It’s not often that you get three posts on one day but RMLS Market Action for April just hit the streets. The trends are largely what we would expect to see in keeping with Case Shiller and other reports: “Also of note was the first decline in average sale price since August 2002 and in median sale price since May 2001 when comparing April of the current year to the same month the year prior. Average sale price dropped 3.9% and the median fell 3.5%.”
One area of growth from March to April was pending sales, which grew 6.8% (2,070 v. 1,938). This is the first increase in pending sales from March to April since 2005. New listings also grew 2.7% (5,295 v. 5,155). Closed sales dropped 6.4% (1,582 v. 1,691). This drop is on par with the last three years, though, as closed sales have dropped an average of 6.7% from March to April.
This surprises on one hand as I am surprised the buyer pool in this range has changed much but on the other hand jumbo loans are harder to come by:
One factor in this price decline may be a 51.2% (21 v. 43) decrease in the number of homes sold for $1 million or more, when comparing April 2008 with April 2007. Year-to-date, sales in this price range are down 31.9% compared with the same time last year.
17 Comments on “RMLS Reports First Average Price Decline Since 2001”
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Here’s something positive to think about, Charles. Given the not so great RMLS numbers, it sounds like you and the wife are doing quite well:O)
PS when are you going post the pictures of your new house/flip. I am dying to see the insides, the woodwork, the built-ins, the fixtures, etc. It’s like walking through time.
On a seasonal basis these numbers are absolutely horrid.
And just how do we know how well Charles is doing? This blog is advertising for a business. If there are cash flow problems they are not going to post them here.
I for one have been finding all the talk about RMLS rules to be really amusing. When was the last time that a realtor was penalized for an infraction of RMLS rules.
Sure we don’t know how well he is doing but he was thinking we bubble heads would be surprised by the numbers since he is doing well these two months. I think we can safely say that HE was surprised by the numbers but that he is likely not feeling it like many of the other realtors, like the ones who have not renewed their RE licenses.
Two words Bearlee: caveat lector.
“One factor in this price decline may be a 51.2% (21 v. 43) decrease in the number of homes sold for $1 million or more, when comparing April 2008 with April 2007. Year-to-date, sales in this price range are down 31.9% compared with the same time last year.”
What about the other price ranges? Aren’t they down about the same?
squeezed, I am not talking to you since you said i was Tiffany, poopoo on you!
Anyway, I took Latin in HS so I crack up whenever I see that term, for numerous reasons
Thanks for the “concern” about our cash flow. Please send donations to us at… Actually, send them to the Make-A-Wish Foundation. Honestly, if I thought we were in trouble, at least one of us would be sending out resumes but that is not the case.
RMLS Market Action is based on averages. Charles Market Action wouldn’t be very instructive to the overall market.
“One factor in this price decline may be a 51.2% (21 v. 43) decrease in the number of homes sold for $1 million or more, when comparing April 2008 with April 2007. Year-to-date, sales in this price range are down 31.9% compared with the same time last year.”
I’ve never understood why this kind of information would be considered useful. It often seems to be offered as an alternative explanation for median/average price declines, other than the obvious explanation of depreciation.
However, instead of being a “factor” in the price decline, it could simply be another metric that demonstrates depreciation. After all, even if there was a uniform price decline across all price ranges (depreciation), it would still look like fewer homes were being sold in the upper price ranges. If a house sold for $1.05 million last April and sold for $950K this April, it would show up as one less house in the $1 million-or-more price range.
Does anybody know what the Oregonian meant when it said “Portland-area home values dropped 3.5 percent in April compared with the same month last year, the biggest year-over-year decline since at least January 2001″? http://blog.oregonlive.com/breakingnews/2008/05/portlandarea_home_values_fall.html
It’s also noteworthy that the version of the article with the quote from Jerry Johnson is no longer available at the O online. “[Jerry] Johnson said he’s hearing from out-of-town investors looking for good deals.”
“It’s also noteworthy that the version of the article with the quote from Jerry Johnson is no longer available at the O online.”
I’ve also heard that a public flogging has been added to the agenda for the next pdx metro realtors association steering committee meeting.
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“After all, even if there was a uniform price decline across all price ranges (depreciation), it would still look like fewer homes were being sold in the upper price ranges. If a house sold for $1.05 million last April and sold for $950K this April, it would show up as one less house in the $1 million-or-more price range.”
Good point.
Found this on Portland Real Estate Craiglist today. Says it all, or at least part of it all:
Why would you want to pay 6% more for groceries, college for your kid, a car, plane tickets, medical procedures and video rentals? Why do you want to pay 6% more for a house? You don’t need help buying or selling anything in the United States of America. It’s a free market economy with a lot of information available to help you. Buying or selling a house is so easy, moreso with the internet now.
Disclaimer: I am not selling any thing or any service.
So, it’s only a 6% commission, 3% for the buyer’s realtor and 3% for the sellers but think about it, it’s 6% of the gross sale but maybe it’s actually 20% of the sellers profit and that’s criminal. On a 365k house that’s a $20,000 commision. Lets say you made 100,000 on it. Long term capital gains are 15% or $15,000 plus you are paying realty fees of $20,000 or 20%. There goes 35% of your money.
Don’t ever pay full commissions. If you have to use a realtor, negotiate the fee down.
Better yet, I recommend doing buying and selling yourself. I’ve done three myself without a hitch. Two buys and a sell on my own. The two homes when there were delays and problems? Realtors were involved. One went into “holiday mode” and went missing during the transactions. Another misrepresented the deal and lied to all parties. I’ve heard stories of realtors using those inspectors who don’t really inspect anything thereby ensuring a fast clean deal. What do you expect? It’s their interest to close no matter what.
Check out real estate prices, look at the comps at Zillow.com. These are good ballpark numbers. Thursday’s Oregonian Homes’ lists what everything sold for by zip code. Or hire a licensed appraiser.
Write an offer on a napkin. Show the ability to finance. Buyer and Seller sign it, pending an inspection. Get an earnest money check made out to a Title Company. You’ve agreed on the deal in principal.
You can then get the real estate forms for a couple dollars at Stevens Ness documents downtown and fill them out. If you do it right, you can open escrow right away with them. The escrow officer looks them over and tells you what’s missing. Or, as I suggest, for a couple hundred dollars have your lawyer look them over. Use the law office forms. Then open escrow. The Title Company takes it from there.
It’s so easy that it boggles the mind.
Why are Portland homes so expensive?
3 reasons.
The first reason is cheap money from the low interest rates. But now, as interest rates went up, prices leveled off and even dipped. Banks are borrowing at a higher rate from the feds and their profit margin is down. They will look harder at the expensive houses you are buying from now on. They will look at your ability to pay.
The second reason is livability. Despite the influence of some bad developers and real estate hacks, the city of Portland is quite progressive and has good planning. Clean air and water. Good transportation. Urban planning. What concepts! People want to live here. The urban growth boundary has put upward pressure on the housing market.
The third reason? REALTORS! Everything is priced 6% too high by virtue of their existence. Don’t use them.
Don’t let Realtors tell you you need the multiple listings service. You can sell and buy off of Craigslist. Oh wait, there’s a million realtors all over Craigslist already. So you know how effective it is. So much for the RMLS. (Craig, you should charge Realtors, btw.) And put a sign in your yard and one on the corner with an arrow telling folks where your home is. It works wonders.
Don’t let Realtors tell you you are better protected by using them. My friend was sued by a buyer because her realtor said the home was zoned commercial, the realtor said that it would make a great office. Except that it didn’t have any seismic upgrades and subsequently the seller and the realtor were sued and had to pay tens of thousands after the sale. So you are not protected by Realtors.
A lawyer is your best bet and can save you thousands. Realtors are basically lazy under-educated people, like most of us. If they can do it, you can and I have, lord knows, I’m close to being a complete dolt.
Don’t pay full commissions. I recommend 1% to the seller if you have to. BUT,have them paint a room or two! Give the buyer’s realtor 500.00 bucks for driving over with the forms and bringing you a latte, give nothing if they didn’t bring all of it. Use a discount broker if you are just plain terrified of doing a transaction like this or use FSBO (For Sale By Owner). Discount brokers do as little as possible which is only slightly more than full priced realtors do compared to what you do!
Look carefully at the double speak and non speak they use. A hungry Realtor will use deflection and misleading statements without actually laying out a bald faced lie but the party concerned will be swept up in their contrivance. Just read the BS in their ads, how carefully they try to walk a line.
How many realtors out there work as hard as you do at your job? Look what you have to do everyday to make a living. Now you want to pay someone tens of thousands of dollars for a couple hours of their time? Not me. Pay a lawyer a couple hundred to do the paperwork, sure. Someone with, ah let’s see, a law degree and years of legal expertise? Sure. In fact, New York State requires you use a lawyer.
Thank you for your consideration. This was a public service message from a concerned citizen. I am not selling a house at this time. I am not offering my services to anyone either.
p.s. Since posting this the realtors are flagging my posting like mad (6 times!. But I am hearing back 3 fold from people who are thanking me. I guess I am providing a service! I will keep posting in the hopes that more people will buy and sell homes on their own. It’s the American way. Happy Memorial Day!
i am willing to bet that the craigslist poster is JAAF (just another angry flipper).
Gee, where is one to begin…my first thought, college tuition IS up some 10-15%, groceries and airline tickets are up, too, thanks to oil.
Zillow comps suck!
Long term capital gains are 15% or $15,000?!?! only if you sold a property that wasn’t owner occupied 2 of the last 5 years, or only if you made more than $250K as an individual or $500K as a married couple. Very few folks get nailed with capital gains.
Some of the stuff I slightly agree with but just slightly. Like squeezed said, probably just another angry flipper.
that settles it for me, my lease is about to expire and i was hoping to buy a house but I think I’m going to renew for one more year and see where the market goes from here…
I work in an industry associated with property transactions and I can tell you where the market is going and it’s not a pretty place.
If this wasn’t an election year we’d already be mired in a deep, painful recession led by housing. When December arrives hold on to your hats.