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RMLS Market Action September 2021

RMLS Market Action Inventory September 2021RMLS Market Action for September 2021 was published yesterday.  No massive shifts but some trends that are worth watching.  Once again, inventory ticked up 1/10th of a month.  At this rate, we’ll reach a balanced market some time in 2024!  Inventory is the ratio of Active Listings divided by Closed Listings for the month.  New listings for the month increase 15.2% from September 2020 and 1.7% from August of this year.  Closed sales dropped 1.6% from August.  Pending sales dropped 10% from August so it won’t be surprising to see another bump in inventory for October.  Keep in mind that “inventory” reported here is a seven county area.  Drilling down into specific areas may have considerably different supply.

The average home sale price in Portland Metro is $571,500, down from June’s peak of $597,100.  Since the peak, there has been a decline every month.

Is the sky falling?  No.  Year-over-year, the average sales price is up 17.5% (from $485,200).  The market needs to slow down, and it is.  Interest rates are still low and buyers who so wanted to buy a few months ago are getting the chance with fewer offers being submitted in a frenzy.  That’s not saying we no longer seeing multiple offers on a property; it’s that we are not seeing as many offers.  That said, an overpriced home on day one will sell for less than it would have had the market believed it to have been accurately priced the day it was listed.  Said another way, overpricing a home is the kiss of death.  It’s also important to consider that some types of properties take longer to sell.

The real estate crystal ball is a little murky these days.  Real estate in 2020, into 2021, was an unpredictable animal.  Will we start to see the general trends we saw prior to the pandemic remerge or has the book been rewritten?  We don’t foresee a market crash but perhaps a return to “normalcy” where long term national appreciation is about 4%.

Neighborhood Spotlight – Lake Oswego

The beautiful Oswego Lake is the centerpiece for the suburban community of Lake Oswego! Its small-town feel, while only 16 minutes away from Downtown Portland, is just one of the many reasons Lake Oswego residents chose the area.

The town of “Oswego” was first founded by Albert Alonzo Durham in 1847, and named after his birthplace in New York. After the acceptance of the discovery of iron ore in the Tualatin Valley in 1861, the iron industry began its boom, and the town of Oswego was home to the iron industry. When the iron industry reached its demise, the town turned to land development and after the incorporation of the City of Oswego in 1910, began building power poles as a way to get electricity to the community. The true development of the Lake Oswego we know today happened around the 1930s when Paul Murphy developed the Oswego Lake Country Club to make the city a place for work and play. The residential development around Oswego Lake really took off in the 40s and 50s and by 1960 the town was renamed Lake Oswego, the town we know today.

Oswego Lake Country Club – Then & Now

Today, the city of Lake Oswego is known for its spectacular shopping and dining, tight-knit community feel, and fabulous schools. The city hosts a variety of events including a farmers market, summer concerts, movies in the park, and the Festival of the Arts. With the community situated around Oswego Lake, there are also plenty of fun outdoor activities to enjoy, including the Lake Oswego Swim Park which is open to all residents through the summer.

We are still seeing a hot real estate market in Lake Oswego with an average sale price of $878,000. Typically we are seeing homes on the market for around 17 days. We sell a lot of houses in Lake Oswego. Mainly buyers looking for great schools for their kids and a great community vibe. At the beginning of COVID, Kaycee and John called and wanted to raise their daughter Grace out of the city of Portland. They had toured a house on Greentree and it turned out to be the perfect setting for their next chapter. We sold their house in Colonial Park and they moved to Lake Oswego. Grace loves her new home and large yard to run and play! Laura and Peter were similar in that they were looking for the best school for their 4th grader Ryan. Ryan was a favorite – always wanting to help open lockboxes and having a definite opinion about every house we saw! We landed in Westlake backing greenspace so plenty of room for Ryan to run & friends around the corner. The perfect match after a long search for perfection!

 

Our favorite spots in Lake Oswego:

  • Gallery Without Walls – A unique outdoor sculpture exhibit throughout Downtown Lake Oswego 🗿
  • Jefe – A traditional yet modern take on Mexican cuisine 🌮
  • Iron Mountain Park – A 51-acre park featuring natural and developed features🌳
  • Babica Hen Cafe – A cute brunch and lunch spot with a variety of delicious choices 🍳
  • Nola Doughnuts – Doughnut shop and bakery with a Louisiana flair 🍩

Resources:

Want to see Lake Oswego? Contact one of our agents today, we’d be happy to show you around!

Portland Metro RMLS Market Action

RMLS Market InventoryRMLS Market Action Report for August was just released and we aren’t the least bit surprised by the current state of the market.

Here are some of the main things we saw in the month of August: The average sales price of a home in the Portland Metro Area is down about $10,000 from July, at $583,600.  To put that in context, the average sales price was $511,000 in August of 2020!  Inventory, the ratio of active listings to closed sales, increased again from 0.9 to 1 month.  Inventory gives us a snapshot of supply and demand.  If four months is considered a balanced market between buyers and sellers, we are still firmly in a seller’s market with no sign of that changing.

So does this increase in inventory and slight decrease in price mean the COVID-induced frenzy is over? Our somewhat murky crystal ball says no. We know that there is expected to be a housing shortage for at least the next 24 months. We also know that we expect these record low-interest rates to at least last through next year. Meaning we still have lots of qualified buyers (demand) and not enough houses to show them (supply).  The metro area is not building new construction at a rate necessary to alleviate supply issues.  In the unlikely event that home prices decrease, a rise in interest rates could still make monthly payments increase.

“Inventory goes down in the winter,” or “it’s harder to buy a home as the weather turns,” are common refrains in Portland–but what does that really mean?

All that really means to us here at Lovejoy Real Estate is that as the seasons change, we see both buyers and sellers become more serious and intentional. There’s less participation int the market (fewer buyers and sellers and overall transactions) but the need to be competitive does not go away.

As a team, we meet regularly to go over the monthly market reports in order to be positioned to help our clients navigate these competitive situations and have realistic expectations. Our role is to educate our clients on market conditions so that they can make the best decision possible based on their situation.   Our team will do everything we can to make sure you know what price and terms will help you to win the home you are making an offer on.

We will promise you this: anything worth having is worth hard work and struggle. In the end, you are going to get into a house and out of the real estate storm!

Whether you are a seller ready to make the transition to a new home, or a buyer looking for your perfect space, we are confident that our team has both the knowledge and determination to make your real estate dreams come true. Ready to make that next step? Give us a call, we’re confident we can get the job done!

Neighborhood Spotlight – Beaverton, OR

If you are looking for a suburban neighborhood feel within minutes of Portland, Beaverton is the place to be! Nike may have put Beaverton on the map, but the food and atmosphere are why Beaverton is ranked #12 in best suburbs to live in by niche.com. With a thriving downtown area, convenient shopping, and great schools it is no wonder Beaverton is the second-largest city in Washington County.

Beaverton has a rich history dating back to 1868 when a railroad was built leading into town that spurred the growth of the small farming community. In 1893, the City of Beaverton was incorporated and had appointed its first mayor, Alonzo Cady. In 1914, Beaverton businessman and Postmaster F.W. Cady built the Cady Building to house his general store, but little did he know the historical significance the building would hold. In 1925 the Cady Building became the home of Beaverton’s first library, and now 102 years later the historical landmark is home to restaurants, retail stores, and apartments.

Beaverton's Cady BuildingBeaverton's Cady Building

The Cady Building – Then & Now

Beaverton is only 15 minutes outside of Downtown Portland, yet provides all the convenience of the city with major retailers, a variety of small businesses, and plenty of community activities. The city has a suburban community feeling and also boasts being home to 5 of the top 10 best schools in Oregon, so if top-notch education is what you are looking for in a neighborhood, Beaverton could be your place. Aside from great schools, there is also an amazing network of public parks, sports centers, and hiking trails to enjoy!

We are currently seeing a competitive housing market in Beaverton with a median home price of $498,000. On average, homes tend to be on the market for about 5 days, compared to a 13 day average from last year. I just helped a friend in Beaverton sell her home to make the move to San Diego. Her home stayed on the market for 5 days, had 18 showings, and ended up with 3 offers, we ended up selling for $25,000 over the asking price. We are definitely still in a seller’s market, which means it is even more important now than ever to have an experienced realtor in your corner.

Our favorite spots in Beaverton:

  • Ki Coffee – A Japanese-American coffee spot with delicious breakfast sandwiches ☕️
  • Decarli – A warm and inviting restaurant with delicious Italian cuisine 🍝
  • Staghorn Mercantile – A small boho boutique with an excellent selection of fun home goods 🤩
  • Ex Novo Brewing – Local brewery that donates 100% of its profits to a variety of charitable causes 🍻

Neighborhood Resources:

Want to check out Beaverton? Contact one of our agents today, we’d be happy to show you around! 😊

RMLS Market Action Report – July 2021

The RMLS Market Action Report for July didn’t provide for any surprises, but it did mirror what we are starting to see on the ground here at Lovejoy Real Estate. 

Here are the highlights: The average sale price of a home in the Portland Metro area in July of 2021 has rocketed up to $593,100, an almost 20% appreciation from July 2020. Furthermore, average days on market in July 2021 was half compared to the same time last year, it has dropped from 41 days on market in July 2020 to only 20 now. Conversely, we saw a slight increase of inventory on the market this month. 

As we all know, the market has been crazy both nationwide, but especially here in the Portland Metro market. However, we have started to see what may be a beginning of a shift in our market place here since July. And before anybody gets excited (or scared), market experts and we don’t anticipate a market crash or dramatic price changes coming soon, just a slight shift in the level of competition compared to the extreme conditions we were seeing earlier in the year.

As we mentioned earlier, we saw the inventory increase to 0.9 months of inventory from 0.8 the month prior. This change may seem insignificant, but our agents are feeling this change in their operations both on the selling side and buying side already. 

On the buying side, we’re starting to see the increase in inventory (or in some cases, that things are staying on the market just a wee bit longer than they have been lately). Allowing our buyers a little more breathing room when selecting homes to see and making offers.  In certain price points, this looks like more appointment times being available as more homes are available for buyers to choose from (even if it’s only a handful more). Then if they find one they’re ready to make an offer on, they’re competing against 2-5 offers instead of 10+!

On the selling side, this minor shift doesn’t mean you’ve missed the window of opportunity—not by any means! It simply means it’s even more critical now to find a realtor or team who truly knows the market and how to build that frenzy around your property. Considering we’ve just accepted an offer well over asking on two of our most recent listings within a week of it going on the market, we’re confident when we say we fit the bill 😉

Bottom line is, both buyers and sellers should take advantage of the still shockingly low inventory and historically low interest rates (which we don’t expect to last going into 2022). If you’re a seller and want to see what price and strategy would work best for getting top dollar for your home, contact us today and we’ll schedule a quick walk through to get the process started!

Buyers? We’ve got you, even in the tougher market, we were able to get our buyer’s offers accepted every weekend! So as the market shifts, with the insights we have daily on both sides of the transactions in our market we’ll know best when you’re ready to make an offer. Contact us to find your roadmap to homeownership today.

The Benefits of Homeownership

The benefits of homeownership are undeniable, some even consider it to be the “American Dream”. Buying your first home can provide financial and emotional security, a sense of belonging, and an opportunity to build equity. Here at the Turner Team, we want to see you succeed financially and one way to do so is making the long-term investment in homeownership.

Stable Monthly Payments

When deciding whether to continue to rent or to buy a home, one thing to consider is your monthly payment. Sure, at first glance, renting seems to provide a stable monthly payment but you must consider that typically rent steadily rises each and every year. In Oregon, the maximum rent increase for 2021 was 9.2%, which may not seem like a large number in the short term, but in the long run that is more money out of your pocket and into your landlord’s. By owning your own home your monthly mortgage payment goes toward your investment and offers stable monthly payments in the long term, which is beneficial for budgeting and peace of mind.

Opportunity to Build Equity

In the last 12 months, the average homeowner gained approximately $33,400 in equity. So what does that mean for you as a first time homeowner? The market right now may seem crazy, and you may be wondering if now really is the best time to purchase a home, but let me give you some insight.

The median home price in Portland as of July 2021 was $549,000, with an average annual appreciation rate of 5.86%. This annual appreciation rate places Portland in the top 10% nationally for real estate appreciation, making Portland homes an excellent investment. Right now if you were to buy a home for $549,000 with this appreciation rate, in five years that home would be worth about $730,000.

Think of your home purchase as a savings account, instead of paying rent to your landlord you are now putting your “rent” into that savings account and watching your money grow as your home value appreciates.

Freedom to Make Changes

Have you been renting your home or apartment, but dreaming of having new paint or an upgraded kitchen? When you own your own home, the opportunities for customization and change are endless! Being a homeowner you are free all your HGTV inspiration dreams come true. Not to mention, these changes also add value to your home in the long run, so those changes just add to the savings account we talked about.

Added Privacy

Owning your own home offers an extreme increase in privacy compared to renting. As a former renter, nothing compares to the annoyance of unannounced drop ins, thin walls, and noisy neighbors. Sure, you never know how quiet your future neighbors will be, but you do have a lot more space between you.

If this all sounds great to you, the Turner Team is here to help. Being a first time homebuyer can feel like navigating a maze, confusing and without direction, which is why it is important to choose a great realtor to guide you through the process and advocate for you!

 

 

RMLS Market Action June 2021

The stateRMLS Inventory of the Portland real estate market was confirmed by June’s RMLS Market Action: crazy; crazy good for sellers and crazy frustrating for buyers.

Inventory is one of the market indicators we look at.  Conventional wisdom used to say that market equilibrium is six months.  Anything below that is a seller’s market and above, the market favors the buyer.  We’re at .8 and have been at a month or lower since November of last year.   Even if we move the six month line to four, or even three months, I can’t see that happening anytime soon.  More on that later.

The average sale price of a home in Metro Portland in June 2020 was $479,700.  Fast forward to June 2021 and it’s just under $600,000 at $597,100- a whopping 24.4% increase.  The year-to-date appreciation is 20.1%.

Compared to May, new listings were up 8.2%, pending sales down 4.9% and closed sales up 9.2%.  Pending sales are the best indicator of the following month’s closed sales so we might see a small uptick in inventory?  It depends how many new listings we get.

When does it stop?  Right now, we’re looking at a supply and demand issue.  In June of 2019 there were 6,735 listings.  Now there are 2,722.  Factor in even lower interest rates, a rebounding economy, a shortage of new construction and a change in attitude about living space during Covid, I don’t see a market drop on the horizon.  A slow-down?  Yes.  A reversal?  No.  The current situation is not sustainable.

Sellers are in great shape.  It’s hard for buyers.  3,477 got new homes in June but many qualified buyers did not get what they wanted.  Some are starting to suffer from buyer fatigue, there is a roller coaster of hoping you are going to get a home and being beat out.  There are things we can do to increase the odds of getting an offer accepted but sometimes there is simply someone better positioned to buy that home.  We have 26 buyers pending right now so it’s challenging, not hopeless.

 

Portland Metro Real Estate Freight Train

RMLS Market Action May 2021 InventoryMay’s RMLS Market Action report was posted today. If it is any indicator to what our market is doing, it’s going up, not down. Seven tenths of a month of home inventory is the lowest it has ever been. What is inventory? It’s the ratio of active listings to closed homes: 150 active listings to 100 closed homes would be 1.5 months of inventory. Conventional “wisdom” says that six months is the balance between a seller/buyer market. Even if we reduce that to four months, we’re a long way off at .7 months!

Prices are going to drop.  Maybe.  Probably not anytime soon.  Portland Metro appreciation over the last 12 month is 18.9%.  I’m going to be the first one to say that this is concerning, I’d like to see closer to 6% but when (not if) the market slows it’s going to hit the brakes, not grind into reverse.  Demand is way above supply and when the market starts to slow it might mean a home that would have had 10 offers will “only” get three or four.  Caveat here for sellers: overprice your home and the market is unforgiving.

Interest rates are going to go up.  Yes, they are.  It’s reasonable to expect that we will see the best rates climb to over 4% by the end of the year.  Those best rates are currently under 3% and every half percent they go up, buying power goes down by 5%.  If your purchasing power was $500,000- now it’s $450,00.  It is entirely possible that the $500,000 house you look at today will be worth $600k next year and your financed buying power will go down.

All the other metrics: new listings, pending sales, closed sales and time on market are all indicating an upwards trend, not decline.  If you’d said a global pandemic and world shutdown would tank the market back in 2019, we all would have believed you but here we are.  There’s something out there that could tank the market but it’s an outlier.

“But the housing market caused the 2008 recession.” Yes, it did.  And it was the housing market that pulled the economy out of the 2020 lockdown recession.  Gone are the “fog a mirror” and other loans that caused the economy to collapse.  There is more equity in homes now than there was then.

“Okay, prices aren’t going to drop but how do I compete with multiple offers?” Fair question.  And honestly, it depends on your situation.  That said, we have 38 pending buyer transactions so we’re doing something right.  We may not win on the first offer but we’re winning in the end.   Contact us to see how we can help get you into a home.  Connect with us on Instagram, Facebook, Linkedin, or via email.

Top Four Seller Questions

Selling your home can feel intimidating for many reasons. It’s easy to imagine worst-case scenarios and base your entire mindset around those fears.

In an effort to help you shift from a mindset of fear to one of empowerment, here are some of the top questions (and answers) we hear from our sellers before listing with us.

1: Is it safe to sell during COVID?

COVID has changed the way we do some things. Please rest assured, our team will make every effort to maintain all health and safety standards throughout all our interactions with you and your home.

This includes wearing masks, gloves and booties, and limiting the number of people on the property when we work with you, potential buyers, and your home. Our COVID precautions have been proven to be effective in selling your home safely.

2: Is now the time to sell? Should I wait until summer, or until COVID is over?First time home buyers live in Portland.

The Lovejoy Real Estate team members recognize that now is a fantastic time to sell based on what we’re seeing in the market (record low inventory, record high closed sales prices, etc.). One could argue there isn’t a better time to sell than now.

However, we also know that market activity isn’t enough to determine what’s right for you in your current chapter of life.

In our first listing consultation with you and your family, we’ll work together to understand why you’re considering selling, and walk through the process together so you can decide whether now is the right time to sell for you.

3: What’s involved with getting my home listing ready?

It’s common to feel like you need to do a major remodel of your home to get the best ROI when you sell. Thankfully, that isn’t the case. There are several simple things you can do to increase the ROI on your home, without remodeling.

Here’s what we recommend you spruce up before you sell your home: refresh any landscaping, fix any peeling paint or damaged siding, give it a nice deep clean, and vacate the property if at all possible.

Don’t worry about needing to have a brand-new bathroom – most buyers are looking to make the place their own anyway. If you’re not sure where to start, let’s chat! We will build a strategy to get your home ready to list in your consultation.

4: Where will I go when the house sells?Learn about comps to sell a Portland home.

With such a wild market, sometimes listing your house can feel like risking potential homelessness. Do not panic though! When we sit down with you in the consultation, here are some (not all) options we’ll discuss:

  • Up to 60 days of rent back
  • Defining your buying strategy with your agent, so we can get your search started right away
  • There’s always plan B, which could look like short-term rentals or temporarily staying with family

Here’s some reassurance for you: we’ve had a lot of clients have a plan B prepared… rarely however, do they actually need the backup plan. Sometimes the peace of mind is really all it takes.

Finally, even with the fear of the unknown or what ifs, remember that in the end your goal is to get the most out of the sale of your home!

What other questions do you have about selling your property? Share your thoughts with us on Facebook, Instagram, or email us today to let us know!

Q4 Market Update