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Our Market Action Reports are produced by the Regional Multiple Listing Service which covers all of Oregon and about half of Washington at this time. There is no market that spans that territory; there are many markets. In fact, RMLS produces 14 statistical reports about this territory. Even then, our report, the Portland Metro report, covers an area including all of Multnomah County, Clackamas County, Washington County, Columbia County and Yamhill County. That covers Mt Hood to the Coast Range; from the Columbia River to rural Salem. That is many, many markets…

While we are licensed to sell real estate anywhere in Oregon, we focus our expertise in the greater Yamhill County area. This includes The West Valley, The Yamhill Valley, and The Chehalem Valley. There are 2 cities, 10 towns, and numerous unincorporated or historically known areas like Ballston, St Joseph, Grand Island, and Bald Peak and many more. We often work in Rural Hillsboro, which comes down to the doorway to Newberg, and rural Sherwood, which shares Parrett Mt with Newberg as well as the look and lay of the land with Yamhill County.

What happens in the Pearl District of Portland often has little to do with Amity. Tigard and Gaston have few comparisons. Grand Ronde and Portland may share the glamour found at Spirit Mountain Casino but not much else. So it is with our real estate markets; they can be as different as Beaverton and Yamhill.

Why is this important? 

In the fall of 2011 we noticed signs of improvement in Portland close-in markets. Our Portland buyers were going up against multiple offers and experiencing tougher negotiations. By the beginning of 2012, properties closer-in to Portland were disappearing quickly and the statistics were now showing impressive recovery. The news reports multiplied about how well Portland was doing. Multiple offers became common; prices were on the rise.

In Yamhill County at the same time nothing showed significant promise except that something good was happening in Portland! We saw our first increase of sales in June/July of 2012 and had a nice run of sales through the fall. However, while Portland truly appreciated values by about 5% in 2012, and we in Yamhill County continued to sell faster, our prices were continuing

to go down! Sellers at that time were still somewhat desperate to sell and negotiated down, and the buyers were still brutal demanding lower prices. Was there good news? Yes, buyers are buying and properties are moving; that was the improvement.

In the first quarter of 2013, our valuations were still down because the only comparables available were from the latter half of 2012 which were discouraging. Meanwhile the word is spreading to everyone in Yamhill County that Portland is hot and appreciating at a good pace. We wanted that also to be true about Yamhill County; it wasn’t. The truth is that our markets lag behind Portland, right now by about a year.

In the second quarter, we are more hopeful, even re-evaluating our values quoted in the first quarter, because we now have 4 months of much better comparables. We expect a better year than last and higher prices to be a reality in our area as well. Some markets correct suddenly; most markets have started the steady road to price appreciation. Rural acreage properties still languish but mostly our out-of-state buyers fuel these sales and that season is just beginning. We have seen more out-of-state buyers already than in all of the past 5 years. We are entering the best season of the year for sales as optimists.

The future is bright for Yamhill County. The wine and tourism industry is contributing many reasons why we are a destination. We are rich with B&B’s, fine restaurants; we have a 5-star hotel and the Evergreen complex of museums and entertainment, and so much more. Our rural setting is naturally gorgeous and interesting. We have two universities and many fine schools.

Let us know how we can help you, your friends and family, and others you know. Stay realistic about our markets and optimistic for our future; that is good enough!

Randy McCreith, Principal Broker

Cell: 503-310-9147 Fax: 866-281-6653

Randy@TheBellaCasaGroup.com

Bella Casa Real Estate Group

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The housing market is again the source of good news in our area.  Recovery is well-established and continues to pick up steam with the seasonal escalation of activity. We have great numbers to report in the Portland metropolitan area including Yamhill County:

1. Closed Sales (solds):

• 14.2% higher than March 2012
• Up 40.6%% from last month
• 1^st Quarter 2013 compared to 1^st Qtr 2012: 11.3% increase
• Best March since 2006!

2. Pending Sales (accepted offers)

• 15.7% higher than March 2012
• Up 23.4% from last month
• 1^st Quarter 2013 compared to 1^st Qtr 2012: 11.3% increase
• Best March since 2006!

3. New Listings (it is a good time to list your property for sale)

• 4% higher than March 2012
• Up 22.4% from last month
• 1^st Quarter 2013 compared to 1^st Qtr 2012: 1.3% decrease

4. Pricing: (reflects both increased prices and more higher end sales pulling up the averages)

• Average Sales Price: +15.3%;
• Median Price: +16.6%

5. Inventory is down to 3.2 month supply at the current rate of sales

• 4-6 months is considered a balanced market
• The 5 year high was almost 20 months!
• The lowest inventory since June 2006!

6. Market Time (average number of days on market- DOM) is down over 16% from last year; 135 days in 2012; 112 days now

Some thoughts…

It is no longer a buyer’s market, but there are still great values and exceptional buying conditions for buyers. It is not yet a seller’s market, but every seller is enthusiastic about realistic opportunities right now. For real estate professionals, we are grateful to be alive and optimistic for the future. We hope now for 6 good years to make up for the 6 past years of famine. The market balance is actually good for everyone; the proof of balance is that we hear equally reasonable expressions of optimism and complaints from sellers and buyers. Most of us are grateful for positive change!

Our Challenges revolve around sales transactions. Appraisers focus on the past to document reality while buyers and sellers are thinking about the present and projecting into the future. Buyers may be willing to pay more (and sellers are definitely asking for that right now) but appraisers must have hard data to prove the value based on closed sales. Lenders also do not want to get caught lending too freely until the market proves it is reliable for the future; that really cannot happen until we see a more solid economic foundation. Accepted offers, even multiple offers, are reality right now; simple and predictable closings are not. Keep the Tums handy!

Please pass this report on to anyone you know who is considering selling or buying in our metro area. We are committed to mastering our craft and that means being lifelong students of the marketplace. This report is part of our commitment to help our clients understand buying and selling, and valuing and marketing properties, and negotiating for the best terms and conditions. We want our clients to trust us, but not just because we ask them to; we ask for trust as we help them to understand for themselves so they can make the best decisions.

I have written another article about what you are hearing in the news and particularly the difference between what you are hearing about in Portland and Yamhill County. This is timely!

Download the full Market Action Report.

Download the March 2013 Home Sales Report.

Best regards,

Randy

Randy McCreith, Principal Broker
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653
Randy@TheBellaCasaGroup.com

The post March 2013 Market Action Report appeared first on The McCreith Team - McMinnville, Newberg, Sherwood, Beaverton, Oregon Real Estate.

Our friends at Pacific Residential Mortgage recognize that many of our friends, neighbors and customers have had life events resulting in bankruptcy, short sale, or foreclosure. If someone has had the unfortunate experience of one of these difficult credit events, does that put home ownership out of reach? Bad things can happen to good people, so Pacific Residential Mortgage offers a product line of loans for folks who’ve experienced difficult credit events.

If you’re wondering, “Can I ever buy a home again?”  the answer is YES!

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Housing Starts spiked by 7 percent in March to 1.036 million units on an annualized basis, well above the 930,000 expected. This was the largest rate since June 2008. In addition, Housing Starts were up a whopping 47 percent since the same period last year.

Building Permits, a sign of future construction, did decline by nearly 4 percent to 902,000. But overall, this was a strong report and further evidence of improvement in the housing sector.

What does all of this mean for home loan rates? The Fed has noted that inflation remains in check and they expect this to continue for some time. The recent inflation and weak jobs data gives the Fed cover to continue its Bond purchase program known as Quantitative Easing, which should continue to benefit Bonds and home loan rates (since they are tied to Mortgage Bonds).

The bottom line is that home loan rates remain near historic lows and now is a great time to consider a home purchase or refinance. Call Stuart with any questions!

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Inventory is very important to buyers; it offers choices and it gives power to buyers. When inventory is high it is usually a buyer’s market and sellers are competing to attract the attention and the money of buyers. Low inventory hurts a buyer in a number of ways.

Realtors® measure inventory in terms of ‘months’. At the current rate of sales, if nothing new came on the market, how many months would it take to sell off the properties currently for sale? This is also called the ‘absorption’ rate. At the high water mark in the recent housing depression we were officially at a 20 month supply, even more in some areas including Yamhill County. This was an unbelievable buyer’s market where demands were aggressive and negotiations were brutal on sellers. When the inventory falls below a 6 month supply, as it is now, it is considered a balanced market between buyers and sellers. At some point low inventory ushers in a seller’s market and the opportunities ripe for buyers dissolve into history.

Things can change quickly and they have in the past year! Current low inventory obviously means fewer choices for buyers. It also means more aggressive competition among buyers for the properties available in the marketplace. This condition results in quick and multiple offers on the same property. Caution is advised; this can suddenly morph into a seller’s market where sellers price properties higher and negotiate less.

What You Do Not Know Will Hurt You and Steal Your Opportunities:

In the past 6 years, almost universally, housing prices have dropped at least 30%. In many places (e.g. California, Nevada, Florida, etc.), and for many price ranges (e.g. high end), or types of properties (e.g. buildable land), the prices have dropped 50% and more. It is time to realize that the prices are already bargain values and buy instead of haggle!

Buyers beware! We have hard data which now documents that the market has turned and we have an improving/escalating market. 2012 saw a dramatic change in Buyer attitudes. Inventory which was high; it is now very low. The rate of sales (absorption) is now brisk and multiple offers have become common in some areas. Prices have stabilized and even increased in some markets. Interest rates are at historic lows (e.g. 3.1% on 30 year fixed loan in the fall of 2012). This is not speculative forecasting, it is reality.

Buyers who do not know this still act as if it is a buyer’s market and they can be aggressive and demanding. These will be the losers of our time because they could not read the signs of the times. Buyers are losing power quickly.

Why It Is Time To Buy Now.

It is time to buy real estate; many other wise people have already scooped up the best values in the marketplace. Failure to buy now means you may miss historic opportunities.

- Everyone wants to buy low and sell high. In reality, the masses buy when prices are going up and they sell when prices are dropping. Of course this is backwards. However, ‘market timing’ is a challenge. No one can forecast the future with certainty but I think it is safe to say that now is a good time to believe we are at the very bottom and starting to move up Here is why:

- The price is very low! Real estate gurus always advise investment buyers to buy at 30% under market value (a no brainer). This is rarely realistic, these kinds of properties are usually impossible to find and to secure these you also must have a pile of cash. Today prices across the board are at least 30% under the market value of 5 years ago!

- Interest Rates are rising! Read the Buyer Advisory #1 which explains why interest rates must rise with an improving market and a strengthening economy. Nothing affects your power to buy as much as a low interest rate. For 40 years we have been paying interest rates routinely in the 8-12% range; at the highest in the early 1980s the mortgage rates were almost 21%. Low prices are good, low interest rates are even better.

- Sellers are motivated now! Sellers have been locked up in their property for too long and have pent up demand to sell and move on. That motivation and intense pressure will soon be alleviated and sellers will exact revenge on buyers when they take hold the market power. I remember the irrational demands of sellers in the height of the market in 2006-2007; it was not pretty! Buy now while you have generous opportunities.

Finally, Beware Of Unpredictable Market Corrections

We all understand that prices appreciate, sometimes slowly and sometimes quickly. Most industry watchers do not think our housing markets will appreciate very quickly for the next several years. Most of us in the industry prefer slow steady improvement to a roller coaster type of ride. 5% appreciation per year sounds good enough.

So is there any reason to hurry? Yes, because certain price ranges and types of properties can go through a quick correction. If certain sectors were unnaturally depressed, then we might see buyers come back in the market at higher prices because the intrinsic value is there and the future risk is low.

Vineyard properties seem to be such an example. Plantable ground has not sold well for over 5 years, but the future of our wine industry keeps getting brighter. In 2012, we had a number of sales at amazing prices, as if we never had the depreciation we all assumed was there. This is a correction which can be sudden and shocking. With a correction, the opportunity is lost and the regret is severe.

What we are here for…

Too often Realtors® are viewed as “just sales people getting customers to purchase our wares”. For some reason, buyers think their relatives, the New York Times, or some distant infomercial guru, knows more about local conditions in real estate than we do. The reality is that we do not have customers; we have clients for whom we work. We are not selling a product line for a company; we are working for clients and advising them how to achieve their goals with less risk and better reward. What our clients buy is their decision, not something we are pushing. We get paid when they achieve their goal regardless of the choice. We advise clients based on our industry knowledge, our depth of experience, and hard data from the local markets. One of our greatest frustrations is watching clients make bad decisions because someone out there thinks they know more than we do. We are not perfect but we are expert in what we do.

Could something worse befall us economically? That answer is always, “yes”. However, without speculating on what we do not know, the current data, and our experience, tells us that this is an historic opportunity for buyers that soon will be gone perhaps for a generation or more. If you are going to buy real estate, do it now; we do not believe you will regret it. Of course, get good advice on the particular property and guidance in avoiding serious mistakes.

Randy McCreith, Principal Broker
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653
Randy@TheMcCreithTeam.com

The post Wake Up Buyers, Think This Through, or Lose Out! appeared first on The McCreith Team - McMinnville, Newberg, Sherwood, Beaverton, Oregon Real Estate.

This February report regarding the local markets is quite late (my apologies), symptomatic of a very busy housing recovery which is keeping us running day and night. A common refrain in the data is that X statistic “is the best it has been in 5 years” or since 2007. This is obviously welcome news to every seller, every Realtor®, mortgage broker, the title & escrow companies, and even all the related companies which thrive when housing does well (moving, furniture, home improvement, landscape, etc.).

Notable Signs at This Time:

1. New construction is coming back strong (particularly in Portland and the close-in suburbs) and this is beginning to affect our most challenged area of sales for the past 5 years, buildable lots and land.
2. Vineyard land seems to have made a significant correction and jumped back to pre-crash levels. Optimism in the wine industry and significant purchases (e.g. Kendall Jackson) have stirred up excitement.
3. Inventory of homes for sale in towns and cities is very low which is producing quick sales and more stable pricing in every price range as competition for properties increases.

Keeping Local Dynamics in Perspective:

1. All real estate is extremely local, right down to the location of a property compared to its neighboring properties. What you hear in the national news is generic, and even what you read in the Oregonian is only generally related to local cities, towns, and areas. The news is encouraging almost anywhere but only boots on the ground can offer understanding the degree and the dynamics of improvement.
2. The closer in to Portland, the better the sales are and the more you will realize higher prices for real estate. In Yamhill County, we are following from a distance. Our rural properties are just beginning to move and new construction is just budding. We are beginning to see more out of state buyers which drive our rural and higher priced property sales. While we lag, there is plenty of good news to celebrate.
3. We now have plenty of comparables for sold listings and plenty of pending sales data in the mix. However, appraisals are still challenging because the solds are lower in price than the active sellers are expecting.
4. Keeping a sales transaction alive has been a Herculean task (see related article, “The Challenge of Closing”).  We have experienced sale-fails at an alarming rate. We believe this is part of the cost of the market correction. Appraisals are the most challenging, lender demands are frustrating, buyer enthusiasm at times is too optimistic and sometimes unrealistic. The market improvements have offered us more business but not easier business.

Attached is the Market Action Report – February 2013 (March’s report should be out by end of the week), the Home Sales Report  break down for Yamhill and Washington counties, and the 3rd installment of our 2013 Buyer Advisory. We addressed why interest rates will rise with an improving economy in the first alert, the second alert noted that prices are rising and why, and in this one our intention is to awaken buyers to the historic opportunity which will soon disappear.

Predicting the future is not a science, it is not even an art; it is more along the lines of divination! We have lots of hard data about the housing recovery – it is real! However, we need to temper our enthusiasm with the question, “How far can a housing recovery go, and how long can it last, without the economy’s support of jobs and stability?” Last week it was reported that Oregon’s true unemployment rate, referred to as the under-employment rate is over 17%; this remains worrisome especially since the Portland metro area ranks among the best in the nation.

EUGENE, Ore. (AP) — If you include people who gave up looking for work and underemployed people in part-time jobs, Oregon’s unemployment rate last year was more than 17 percent of the workforce — almost double the state’s official jobless rate. Figures released Tuesday by the U.S. Bureau of Labor Statistics show 173,300 Oregonians were unemployed in 2012. Another 167,800 were underemployed or unemployed and not counted.

Thank you again for entrusting your real estate sales to us. We continue to push the limits of continuing education to stay up with an ever-changing world, to improve client service (a never-ending passion), and to remain on the cutting edge of competency and technology to get you the best results available in any market. Your trust and referrals are treasured!

Best regards,
Randy

Randy McCreith, Principal Broker
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653
Randy@TheBellaCasaGroup.com

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