Friday, September 25, 2020

This Market is Getting HOT!

The crazy rush to snatch up every house has now extended up into the half million dollar price range. These super low rates and a tight inventory continue to push values higher. There is some kind of perfect real estate storm brewing round these parts as buyers are crawling out of the proverbial woodwork to snatch up anything under $500k. There are literal traffic jams leading into neighborhoods with sub-$400k homes as agents scramble to get offers in.

Low rates, tight inventory, and at least a little California and Oregon exodus appear to be more than enough to counteract any COVID-19 related economic slowdown. It has been a while since I saw a mad rush to buy like this, we had a similar run up in 2016-17. It's nuts out there for buyers with budgets under half a million dollars. Those of you qualified to spend a bit more will find a more relaxed experience as the supply of high end properties are more in line with demand at the moment.

Even fixers are starting to show robust activity after a couple of years of buyers snubbing them. This is a smokin' hot market right now and so long as rates stay low a sellers remain in the minority, buyers will have to fight for every deal.

Friday, September 11, 2020

Pricing is a critical element in the mid level price range

Pricing is a thing in this market. The sub $450,000 market is pretty hot right now and it is hard to miss the mark. But as you move into that middle range between $450k and $700k pricing is very important. Now, to be clear, pricing is important in all price ranges, but the market is hot enough right now at the entry point that a seller can get away with a price too low or too high. The starter market will gobble up a deal with multiple offers over asking if it is priced too low and over priced homes will see slightly under asking offers. But the middle range can be a bit dangerous. Price it too low and it will sell but multiple offers may not happen, and that means the seller is leaving money behind. Over price it and it will sit. Many buyer's are reluctant to offer substantially under asking even when the KNOW the house is too high. 

Getting the price just right is a very big deal right now in that middle range $450-$700k. Buyers should not be afraid to offer less if the home is overpriced. Low-balling is not a thing right now and buyers should be aware that sellers are often emotional enough to not even counter you should your offer be insulting. That said, a seller should counter any low ball offer because generally, a person that takes the time to write the offer has enough interest to potentially come to terms that are mutually acceptable. All parties in a real estate deal should try to stay logical about the price and terms, buyers should save the emotion for choosing part of the equation. Once a choice is made switch to logical thinking. 

That can be difficult, but I have had clients wish they had been logical in the negotiating phase after losing a house they later wished they had bought. Another issue is the time on market. This is often misunderstood by buyers and even agents sometimes. When a property has been on the market a long time there are a variety of reasons why, sometimes the house was overpriced for few months and the seller just lowered the price recently to place it more in line with the market. Some buyers may think they can low-ball the seller here, but they may find a solid wall. Often another buyer steps in and snipes the property from them while they wasted their time offering too low. 

There are 2.6 million people in the Portland-Vancouver metro area and some 7000 agents working it. The MLS is interconnected with the world wide web and few deals go undiscovered. If a price looks too good to be true, it probably isn't true :) Buyer's looking for a "deal" should look at fixers. They should be prepared to put 10% or preferably 20% down. This market has not been too cozy to fixers and that means potential value opportunities. Also homes that need enough work to be ineligible for FHA or VA financing are less competitive because at least half the buyers are using government backed loan products. Thinning the competition is a good way to get ahead. Of course buyers that are not predisposed to make repairs may find the local market prices for such work to be very expensive and thus that "deal" may turn out to be not such a great value after all.

Sellers and buyers can both do well in the current market climate. Buyers should be less concerned about price and buy the house that will make them happiest. Loan rates are super low right now and getting the house you want will pay off in the future as the mortgage rate is locked in at historic lows. Every month you get your "deal" when you make that payment. 

Friday, September 4, 2020

Fickle Market Likes Sub 400k

 This real estate market is gobbling up everything it sees under $400,000. Homes that seem to have high-ish prices are snapped up in a matter of days. I wrote "-ish" because this market still tends to ignore truly overpriced homes, but under $400,000 seems to be like under $300,000 was just two years ago.

These low interest rates are bringing new buyers to the market and that is no doubt applying maximum pressure at the entry point to home ownership.Sellers seem to be sitting tight as inventory in this high demand sector of the market remains tight. Any seller sitting on a sub $400k property ought to consider listing and making a move up as the middle of the market is not as hot as the bottom. We continue to see bottom pressure creating an opportunity to sell high and buy low-ish. Again with the "ish" that low is relatively speaking, this market will ignore an overpriced listing but it will swallow whole a "value" priced listing.

If you are sitting on a 3 bed 2 bath home in that coveted $300-$400k price range call me or call your go-to Realtor® today, you may be shocked to see what the market might pay for you little house :)