“How’s the market?” Our business coach wisely points out that, “It depends.” What are you trying to do in the market? The Case Shiller report for April 2011 was published last week. If you read didn’t read anything more than the headline in last week’s Portland Business Journal or didn’t make it all the way to the last paragraph, “Portland Home Prices Drop 9.2%” you’d have missed one of the rare bright spots in what has been a very challenging market: the index rose for the first time in almost a year. Conversely, the Oregonian headline reads, “Housing prices tick up in Portland and U.S., but gain might be short-lived.” And to be fair, on a seasonally adjusted basis the Index is still down and both headlines are accurate.
When I was named to the Portland Business Journal’s 2011 Forty Under 40 I stated that one of the biggest challenges in our industry is “keeping a positive but realistic attitude in the face of doom and gloom media coverage.” Don Henly reminds us to “kick then when they’re up and kick them when their down. We love dirty laundry” and it’s no less true when discussing the Portland real estate market. Real estate market education is more important than ever. “Stick a sign in the yard and it will sell” worked for a number of years in an up market. In a decline market education became key. People need to understand how the market has changed and how it effects their situation. Some of our listing presentations end with a recommendation to rent the property. Some situations don’t allow for that. Buyers have more buying power than they have had in close to a decade. Finding the best balance for a long term situation is a team effort of both Realtor and seller or Realtor and buyer.
When we discuss “Portland” in terms of real estate there needs to be some definition of what Portland is. For Case Shiller, it is a 140 miles from the tip of Skamania County to the bottom of Yamhill County and everything in between. For RMLS, it is a slightly smaller five country area. The City of Portland is just a fraction of the size of either reported area. The methodology of the reports hasn’t changed so the comparisons from then and now are accurate but the outlying areas have been hit harder in the decline than the closer in area. Both Realtors and appraisers start their value estimations looking at a neighborhood micro level not a metro macro level.
I watch a lot of the local real estate social media chatter and after months and months of no mention of multiple offer situations I’m starting to see more and more of them. This isn’t a sign that the market is picking up and taking off (well it could be) but that homes are coming on the market with more accurate pricing and perhaps even underestimated pricing. It’s better to be slightly on the low side now than stuck on the high side where price reductions are required to catch the market. The balance of accurate pricing is a challenge because no one wants to leave money on the table so pricing strategy isn’t black and white- you can’t create a bidding war/multiple offer situation if there is only one potential buyer interested.
Your last paragraph is SOOOOOO accurate. We’ve been working with an agent for a couple months now, looking to buy. What we’re finding is that when a home goes on the market, priced correctly, we can’t see it or make an offer fast enough. We’ve missed out on a couple this way.
It’s my opinion that pent up demand from buyers exists here in Portland, BUT we, this time, are absolutely NOT going to overpay for a home. We’re not going to enable the mistakes of the past, overpaying, market run-up and the entire mortgage mess.
I feel for the sellers, we’ve been there and felt the pain, but if you HAVE to sell you HAVE to face the market realities. We’ve made fair offers to sellers that, because they overpaid, aren’t even will to recognize the offer nor negotiate.
If nothing else the Case Shiller graph is starting to look like a gentle “bunny slope” as opposed to the “black diamond” it once was. Really, just because the X axis (time) just keeps moving forward.
We should all look on the bright side….. 100 years from now the slope will be so minor we’ll hardly see it. Maybe it will even start to go up again someday 🙂