Clients and Friends,
The 3rd Quarter Affordability Index (last page of the Market Action report) shows that properties in the greater Portland metropolitan area are the least affordable they have been in the past 10 years. This is not surprising. Ten years ago, at this time in 2008 we were crashing for the second time. The sub-prime mortgage mess hit us in August of 2007, and the financial meltdown hit us in September of 2008. Since the bottom in 2012, prices have been escalating rapidly, and continue to climb, but at a much more modest rate now. While we see many “new price” messages in the marketplace, this is just reining-in of the euphoric optimism in pushing prices aggressively.
Consistent with every monthly report of 2017, our numbers are retreating in every category but price. The high water mark of this recovery, except for sold price, was in 2015. We are certainly not in a free-fall, the numbers for the past 3 years are still tight but the leveling out and falling back some is consistent for 2-3 years.
For buyers, everything is expensive!
What does this mean for sellers? The higher we go means the fewer the buyers in your price range. It also may mean that buyers are less motivated to get out there and ‘buy now’ because there is no such thing as a bargain anymore. The slowing of the market also adds fuel to the buyers resistance to buy quickly; it is unlikely (for now anyway) that they will be left behind as the market zooms up. Therefore, buyers have all the motivation to remain idle, to take their time, to negotiate a bit more aggressively, and find and negotiate the best value they can find. Nothing is more frustrating to sellers in the marketplace than lack of buyers ready to buy in their price range! A seller would always rather have showings and offers, even if lower, than to have no activity. Listing agents fear ‘no activity’ more than anything; how do we explain that satisfactorily???
Anecdotally, we are enjoying a ‘normal’ 4th quarter which is good. The rains are here but we have enjoyed a rather sunny October and many good sun breaks between the rains. No extreme weather so far means our real estate activity is good this year.
In the links below you will find the Market Action Report with graphs, charts, and data. The monthly home sales numbers are also broken down by price range and bedrooms in the Home Sales Report. I also included an article about what we cannot do for you!
We are as busy as ever at this time of the year as we improve our services, upgrade our methods, learn from the past and prepare for greater success for our clients next year. We enter the holiday period this week and we wish you all.. great enjoyment of the season’s riches, time with your family and friends, and the understanding of these simple yet profound holidays.
Randy McCreith, Principal Broker