Land Opportunities Abound

In the local market we are still fortunate to have a large area in which homes can be built on five acre estate parcels. These need not be far away from town, and many in fact are very close in.

I recently showed a five acre parcel ready to build in Hockinson just five minutes out of East Vancouver. It was listed at $179,900. Buyers dreaming about that country estate should consider looking now. Land prices are inching up and rates for now remain low. Building costs however have been rising sharply. Building materials are experiencing price increases that are disproportionate to the economy at large. This could be due to the recent heavy demand added by a major influx of suburban and urban development in the local market.

Here in Clark County five acre building sites abound from areas in close like Camas, Hockinson, or Ridgefield all the way out to places like Yacolt and Amboy. The further out locations will often yield better pricing. The trade off becomes convenience versus value.

Some of the lots that are found for sale are located in subdivisions with a strict set of CCRs or even an HOA that may place restrictions on the size and type of buildings. Other lots are relatively unregulated in that regard. Our office currently has a generous supply of listings for buildable land. I am quite impressed with the variety.

Red area is seeing suburban development pressure,
yellow area remains mostly rural in nature
and is outside of the urban growth boundary

For those who wish to have a five acre estate in close to the city, the time is now. These types of parcels are reacting to the increased pressure from hungry buyers. Soon land pricing couple with building costs may push these completely out of the reach of the middle class.

The future of housing is in cramped quarters with neighborhoods stuffed with homes on tiny lots. The chances to own some space grow thin as increased regulations and the finite nature of land create a market that can only get tighter. In the graphic shown the area in the inside the yellow line is all within 20-25 minutes of PDX and has many opportunities to have a five acre country estate.

We are very fortunate in the metro Portland-Vancouver area to still be able to have a rural country home less than 30 minutes to the city core. Seattle lost that ability long ago. Those wishing to enjoy the country estate are well advised to make their move now.

Why Autumn is a good time to buy a house

Today I would like to offer up a good reason that frustrated buyers may find the proverbial light at the end of the tunnel as the fall season approaches.

During the summer months, most real estate markets enjoy a surge in sales activity. Many home buyers are families with children and the idea of moving in between school years is very attractive. It also does not hurt us locally that we have fabulous summer weather with which to enjoy touring homes. In any market the law of supply and demand is ever present. The summer months are yielding more buyers and thus the market experiences buyer pressure. If that sales pressure is not alleviated by increased supply (listings) then prices will nudge or even surge upward. We have seen this effect locally and around the nation this summer.

As our summer comes to a close many buyers have left the market. These buyers may only be out temporarily to get the family adjusted for the new school year or perhaps they feel that next year will be better for them to buy. Of course some of those buyers became purchasers. For the patient buyers this could be a small but significant bonanza. Those buyers that have left the market represent a relief of sales pressure. My experience has been that more buyers tend to leave the market in the fall than sellers. This creates an opportunity to buy that may not have been available in the height of the summer sales madness.

Current Listing in the Felida area of Vancouver $274,900 

Some of the run up in price is caused by multiple offers becoming an auction like frenzy driving up the price. Sometimes its less exciting than that, but houses seemed difficult to find this summer. The autumn tends to soften that just a touch and that could be the edge a buyer needs to get the house they want at a price they can live with.

Buyers should not be discouraged as the cooler days of fall settle in. Rates have settled down a bit and still remain very low by historical standards. The Fed is indicating they will be backing off the support of these low rates as the year closes. This could be the opportunity some buyers have been waiting for to own the home they have always wanted. The window could close in the next few months as interests rise and buyers become panic prone bidders. Call your favorite Realtor® today and happy hunting.

July's MLS sales figures for Clark County were stellar

The numbers are in for July from our local multiple listing service and they look great. Looking back first at last year, July 2012 was healthy but not stellar. Inventory was starting to tighten up and demand was strong enough in certain segments to generate multiple offers. 499 transactions were closed in July 2012 for Clark County against this year's total of 696. We are still well off the frenzied pace of 2005-2007 but clearly the best we've seen since "the crash".

Evaluating numbers is never as easy as just looking at the one or two "big" stats. Often people, including some Realtors®, look at median price or total unit sales as an indicator that all market segments are moving equally. Just because the median price is up 21% by no means suggests that any random house that was sold last year is now worth 21% more this year. The real estate market is very complex with neighborhood fluctuations, locations, home size, price range, and styles often performing independent of each other based on market demand or supply.

The chart below shows the "big" over all county stats for this local market and then breaks the numbers down a little further to show some broad segment trends. The big question for John and Sally homeowner is often geared towards, "can I sell MY house right now"? If John and Sally own a condo they may not be much better off this year than they were last year in market appreciation. The condo market is almost always late to recover.

Last year the sales figures were heaviest in the entry level market. Those $125-150k three bedroom ramblers were being snatched up and as such, supply tightened up and prices soared. This year that market segment was priced high enough that demand slowed down a little, but the middle market surged with larger four bedroom houses seeing significant increases in unit sales. Those bigger mid sized homes saw a massive 59% increase in sales but a more modest 13% increase in median price.

Last year I said that the bottom has to tighten up first before the middle can take off. Well, the bottom did tighten up and now the middle is taking off this year. That is driving the increase in median price. The smaller two bedroom houses have peaked with only a 1.3% increase in median price despite a large surge in unit sales of 46%. Even the bread and butter three bedroom market that was red hot last year, is showing preliminary indications that the buyers are nearing their limits. The 18% increase in median against a large surge of 29% in units sold is still quite robust, however. The sellers in the entry level often move up to that bigger house and as they sell their 2 and 3 bedroom homes they move into the middle market. The 59% increase in unit sales in that segment will likely produce more impressive median increases when we check the numbers in a few months.

Of course this discussion has to hinge on keeping other complex variables favorable, such as the general economy, jobs and the ever critical mortgage rates.

The big takeaway for homeowners is the fact that their home that may have been upside down or too tight to sell, could in fact be a seller today. Contact your favorite Realtor® for a Comparative Market Analysis on your home. Most offer this service for no charge, I certainly will.

   
         

Keeping an Eye on the Market

I wrote this article for the Equity Northwest Properties Blog this morning and decided to re-post it here for you.

There is a huge inventory of homes that were purchased at or near the height of the market from 2004-2008. The average homeowner moves every seven years so many of these homeowners that bought at the peak are getting towards that "time to move" point. The problem is that values for many of them are still not quite high enough to clear the loan obligation. Many of these would be sellers are sitting on the fence patiently waiting for the market to yield the price they need to exit clean.

For Realtors® and sellers this is a 'watch the market' time. We enjoyed a robust 8-12% gain in values over the last twelve months. If this upward pricing trend continues, many homeowners will finally exit the proverbial tunnel and be able to sell their home and clear all liens and fees.

Our local market and many other markets around the nation are seeing tight inventory, especially in the entry level price range. This is driving an increase in price. Low interest rates are also helping to keep demand relatively high. As these 'top of the market' homes become viable to sell again, we will see less of a squeeze on inventory. This can be a bit precarious, too much inventory may cause prices to flatten out if demand does not keep up. So long as interest rates remain at or below 5%, I believe the market will continue its growth, even if inventory levels fatten up. A combination of higher rates in the more normal range of 6-7% and bulkier inventory would likely cause the prices to stop rising or at least severely slow down.

What does all this really mean? For buyers that really want to own, rather than rent, now is truly the time to buy. Rates are low and there is no guarantee they will remain low. Prices are rising but still relatively low. For sellers, things are a little dicey at the moment. Selling now could be the genius move of the decade or it could be one of those "oops" I should have waited situations. No one really knows what this fragile market will do. If you are a owner occupant seller and you actually want to move then selling as soon as possible makes sense. If you are selling based on an investment then you are forced to gamble a bit. Wait or sell? For an investor I would wait a little longer but of course that may or may not pan out. In the end, I believe real estate should be a long term investment and waiting will rarely cost you money, it may just cost you some time.

Sellers and would be sellers should remain 'market engaged'. In other words, pay attention. Things are moving in generally positive directions and the opportunity to sell will present itself soon. Potential sellers should stay in contact with their favorite agent or broker and 'keep and eye on the market'.

Relocating? Rent for a few months first?

Many people find themselves involved in a real estate relocation. Perhaps a job change, promotion, or family related issues. In these situations there are times when the relocation is to an area that is unfamiliar and far away. It can be very difficult to gauge neighborhoods and services in the short visits as buyers look for a new home.

It may serve buyers well to rent a home or apartment for six months to a year keeping the bulk of their items in storage while they learn the area. An advantage to renting is mobility. Once you are ready to move, you give notice, pack up, and leave. Selling a home however is a more enduring process. I believe that it is wise to carefully evaluate the schools, shopping, proximity to work, neighborhood condition and lifestyle, before buying a home. This may take several months to really understand.

Many people however, may be like me. I hate moving. If this is the case, then it becomes paramount for the buyer to consult a true buyer's agent. Many real estate agents don't like showing homes and dealing with the buyer's side of a real estate transaction. Ironically, they are often the first type of agent a prospective buyer meets. The buyer is sitting out in front of a house with the 'Acme Real Estate' company sign and the call the number. That agent may be the classic 'listing' agent.

If buyers are relocating to a 'strange new world' it is advised that they interview a few agents and find one that is willing to spend some time working with them, showing multiple homes in a variety of neighborhoods best suited to their needs. In the end this helps to ensure that best possible purchase and the highest chance of many happy years in their new home.