Real price appreciation is challenging to understand. The average sale price increase is affected by more than individual values rising. We are coming off of a period when mostly low priced properties (bank-owned, short sales, distressed sales) and lower price ranges (starter homes) were selling. Beginning in 2012, we saw properties in all price ranges begin to sell. That significant change has a dramatic effect on the ‘average’ price without even considering individual pricing. Did your property in Yamhill County go up 8.3% in 2012? No it did not. Really, homes in the $350-500k range actually sold fairly well which was new and pulled the averages higher. That is a good thing but it is not a commentary on your home’s current value.
Price valuation is an intensely local dynamic. Our rural properties are just starting to move and therefore we could continue to see drops in pricing until that sector stabilizes perhaps later this year. While the price range of $350-500k in McMinnville sold quite well in 2012, the actual sold comparables still showed a dramatic loss of value last year even so. Starter homes and other price ranges are seeing prices go up as consistent demand, low inventory, quickly turning sales, and multiple offers, allow sellers to get more money and negotiate less off the asking price. Some neighborhoods and some kinds of homes are selling very well and others are not. Only a personal, custom, and careful analysis of your property can tell you the current market value of your property. Home Sales Report.
We are expecting a very good year in real estate. Each sale begets another and the market feeds on itself and grows. We are seeing more out of state buyers and expect that there will be a strong exodus from California because of pent-up demand, and economic and tax issues in the Golden State. That is particularly good for our rural properties (remember however, they are coming with less than half the money they used to have!). Distressed sales are dropping for a few reasons and that is good for property valuations. New construction is budding but it is still less expensive to buy than to build. However, the inventory of alternatives, particularly new homes from the last time construction took place, is almost depleted. Supply and demand are working for us now, not against us. The stock market is above 14,000, last seen before the housing collapse of 2007, and businesses are lean and efficient and hungry for growth and expansion.
Unemployment is still very bad and economic challenges related to debt hang over us like the Sword of Damocles. The wealth of many people was decimated in the past 5 years and that plus credit issues now limit the number of buyers. Buyers are also ‘scarred straight’ and they demand to buy well so as not to face the same fate. For those buyers fortunate enough to buy, I wrote an article called a “Buyers Advisory for 2013,” which I think is very important if the current improvement trend continues. This month’s topic is about mortgage interest rates- the most important factor in buying power.
Your Help is Appreciated!
We are able and eager to take on much more inventory to sell right now and your referrals of your friends, family, neighbors, and colleagues are welcomed with our gratitude. We promise to treat your people exceptionally well. Our Realtors® are also looking for those buyers ready to buy this year and will provide them with the finest expert services available. We all have a lot to make up for and so are highly motivated. Thank you!
Bella Casa Real Estate Group Continues to Earn the Highest Respect:
I have attached the 2012 FINAL sales totals for real estate offices in Yamhill County. Bella Casa remains in the top position for sales. While this is satisfying to us, our purpose is to provide you with the confidence to call and interview us for your real estate needs. In a 5 year housing depression, we moved from a new brand to the top office in spite of challenges unprecedented since the Great Depression. Thank you for your support of us and your confidence in us.
Randy McCreith, Principal Broker
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653