Clients and Friends,
My apologies; I have missed sending out a couple of months of these market reports. An intensely busy work load, our annual vacation, and then the passing away of my Mom overloaded my schedule. I am returning to normal just in time to begin again a new year’s cycle for what is expected to be another strong selling season in real estate.
We wish everyone the beginnings of a happy and prosperous new year in 2017. In real estate, we have much to celebrate in 2016 and we have many reasons to be grateful (for Joni and me, 3 new grandchildren this year now makes 10!). When I see the year ‘2017’, I cannot help but think that it was 10 years ago this year we got hit with ‘The Great Real Estate Famine’ which should have killed all of us in this industry. I am grateful to be alive but for too many years it felt like a living-death. These ‘dark years’ have scarred us for the rest of our lives. I can relate with my grandparents’ generation who endured the Great Depression of 1929 and who forever were changed by that horrible experience. It is in 2017 that we expect to cast off the last of our depression era debt and return to ‘normal’, and reasonable prosperity (we trust).
The extremes of the heights of the marketplace in 2007, the lows of the fall to the deep and dark bottom through 2012, and now again to new unprecedented heights of euphoria in these past few years leaves us with some new concerns as we begin another year. Our industry is surging with new and fresh talent and new brands applying new methods and technologies. That can be good. However, many are also untrained, untempered, and untested prospectors focusing only on striking gold in this hot market. The motivation can be dangerous and the fast pace of our industry right now leaves little time for seasoning and the maturing process. Prices are now very high compared with anything we have ever known in our area and may continue to take us to a new tier of value as experienced by all the other West Coast metro areas. Interest rates finally are actually rising from irrational lows for a decade, but this affects buyers purchasing strength more than any other issue. We expect a good year in 2017 but it is never without its challenges and its cautions.
Portland and Yamhill County Fall Summary of Market Conditions:
Overall in the Portland Metroplex, this continues to be a year of some cooling off, a slowing escalation of the housing recovery begun in 2012. There is nothing negative to report, just a slowing of the recovery pace. I consider this to be healthy. If you look at the 5 year chart of closings you can see that we began this year at an unprecedented pace but soon dropped modestly behind the numbers reached in 2015. Prices continue to appreciate at aggressive rates to new highs; sales are still among the strongest for the last decade. The annual cycle for housing is perfectly normal. It has been a very good year for real estate. As the recovery spreads, a broader geographical base is now sharing in its fruits.
Yamhill County has been such a recipient (see page two). Among other dynamics, as Portland gets crowded and expensive, more people push out farther and our housing market improves for our sellers. Even more, it really does appear that the epicenter of Oregon’s maturing wine industry has reached critical mass. We are attracting new and many more investors spending enormous amounts of money for their stake in our future. Our new-housing sector is swallowing all our available buildable land and infilling any available lots. Prices in Newberg and McMinnville are above the top of the market in 2007 and our other towns will soon follow suit. Rural properties, like a long, heavy train are cleaning-out any legacy bottom-of-the market values and will likely this year get up to speed with the recovery.
Finally, I would like to share our Sales Training Series for our brokers. I know of no better way to understand the values we are committed to than to let you in on our back room conversations. Here you can actually hear what we believe, what we are committed to, and what we hold each other accountable for. Our values affect you dramatically and they are fundamentally crucial to our success. An agent’s value system is the most important information you need to know when selecting someone to represent your interests and help you achieve your goals.
We remain faithful to our clients, we never give up. With new challenges we will adapt and pursue what is in our clients’ best interest in new kinds of marketplaces this next year. You have made us the most successful real estate office in Yamhill County with your trust and your referrals to us. We look forward to working with you and your friends, neighbors, and loved ones in 2017. We are grateful for you.