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Local Market Activity:

The Real Estate Market in the Portland Metropolitan Area is fair. The month to month average sale price in the Portland Metro Area from June to July was "up" 2.5% . The average time on market to procure a sale pending contract for a properly priced, clean, and ready to show home is 121 days on market. Inventory is at 10.8 months which is the amount of time it would take to deplete the existing inventory of homes for sale based on the current sales pace. In SW Washington the month to month average sale price from June to July was "down" 4.9%, average time on market to procure a sale pending contract for a properly priced, clean, and ready to show home is 130 days on market. Inventory is at 12 months which is the amount of time it would take to deplete the existing inventory of homes based on the current sales pace. The large inventory of short sale and foreclosure homes has held house prices down. Thankfully low interest rates and tax credits for qualified buyers has created an increase in buyers entering the market which has helped to slow the depreciating housing market and absorb some of the inventory. Inventory is fair which is good for sellers, time on market is fair, these are positive signs in comparison to 2008-2009. Its still too early to tell if the market can sustain itself. The mortgage interest rates and tax credits will have a big impact on the housing market as well. If buyers go back to sitting on the fence then inventories will rise which creates competition among sellers resulting often in price reductions. The high unemployment rates could also hurt housing in that as foreclosures, and short sale properties come on the market at substantial discounts, normal sellers cannot compete at these discount prices and this again brings down house prices, also the large influx of foreclosure properties increases inventory which results in prices dropping. There are rumors brewing that lenders are holding what is being called a shadow inventory of foreclosed homes off the market in an effort to not over saturate the inventory with wholesale priced homes which can affect competing properties and drive down the housing market, however if there is significant foreclosures then banks may be forced financially to put these homes on the market in large numbers which will raise inventories and could cause a drop in prices. The FHA is nearing its financial reserve minimum of 2% if they drop below this they could be asking either for a bailout, increasing the mortgage insurance that buyers pay for financing an FHA loan, increasing down payment amount, or raising risk criteria to minimize losses, any of these scenarios could upset the housing market. My concern is that a large percentage of less then prime buyers have used the FHA financing process due to its less restrictive credit requirements and down payment requirement of just 3.5% and I question if the FHA will not be left holding the bag in the near future as many lenders did during the current crisis when homeowners defaulted on their loans, only this time we the taxpayers will be bailing out a government entity rather then banks. I cannot stress the importance of accurate pricing in this current market, fishing to see if you can find that one in a hundred buyer and overpricing a home will likely backfire resulting in price reductions and extended time on market. The recent problems in the mortgage industry primarily caused by a high number of defaulting loans accounts for a relatively small percentage of the mortgage market as a whole. The negative media coverage and talk of thousands of defaulting loans and foreclosures is not specific to our local market which has faired pretty well. However many lending institutions have suffered heavy losses as a result of loan defaults and declining real estate markets in other parts of the country resulting in tightened loan standards making it tougher for some to qualify for loans. The economy is also playing a big role in the real estate market, buyers are sitting on the fence waiting to see if tough economic times are ahead. If you are considering selling now is still a good time but pricing must be conservative and expect the sale to take a little longer. It is important to choose a professional like myself who knows how to properly price a home, knows the local real estate market, has a detailed, and proven marketing strategy, good working relationships with other agents, and references to demonstrate success. I use a hand picked team of consisting of a Mortgage Broker, Contractors, Inspectors, Appraisers, and Escrow Agents that will work hard to get the deal done, while upholding the customer service and honesty that I myself expect. Mortgage interest rates are low and a good inventory of homes are available, as a result there are many active buyers looking to purchase making it a decent market for sellers, and great for buyers. Buyers the time to buy a home is when the market is down. Buy now at great prices and excellent interest rates, then when the market recovers you can ride the wave of house price appreciation. I work with a great mortgage broker who will work hard to get you approved at a good interest rate. Sellers I offer listing plans starting as low as $395, and Buyers there is no cost to you for buyer agent services. If you are not currently under contract with an agent then feel free to contact me anytime as I am happy to assist you.


My Opinion On The Economy:

Simply stated "The cost of living did not rise in proportion to wages". The average American family saw the cost of housing, fuel, automobiles, healthcare and other daily necessities rise much faster then the living wage needed to meet their financial obligations. When house prices were appreciating rapidly and an abundance of low interest credit was available, many Americans were tempted into using their home equity to supplement their incomes. When house prices fell, the equity was gone, and wages had not caught up with the cost of living, it was a cold reality that many could no longer afford to live their current lifestyle. While there were certainly people who bought houses they could not afford, and those who drained equity in there homes to live lavishly and buy material items, I think those cases are not the majority. I started seeing a shift in the housing market three years ago so for experts to say this was a surprise is nonsense. While many including myself did not predict such a steep drop in housing prices, we knew tough times were ahead. I am certainly no economic expert and only airing my own opinion, but there may be a second wave of economic trouble ahead. The first round was the subprime and those homebuyers who purchased homes with very little down, they had little or no financial stake in their homes so it was financially easy to allow a foreclosure and walk away. I am now seeing many preferred mortgages in trouble, those with large down payments, good credit, good income, low debt to income ratios. As people lose their jobs they lack the income to maintain the lifestyle created when times were good. Credit card companies and Automobile companies are now seeing the defaults, which I fear could bring more trouble to the financial sector. Retailers are seeing the pinch as Americans are having trouble obtaining or maintaining credit to purchase goods, and with economic uncertainty are cutting back on spending. It was the housing market that played a big role in the collapse of the economy and it will play a big role in its recovery. Two of the largest sectors affected by unemployment have been construction and manufacturing. If the government will step in with plans to help struggling homeowners modify troubled mortgages and to make credit available at interest rates too good to pass up (below 4.75%) then I feel it will help turn the housing market around, which in turn will allow Americans to again build equity, put the construction industry back to work, and produce alot of manufacturing jobs to make the materials that go into building and remodeling houses. Etch it in stone now FHA Loans could be a future problem as they are allowing borrowers with less then perfect credit buy homes with as little as 3.5% down payment and the sellers are often contributing the closing costs, etc, these may spell trouble in the future. Lets pray those who are given the privilege of homeownership under such lucrative government programs use them wisely, build equity, and don't tap their equity for foolish purposes. 2009 will be an interesting year to say the least as while the economy is fragile, the Obama administration is proposing unprecedented spending, lets pray that our Government spends with transparency and accountability for our tax dollars and that future generations won't be burdened by this debt, but rather will reap the benefits of a stronger and brighter future.   



Why Use a Realtor:

In 2008 the National Association of Realtors reported that 84% of homes were sold using a real estate agent. Just 13% were sold For Sale By Owner and of those transactions approximately one third were sold to buyers they already knew. Approximately 3% were private party sales. Seller's using a Real Estate Agent obtained approximately a 16% higher sale price on their home.

Choosing The Right Realtor:

Perhaps you have seen a house that sits on the market for six months where you can't remember it without the For Sale sign in front, the neighbors and potential buyers are thinking something must be wrong with the house not to have sold, the flyer box is often empty or has cheap black & white photocopied flyers, no open houses, no broker tours, no newspaper  advertising, or directional signs. Some agents believe in what is called the 3P strategy. Put up the sign, Put it in the RMLS, and Pray that another agent brings a buyer. This is not the way to sell real estate. Be cautious of offers to list your home for 1%, often 1% is the fee only if the listing agent sells the property and you may not get full service and market exposure such as extensive advertising, open houses, etc. I offer some of the most affordable listing services available but I never reduce service and I back this claim with a written service guarantee. It's important to choose a Real Estate Agent and Company that has positive relationships with other agents in your market area as other agents may represent prospective buyers. Any agent you interview for listing your home should be able to provide you with comparables of your neighborhood and be able to support how they arrived at a recommended listing price. Overpricing a house just to please the sellers in order to obtain a listing is only wasting the seller's time and will result in less showings and future price reductions. When interviewing an agent for services don't be afraid to ask for referances of the agents past clients. I am proud to be a Realtor and take pride in my work and efforts for my clients. Before you list your house I would appreciate the opportunity to sit down with you, as I am confident I can come up with a plan to meet your needs.

 
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