Friday, May 27, 2016

Spring Inventory is helping, but we need more

Now that May is nearly done, the inventory boost that typically increases supply has begun to show up in the MLS. However it isn't enough to slow down the seller's market. Buyers will need to continue their diligent efforts to find a home and present the winning offer.

The MLS currently shows 1175 active listings in Clark County and we have been selling about 700 a month. That is a six week inventory. It is still very tight.

The interesting thing is that the median sales price has been just shy of $300,000 countywide the last couple of months yet the median priced listing is currently $406,000 countywide. Buyers in the $400k plus market are not going to be quite as challenged as the inventory to buyer ratio is a more healthy balance. Buyers in the median to sub median range will continue to struggle with multiple offers and above asking sales prices.

Buyers need to realize that time is not on their side in these kinds of situations. Sellers also need to be prepared to find a home fast. This can be a hectic time for real estate but it is kind of exhilarating as well. Just keep your chin up and enjoy the ride.

Friday, May 20, 2016

New or Resale?

The new construction market has a lot more inventory relative to comps in the resale market. Buyers are snatching those up too. This article from last summer is still relevant and since I am out of town today, I figured I'd recycle.

Originally posted on this blog, July 10th, 2015, by Rod Sager

Many home buyers may be feeling frustrated at the lack of resale inventory in the market. here in Clark County it remains a tight seller's market. There are many buyers and they seem to be preferring that move-in ready house rather than the one that needs "TLC". The builders are back and they have come with force. Dozens of new developments are underway all over the fruited plain.

For the buyer that has to have the house just so, a new home holds an advantage in that often times the buyer can choose carpets, flooring, counter tops, colors, etc. The downside is that builders are booked solid and completion times are pushing 6-7 months. New spec homes are always and option but they lose the pick you theme angle in exchange for buy me now availability.

The general theme in new homes has been big house, tiny lot. The older homes are usually found on nice big lots with 7-8 thousand square feet and go back to the 1970s and you will likely find reasonably priced homes on 10,000 foot lots.

That remains the trade off, older homes on giant lots versus newer homes on smaller lots. In general a new house will appreciate quicker in the first 5 years. When looking at newer subdivisions consider the neighborhood and price ranger. Entry level homes will often hold up better if an HOA or strong CC&Rs exist to keep the neighborhood conforming and tidy. Generally upscale developments with large expensive homes fare well with or without an HOA.

I have written in the past that sometimes buying a brand new house in an older neighborhood can backfire. Be aware of your needs and think about the future. Buying a home is a little more "permanent" than renting and will require a bit more time commitment on the part of the purchaser.

Most new home developments list their properties on the local MLS so your favorite Realtor® can still help you find your dream home, whether it is brand new or 100 years old.

Friday, May 13, 2016

Seller's: A Cocky Attitude May Cost You Money

In times where the real estate market turns to a "seller's market', many listing agents become lazy and some sellers become cocky. Both can lead to a seller ultimately getting less money for their home.

The lazy agent is the one that simply figures the market is so hot they'll just toss it up on MLS and wait for the offers to pour in. Under certain circumstances that can be a wining approach. In general however, it is not. No matter how hot the market is, the home still needs to be presented to as many buyers as possible to attract the best offer. The best offer is not always the highest actual price. Some offers are better than others and what constitutes better may lay in the details of the terms presented by the buyer. A good listing agent knows this.

Cocky sellers are those that figure they can show the house when they want. Turn prospective buyers away because they don't 'feel' like showing the house. Making unnecessary and restrictive showing conditions. Yes, I have encountered this recently.

The best offer may have been coming from the client the seller just irritated to the point they passed on the house and offered on another. Lazy agents that don't council their sellers to make the best choices are equal in the blame should the house not achieve the goals the seller is hoping for.

This market needs listings. This is a good time to list a home. But even in a so called, 'seller's market', without buyers there is no sale. Believe me, frustrated buyers are leaving the marketplace. That is not good for the market. Ultimately it is not good for sellers.

The rules of selling a listed property don't change because of a surplus of buyers. The highest and best offer still comes to the seller that follows the general rules of for making a house as marketable as possible.
  • Good curb appeal
  • Clean and tidy interior and yard
  • Minimize personal clutter
  • Eliminate pet order
  • Replace worn flooring and carpet
  • Update kitchen
  • Make bathrooms as 'cute' as possible
  • Keep showing rules as loose and flexible as possible
Some realtors are having their sellers take a weekend getaway and having open showing with the intention of collecting offers and making a decision on the following Monday. For a really nice updated and move-in ready home, this can be a great tactic to get a solid offer and put the least amount of strain on the sellers. It is far less effective on homes that don't show well, need work, or are dated. Sellers should keep this in mind.

The bottom line for sellers is simply this. Don't let your strong position turn you into a $*&^%, enough buyers will walk away to keep you from getting the best price and terms on your home.

Friday, May 6, 2016

Are there 'good deals' in this market?

Well, are there? As Robert Ripley might say, "believe it or not", yes there are good deals to be found. In general, real estate is most expensive in close to the center of a metropolitan area. In our case, Portland. If the 'core' city is built out (Portland is) that city becomes increasingly expensive as there is little room for growth. Aside from assorted affluent communities scattered throughout the suburbs, homes tend to become less expensive as you radiate out away from the center of the urban mass. There are notable exceptions to this notion but here in Metro Portland the rule is generally applicable.

The first thing a frustrated buyer can do in this type of market is to look a little further out. One thing that is nice about our area, is that most of the heavy traffic is in close to Portland. Generally Clark County freeways away from the Columbia are running at the limit around the clock. For a person that is commuting to Downtown Portland, the ride from Mill Plain, Blvd. in downtown Vancouver, WA at 8:50 AM this very morning is shown at 24 minutes with some heavy congestion between Delta Park and the Fremont Bridge. The distance is 9.9 miles. Double that distance to 20 miles at the SR 502 interchange North of Vancouver and the ride is 31 minutes. In all fairness it is still double the distance and a commuter will put more mileage on their car, but most people are more concerned with time, rather than a little extra wear and tear on the car. This is not the case with every suburban area. But Clark County has an excellent highway system, so it does apply here. Push that ride all the way up to Woodland at 30 miles out and the ride is 37 minutes. The median price of a home in Woodland is roughly 40% less than a comparable home in either North Portland or NE Portland. Of course it should be noted that a bad accident on the highway can make the commute randomly horrible and the further out one lies, more chances for a random traffic issue. Of course timing is often everything and commute times at 8:50 are lighter than they are at 7:30. A typical traffic pattern in the morning sees the peak of heavy traffic at SR500 on I5 in Vancouver and on the return trip home almost all the heavy traffic is south of the Columbia. In general the notion that one can double the distance for only 20% more time is still viable.

Another way to find a deal is to look for a home that needs some work. This market right now is strong, but not as "hot" as some suggest. The houses that are getting bid up to ridiculous prices tend to be immaculate specimens. The homes that need a little work are lingering a bit longer. I am not suggesting really ugly homes. Often those are not financable. I am referring to the house with older worn carpet, scuffed up flooring, dated kitchen and bath. These homes do not attract the hordes of hungry buyers and can still be found at a respectable price. Of course the buyer will be faced with some weekend sweat equity to make the house shine. This could be a great alternative to the 'further out' approach.

For buyers that want a really screamin' deal, the application of both principles can be considered. Perhaps a light fixer in Woodland or Washougal. That should get you a house on the cheap! Don't fret frustrated buyers, there is light at the end of tunnel :)