Portland Real Estate Blog

New home sales post surprise rise

December sales top Wall Street’s estimates after tumbling in November.

January 27, 2006: 11:33 AM EST

Sales of new homes rose 2.9 percent in December, a government report showed Friday, exceeding Wall Street’s estimates.

The Census Bureau reported that the annual pace of new home sales increased to 1.27 million in December from 1.23 million in November, which was revised slightly lower. Economists surveyed by Briefing.com had forecast sales would slow to a 1.23 million annual rate.

While home sales gained ground in December, there are still signs suggesting a cool down in the real estate market, said Gus Faucher, director of macroeconomics at Moody’s Economy.com

"I don’t think month-to-month fluctuations are that important. I think we are still going to see a gradual slowing in the housing market over the rest of this year and into 2007," he said.

Weakness in economic growth, a general uptick in mortgage rates and slowing existing home sales are just some of the factors that point to an overall cooling in the housing market, Faucher said.

The Commerce Department said Friday that gross domestic product, the broadest measure of the nation’s economic activity slowed to an annual growth rate of 1.1 percent in the fourth quarter, down from a 4.1 percent rate in the third quarter.

Much of the nation’s economic growth has been tied to the housing boom, which has created jobs in construction as well as spurred purchases of big-ticket household items such as refrigerators and washing machines.

While the average rate on 30-year, fixed-rate mortgages eased in December to 6.27 percent from 6.33 percent in November, according to mortgage finance firm Freddie Mac, rates are still up from an average 5.71 percent at the beginning of last year.

SHAWN HEADLEE

Senior Loan Officer

Columbia Mortgage, LLC.

Phone/Pager – 503-906-1353

Fax – 503-526-2835

www.OregonMortgage.tv

SHEADLEE@CMORTGAGE.NET

9600 SW Barnes Rd. #100

Portland, OR 97225

Published in Realtor Magazine Online:

Study: Discount Brokers Take Longer to Sell Homes

(January 26, 2006) — Homes listed by discount brokers take about five days longer to sell than those listed by full-service real estate brokerages and are 12 percent less likely to sell at all, according to a study by Penn State’s Smeal College of Business and the University of Texas at San Antonio.

Abdullah Yavas, research director of the Institute for Real Estate Studies at Smeal, and Ron Rutherford, professor of building and development for UT, examined nearly 300,000 single-family home listings in several Texas MLSs. The researchers concluded that although discount brokers were slower and less reliable, using one had no affect on the price for which the house sold.

What does Active, Bumpable, Pending, Withdrawn, Canceled, and Expired mean in Oregon real estate? RMLS codes each listing according to status:

Active: The property is on the market and does not have an accepted offer.

Bumpable: There is an accepted offer but it is contingent. If the seller gets an offer they would rather accept, the buyer that is bumpable usually has 24-72 hours to remove the contingency and proceed with the sale or the seller can accept the other offer. Read more.

Pending: There is an accepted offer. The seller cannot accept another offer. The best a second buyer can do is a back up offer in the hope that the sale fails.

Withdrawn: The listing is not on the market but the listing is still “owned” by the listing agent. The seller cannot list with another agent. The expectation is that the home will come back on the market or will expire soon.

Canceled: The home has been removed from the market and the seller is free to relist with another agent.

Expired: Listings all have an expiration date. When that day arrives, the listing expires and it may be relisted with another agent.

I visited both the John Ross and The Strand showrooms today. The John Ross was holding a Realtor’s open house and I wanted to see the models of the Strand to get a better idea of how the three buildings are situated on the lot. There will be some great views from the West Tower looking north towards the city and Willamette over the existing Riverplace development.

Read the rest of this entry

The West Tower of the Strand was released for sale today. Units range from $319,000 for 792 square feet to over $2 million for a penthouse.

The release is for those already on the Priority Wait List. Units that are not sold to those already on the list, if any, will be opened up to the “public” for sale at a later date.

Front page headline of today’s Oregonian article by Dylan Rivera: Housing Prices Refuse to Cool.

The Portland area’s median home price jumped 20.4 percent to $252,900 in December from last December, according to the Regional Multiple Listing Service. The inventory of available homes was 2.1 months’ supply, close to record lows that have persisted since last spring.

This echoes our December, one of our busiest months of 2005. We did see a little slowdown right around the New Year but we’ve picked up again with clients looking for homes at both the low end and high end of the market. As of this morning, there are 86 active listings over $1,000,000 in Portland. There are 366 listings priced from $100,000 to $200,000.*

*Combined active and Bumpable listings in RMLS areas 141 (N. Portland), 142 (NE Portland), 143 (SE Portland) and 148 (West Portland) as of 9AM 11/17/06.

Practice what you preach. We started packing up our home today with the goal of putting it on the market in the coming weeks. The first step is getting rid of the clutter- the stuff that distracts from the house. We know from experience that the way you live in your home is not the way you live in your home when it is listed. There are advantages to listing a vacant house!

Between active and pending, there is the bumpable buyer. If a buyer has to write an offer subject to the sale of another property and the offer is accepted, the buyer is considered “bumpable.” The seller may still actively market their property and if they get another offer that they consider acceptable, they must go back to the bumpable buyer and give them the opportunity to remove the contingency and proceed with the sale or walk away from the transaction. The bumpable buyer usually has 24-72 hours to make a decision.

The contingency is usually removed by one of the following ways: the buyer has an accepted offer on their property or the buyer is able to make the purchase of the new home without the sale of their existing home (often through a bridge loan). Once the contingency is removed, the transaction becomes “pending.”

Here’s my reply, also posted to the Willamette Week website, on Nick Jaquiss’s story “Will Portland extend a tax break for homeowners?” received by those of us on the State Historic Preservation Office Special Assesment program for historic houses:

I can clearly see the point of your article but you’ve made the program out to be a scam for the rich.

We purchased the 1902 William L. Brewster House on NW Lovejoy in September from a family that had owned it since the 1940s. The house is a “contributing property” to the Alphabet District but was not a part of the tax abatement program when we bought it. The program was a major factor in us being able to afford the purchase and the substantial remodel that is still currently underway. The seller sold to us, at a lower price than another offer, because we were going to save the home. The other buyer was going to tear it down and build condos; a much more profitable option. So I’d have to, respectfully, disagree with Jeff Merkley when he says that the program has not saved a historic home. The decision between teardown and restoring was close.

You state:

“All that’s needed to qualify for the freeze is to pay an application fee of one-third of 1 percent of the property’s real market value, file a maintenance plan, and hold an annual public open house.”

Our application was about 40 pages detailing how we are preserving, restoring and improving the house. We have ongoing communication with the State Historic Preservation Office as the project progresses. I probably spent close to 80 hours putting it together and my wife has spent about that much time again going through Portland’s Design Review process. The majority of our exterior work is stalled while we go through the permit process that was started in September.

Filing a maintenance plan also means carrying it out. The program prevents all of us who are a part of the program from just doing what we want or choosing the cheapest option. We are trying our hardest to do what is best for the property while making it a comfortable home to live in. Just because it made sense in 1902 and through subsequent remodels does not make for a comfortable home today. The program allows for the assessment of previously abated taxes for failing to follow through. Enforcement of that, I cannot speak to.

The program is doing for us what it was designed to do. If it is being abused by others, that is your real story, not just a generalization that we are all in it for a “tax holiday.”

I just did a comparable market analysis (CMA) on a property in the Pearl District. The property is listed for $499,000 so I searched back sold properties since August 1, 2005. There were eleven comparable properties. The average price per square foot was $402. It wasn’t all that long ago that $300/sqft was average.