Friday, September 30, 2016

Market Update

So the seasonal slowdown has arrived. No need to freak out, the summer is generally the busiest time of year often with a 25% bump in monthly transaction volume between May and September. That is beginning to settle back into a more typical autumn pattern. But it should be noted that inventory although still tight has softened a bit and combined with the seasonal adjustment to demand, things are less hectic for buyers. Make no mistake, the market still favors sellers, but the ten offers in ten hours craziness we had in the spring has subsided and sellers seem to be a little bit more malleable.

According to our local MLS service here in Clark County, we are seeing the median days on market creep up a little, but still fast at just 12 days. Median price is still rising but over this summer the prices have stabilized and the increases have been modest. Median sold value in Clark County is hovering right at $300,000. Stabilized pricing is healthy as the real estate market cannot sustain double digit year over year growth for more than a few years.

This is an excellent time for buyers that failed to find a home over the summer or were not prepared to buy in the last few months to jump in. Supply is slightly up and demand is slightly down and that means the market is still very healthy but also a little more accessible. Sellers that were a tad overpriced in the summer months are ready to make a deal as they usually don't want to be selling during the holidays.

I am looking forward to a strong fall season.

Friday, September 23, 2016

Seller's Need to Relax

This recent upswing to a seller's market has left many seller's with a serious attitude problem and the market is starting to make an unfavorable adjustment. Seller's are finding that buyer's are leaving the market and this has reduced pressure on inventory. It is still very much a seller's advantage, but the craziness of last spring has softened into a more healthy condition.

The problem is that seller's continue to exert pressure on buyer's as if they had ten offers in line when in fact they have just one. Buyer's are leaving the market in frustration. This market has shifted back into a more traditional situation that still favors the seller in the lower portion of the price range up to about 10% above median. But sellers need to actually "sell" their house and being rude, making it difficult to show the home, demanding unreasonable closing periods, etc. are going to lead to disappointment for them. They are leaving cash on the table by pushing away potential buyers with a bad attitude.

Regarding timelines, there are many things delaying closing times right now, the most prevalent is the ridiculous appraisal situation. Appraisers are quoting 4-6 weeks for an appraisal and then extorting cash to get it faster. Right now we have a racket being run by appraisal companies that are basically selling appraisals to the highest bidder. There is no accountability at all and as usual the federal government has screwed the system up. I have heard of appraisals being bid up over $2000. This is a practice so egregious that it would make the Godfather blush.

Locally the cost of appraisals has more than doubled int he last 12 months. It is time for "El Federale" to crack down on these appraisers or better yet mandate that the banks pay all appraisal fees. After all it is the banks that demand appraisals, right? Believe me, if the banks were paying they would kick the appraisers teeth in before succumbing to this latest round of extortion.

Once again the government under the guise of protecting consumer rights has gone off and created a situation where pure unadulterated greed reigns supreme and the ultimate victim of this unregulated catastrophe is of course, the consumer. Classic. I find it interesting that appraisers were offended that they were targeted after the collapse of the market in late 2008. There were some appraisers on the take back then, puffing up prices for dirty loan officers to get cash out refinances pushed through. I have no doubt that these dirty scoundrel appraisers were a minority representation of the industry. But they certainly have not helped buff out the tarnished reputation with this current trend of plundering the public like an 18th century pirate. Ahoy matey, raise the black flag, there be treasure to plunder in thar appraisals...

Friday, September 9, 2016

Bottom is still tight, the rest of the market is settling in.

This article from last year is still resonating in the current market. The prices are all up about 10-12% from the time when this was originally published but it still seems to be the case that the bottom of the market remains tight on inventory and flush with eager buyers. The middle and top however are actually close to a neutral market only favoring sellers a little bit.

Houses under $250,000 are still pretty hot and under $200k it is nigh impossible. As the buyers look up the price ladder they will find less competition in that $350-450k range and that means sellers have to try and play ball.

Originally published, January 9th, 2015, by Rod Sager

"Have you felt trapped in your house over the last few years? Biding your time waiting for the real estate market to correct so you can sell? 2015 may be the year for you. Over the last two years here in Clark County we have seen a roughly 20% increase in the median sale price. Many people that were not able to sell now may find themselves in a positive situation. We very well could be at a turning point of opportunity. For people that are making a move up in price, selling their less expensive house now for a slightly lower amount than they might get next year could prove advantageous. The more expensive house they want will also likely be more expensive. So selling a small house for less to get a big house for less sometimes makes sense.

I saw prices on entry level houses flatten a bit in the second half of 2014. I believe that the market for the 40 year old 3 bed 2 bath home is just about as high as the economy will support right now. Barring any dramatic improvement in the overall economic condition 2015 is a great time to sell an entry level home. Where the market continues to see improving prices is that middle move up. Last summer I ran into situations where a simple 1400 foot ranch home would sell for $220k and a gorgeous 2100 foot home in the same area was fetching just 10% more. I believe that the gap in those market segments should widen this year as the entry level could be flat and the middle will continue to swell in values. Selling the little house to get a big one is prime for 2015. Some people may even find that their house payment is only marginally higher since rates are quite low right now.

Generally a real estate market rebound will begin at the bottom. The bottom of the market can drive the middle. If the bottom is soft so will the middle be. When the bottom begins to move up in value the middle is going to trail behind for at least six months. So that leaves a window to move from the bottom to the middle with the move up house feeling like a bargain. Once the bottom hits the high plateau then there is only a six month window of opportunity to capitalize on the middle lagging behind on growth. This is the gap between the market segments. As an example, entry level homes that were fetching $160,000 two years ago are now selling for $200,000. But the middle houses that were getting $220,000 two years ago are running about $260,000 now. The 25% gain at the bottom and a 16% at the middle translates into a relative deal for the move up buyer. This year there is a good chance the $200,000 house will only rise a little maybe to $210,000 but that middle market is showing signs of activity suggesting the 260,000 house will get to $285,000 this year. So holding out for an extra ten to buy a house that will cost an extra 25 may not be the best approach.

Keep an eye on the real estate trends. Have your favorite Realtor® send you listings so you can keep your finger on the pulse of the market. I can only see trends, I am no Nostradamus, so anything can happen. Real estate is however a very trend based market and it typically follows modestly predictable patterns. Let me know if you have any questions and feel free to comment below."

Friday, September 2, 2016

Autumn Is Near

Ah September, the waning days of summer. Here in the Northwest, Autumn comes quick. We can feel the temperatures plummet as fall approaches in the middle of September. Soon the leaves will turn and fall off the trees. For people selling homes in the Autumn it is important to keep the driveway, side walks and rain gutters free of leaves and debris. Slippery and messy leaves are both an eyesore and a potential hazard.

Leaves look beautiful when they first fall on the ground. All those brilliant colors scattered about, make for a storybook setting. But quickly the rain and wind will break them down into a mushy mess. Curb appeal is important and sellers are advised to keep the home as tidy as possible.

On the sales side of thing, this can be a good time to buy. The rush of summer buyers starts to wane a bit and less competition is always good for buyers. often sellers are motivated to get their home competitively priced if it failed to sell over the summer. yes even in a robust buyer's market like this one, sellers sometimes price their home a little too optimistically and find themselves in a September slump. This could be a buyer's opportunity to strike.

Sales in out local market seem to be nearly identical to last year with the exception of prices running about 8-10% higher. The market has been more of a lack of sellers than a flurry of buyers and that doesn't look to be changing anytime soon. Medium demand and very tight inventory is still the state of affairs in the Clark County real estate market.