I didn’t write the title of this post. It is the first line of the cover story of the April 8th Portland Tribune. A combination of factors contribute to a more optimistic outlook:
- Low interest rates (I received a 4.875 quote this morning which is down from last week’s low 5s)
- The impending expiration of the Home Buyer Tax Credit on April 30th (must be in contract by that date and closed by June 30)
- Reported increased activity in the last couple of months from RMLS
- Desperate sellers are mentioned in the article but perhaps that should be amended to “realistic sellers for the current market.”
The article also previews the John Ross auction which was held yesterday. I was holding an open house during the event but Ryan Frank from the Oregonian was there and posted this on his Front Porch blog:
Here’s the details. 47 condos sold this afternoon in less than two hours. These numbers are unofficial. But by my count, the winning bids came in at $237 per square foot on average. That’s a 52 percent discount from the highest list prices ($501 psf) on the same units and a 19 percent discount ($292 psf) from the previous list price.
To say the new construction condo market has been challenging lately may be an understatement, it could have been far worse with a much larger current inventory if projects such as the Wyatt in the Pearl District and 2121 Belmont in southeast had not been converted into apartments. They combine for 367 units.
A search in RMLS shows that there are 602 active condo units for sale in Portland that were built since 2004 (new construction complexes do not necessarily list all of their inventory in RMLS). Selling 47 units at one event is significant in reducing that inventory.
There are reasons to be optimistic but each person must make their own decision whether it is the right time for them to buy (or sell).
These ‘realistic sellers’ may become even more ‘realistic’ when the credit expires and the summer buying season is not as great as many had hoped, especially for the $400K+ houses which still seem to be lingering on the market.
Time will tell but it is some what uplifting to see the real estate props being pulled and a return to ‘normal’ market conditions. We’ll see if this market can stand on it’s own. Can’t really imagine any one enjoying this uncertainty these past couple of years.
I can’t help but to think about what created this Portland bubble and what factors are gone, ie California cash and creative financing.. Why will prices go up, will they go up? What might contribute to a stagnant market?