Friday, April 25, 2014

More Multiple Offer Scenarios Bode well for Appreciation

I have become very busy these last few months and the market is showing increased aggressive behavior from buyers. This has moved from the bottom which has been hot for over a year, into the middle and upper end of the market. Homes that are "move in ready" and priced right get snatched up quickly and over full price. Just last night I had clients make a generous offer on a home priced at $350,000 which had been listed for just one day. My clients were outbid and the house went pending this morning.

For those folks that are sitting on a home they either bought or refinanced in 2006-2008 this could be the year you pop up above the surface of debt into positive equity. There are few real estate agents that "enjoy" short sales and those may become fewer and fewer as the appreciation generated by all this activity pushes values up.

For buyers, appreciation is a double-edged sword. The rising market gives confidence that they will enjoy a strong equity position over time but the pressure is "on"; as prices rise faster than income, they lose buying power and may have to settle for less home.

I have had a few buyers that didn't pull the trigger last year and now find themselves on the brink of being priced out of the market all together. The moral of the story is that we are moving further into the seller's market and buyers need to jump in now to take advantage of current pricing and these low interest rates. Rates will not remain low once the market shows an ability to sustain growth. Sellers that have been waiting for the market to come to them, need to contact their favorite Realtor® and have their home evaluated. The time may have come to make that move they have had to put off due to the depressed prices of 2010-2012.

I see a confidence in the market that has been lacking since early 2008 and that bodes well for the short term health of the market. Long term will ultimately be driven by interest rates and that is an area where change in the upward direction is inevitable.

Friday, April 18, 2014

Spring Market Trends

Trends for the $200k-$400k market
The market is just moseying along at a nice comfortable pace. Inventory numbers show a bit of a spike in the middle of the market. The bottom is still hot but the middle is now starting to see solid and promising activity. Between $200,000-$400,000; new listings, pending units, sold units are looking favorably up with a median price running flat since the start of the year. One statistic that is intriguing in this middle market analysis is the price change differential. This indicates how much less than list price homes sold. That is trending down which means more full price or near full price offers are coming in. Once the middle gets some good traction we will see the top of the market begin to swell a bit also.

Trends for the $200k-$400k market
2014 is shaping up to be a healthy market. I do not expect explosive growth like we had in 2013 but I am very optimistic about the overall trends that seem to be forming now.

I have also seen a nice surge in the $275k-$325k new home market with builders offering a little more inventory in that middle upscale market. The move up market can drive both the top and bottom and I feel that it is critical to see positive movement in this area.  Buyers are out there and they seem to be jumping in cautiously but in good numbers.

Buyers also seem to be continuing the trend of spending less than the bank will offer. The mid 2000s saw buyers using every dime of borrowable assets but lately I see a trend to leave some on the table. Caution after a rough market crash that is only five years in the rear view mirror.

This is a great time to list a home and it is still a good time to jump in and buy.

Friday, April 11, 2014

How far will someone drive to live?

Well that's a loaded question. I think I would drive indefinitely rather than face the prospect of not living! I guess that title needs some clarification. In real estate the general rule of thumb is that people will drive to own but not to rent. That is to say someone is often willing to make a long commute if it allows them to buy a home they could not otherwise afford. Rentals in general however, are less so. People tend to rent in close to work. These are broad generalizations of course and some markets, like Seattle that have hyper-inflated pricing are exempt from that line of thinking.

I recently took a fabulous listing in Yacolt, WA. This house was completely remodeled down to the last nail. Well, almost the last nail anyway ;) The home is gorgeous and is priced at just $198k. This house in Vancouver wouldn't last the day at that price but in Yacolt, it sits quietly awaiting the lucky person that finds her. Yacolt isn't really all that far out. In fact it is a great little town of around 1,200 people nestled in the mountains at the entrance to the forest. There is a library, school, town hall, tavern, country store, etc. For the more urban amenities one need only travel to Battle Ground about 15 minutes away. Freddies, Safeway, Walmart (opening soon) and everything else you need on regular basis is right there. Virtually everything remaining can be had in the 'Couv' or Portland. In fact PDX is 45 minutes away according to map-quest it is 31 miles. That's about the same time and distance as Hillsboro, OR is to PDX.

It is all perspective. Yacolt is a small town and up in the hills. The scenery is breathtaking whereby Hillsboro in contrast is predominately urban all the way to the airport. During rush hour, Yacolt is faster to PDX than Hillsboro. Yet there is resistance to rural areas that are essentially closer than some urban counterparts to the "center" of the metro area.

For buyers this means there could be wonderful opportunities for tremendous value in a short drive. Rural towns lack some close in convenience but gain that amazing small town ambiance that cannot be duplicated in the city. Too many buyers miss a golden chance at the kind of living most people say they want in surveys, yet act differently when it comes time to look for a home.

here in Southwest Washington we have a variety of these less populated places that offer a chance to get away from it all with out getting too far away. La Center, Woodland, Amboy, Yacolt, Rural Washougal, etc. Before you dismiss that great house in that cute little town, take a drive and check it out, you may just become a believer.

Friday, April 4, 2014

Early Spring Often Sets the Tone

Looking back over the years I find that the early part of spring has proven to be a pretty good Nostradamus act for the real estate market. Like the famous 16th Century prognosticator, the indications are not 100% accurate and may require a little creative imagination to confirm.But in general if sales and new listings get a early spring bump the rest of the summer selling season tends to do well. Of course the market has many economic influences such as interest rates, legislation, overall economy, etc.

So my anecdotal view is that this spring is starting off quite nicely. Bare in mind that the industry experts are suggesting a more modest level of growth in values this year in contrast with 2013 which was quite robust. I am seeing well priced properties selling quickly and at very near or even over full price. Overpriced listings are not selling or are getting low offers closer to market value. We are not seeing the bid it up to the moon craziness of 2005-2007. Buyers are shrewd and seem to do a good job of sniffing out a deal when they see it or coming in soft on an overpriced listing.

This market still seems to favor the turn key move in ready homes. Light fixers or extremely dated homes take much more time to sell. Heavy fixers however, that are not financable are selling quickly as investors seek to find properties in a market with tight inventory.

All of this bodes well for the forthcoming months that are considered "prime time" for real estate. I am looking forward to helping many families find their ideal home in this solid and seemingly stable market.