The MLS (Multiple Listing Service) number is essentially the serial number of a listing. In RMLS the first two digits denote the year: 13208782 shows that the property was listed in 2013. So what do the next six numbers tell us? Absolutely nothing. The last six digits are randomly assigned. Up until a couple of years ago listings were assigned sequential numbers. Low numbers in the series meant the listing was older. This caused many agents to “refresh” the listing by canceling it and relisting so a new MLS number was assigned It also reset the Days on Market calculation. Though the practice of relisting still goes on there is less motivation to do it now. The second deterrent was the addition of Cumulative Days on Market tracking. Instead of the days resetting with a new MLS number the days continue accrue unless the property is off the market for at least 30 days.
Archive for the ‘Portland Real Estate’ Category:
What a difference a couple of years makes! In February of 2011, I ran a search in RMLS that resulted in 4208 active listings in Portland. 441 of those were bank owned (REO) and 750 were short sales. REOs made up 10.4 of the market and 17.8% were short sales.
I ran the same search yesterday: 1544 active listings of which 45 were REO (2.9%) and 87 short sales (5.6%).
Why the drop? The simple answer is that the economy is better. There have been fewer foreclosure actions/defaults and as the real estate market improves, the number of underwater owners decreases. Additionally, a strong argument can be made that those that have held on this long can/will probably ride through the rest of the storm. The system has worked through the majority, but not all of the at risk properties.
On the bank owned front, there are additional reason. A quick scan of the listed REO tells me that the majority are owned by the quasi-government agencies, Fannie Mae and Fredi Mac. These agencies are not subject some of the restrictions and laws (for mediation) placed on the commercial banks and were not subject to the impact of the MERS related ruling in the Oregon Supreme Court. My belief is that the banks are not sitting on property they can bring to market and sell but that they are holding property that they don’t have the ability to clear title and therefore cannot bring to market. I know of two instances where the mortgagee filed for bankruptcy and the properties have been stuck in limbo and vacant for more than a year.
I expect that we will see another wave of bank owned property in the Portland area but it will be nothing like what we saw in the past and I don’t think those properties will be massively discounted. Why? Look at the number of active listings. There’s just 36% of the number of listings on the market now as there were two years ago. I did discover that Zillow appears to universally discount bank owned properties 13% from their Zestimates.
I’ll do more of a year in review when the next RMLS market Action comes out mid-month.
RMLS Market Action for November was released yesterday and we have our new infographic ready! The Portland real estate market has slowed some but we expect that with the holidays. We typically expect to see fewer buyers and sellers in the market at this time of year but they are usually more motivated- it’s not a lot of fun looking at homes in the rain and cold.
It’s been quite a year. Year over year, the average sales price is up 13.5% to $310,800. We can’t do that forever but it gets us a lot closer to getting back on the 4% track we have seen historically over the last 40 years. The market went way over the trend line pre-bubble and way under it a the post-bubble bottom. Like all markets we’ll have our ups and downs and we got a painful reminder that real estate is a long term investment (there are exceptions).
Case Shiller’s September 2013 housing report was released yesterday. The two-month lagging report show that the Portland real estate market edged up from August. The 160.18 is up less than a point but more importantly has rebounded 30 points from the March 2012 low of 129! That means that the pool of underwater houses has dropped to three years: the market was higher than today between October 2005 and September 2008, not taking into account entry and exit costs to the property.
Historically, over time, real estate markets have increased 4% annually over time. If we extend that out from October 2004, Portland’s index would be at 180 so we are still behind that trend. How long will it take to catch up? That’s the crystal ball question which the “Now is a great time to sell” and “now is a great time to buy” pundits ignore. Have you ever noticed that most real estate marketing suggests that right now is the best time to do something? It may be for some but for others there will be other opportunities.
RMLS Market Action for October 2013 is hot off the press and it shows that housing inventory in the Portland Metro area dropped to 3.4 months. Inventory was 3.7 months in September and 3.8 months this time last year.
The average sales price is $314,100 which is a slight drop from September but up 13.5% from October 2012. That level of year-over-year increases isn’t sustainable. Historically housing prices have increased about 4% over time and after the bubble crash, we’re still behind that but not by much. [Graphic below infographic]
We’ve created a new info-graphic for this month’s Market Action (click image to view full size):
I got a call today from a home buyer asking if there are any view ordinances preventing neighbors from planting trees that will eventually block their view? The answer would logically apply to an existing tree as well.
I wasn’t entirely satisfied with my Google search to figure out the answer but I was leaning towards, “No, there is nothing protecting your view.” I found this article regarding your neighbor’s trees on the City website. There’s a mediation program for dealing with your neighbors too. Maybe you can work something out before it escalates into something ugly. They deal with more than just tree issues.
I called Urban Forestry to ask the question. As long as the tree is planted legally, “there is no intention of protecting views.”
In other words: caveat emptor.
What’s my home worth? The answer is the foundation for intelligent decision making. No matter what type of evaluation is done, the result is a matter of opinion. There are three basic types of home valuations:
- Completely automated reports like those from Zillow (Zestimate), Trulia or our Market Snapshot, which is a Realtor.com product. These reports have no human interaction and may be online or emailed to you on a periodic basis. This is the instant gratification method.
- The Realtor generated Comparative Market Analysis (CMA). These reports can be very broad or drill down to very specific criteria. This the report that we create to advise clients regarding pricing the property that they are buying or selling. This is the free report that we are offering here and can take anywhere from five minutes of hands-on time to over an hour. The final valuation may be manually calculated and adjusted or formula based. View a Sample CMA and sign up for yours:
- The appraisal: this report is done by a licensed appraiser most commonly for the bank’s benefit (if you were paying cash, an appraisal would be optional). The fee for an appraisal starts around $350 and can climb into the thousands depending on what is being appraised. $450 is a good budgeting number for a single family, owner occupied appraisal. Appraisals for investment property cost more as rent rates and income potential are examined. A full appraisal is often used for valuation purposes on estates, refinancing and purchases.
July 2013′s RMLS Market Action was published yesterday. Inventory remains tight and consistent at 2.8 months and other metrics are in positive territory as well. The average sales price is $326,500 compare to $287,000 this time last year.
Here’s a metric we’ve never looked at before: the ratio of accepted offers to closed offers. We could call it the “Likelihood to Close.” Year-to-date there have been 15,467 closed transactions and 17,406 accepted offers. That’s and 89% Likelihood to Close factor.
For the same period in 2010, there was a 92% Likelihood to Close. In 2007 94% of accepted offers closed. What does it mean?
Even in a tighter inventory market than we’ve seen in years, transactions are more likely to fail. My personal opinion is that the main cause is buyers are more cautious than ever before and are more willing to walk away.
“Our team has been closing a record number of transactions in the last few months,” Turner Team realtor Charles Turner wrote in a recent blog post. “These numbers exceed the month that the First Time Buyer Credit expired and any of the peak months of the 2005-2007 ‘crazy’ market before the crash,” he said.
Of course, it becomes a case of be careful what you wish for. The double-digit jump in the average sale price is “frightening,” Turner writes. “Hopefully the market will settle down to an appreciation rate of around 5 percent. That should be sustainable.”
I wrote that just as interest rates were spiking. July was our best month yet but August has cooled which seems to mirror both our local and the national markets.