The May Market Action Report tells us that average and median sale prices have risen above the top-of-the-market prices in mid-2007 (reporting figures for Portland metropolitan including Yamhill County). Portland again is very expensive and demand from people moving to Portland from out of state is driving the pricing sky-high right now. However, remember that all real estate is local – right down to the particular neighborhoods. The farther out from Portland’s epicenter, the markets lag and will vary greatly. For Yamhill County, the market is doing very well with improving sales volume and rising prices. We have nothing to complain about (unless you are a buyer!) but we certainly are not Portland.
The challenges in our marketplace right now are these: Buyers still have historically low interest rates (about 4% on a 30 yr loan) but the fundamentals in the economy and the marketplace foretell interest rate increases are imminent, and in fact, are already rising very slowly (for now). Inventory is rapidly decreasing so finding the right property takes diligence and decisiveness and a heavy dose of realism. Buyers are not willing to accept this radically changed market and they are risking losing out on the remaining good interest rates, good values, good choices, and still low prices because it is no longer a buyers’ market even in our area. Sellers are pleased with the ability to sell and get better pricing for their homes. They are frustrated because the transaction process is backed up and almost every transaction is closing late. There are not enough inspectors to investigate homes, contractors to do repair work, appraisers to handle the sales volume, vendors for every other aspect of the sale (e.g. well testers, etc), and the bureaucracies for processing the loans are bloated with regulations that need to be satisfied and stuffed with sales to process. We have gone from predictable 30 day closings to 45 day closings; we are soon to see a new norm of 60 day closes. This is painful.
Regarding Industry Changes:
Inspections periods are getting more and more complex. It used to be a professional home inspector used his skills to find symptoms of prospective problems or near future expenses so the buyers could be well-informed buyers. Buyers could then have experts in the trades tell them about problems and help them understand the costs to remedy and the relative seriousness of various issues. For years now, buyers have demanded a high level of repairs and remediation be paid for by the seller including some big ticket items like crawl space issues and sump pumps. Today you should expect to add many more inspections to the list. It is common to hire a home inspector at about $400+ and then to add sewer scoping or septic inspections for a couple hundred more dollars. Wells need to be tested for water volume (flow tests) and potability (coliform, nitrates, and now arsenic); add another several hundred dollars. Radon testing is becoming prevalent and though our area has not been considered a high risk area, the standards still end up causing problems for many and remediation is becoming the next wave of expenses to sell or buy a house ($$$).
Government backed loans (USDA, FHA, etc) seem to be putting lots of pressure with ‘lender-required’ repairs which is as it sounds… if you do not get these repairs done (usually at the seller’s expense) the loan will not be funded. For example, peeling paint (regardless of how miniscule) causes these demands. A lender can require a new roof or rebuilt decks, etc. Of course everyone now has to have the current code smoke detectors and carbon monoxide detectors, and now older, uncertified wood stoves and fireplace inserts must be removed and destroyed and proof of this provided to the lender.
On a more positive side, Accessory Dwelling Units (ADU) are becoming popular and surprisingly promoted by municipalities. Remember the days when you could not rent out any portion of your home legally? When ‘guest houses’ in a shop or on the property, or ‘mother-in-law’ quarters, or dual-living homes were kept under the radar and built with stealth technology? Wow; the world is changing. Under the banner of green building it is now the governments that are encouraging and supporting turning your basement into a separate rentable unit, or renting out your bedrooms as an ‘Air B &B’, or creating a separate apartment as income producing space, and using your home as a Vacation Rental By Owner (VRBO). What’s up? Cynically, we might say more revenue for the city as we pile people higher and higher atop each other, but more generously, things are changing with new trends and grass root practices already rapidly expanding throughout our cities. Want to know more? You can start with this website: http://accessorydwellings.org/.
New Newberg Office:
Bella Casa Real Estate Group has opened its new and much larger office in Newberg, in our renovated building formerly Underground Coffee. It is on the corner of Hwy 99 and Springbrook Rd next to Shari’s Restaurant. This remodel was an immense project and we will be tinkering and finishing the project for the entire summer, I am sure. We will then have a grand opening and an open house for our clients, our colleagues, and the public (likely in September), when we all regroup from Summer fun (and work). In the meantime, stop by anytime and see the new home for our Chehalem Valley services. Of course, our signature office in McMinnville remains to serve our Yamhill Valley, and West Valley clients.
Thank you for your interest in our work, and for your referrals, and for your trust in us to provide you with the highest quality of professional real estate services. Remember, we offer all residential services, farms and rural properties, luxury properties, commercial and industrial real estate sales, investment properties. Our Bella Casa Property Management is now about 250 doors strong and growing!