Clients and Friends,
It is time to declare the housing market in our area recovered (but perhaps never the same again?). Portland is white hot. We are doing quite well, and the recovery has finally reached all areas and property types in our geographic area.
Summary of Recovery:
Late July of 2007 ushered in the sub-prime mortgage explosion. September of 2008 added the financial sector meltdown. By January 2009 a tsunami of business consolidation and failures left a path of devastation cluttered with high unemployment and pervasive foreclosures. Portland first saw signs of true recovery in early 2012; in the greater Yamhill County area not until 2013. Portland then outpaced us by at least 2 years, but I think it is safe to say that we have arrived. The Newberg area is hot, McMinnville is off and running, the small towns are selling throughout the Chehalem Valley, the Yamhill Valley, and to the West Valley towns of Sheridan, and Willamina. Finally, just this quarter, our rural properties have clearly launched and we expect good sales this year to this sector which has been mostly anemic. New construction in the towns has been good, now rural buildable land sales show signs of imminent recovery.
For the Portland metro area including Yamhill County, March sales numbers spiked and the 1st quarter ended with fireworks. Closed sales are now at a level not seen since this time in 2007 (top of the market). Pending sales match numbers in 2006, and inventory has not been this low since the run-up to the top of the market in 2005. Only our average and median sales numbers have room to rise to match old records but they are rising rapidly, especially in Portland proper. Check out the actual numbers in the attached Market Action Report.
Urban areas close in to Portland are a rabid seller’s market with inventory that lasts less than 1 month on the market (often just a few days). Yamhill County is still a balanced market with an average of 4.05 months of inventory. It is widely accepted that a balanced market (and I think the fairest market) is from 4-6 months of inventory. Until this first quarter, rural areas have been balanced but very close to being a buyers’ market. That is changing and we are very close to becoming a sellers’ market again; at the current pace we will likely transition this next quarter. See the Home Sales Report for the details.
Many of you have heard media reports that Oregon is leading the nation with relocations to the State (see attached article about Portland’s Growth). Drought problems and high costs in California contribute to this, but the lure nationally is what might be called the Portlandia effect. Most of those relocating to Oregon are heading to Portland and its contiguous neighboring areas. In Yamhill County the lure traditionally has been the wine industry and the beauty of the vineyards and the boutique wineries. However, even to date, the numbers of Californians moving into our area seem to be nothing like it was at the top of the market some 8+ years ago. The current trend into Oregon at this time seems to be directly into Portland because of its reputation and the publicity it continues to gain for its culture of bicycles, uniqueness (‘Keep Portland Weird’), technology, beauty, individualism, and who knows- pot? This has driven the housing marketplace for rentals and sales to the frenzied level it is now, but it may also explain why our area, while improving steadily, has not seen the same robust and rapid recovery as Portland.
What is now affecting our local markets is that Portland is so expensive now (top of the market pricing) and the inventory is so rare, that buyers are pushing out of the metro area to find more choices and better values. I do not ever remember seeing so many Portland area Realtors® now shopping in our area! This is good for our sellers. Buyers, you will see increasingly tough days ahead to find low prices and great deals.
Thinking about affordability, I attached the 1st Qtr Distressed Sales chart. Short sales and bank-owned (REO) sales are no longer much of an influence on our pricing and challenges to appraisals, but it is still amazing how many properties are available for sale (between 8% and 10% of our inventory overall). Most of this is the shadow inventory that has had so much press.
With this report, I am officially a month behind on keeping up with these reports! We have been putting in long hours to serve our clients’ well. January to June is the intense listing season which is as taxing as Christmas is to a retailer. Additionally, the dramatic market improvements have us stretching our days to respond to all the offers coming in and handle the surge of challenges with each transaction (much worse than before- something about ‘the cure is worse than the disease!’). Much of the data from the never delivered February report is in this March report in the graphs and charts. You can also access the February reports on our website but without any commentary. This year we are also doing an extensive build-out for our new Newberg office in the former Underground Coffee suite. We look forward to moving in during the next few weeks and having an open house grand opening hopefully in June.
If you have been waiting to sell, the time is ripe now. If you are waiting to buy, keep in mind interest rates at 3.75% for a 30 year loan is about as good as it ever got. How much longer? I certainly do not know as I have proven in the past! Prices are rising and the deals may soon disappear. Move-on! We have excellent agents who have survived the hard times because they are professional, accomplished, wise, and trusted. We want to help more people achieve their goals and hopefully realize some of their dreams.