Well, boy were my projections for 2015 off.
Last year I said, “For 2015 I predict an
amount of the same, but with a few more houses on the market. So, slightly increasing values (I’d love
something like 5%), slightly increasing interest rates (to 5%?), and slightly
increasing inventory. I think we’ll see
a larger variety of loan products as lending eases a bit.”
Instead, We saw the average sale prices increase as
much as 13.5% in North Portland, and 8.3% and 7.7% in Southeast and Northeast
respectively. Our inventory shrunk to
less than two month’s worth, for most of the year. Interest rates remained low,
and sometimes dipped even lower. We saw
more multiple offer situations and prices driven quite high by emotional,
“gotta have it” buyers. We did see a
larger variety of loan products available, giving buyers more choice.
But the big story this year
is with regard to our rental market.
Often, pre-crash, an active ownership market (people buying and selling
to owner occupy) meant a soft rental market.
Instead of renting, folks are buying.
This year, we have had both, with a vengeance. The rental market is so tight, rents have
escalated sky high, and the prices on multiple unit properties have increased
accordingly. Long time landlords are selling off their rentals and getting good
prices. Many out of town investors,
attracted to our rising rents and tight market, are jumping in.
Wholesale evictions and
exponential rent increases led the City of Portland to declare a housing state
of emergency. Through this, required
notice times for no cause evictions and rent increases over 5% were extended to
ninety days. This is a small piece,
slowing rapid fire eviction and rent increases to give beleaguered tenants a
chance to catch their breath.
The CFPB Consumer Financial
Protection Bureau issued new rules that took effect on October 3rd,
furthering borrower protections with regard to loan costs and fees. These rules, commonly called “Know Before You
Owe” assure borrowers ample notice and disclosure when the terms of their loan
changes beyond certain thresholds. This is a good thing.
As for my 2016 prediction:
Seriously though. We’ll see
more of the same; tight inventory, with not enough houses to satisfy demand,
slightly rising interest rates if the FED makes their move and slightly longer
close times to accommodate the new CFPB regulations.
We’re seeing some rumblings and action being taken by county
tax collectors in efforts to include in the tax rolls, “omitted property”. That is, improvements that have been made to
a property, but not included in their assessed value, such that taxes aren’t
being collected on the improvement. For
instance, you remodeled your kitchen and baths, and finished your basement into
a family room. But your tax assessment
is on the house, without those improvements.
When assessors find omitted property, they notify the owner
and add the property to tax rolls. The law allows them to assess the property
in previous years as well: up to five years in Oregon. Oh joy.
Some of you took me up on my
offer of radon test kits. I hope you all
got low results. I do have a few more
kits available should anyone else want to test.
I remain honored to help
folks with some of the biggest decisions in their lives, and humbled by the
trust that is put in me. My business is
based on referrals. I will always take
good care of anyone you send my way. Be
it selling or buying, or just curious, I’m always glad to answer questions and
provide information.
