Are we nearing the end of the Buyer’s Market?

View and download the full Market Action Report March 2012

Summary of the Portland metropolitan market:

1. Pending sales are up 12.8% over last March; 7.7% up from February, and year-to-date pending sales are up 18.2% over 2011.
2. Closed sales are up 4.9% over last March; 34.2% up from February, and year-to-date pending sales are up 12.2% over 2011. This is the highest number of closings in the 1st Qtr since 2007 (pre-crash).
3. Average price and Median price are still down but less than .5% in the former and 1.4% in the latter. We currently compare with pricing in 2004 and early 2005.
4. Inventory is low (5 months), well down into the ‘normal’ range (<6 months) and many homes are selling very quickly. Average time on the market for the 1st Quarter is 135 days down from 165 days last year same time.

Anecdotally, we are amazed at seeing lower end homes in Portland predictably get multiple offers and sell above asking price. One bank-owned property we helped a client with had 16 offers on it. Another client lost a home after offering about $25k above asking price. Homes can once again go pending within days of listing. What happens in Portland spreads to our areas. We are seeing some of the same and we are seeing good activity including offers in every price range and for every type of property including new construction and luxury/higher priced homes. This week we sell a buildable small acreage property; very rare for 5 years!

Yes, it appears that the buyers’ advantage is dissolving right before our eyes. A return to a balanced market is healthy for both buyers and seller and industry professionals. For buyers right now, the handwriting is on the wall. Buy this year because next year could be very different for choice, and price, and interest rates if the economy follows the housing markets up. Last week I heard Dave Ramsey (no slouch on money management and also still a practicing Realtor®) say on his national radio show that he is buying every good real estate deal he can find right now.

Some important qualifiers:

• Recovery will likely be very uneven with fits and starts, ups and downs in the short term. Improvement is starting at the bottom where there are more houses and more bargains but it will move up. With many sales, the log-jam of inventory begins to loosen up, the seller becomes the next buyer, and this multiplies as sellers are set-free to move on.
• Buyers should take this seriously but not panic. Realize that as people become aware that properties are selling, there will be many who are currently sitting on the sidelines who will once again enter the market and try to get their property sold. We also still have a lot of future bank-owned inventory (or all stages of foreclosure) which will be hitting the markets, affecting the numbers, and continuing to offer great deals.
• As I write this, the national news is much more negative than our local markets would indicate. Remember the maxim, “location, location, location”? That includes within it, “local, local, local. National averages tell you little about your challenges or your opportunities. ALL MARKETS ARE LOCAL- right down to the neighborhoods.
• Right now I am telling our sellers that we have the best odds of selling their properties than we have had in 5 years. That is hopeful news. It needs to be tempered with this: Our numbers for the volume of sales are better but they are still much lower than ‘normal’. That means that the market is still very competitive and the buyers are still attempting to cash in on a buyers’ market to pick-up bargains. Prices are still declining but the rate of decline is slowing to a crawl. The return of balance is good but we are way off from a sellers’ market!
• We are still vulnerable to an economy which seem to be struggling to recover and also suffers from fits and starts. In 5 years we have been hit with multiple crises not just one. We all hope for no more economic tsunamis.

As always, glad to have your thoughts. As always we greatly appreciate your trust of us and our services and thank you for referring your friends, neighbors, family, and co-workers to us.

Randy McCreith
The McCreith Team
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653
[email protected]