Clients and Friends,
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!
Randy McCreith, Principal Broker
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653