Friday, April 24, 2015

Listed, Shown, Sold

That just about sums up the state of our market right now. Houses come on the MLS and agents are just waiting for them. Like sharks to the chum, they attack! Such is the state of housing in Clark County, Washington and in many other markets as well.

Many home owners seem to be guarded about selling right now. If the seller has equity and can sell, this could be the ideal time to list. There are not an overwhelming number of buyers but they do outnumber sellers significantly. This market locally is all about a lack of inventory not so much an abundance of buyers.

Sellers can capitalize on the lack of inventory and get a little more for their home. As more inventory hits the market prices will stabilize a little. There is always that sweet spot in market transitions. This is one of those sweet spots. Tight inventory makes it easy to sell but difficult to buy.

The real heat in the marketplace is generally in the bottom half of pricing. Those sellers looking to move up from the bottom half into the upper half can take advantage of that sweet spot I mentioned. Rapid price increases at the bottom and much more modest increases at the top make for a tidy advantage for a seller to sell now. Also, interest rates remain low and although I have been barking that they could go up significantly for several years, they will go up. When they do, all bets are off for many buyers and sellers.

For a seller that has been waiting to get out from under and upside-down house, now could be the time to grab one of the desperate and frustrated buyers to give them that little bit extra they need to clear the bank and move on to the next house.

It looks like this summer is going to be very interesting indeed.

Friday, April 17, 2015

New Homes are Hot

Over the last few years our local market has been driven with buyers looking for clean move-in ready homes. Sure, there have been the deal seekers buying up the rough homes, but most of that was investors flipping or renting the properties. It seems our owner occupant buyers have been willing to bid up the cherry homes with multiple offers while the rough ones tend to sit.

I don't think this is just an anecdote. Fannie Mae and Freddie Mac have been fixing up their REO inventory with fresh paint and carpet to try and tap into this move-in ready market.

It seems that new home builders are tapping that resource as well. There is quite a bubbling renaissance in the new housing industry. What the resale market brings to the table is location, lot size and price. Right now the resale market is clinging to its inventory. There just isn't a whole lot out there. This makes new homes that much more attractive.

Some of the small local builders are back in business and that is providing an opportunity to buy a new house in an established neighborhood. One such development is the Tall Tree Meadow in Vancouver. I am delighted to be a part of this particular subdivision. It is just six homes, three are built already and three more lots will be built later on.

This subdivision is located in a built out area near Arnold Park in Vancouver. It is close in to both SR-500 freeway and I-5. It's just three minutes to the Interstate Bridge, yet offers a home that feels like suburbia.

It is often the trade off home buyers make when looking at neighborhoods. Do I want that bigger, newer home with the three car garage but out in the 'burbs or do I want the eclectic experience of the older, established neighborhood close in to the city?

Developments such as Tall Tree Meadow offer the buyer a third choice, "all of the above". In reality it is a blend of the two, but for many it is the perfect blend. For buyers seeking a perfect conformity of neighborhood, the modern suburbs in an incorporated city are the ticket. For those seeking that multifarious buzz, the older neighborhoods in close to core are the best. But there are those who want both, and small infill developments like Tall Tree Meadow are an ideal option.

In our local market most builders, large and small list their homes on the MLS. I have always liked that about Southwest Washington. Buyers can work with a Realtor®, look at both new homes and resale homes. They get an honest opinion about what is best for them rather than the conflict of resale versus new home with the developer in direct opposition to the resale Realtor®. Other markets around the nation are often different. Ask your local real estate professional about new homes.

Here in our local market we have seen a resurgence in both large scale suburban new home development from national juggernauts like Lennar and the smaller infill developments like Tall Tree Meadow. Buyers considering a new home should be aware that negotiating with a builder is very different than negotiating with a resale seller. Builders are very resistant to a lower price. Many buyers mistake this reluctance as greed. In reality buyers must remember that a a sale in the development is recorded in the public domain. Most new homes are purchased using financing and the bank will require an appraisal. Once the developer sells a house in the neighborhood that discounted comp will haunt him. Imagine a buyer negotiates a $5,000 discount on a 50 home subdivision which is filled with very similar homes. That $5,000 discount could cost the developer $250,000 as that comp is used by every appraiser for every purchase over the next several months. Negotiating with a builder requires some finesse and an experienced real estate professional. There are tactics that can benefit both parties whereby the builder is happy and the buyer gets a "deal".

Now get out and soak up the beautiful spring weather while looking at great new homes. I'll be back next week.

Friday, April 10, 2015

Market Trending Up on Values

The tight inventory I wrote about last week has translated into a perk for sellers as prices continue to feel upward pressure with more buyers than sellers. Lending is still tight so the buyers are not always the strongest and sellers should be advised to look deeper than price on each offer. As I have said time and again the best offer may not be the highest offer.

All of that said, here is the data for the first quarter of 2015. The Regional Multiple Listing Service says that Clark County Washington has 3.2 months of inventory. That is indeed tight. The median price was $255,000 over the first three months of the year. That is $10,000 higher than the same three months last year. Days on market are getting shorter and shorter as supply continues to shrink against a steady stream of ready buyers. As we move into May we might see a surge in inventory that will slow down the price frenzy.

Lending is tight and that is making it tough on the first time home buyers facing higher prices and onery lenders. The robust activity in 2013 and 14 on the entry level homes has in fact provided a nudge up for the middle market sellers. Top of the line properties are seeing some much needed sales as well.

The fly in the ointment is this tight lending situation. Regulators had a field day after the crash in '09 and that is having a negative impact on the market as buyers find difficult guidelines and tougher mandates to get a loan processed and funded. Although many of the changes to the banking regulatory and lending practices have had positive results, in typical government fashion they have gone over board and may lead to worsening conditions.

Let's hope not. Buyers are well advised to act swiftly when the see a house they like and if it looks like a sharp price, it probably is. Don't try to haggle the seller down, he probably has three offers to look at. There are still some sellers that have overpriced listings and these sellers will find the market to be cruel. Buyers will bid up good values but they won't bit on that hydrogen filled, puffed up price that some sellers think they can float into the market.

Things are good out there folks, but things are tight also. You may want to get while the getting is good, as they say.

Friday, April 3, 2015

Inventory is Tight

Inventory is very tight right now in many markets across the country. Here in Clark County, Washington that is very much the case. Buyers are snatching up all the clean, well priced and move in ready properties in the first couple of days they are on the market. Multiple offers on these homes are becoming the normal rather than the exception.

When it comes to homes that need some attention and minor repairs, these tend to hang around a bit longer. These are the homes that buyers can acquire without getting into a bidding war with half the county. The market over the last year or so has been filled with eager buyers looking for move in ready properties. The fixers are not seeing the rush of buyers.

As a Realtor®, I often find myself with frustrated buyers that have been outbid or too slow to act to get a house. I try to show them properties that need a little TLC but are still financable but some buyers just don't want to deal with any "fixing". One idea that can help these buyers is to seek the fixers that have a willing seller and get the seller to make the repairs before closing. Buyers that are up against a financial barrier have to remember that they may not get the perfect move in ready, big house on the small dime. There are often choices between a smaller property that is cherry or a bigger property that needs a little work.

The important thing to realize is that as prices continue to nudge their way higher, the buyer only gets in a tighter spot. Unless that buyer gets a huge promotion or takes a new job making allot more money the housing prices are rising faster than income.

Some buyers need to consider buying a smaller home to start and then use the equity they gain over time to leverage a larger property a few years down the road. Real Estate can be a very good way to build wealth and having the benefit of both a home and an appreciating asset is a major step towards financial independence.