Change

I'm pretty good with change, or at least I like to  think so.  My work is about helping people with change.  Almost by definition, people buying real estate are in a state of change.  Minimally, buying or selling an investment property is a state of financial change.  Buying or selling an owner occupied property is a pretty big change.

For some, buying or selling is the change itself; moving.  But for some, the real estate transaction is both a result of change, and the change.  Many real estate transactions start with a life change.  Some life changes are happy: marriage, cohabiting, birth of a child, new job.  And some life changes are less happy: death, divorce, financial hardship.

Physicists think of Newton's first law of motion: an object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.  In our personal lives we often hear the advice not to make any big changes after a large event in our lives. hmm.

I work in an industry full of change. Technology, interest rates, housing trends, environmental changes, government regulation, climate change, political climate and many more factors effect the real estate business.  We are also an industry that is a target for disruptors.  Just as the taxi (Uber, Lyft and car sharing) and hotel (air bnb) industries have been disrupted, there are LOTS of innovators and entrepreneurs trying to figure out how to disrupt, or get a piece of the real estate industry.

Lately, there has been a ton of change around me.  Any one thing isn't so big.  But wow.  We have a new agent services coordinator at our office, we have a new (returning) leader at RE/MAX equity group, RE/MAX is doing a big re-branding this month (which means we'll be changing logos and marketing materials).   My yoga studio closed, my personal trainer is moving out of state, my daughter is moving out, we have two new tenants in our rentals and so on.

Taking a page from Newton's book, I'm planning to harness the energy around all of this change to make some changes myself.  Resisting change just might be the "unbalanced force" of which Newton speaks.

Do you smell smoke?

Our sale agreement is eleven pages long, with options for a variety of addenda that can make it much longer. 

One of the important things the sale agreement says is: at the earlier of possession or closing date, the dwelling will have one or more operating smoke alarms, smoke detectors and carbon monoxide detectors as required by law (see http://www.oregon.gov/OSP/SFM/).

We all pretty much know and agree that smoke alarms and detectors save lives.  But many of us  have gotten a bit complacent keeping up on current some alarm/detector laws, and on keeping our actual devices up to date.  MANY real estate transactions get bogged down and slowed down while the correct devices are negotiated and installed.

Sometimes the issue comes up on the home inspection.  Sometimes an appraiser notes a missing device, and sometimes a sale closes without anyone noticing a missing alarm or detector,  EVEN THOUGH BOTH PARTIES SIGNED THE AGREEMENT SAYING THEY’D BE THERE.

The City of Portland has its own smoke and carbon monoxide detector rules, as distinct from the State of Oregon.

Anyone looking for a business idea?  I think there is market for the following service:  be familiar with the prevailing code, perform an inspection of  a property before it goes to market or sometime in the inspcetion process, and update or install the required devices.  Inventory woud be inexpensive.  There would be some sort of inspctor or contractor's license involved, and probably a chunk of liability insurance.  Oh, and putting seismic straps on water heaters is another service often needed, that can be inexpensively done.  Anyone?

June Market Stats

RMLS just published the stats for June, 2017.

We've been feeling a bit of slowing in the market; its been discussed 1n Realtor facebook groups and in offices around the city. These new numbers show slight slowing, but not much.  Yes, there is usually some slowing in the summer, while folks are busy vacationing.  Comparing to previous years normalizes for seasonal changes.

Our inventory, which we count by the number of months it would take to sell the current inventory at our current rate of sales, is 1.6 months.    This is every so slightly up from 1.5 months.  It is thought that a balanced market, favoring neither buyer nor seller is somewhere around 5-6 months.  Clearly, we've got a way to go.

Our market time, the average number of days it takes to get a pending sale, is 38 days. This time last year, it was 48 days.  That's pretty quick, as this includes sale fails and over priced properties.

Our year to date median price is $375,000, as compared to $339,000 year to date at this time last year.  Year to date closed sales are indeed down 3.9%.

What does it mean?  It means the market is good.  For sellers, you can still get a reasonably quick sale on your property at a good price.  But don't count on a frenzy driving the price up far above comparable properties in your area.  Sellers often hope for that "California buyer who will pay over the value".  While folks from out of state may have an amount of money to spend, and find our properties reasonably priced, they too will look at neighborhood values.  For buyers, things are easing a bit.  You may be able to buy a property at or even slightly below the list price.  And we are seeing some contingent offers accepted (where a buyer must first sell their current house before being able to purchase a new property).

If you have questions about the market, or want more information.  Please get in touch. leslievjones@gmail.com  503-312-8038.

Some ways to think about investment property

In addition to owner occupied housing, I work with a few folks investing in residential real estate.  No, these are not huge conglomerates buying up large apartment buildings.  My clients are primarily buying single family homes, or multiple units, usually up to four units.

Different people invest for different reasons, have varying resources (time and money), and differing investment goals.  Even the financial goals can vary. Yes, everyone wants some return on their investment, but for some a longer slow growth is fine.  For others, access to some tax deductions are the priority.  I'm not delving into the financial side here.  If you'd like to talk about your specific situation and investment priorities, I'd be glad to do so, one on one.

Aside from financial, how do people decide what kind of property to buy?  Should you buy the most you can afford, either in price or number of units?  Newer?  Older?

The first decisions, I think, are if you'll be managing the property yourself, or paying a property manager.  And if the place needs some work, will you be hiring that out, or doing (what you can) yourself?  These questions lay the ground work for what I think of as "the capacity" question.  That is, do you have time and room in your life to take on managing another thing?  If you lead a busy life, what are you going to stop doing, in deference to your new investment? If you'll be hiring things done, perhaps a newer property, in better repair might be best.

A lot of investors favor multiple units, as even with a vacancy here and there, you'll still have income.  With a plex, usually comes more turnovers (management time or fees), and sometimes intra-tenant disputes.  Yes, sometimes landlords can feel like parents.  We had tenants who squabbled about every little thing; who took the garbage cans down to the curb, unhappiness at the shared back yard.

 In general, a plex will always be investment property. when it comes time to sell, you'll be selling to investors, and dealing with whatever the current investment and rental climates.  Changes to tax structure and rental housing laws can affect your investment.

Some folks buy only single family rental houses.  These tend to be more simple to own, and often can have longer term tenancies.  In addition, when it is time to sell, a bit of spiffing can turn that rental into a" must have" for a first time buyer.

I'm working with an out of town investor right now,  who has been grappling with these questions.  For a remote landlord, professional management and simplicity can be important, so they're leaning toward a single family home.  Earlier in the year, I sold a four plex to local clients.  It was their first investment property, so they were thrilled to find a property in good repair, with rents at, or close to market, and fully rented.  They'll be managing it themselves, but having things pretty well squared away, was a good way to start out.

When Don and I were in a buying mode, we looked for things that needed work.  Don has crazy construction and mechanical skills (and really enjoys it) so it was a great way to add value.  And managing our rentals (I'm not a property manager, and don't manage other people's rentals) isn't all that different from my regular work.  We also liked vacant properties so he could get in there and work, and then, we'd find tenants.

One plan doesn't fit all.  Part of investing is very personal, and should mesh with your skills, risk level and capacity.  Our time is a valuable resource, pay attention to how you want to spend yours.  Get in touch if you have questions about investing in real estate.  I'm always happy to talk.  Leslievjones@gmail.com  503-312-8038

Rats and Mold: the glamorous life of a realtor

Or the other title might be, Welcome to Portland.

The reality of urban living is that rats are everywhere, ideally everywhere outside.  Our temperate climate, plentiful restaurants ( and dumpsters), high backyard chicken population and so many people feeding birds and squirrels, make Portland a destination resort for rats.  As a matter of fact, a study showed that Portland rats are happier and healthier than New York rats.

So what to do?  Stop feeding the birds and squirrels, don't feed your pets outside, don't have chickens, pick up your dog's poo promptly, be sure your crawl space (if you have one) is well sealed, but for screened foundation vents.  If you have a basement, don't keep food nor yummy garden supplies down there.  If you do any backyard composting, use a sealed composter.  Be sure your attic doesn't have any accesses for rats.

Once you have rats, get a good, local pest company out.  Rats have rather predictable behaviour, and a knowledgeable pest company can save you lots of time, money and anguish.  Most likely, they'll do both some trapping and some baiting, and will have to come back for follow-up visits.  Invest in the follow up visits.

And the mold...
In general, Portland does not often get the scary, toxic, black mold that was alarming folks several years ago.  That stuff grows in damper and warmer climates.  But we do get mold, and folks can have allergic reactions to it.  Most often, we find mold in attics, and sometimes in basements.  Mold is usually caused by poor ventilation.  A well insulated attic will have soffit vents at the bottom of the roof line, and roof vents toward the upper part of the roof.  This allows air to come in the soffit vents and go out the upper vents.  In addition, bathroom, kitchen and laundry room fans should have their own roof vent or opening, and be directly vented there.  Use your bathroom fan when you bathe; best if you have a timer on it so it continues to run at least 15 minutes after you bathe.  I've been told that through our cooking, bathing, breathing and laundry, we each create about two gallons of water vapour a day!  The more of that we can direct out of the house, the better.

Finished basements can also be a place where mold grows.  Basements are, after all, a hole in the ground.  And in Portland, Oregon, a hole in the ground can be pretty damp.  Often, in finishing a basement, walls and flooring can trap the moisture that naturally comes through the concrete walls.  Before finishing a basement, , do as much waterproofing as possible.  As part of the finish project, look at ways to leave space for air flow behind walls and under floors.  And if you know of a damp spot, consider leaving that unfinished.

If you're having some of these issues, er, I mean if you have a *friend* with these issues, I'd be glad to suggest a few contractors and tricks that might help.  leslievjones@gmail.com  503-312-8038.

This cool listing

I get to list all sorts of houses in my work.  I love the variety, and the variety of people who are drawn to the different properties.

This spring, I've listed a big fixer in NE, a sweet little ranch on Mt. Tabor, a classy ranch in Reedwood,  a fab condo on SE 44th and Division, and a big traditional beauty in Hawthorne.  Now, I've just listed a sweet bungalow in Roseway (think where NE Fremont crosses NE Sandy).  Click for a map of a few good spots.

The sellers are friends of ours, so I've seen this house over the years (didn't we play Cards Against Humanity once at that dining room table?).  With lots of hard work; packing away stuff, cleaning and prepping, I think the place looks great!  

One of the sellers is an artist and furniture maker.  He has done some truly beautiful work here.   The kitchen was re-done with some incredible finishes:

That backsplash is subway style marble with racked glass details.  The cabinets are maple veneered apple ply and zebra wood.  And the counters are stainless steel and zebra wood.

The master bedroom has custom built-in dressers and bed of Wenge and reclaimed Honduran Mahogany. The ceiling is woven maple.  Plus there is a walk-in closet built with cherry wood.

Then there's the master bath with a copper (!) shower and slate floor with radiant floor heat. 

Oh year, and lest I forget the dining room with bamboo floors and traditional built-ins:

There's lots more; photo voltaic solar, on demand hot water and a high efficiency furnace.  The back yard has a deck (with wiring for a hot tub), outdoor shower, grill shack and bike shed.  

I enjoy every property I list.  But this one, has SO many cool features and so much whimsey.  I feel like we need more whimsey these days.  I'll be holding this open on Sunday, May 14th from 12:00 noon to 2:00 pm.  3207 NE 71st Ave.  $449,900. Two bedrooms, two baths, plus bonus room and partially finished basement.  Come see me!

Latest Portland Market Stats

Hmm.  I've been feeling like the market has slowed just a tad, and the latest stats from RMLS, released this week, may back me up.

All of the year to date numbers, that is, comparing April 2017 to April 2016, show slowing.  New listings are down 7.9%, pending sales are down 10.0 %, and closed sales are down 15% .

Inventory crawled up a bit, from 1.3 months in March 2017, to 1.7 months in April 2017.  April 2016 had 1.4 months of inventory.  Remember, this is how long it would take to sell all the properties on the market, at the current rate of sales. The 1.7 months of inventory is still VERY low inventory.  We consider a balanced market, when neither buyer nor seller have an advantage, to be around 5 or  6 months.  We're a heck of a long way from there!

Prices are still going up; comparing the median price of homes sold in the 12 months ending April 30th 2017, with the median price of homes in the twelve months preceding April 2016, we have seen an increase of 11.6%,  Market time is shortening; 42 days on April 2017, down from 58 days in March 2017.  Increasing pirces are often attributed to a shortage of inventory.

What are the factors that could be at play?  Elliot Njus, at the Oregonian, attributes the slowing to a lack of inventory.  But our inventory is a bit higher than last month, and higher than it was last year at this time.  Slightly increasing interest rates?  Political unrest? Rent stabilization measures by Portland and Milwaukie?

What's to come?  We usually see a bit of slowing in the summer, Its so gorgeous here in summer, I feel like a significant percentage of buyers and sellers are vacationing at any given time.  I expect that will be the case this summer too.  That will mean fewer houses on the market, and fewer buyers looking.

If you have questions about the market, or are thinking of buying or selling, give a call, text or email.  leslievjones@gmail.com 503-312-8038.