Friday, September 2, 2022

Housing on the Brakes?

Well the housing market is definitely not as hot as it was at the start of this year. A combination of rising rates, the worst inflation in 40 years, and a falling consumer confidence has lead to an apparent slow down in real estate. There is however, a fly in the ointment of the doomsayers in real estate. The economy in general, at least locally remains hot. Jobs are plentiful and employers are paying more money than ever for the same jobs. Furthermore there is external positive pressure on our local market from out of state as well as from the price bloated Seattle Metro area.

For the last three to four years Washington State has been at the top of nearly every "best place to live" list in the country. Clark County is benefitting from this as is other parts of the state but we have a secret weapon; it's called Portland. The only people left defending Portland are the die hard Rip-City 'fanboys' and the elected officials responsible for taking Portland from America's Sweetheart city, to the laughing stock of the country. Even my relatives in Europe are wondering, "What the heck? are you OK? What's happening there" The only positive press coming out about Portland is from local sources, nationally the once amazing city is viewed as a train wreck. Portland is the poster child of what NOT to do when running a major city.

Portland is on the verge of joining several California cities in the 'losing population' category. People are leaving and our immediate border location to the city is benefitting us on the real estate side. Unfortunately the influx of Portlanders could bite us in the hindquarters later if they start voting for the same types of candidates as they did when they lived in the Rose City.

So I am definitely seeing a less aggressive seller's market. Houses that once sold in 2-4 days with multiple offers well above asking are now quietly sitting for a more normal 2-3 weeks with offers coming it at or just a tad below asking. Buyers that were scared off by the multiple offer fiasco of just six months ago can come back to a much more civilized real estate market. But there are no bargains, the demand is still there. More listings have appeared and that has taken some of that pressure off the buyers. We are still sitting on less than 2 months inventory. It will be interested to see the updated stats in a week or so when the MLS publishes the September report. Even if we added another month of inventory, the market still slightly favors sellers and that suggests the sky is not falling.

Some markets have seen legitimate drops in median prices even for specific categories. We have not. Yes there are price reductions happening in our market but those are almost exclusively on overpriced homes. Homes priced at or very near comparative market pricing are selling in less than month without price adjustments. Many sellers are jumping in to the market and are pricing their homes, often against the advice of their agent, too high. As the market starts to cool, appraisers will be keen to the conditions and they will not be so generous with overpriced listings.

So sellers it's time to be realistic with home values, the market is stable but you are not going to get that unicorn price for your house. Buyers, worry not, the market is not going to kick you in the face every time you write and offer. This is a healthy market right now.

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