Dear Clients and Friends,
Everyone likes to be around positive, uplifting, optimistic people. I suspect we all could use a dose of encouragement and hope almost every day. Sales professionals tend to be such people or they would not survive the daily grind of rejection and regular disappointments, incessant problems to solve, and the challenges of working with every conceivable kind of person on the planet, often in highly stressful situations. However, being a professional means you must deal with reality as it presents itself. You must help your clients understand reality and face it strategically. The January reports illustrate the tension and the difficulty of the greater Portland area real estate market:
Anecdotally, we have come out of the gate slowly this year. This is what I experience and also what I hear from so many people not only in my industry but from many other economic sectors. The lethargy of the market during the last part of 2013 seems to continue to dampen spirits. Factually, the jobs reports for the past two months are deplorable. Almost every day we hear about national companies laying off thousands of people. Locally, over the past couple of months the news papers have reported a stunning number of small business failures. We have been through the closest thing to the Great Depression in almost 100 years and we seem to be coming out of it very slowly. Political fixes seem futile. In fact, the vibrant housing recovery we have known for over a year (or two in Portland) seems to have happened with little thanks to the economy and no thanks to the government. Some of you want to stop reading right now, proving my point that people do not want to hear negative outlooks, but if you stop reading now then you would miss the counter-weight.
We are caught between the ‘already’ and the ‘not yet’. The already is very encouraging as we have seen remarkable recovery in the housing sector since hitting the very bottom in late 2011. Sales are up dramatically, all kinds of properties are selling, prices have stabilized/corrected/rising, and distressed sales are disappearing. I tell people that I have nothing to complain about in light of the previous 5 years. Even with a weak ending to 2013, we still managed to improve compared to 2012 by double digits. Our outlook for 2014 is that we expect to continue the upward trend on all fronts. In our area (greater Yamhill County) we lag the urban recovery but we are seeing the flowering of our dormant new construction sector which means the sales of the ‘lots and land’ category – unsalable for way too long. We are also expecting our rural acreage sales to lift-off this year as our out-of-state buyers return. The winery business, and the growth of that industry in our area, is vibrant. Yamhill County depends on agri-tourism. Good news!
But we live daily in the ‘not yet’. The number of ‘showings’ of properties remain frustratingly weak at this time. Our sales numbers are down for the first 6 weeks of the year. Offers are few, negotiations are tough, and we remain in a buyer’s market (although for one month we experienced a balanced market locally). When jobs are lost in McMinnville, the unemployed usually move somewhere else. When companies like Evergreen are lost, we cannot help but feel the effect in housing. We still have a ways to go to fully recover. We may be on the way but the road in front of us is still seems to have a long horizon.
Back to positive and optimistic! In spite of current mood, and a reality check, the numbers for January have proven to be better than anticipated and the attached reports are the facts. They are the reason we keep our eyes up, our sights on the horizon. The numbers are modest and mixed but on the whole still better than last year and still improving from December in many cases. Who knows how great a part the weather played this winter? The national numbers more dramatically show the weakness in this winter season. Remember that The Market Action Report presents data for the entire Portland Metroplex but the averages are weighted heavily to the urban areas. I included specific rural numbers for Yamhill County on the report.
I recently put together a semi-annual study of ‘Buildable Lots and Land in Yamhill County’. This extensive report looks back at 2013 to understand what is actually happening in this, the hardest hit sector of the housing market recession. It also helps our clients prepare for what I believe will be a much better year. In addition to my thoughts, you can selectively look through details of all the sales of lots and land in 2013 and also see all the competition remaining in 2014. We emailed this to our clients who own such properties, but if interested, you can see it for yourself and even send this to a friend or neighbor for whom this might apply. Note also that in the current Home Sales Reports I have added another sheet which focuses on new/proposed/under construction home sales and inventory. It is time to start tracking this again!
The bottom line is that we think we will have a year that is substantially better than we have seen in 7 years but we know we have to work hard and you may have to endure much to see that happen. Some day life will get easier; maybe? Thank you for thinking of us to help us expand our business services in 2014. We value your referrals and promise expert service and exceptional care.
Randy McCreith, Principal Broker
Bella Casa Real Estate Group