Leslie’s annual real estate report:

Last December I said, “We’ll see more of the same; tight inventory, with not enough houses to satisfy demand, slightly rising interest rates and slightly longer close times to accommodate the new CFPB regulations.” 

Most of this was correct, Inventory remained mostly tight, though I didn’t predict the slight slowing that hit in July. Interest rates did creep up and closing times did lengthen (not so much because of the then new CFPB rules, but due to a shortage of appraisers).

This year, had a variety of markets.  The year started VERY strong, with quickly rising prices and a shortage of inventory driving demand.  Multiple offers, well over list price were the norm.  Buyers grew weary of the scramble, and missing out.  

But by mid-July we saw the market slowing a bit. Aspirational pricing saw many listings sitting, and eventually reduced prices.  The public is often a few months behind active agents with regard to knowledge of the market place.  Sellers were still expecting escalating prices, bidding wars and prices substantially over list price. 

We do still see multiple offers and sale prices well over list price.  It is very hard to predict what listings will attract this attention.  Yes, well priced is essential.  But we’ve seen plenty of very good, well priced houses, sit on the market.  The unpredictability of what is hot and what is not can be frustrating.

And perceptions of market times are interesting.  Even in the hot fast markets, our average market time was around 35 days.  But if a listing sits for more than 10 days, it has the stigma of being overpriced and having something wrong with it.  Only the really, new-to-market properties can have that “on fire” sense.

The big story this year has been about appraisal.  A shortage of real estate appraisers (due in part to steep entry requirements to becoming an appraiser) has slowed our closing times considerably.  Close-in, easy to appraise properties still take up to 60 days, but rural properties, unique properties and properties outside the metro area can easily take up to ninety days to close.  In the short term, we’re increasing the cost of appraisals to entice appraisers to take our specific files.  What used to be in the $500 range is now well over $1000.

Overall, the median sale price (year to date) increased 13.4% to $347,000, region wide.

My crystal ball for 2017 is pretty blurry.  The surprising election of Donald Trump as President, and apparent inconsistent adherence to campaign promises makes prediction challenging.  Trump is a “real estate guy”, but his real estate work is pretty far from older homes in Portland, Oregon.  Downsizing government and easing regulation was a tenet of the campaign.  Loosening Dodd Frank regulations around lending and doing away with the CFPB could open the market to more buyers, but not many.  It also could allow questionable lending instruments back in the market.  The National Association of Realtors conjectured that downsizing could reach as far as Fannie Mae, Freddie Mac and FHA.  Dismantling these programs could have a chilling, if not devastating, effect on the local and national housing markets and economy.  I just can’t see that happening, and doubt that stifling the housing market will be part of “making America great again”. 

In light of the election and subsequent cabinet appointments, I can imagine even more folks from around the country being drawn to Oregon, and Portland, in search of a liberal town, with a strong economy, in a blue state.  So, inventory will remain low, and demand will remain strong.  I’d guess the median sale price won’t rise more than 10%. Interest rates will rise (they already have) as a result of the improved economy, and in part due to the election (interest rates were set to rise, in any case). 

 I do expect, in 2017, the small, expensive, close-in apartments will be over supplied.  Larger apartments, plexes and rental houses will be more popular than ever. 

Pressures on rentals and affordable housing will probably bring some form of rent control to the City of Portland.  This may cool slightly, the avid purchase market for rental properties.  The City of Portland will be instituting a home energy scoring system, much like a miles per gallon for cars, requiring sellers to obtain an energy audit and score before putting a property on the market.  This will start January of 2018. I doubt this will deter anyone from buying or selling, but might slow things down a bit.  In general, homeowners aren’t very price sensitive to energy costs.  So while the data will be informative, I’d be surprised to see much of a change in consumer behavior.

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 here to help, answer questions and provide information.

Location, transportation and affordability

The Department of Housing and Development (HUD) has this cool new tool that helps folks look at the relationship of housing and transportation for a specific location.

Since it is thought that transportation is our second largest household expense, it makes sense to consider transportation costs when looking at the affordability of housing.  The website provides a transportation cost calculator and a location affordability index, both of which are customizable to your specific household.

The Location Affordability Portal also has a resources tab with several articles on transportation and housing, along with a few examples or vignettes, showing how the tool provided information to home buyers.

My guess is that choosing one close-in location from another won't show much of a difference.  The information would be valuable when considering rural locations or loner commutes.  Keep in mind, this portal is not about home values in the area in which you are looking, but does use some area specific information about median income.

Portland has focused a lot of resources on public transportation.  I wonder if we spend less on transportation, on average, than other similarly sized cites?  Then again, we aren't as dense as some cities, and our housing cost might more than make up for any transportation savings.

Contact me with any questions you might have about the Portland real estate market.  leslievjones@gmail.com or 503-312-8038.

I was right! I was right ! I was right!

RMLS released market data for July 2016 and I was right!  We DO have more houses on the market to sell.  We measure inventory by dividing the active residential listings in the month (July), by the number of closed sales in the month (July).  July 2016 came in at 1.9 months, up from 1.5 in June.  We consider a balanced market (favoring neither buyer nor seller) to be around five or six months.

The market is showing slight cooling in both pending and closed sales.  Pending sales are down 2.6% from June and 2.8% for the year to date.  Closed sales are down 12.1% from June 2016 and 2.8% for the year to date.

But...the market time still fell (by one day) from 33 days in June 2016 to 32 days in July 2016.  Market time in July of 2015 was 45 days.  And prices are still increasing.  The year to date median sales price rose 11.5% from $304,900 at the same time in 2015 to $340,000 in 2016.

Is the sky falling?  No.  Has a bubble burst?  No.  We are seeing some houses sit, and only sell once their prices are reduced.  We're still seeing multiple offers and houses selling well over list price.  The market time in North Portland is 16 days.  And in Northeast and Southeast, 24 and 25 days respectively.

Pricing listings is as challenging as ever.  It seems swell priced and well prepared listings are selling quickly and in competitive situations.  Speculatively  priced listings, and those not in tip top shape, seem to be sitting a bit.

Is it a good time to buy?  I'd say yes.  Interest rates are at crazy lows. Sellers are feeling the easing in the market and are cognizant of the approaching fall market.  We usually see is busy flurry after school starts, but before Thanksgiving.  Sellers of properties that aren't selling now have a good chance to get their property sold if they reduce that price and do some spiffing.

Is it a good time to sell?  Yes,  IF it is priced well.  That doesn't mean a fire sale.  Prices are still up.  And buyers are anxious to take advantage of these great interest rates before they start rising.

You can read the full report here.  And since its such a crazy market, feel free to contact me with questions or for guidance.

What is going on with the market?

I’ve been trying to get a handle on what’s happening in our real estate market.  It feels like there is a slight shift. Some houses are staying on the market longer; longer being eight days instead of four.  And some sellers are needing to reduce their prices in order to attract offers.   But some houses are still getting multiple offers quickly, and are still selling well over list price.

Buyers have become weary. Weary of rushing around to see houses as soon as they come on the market, rushing to get offers in, and scraping to offer as high as they can.  Sometimes this weariness results in that high offer; they’re tired of making offers and want to actually buy a house.  Or this weariness results no offer, as they don’t think they can compete.

Seller expectations and listing agent pricing strategies vary widely.   Some price low in hopes of attracting multiple offers to drive the price up.  Others price where they think the value is, and some (usually due to seller preference) price high, so there is some room to come down in negotiation.

Just as real estate is local, the dynamics of a real estate market break down to the idiosyncrasies of the individual buyers, sellers and their agents.

RMLS just released their numbers for the month of June, and they tell a mixed story.  Inventory is indeed up.  We have 5.2% more properties to see now, than in June of 2015, and 8.6% more than in May 2016.  But, pending sales are down from both May 2016 and June 2015.  So wait, we have more houses to sell, but fewer people are buying them?

With inventory up both from 2015 and last month, we can see the long and short term trends.  Similarly, pending sales being down from 2015 and last month, help discern longer term change from seasonal change. 

 And the median year to date sales price is up 13.3% from last year’s median year to date price.  We’re at $339,000 now.  The median year to date sale prices in North Portland, Northeast Portland and Southeast Portland are $366,500, 365,000 and $311,000.  Make note that Northeast and Southeast Portland stretch east past 148^th Avenue.

What does this mean if you are buying or selling?  Buyers, there is hope!  Sellers, you’ll still get a pretty penny for your property.  Call or email me if you’d like more in depth information.  Leslie Jones 503-312-8038  leslievjones@gmail.com

The return of condominiums?

If you've been paying attention, you'll have noticed the majority of those big residential construction projects of late, have all been apartment buildings, adding to Portland's rental inventory.  Expensive rental inventory, but rental inventory none the less.

Nextportland.com  is reporting a new condominium project has been proposed for the Pearl; the first condominium project to be proposed in about three years.   The proposed project, Block 20, is a 21 story tower with 149 residential units, parking for 192 cars and 224 bicycles.  It would take up a full block that previously housed the Hoyt Street rail yards, between NW 11th and 12th Avenues and NW Pettygrove and Quimby.

In a December 2015 article, Luke Hammill, of the Oregonian wrote about the notably small increase in owner occupied housing when comparing the rental housing versus owner occupied from 2005 - 2009 and 2010 to 2014.  Rental housing units increased by 14% where ownership housing increased by only 1%.

Is this project an aberration?  Or might we see new condominium projects outside the Pearl, and appearing in Portland's popular east side neighborhoods?  I know I have out of state buyer clients, primarily retiring baby boomers, who would LOVE spacious one-level condominiums on the close-in east side.

Shoot me an email or give me a ring if you have questions about Portland real estate.  leslievjones@gmail.com  503-312-8038.

What's next Portland?

Lots of news and chatter and scuttlebutt these days about tear downs, and stopping the demolition and developers and the like.  And yes, there are a lot of tear downs and demolitions and developments.

If you've not yet found it, nextportland is a website, facebook page and blog devoted to reporting on architecture and development in Portland.  They've got a great interactive map on their website with which one can get information about projects in various stages.

Sorry I'm not fancy enough to embed the interactive map here.  But click the link above and it'll take you there.  The different icons denote projects in permit review, early assistance, completed projects, announced projects, those in design and land use review, and inactive projects.

I hope you find this information helpful and interesting.  Let me know if you have any questions!

The Most Recent Market Stats are out!

RMLS just released the most recent stats about the Portland area real estate market.  As we've been feeling in our office, things are easing a bit.  Thank goodness!

Our market has been plagued by low inventory, with not enough houses on the market to meet demand.  As often is the case, this demand has been helping to drive prices up.  Not that a ton of houses have flooded the market, but inventory in April increased from 1.3 months to 1.4 months. When the May numbers come out, I predict we'll see a further increase in inventory.

We have clearly been in a seller's market.  A  balanced market, where neither buyers nor sellers are seen as having more power or advantage, is thought to be five or six months of inventory.

Speaking of those prices...Our year to date median sales price is now at $329,000, up 13.4% from the year to date median price in 2015 of $290,000.

The other indicator I like to watch is the total market time in our area.  The total market time for houses that went under contract in April was 43 days.  This compares to 61 days from April 2015.  Market times in North, Northeast and Southeast Portland for April 2016 were 25, 29 and 29 days respectively. Isolated to the neighborhoods inside Interstate 205, I'm sure we'd see even shorter market times.

It would be great to see a bit more easing, whereby we'd see more buyers getting their offers accepted.

Read the full Portland area report.

Get in touch with me if you have questions about the Portland real estate market, or want to talk about buying or selling. leslievjones@gmail.com  503-312-8038

Development costs and affordable housing?

It seems general sentiments in Portland are that residential real estate developers are a part of the affordable housing problem.  That is, the large expensive houses and small expensive apartments being built around town are driving home prices and rents up, beyond what low and median income buyers and renters can pay.

Nationally though, there is talk that the costs and delays associated with getting a piece of land to a build-able state are an oft cited reason for the increasing costs of housing.  That is to say, if development costs and processes are easier and cheaper, housing would be cheaper.  A Business Insider article by Bob Bryan addresses this.

A recent study from the University of Pennsylvania placed each state on a spectrum called the Wharton Residential Land Use regulatory Index (whew, say that five times fast).   States with less restrictive housing market regulations had lower WRLURI values.  As one might imagine, states seen as more environmentally aware and concerned had higher WRLURI values than states seemingly more sympathetic to business interests.  Check out the map at the bottom of the above linked article.  Oregon is classified as having above average land development restrictions.  I'm guessing the City of Portland would be classified in the "most restrictive" category.

Do you think that follows locally, in Portland?  Do you equate policies that are pro-developer with lower housing costs?

2015 stats from our multiple listing service

RMLS released the December and 2015 year end stats this past week.  For anyone working in real estate, selling, or trying to buy a house, none of this will be startling news.

Housing in the Portland area is in short supply; both for rentals and home ownership.  The number of houses available for purchase, at our current rate of sales, fell in December to 1.2 months.  This is the lowest inventory since we began keeping track in 1999.

At the same time, our average sale price (Portland area wide) rose 6.5% in the 2015 calendar year, from $333,000 to $354,500.  The average sale price in North Portland rose 14.8% .  Northeast and Southeast Portland average sales prices rose 8.3% and 9,0% respectively.

The number of days a house stayed on the market fell from 70 in 2014 to 54 in 2015.  In high demand neighborhoods, we are seeing houses sell in just a few days.  While the average days on market in some west side neighborhoods; Lake Oswego/ West Linn and Tigard/Wilsonville are at 81 and 70 days respectively.

Activity on the financial markets indicate possible increases in interest rates.  But for the time being interest rates are staying enticingly low.

This morning I'm off to show a house to some first time buyer clients. They have written countless offers, well over asking price, to the top of their price range. I continue to be amazed at the enthusiasm and fortitude of buyers in these market conditions.  I sure wish we could bring more houses to the market.

And for the record, an amount of this real estate activity is spurred by folks moving in from out of state. In my practice, those people have been mindful people, moving here to be near family.   Indeed, development is making its mark on our neighborhoods.  Keep in mind, most often, folks selling to developers and investors have been long time residents who are benefiting from the money. Some of my seller clients have used such funds to pay for a kid's college education or to retire from public service.

Please give me a call if you have a house you've been considering selling; rental, family house no longer in use?   Someone out there really wants it.  Thinking of buying?  Buying could actually be easier than renting.  Give me a call.  Considering a remodel project and want some input?  Give me a call.

Read the RMLS Portland Area Report

Leslie Jones 503-312-8038
leslievjones@gmail.com