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A Look at Current Market Conditions
As winter comes to a close in the Northwest, the real estate market is gearing up for another busy spring and summer season. Will it be as hot as 2016? What does it mean for buyers and sellers? Let’s take a look at some telling trends.
Washington County Market Conditions
The above graph represents real estate sales in Washington County, Oregon, from December 2015 through February 2017. As you can see, the days on market get shorter in the summer months, meaning sales are moving quicker then — but even in the winter months, 33-40 days on the market is not exactly very long. Things are still moving very quickly.
The top line indicates the average percentage of sale price vs. original list price. This number has been steady, right around 100%. That means for every house that sells below its asking price, others are selling above. This is great news for sellers — if your home is priced correctly, you probably won’t be waiting long to get offers, and the market is so competitive that buyers will likely be paying the full asking price, if not more, when you close the deal.
If it’s good news for sellers, does that mean bad news for buyers? Not necessarily; but buyers must be aware of the current market conditions to avoid frustration and heartbreak.
The market is moving FAST. That means you need to stay on top of the listings as they come out. As your Realtor, I check the listings at least once daily, and alert you as soon as something new pops up matching your preferences. If you see something online that interests you, you need to move quickly. Many homes receive offers within their first few days on the market. If you’re not ready to check out a home as soon as it becomes available for sale, it could go pending before you get a chance to see it. What if you’re just not available right away? No problem — I can preview it for you, and communicate with the sellers to let them know you are interested. They may give us some extra time to tour it and get an offer in, or I can write an offer for you before you see it, with everything contingent on your approval once you do get to view the property in person.
When it comes time to make your offer, keep in mind that sales are averaging 99% of the asking price. Many sellers receive multiple offers — I’ve seen some with over 20! — so you need to be putting your best offer forward. Do not expect to be able to lowball your offers in a market like this. I’ve had lots of clients say “We’ll start low, and see what they counter-offer.” But what happens is that the seller doesn’t counter-offer at all — they pick from one of the other, better offers they’ve received. Unless the property you are considering has already been on the market for several weeks, you need to plan for a competitive offer situation. Make your best offer from the start. What is the home worth to you? If you lose the contract to someone who offered more, are you going to wish you’d offered more, too? Offer what you are willing to pay. If we find issues during the inspection or appraisal, we can always negotiate fixes or price reductions then.
It’s true that buying real estate in the Portland area has become more expensive and more competitive in the last few years. The trends have been steady for the last two years, and there are currently no indications of any major changes ahead. Savvy buyers with savvy agents can negotiate even the toughest market conditions. The key is simply to stay informed. It’s my job to keep you on top of the market conditions and to help you make the best possible real estate deals for you. Contact me today for more information. I look forward to working with you!
How much does street noise affect a home’s comfort?
My first job out of college was in an office that had been converted from an old train depot. Trains went by, within inches of my office window, several times a day. The first time it happened, when I was there for my interview, I was caught off guard in a spectacularly embarassing manner. But I got the job, and after a few more trains, I pretty much stopped noticing them. My point is that even noises that seem jarring at first probably won't register after you become accustomed to them.
A lot of buyers hate the idea of street noise in their home. I understand that it's not anyone's favorite sound, but unless you're buying a secluded farmhouse, there are going to be noises. And you'll get used to them, and they won't bother you. They'll be white noise. My house isn't on a major road, but there are kids playing outside all the time. There are shrieks and screams and typical kid noises. And there's a big, barking dog at the house next door. Inside the walls of my home, these noises don't really disturb me. If I don't want to hear these noises at all, a quiet radio is enough to cover it.
All houses will have some noise. If it's not cars on the street, it will be a train in the distance, a neighbor's dog, or kid, or motorcycle, or cows bellowing somewhere nearby. You simply can't eliminate the noises from the outside world — but you do get used to them, and it doesn't take long to adjust. You hear what's important and you tune out the rest. I don't think street noise should be a dealbreaker for buyers. You, as a buyer, may disagree with me, and that's okay — my job is to make YOUR priorities MY priorities. It's not going to be my house, after all. I'd just hate to see you pass up a great home for something that really isn't as big a deal as you fear. After all, millions of New Yorkers sleep soundly every night despite sirens and horns constantly howling below their windows.
How much does street noise affect the comfort and value of a home? In most cases, not much at all.
Blackout Curtains for the Late Summer Sun
Legally, a room has to have a closet and a window in order to be called a bedroom. The best sleep I've ever had was in what's known as a "non-conforming" bedroom. It was a basement addition that had no windows. When the door was shut and the light was off, it was completely dark. Insulated by the ground, there was almost no noise, either. It was wonderful. I miss that little non-bedroom.
I love the summers here in Oregon, but I don't love that the sun is out for so much of the time that I'd like to be sleeping. The light wakes me up, or makes it hard for me to sleep restfully, and I know I'm not the only one. Good luck getting your toddlers to go to bed at a reasonable hour in the summertime, too. "But the sun is still out!" As much as I loved my windowless room, I doubt it's a trend that will catch on. The next best thing is a good blackout curtain.
I got these inexpensive Deconovo curtains on Amazon, and I'm very happy with them. They're attractive and effective — almost as good as having no bedroom window at all 🙂
What Buyers Can Do to Get Ahead in a Seller’s Market
You've no doubt heard that it's a hot real estate market here in Portland right now. Last week I wrote about how quickly everything is selling in Portland. When we talk about a hot market, though, we mean it's a hot time to sell. For buyers, though, it means more competition and, often, more difficulty.
A lot of buyers are just not prepared for the challenges they'll face when they make their first offer in a market like this. They expect to be able to come in with a low-ball offer and take negotiations from there when the seller counters. But that's just not wise in a market where nearly every seller is seeing multiple offers for their property, often as soon as it hits the market. When they have lots of offers to choose from — I've seen properties get more than 15 offers several times in the last year — sellers are not going to bother negotiating with everyone. They're going to pick the offer they like best, maybe keep one or two as backups, and reject the others.
It's important for you as a buyer to understand these conditions, so that when you are ready to write an offer, you have your best shot at getting it accepted. So what do you need?
- PROOF OF FUNDS — Aboslutely the most important thing going into an offer is to have your finances figured out in advance. If you're paying cash, you'll need to prove you have the cash. If you're using a loan, you'll need a pre-approval letter. Have your lender provide you with pre-approval letters at several different price points, so that when you find what you want, you've got the pre-approval to submit with your offer immediately, and you don't have to rush to get something in writing from your lender before a tight deadline.
- BE READY TO ACT — Houses are selling faster than ever right now. That means that you just don't have time to look at it on the internet, set an appointment to view it in two weeks when you're free, and then think about it for a couple more weeks. It will more than likely be long off the market by then. Know what you want, where you're willing to compromise, and if a listing comes up that interests you, check it out immediately. When you find something that fits your criteria, be ready to write your offer that day. You will have chances to back out if you get cold feet later, but you'll have a hard time getting a contract if you can't move quickly.
- HIGHEST & BEST — Most sellers right now are not just considering the first offer they get. They'll set a window of time for potential buyers to see the house and submit offers, and they'll review them once they have several to choose from — they almost always do. If you really want to get the contract, you have to bring your very best offer immediately. Think of it this way: if you offer $450,000 for a house, but the winning bid is $460,000, are you going to wish you'd offered more? Then you should offer at least $460,000. If the winning bid is $465,000, now are you upset you didn't offer higher, or just sad that it ended up being out of your range? Find the top of what you'd be willing to pay, and write that into your offer. Remember that there are opportunities to negotiate further on price if something comes up during your inspection.
- LIMIT CONTINGENCIES — The fewer hurdles the seller has to clear to close the deal, the better. Is your offer contingent on selling another property first? Don't expect to beat an offer that can close immediately. Are you asking for the seller to cover closing costs? They're going to see how that affects the bottom line, and your purchase price offer has to be high enough to beat out a buyer who offers less but covers their own closing costs. I will never recommend to a client that they waive the inspection. Sellers are thrilled if you're willing to do that, but it's just too risky. If the seller needs you to waive the inspection in order to make the deal happen, I advise you to move on. This is not a place for compromise.
It's so easy to see what you think is the perfect house, and before you sign your offer, you're already envisioning your life there. Try not to get too attached. It's heartbreaking to miss out on a house you love, but in this market, buyers rarely win their first offer. Just remember that new houses are coming on the market every day, and as long as you follow the above guidelines, you will get something great. When you work with me, I'll guide you through the process, and I won't let you settle for something you don't love just because you're getting market fatigue. This is your home we're talking about! Hang in there, and it will be worth it when you sign those closing documents.
Portland Real Estate: Why It’s Not A Bubble
KGW recently reported that Portland has the fastest-rising home prices in the United States. Check out this graph representing Multnomah County. The line at the top is the average sold-price-to-asking-price percentage, and the bars represent days on the market.
It's incredible! Days on the market — from listing to closing! — is averaging less than a month. And the average sale price — AVERAGE — is above the asking price. Houses in Portland are selling immediately, and they're selling above list price in nearly every case. It's hard not to wonder when this bubble will burst and the market will crash again. This momentum can't last forever, can it?
Well, the pace of growth probably will slow down eventually, but I'm confident this is NOT a bubble, and we're not headed for a crash anytime soon. Here's why:
- Buyers are paying cash. Approximately one-quarter of all Portland home sales in 2015 were all-cash offers. When a buyer pays cash, there's no mortgage on which they risk defaulting. The house is paid for and the money is accounted for.
- Mortgages are stronger and more secure than they were before the last crash. The last crash in the late 2000's was largely due to irresponsible lending and borrowing. Whether the banks paid fairly for their part in the crisis is up for debate, but they absolutely learned a lesson about making flimsy loans. And just in case they didn't, the government put new restrictions in place to ensure that future mortgages meet higher standards. The result is that it is more difficult to get a mortgage, but those who do qualify are sound borrowers — much less likely to default.
- Portland is the greatest city in the world, so of course it's growing. Okay, this last point is just my opinion rather than a strict fact, but it is an opinion shared by many! This is a great city, and even though prices are rising fast, the cost of living remains much lower than in many other big cities.
As prices continue to rise, the growth momentum will probably slow somewhat, but this is not a market that's headed for a nosedive. We can expect it to level off at some point — no one can predict when, but based on current trends, that still seems a long time from now. But unlike the wild real estate market of 2005, 2006, the money is there to back up the purchases this time around. We're not going to see a big wave of foreclosures and short sales. At worst, there may be a plateau coming, where prices don't rise and the homes for sale stay on the market a little longer.
If you're waiting to buy because you're expecting prices to drop, you'll likely be waiting a long time. This is no bubble.
That’s So Portland!
When I talk to my friends about my life in Portland, I hear the phrase "That's so Portland!" all the time. This city is full of unique opportunities and experiences, and living here, it's easy to take for granted just how unusual — not to mention fun, interesting, exciting — my routine can be.
We've got all the usual big city stuff, so if you want to live a normal life in Portland, you certainly can. But whatever your quirks and interests, there's a niche for you here. Talking with my friends about New Years resolutions, we got into discussions about what we were working on to be more fit. Some friends run, others go to crossfit gyms, but then there's the guy who's taking partner acrobatics classes, my girlfriend who is getting really into roller derby, and another friend who is taking a men's burlesque class (he's also joined a ukelele jam band). That's so Portland.
I made it a goal for myself this year to take advantage of more "That's so Portland!" opportunities. I asked my local friends for suggestions for more Portlandy ideas. Last weekend I went to a demonstration for a glass art school. In a couple of weeks, I'll be running in The Worst Day of the Year 5K, where runners dress in wild costumes and celebrate the dumpy January weather. Because why not? And there's a new food truck I have to try — PBJ's Grilled, gourmet grilled peanut butter and jelly sandwiches. Maybe this summer I'll learn to ride a unicycle.
What are your "That's so Portland!" experiences?
It looks like sound check before a concert, but they're actually getting ready to run in the Starlight Run, one of many annual costume 5K races in Portland. Photo by Swanny Mouton on Flickr
Is Winter Over?
Outside the office this morning, I saw a whole bunch of robins, and also a hummingbird. Is it spring already? One can dream, right? The weather may not be ready to cooperate, but spring does come quickly to real estate. We saw the typical yearly slowdown with the holidays this year, but two weeks into 2015, it already feels like that season is long behind us.
I held an open house this weekend and saw more traffic than I'd had at any open house all throughout the fall. Just about everyone said the same thing — that they were "just starting to look; hoping to buy around March." March is just six weeks away. We're already seeing a steady flow of new listings, and lots more interested buyers out there shopping. It's getting exciting now!
Are you ready to start looking, or thinking about listing your home? Give me a call and we can get moving quickly to be a part of the real estate spring that's just getting started.
How Accurate is Portlandia?
People who have never been here often ask me if Portland is anything like the satirical comedy Portlandia. Of course it is, or the jokes wouldn't make any sense. Maybe they don't make any sense anyway, but that's one of my favorite things about this place. It's okay not to make sense sometimes.
I usually tell people that Portlandia is as much a documentary as it is a satire. Portlanders revel in their otherness. We want to Keep Portland Weird, after all. If you want the Portlandia life, you can definitely find it here — but you don't have to, either. We celebrate differentness and individual creative expression in Portland, but along with that mindset comes the philosophy that you can live however you want — even traditionally — and that's okay here. If you want a white picket fence and two-and-a-half kids to put in your minivan, that fits in, too.
You can't live in Portland without at least a little bit of the Portlandia experience — you will likely get passed on the sidewalk by a bagpipe-playing unicyclist, or by a hipster walking his pig — but we'll welcome you to our city even if you don't commute by skateboard or sport purple hair.
What is Rip City?
You're probably aware of Portland's many nicknames: Rose City, Stumptown, Portlandia, Bridgetown, Beervana…each has its own significance in our city's lore, but one that may not make sense to you is Rip City. Why Rip City? What does Rip City mean?
Originally, it didn't mean anything, but it quickly gained great significance for Portland Trailblazers fans. In the Blazers' inaugural season, in a 1970 home game against the Lakers, Jim Barnett hit a game-tying long-distance jumper. The crowd erupted and announcer Bill Schonely yelled "RIP CITY!" Schonely admits it just came out — and colleagues encouraged him to keep using the phrase. In the 44 seasons since that moment, "Rip City" has become synonymous with Portland Trail Blazes Basketball, and the city of Portland itself.
Not every Portlander is a Blazers nut, but you wouldn't know that from inside the Moda Center. It's a truly magical environment, and while I admit some bias here, I do believe Blazer fans make up the best crowds in all of sports. The Blazers are our only major professional sports team, and we love them dearly. (Portland also has the Timbers and the Thorns of professional men's and women's soccer, but as far as "Big Four" sports, it's just Blazers here.) Inside the arena and all aound the city, Blazers fans make up a really wonderful community — a community now known as Rip City.
A Few of My Favorite Portland Things: Mountains
Photo by Flickr user Mulling It Over
The Cascades are different, though. The volcanic peaks that rise high above the rest of the mountain range every 50 miles or so are like giants. The Rockies are taller, sure, but they're ALL tall. Oregon's peaks are exceptional because of the way they stand alone. I've always thought that Mount Hood seems to stand guard over Portland. This mountain is, in my opinion, the most stunning element of our gorgeous city.
Over time, I fell in love with nearly everything about Portland, but it was Mount Hood that drew me here, 2800 miles from the Blue Ridge foothills I once called home. A view of the mountain was a prerequisite for my home here in Oregon. It doesn't always show itself from behind the clouds, but on clear mornings when I first wake up to see the sun rising behind Hood, it still takes my breath away, seven years after my first encounter.
