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. 

Well Priced Properties Go FAST!

For nearly a year now, the real estate market has been in a state of near neutral conditions, favoring  the buyers or sellers with a sliding scale from entry level slightly favoring sellers to upper end slightly favoring buyers. That has not changed even with the COVID-19 pandemic. A well priced property will sell and if that property is priced below the local median it will sell quickly. Local median prices fluctuate in Clark County between $350k and $450k depending on the area.

There is an opportunity for sellers and buyers in that the overall market is slower than normal, there are fewer homes being listed and fewer buyers bidding. So pricing is steady but the atmosphere is a bit more relaxed. It's a good time to be a buyer or seller because your agent should have a little extra time since volume is down.

There is always opportunity in real estate when you keep your eyes peeled for it. One part of the market that seems to be softening up is the fixers. Most buyers right now are looking for something turn key, move in ready. So looking for something that needs a little TLC could produce an opportunity to get a bargain. Don't expect a crazy bargain though, this market is too large to let a good deal go unnoticed.

Stay safe and let's hope the Governor's phase 2 plan gives us a little more room to stretch out.

Spring Activity can be a Harbinger for Summer

The first teases of spring are in the air round these parts. Yesterday the temp climbed up into the mid 50s and the sun was ablaze in a clear blue sky all day. My listings all got extra action this week under all that sunshine. That is sometimes a sign of what is to come when the "real spring" arrives later in March.

The early question is whether or not we will see a rush of listings to fill the demand of a hungry market. Analysts seem to think 2020 will be a solid if not modest marketplace for Clark County, WA. New construction continues to add inventory but most of that is in the middle market with pricing between $450-$600k.

Buyers in that sub $450k market typically have to buy a smallish new house or a larger resale home. The resale market has been tight with fewer listings than buyers and that makes things a bit nerve racking for the buyer in that starter price range. Buyers in the middle to upper end of the price range can relax a bit as inventory exceeds demand at the moment. It isn't that there is a glut at the top, just a slight advantage for the buyers. Once you breech the seven figure market buyers tend to be a bit picky regardless of market conditions. 

If March and April bring an above average boost to the inventory we might settle in for a neutral summer. If owners continue to hold on to their homes it could be a long summer for those beleaguered buyers. Only time will tell, but March is just around the corner and if the 3rd month is warm and springlike, we could see the rush early this year.

Great Market, a Few Holes Though

This market is starting to get sizzly again, but like the title above suggests, there are some holes. Most segments are seeing a little bit of a seller's advantage, but aside from the entry level sub $325k market, conditions are mostly neutral. 

There is this one anomaly however. Two story houses with 3-5 beds and 2200-2600 square feet, priced in the 400-500k range are in rather plentiful supply. Buyers actually can kick a few tires and even smack the price around a bit on a mid-priced multi-level house.

Builders are 'all in' on this price range and they are producing them in large quantities. This is dragging down the resale market in the size and price range. While the entry level, mid price single levels, and even some of the upper end ranges are smoking hot, this mid priced two story segment is favoring buyers right now.

The market is screaming for single level houses right now. But single level houses, particularly in the larger size ranges like 2000 plus SF require a larger lot to support the bigger 'footprint'. Builders are trying to stay in a price point that is affordable for enough people to support the development projects they are building. Land has become the most expensive element in our market and so a two story design allows builders to build more houses on the same amount of ground. So we are seeing this play out in the market as hundreds of new houses are coming available and many are priced in the $400-$500k range.

So if you are looking for a "value" in this market larger two story homes in that 400-500k range could be your ticket.

Fixers On The Comeback Trail

For a number of years buyers have been most excited about move in ready properties. Of course clean and tidy homes have always held an advantage in the resale market, but back before the crash, a lot of buyers were seeking fixers to put some classic sweat equity into. That more or less died off after the crash.

One thing that certainly aided in the decline of the fixer market was the lack of decent financing options. Sure hard money lenders were always there waiting to take you payment in the form of a few broken bones if necessary...kidding... sort of. But mainstream lenders were very gun shy about houses that were not real clean. 

This latest run up in values however has made it difficult for traditional rehab companies to acquire property cheap enough to pencil a remodel and resale. That same run up in values has brought a whole new wave of potential homeowners back tot he drawing board and the fixer is making a return to prominence.

Although lenders are still not a loosey-goosey with the vault as they were in the mid 2000s, and let's be honest that is a good thing, they are starting to lighten up on the condition requirements. This make the dream of home ownership available to a larger group of people, and in general that is also a very good thing.

Buyers at or near the bottom of the price range for homes can start looking at fixers. bear in mind that FHA and VA are still a bit more picky about condition so using a conventional lender is the best approach for buying rough property. Be sure to stay connected to a real estate pro as they will help guide you to what can and can not fly with a bank loan.

Real estate is still America's best investment for the mainstream consumer.

Multiple Offers are not Gone...

Well the old rule that a well priced house will get offers in any market holds true. Conditions have moved into neutral territory but a nice little 1400 foot ranch style came up a few days ago and got four competing offers within a day or two. This house is situated right in the thick of the hot spot in the market at around 300k. Clean and tidy, doesn't need a lot of work, move right in. These are the properties that are selling, these are the types that still get multiple offers.

Although buyers in general are taking their time, these types of move in ready sub-median homes are hard to find, and when a nice one pops on the MLS the Realtors® swarm about. Buyers looking for a "deal" will need to look at properties with some special needs. Light fixers are not getting snatched up lie they were at this time last year.

Sellers are wise to spend a few pre-sale dollars to spiff up the house before listing it. Fresh paint and a minimalist look inside will go a long ways in this market. Sellers however ought to be careful not to overspend or over improve their home. One should never be too much better than the rest of the homes in the neighborhood. That is sound advice in any market.

The market continues to favor one level homes or master on the main and tidy homes with a bright look and feel as well as tidy and well kept. These are the properties do the best.

Although most listings are likely to sit around for a few weeks, properties that hit the "spot". Clean, well kept, light and bright, open and minimalist decor, under the median will go quick.

Stock Market Turmoil Can Be Good for Real Estate

Well 2019 is underway and those that follow the stock market might be a bit nervous. . A bumpy Wall Street however, can be effective at keeping the fed from getting a itchy trigger finger for rate hikes. That bodes well for buyers of real estate. But even deeper than that is the larger picture of real estate investment. Builders and developers require large amounts of capital for the projects they build. Whether it is single family homes by developers like Quail Homes here in Vancouver or the big commercial projects like we see going up on the waterfront. Capital investment is what fuels these projects.

When the stock market has adjustments like we have been seeing over the last few months, money is leaving the equity markets and moving elsewhere. Some of it may be landing in the safety of treasuries or other long term bonds, some may head for precious metals like gold, and some of it inevitably ends up in real estate investment.

Locally our government can help direct some of that massive money movement to land here in Clark County. Streamlining the approval process for desirable projects, particularly those in the Downtown Vancouver area will have a long term benefit to the area. If we don't capture that capital now, it will end up elsewhere.

Despite the savage losses on the Dow and other stock market indices, the economy is still growing and institutional investors are still pushing cash to markets they feel will net them a positive return over the next several years. Real estate has always been a solid long term parking place for cash. There is a large amount of investment capital available right now and local builders and developers need to grab their piece while the 'gettin is good'.

Vancouver is pushing allot of residential units in the downtown, that is all fine and well, but they need to focus on getting premier employers to settle in as well. This helps to provide superior jobs that take our Clark County residents out of the Portland workforce and Oregon's aggressive income tax.

Happy New Year!

Sales are still strong, But Sellers Beware...

Sellers best take notice, the robust sales are still alive and well in our local market, but buyers have choices and they are not tolerating high prices. This recent uptick in rates has eliminated many buyers from upgrading their home or even buying a home at all. That has taken pressure off the market. There are still plenty of buyers and these rising rates are also helping them "pull the trigger" but with more choices, buyers can be a little more discerning about how much house they can get for what cash they have to play with.

Lenders are also sniffing out the soften demand, and that means appraisers are even more vigilant in finding true comps. Puffed up values are not going to fly in this market. Sellers may miss a golden opportunity to sell if they get too greedy and try a high price. As rates creep up buyers lose buying power and that overpriced listing sits on the market.

A trusted professional realtor® will pull comps and should offer a trend analysis to help sellers determine the effective price range for their property. Most agents want to help sellers get the best price possible, but they also know that sometimes sellers and the market are not on the same page. A year ago sellers could get away with a 10% bump as the market was a raging bull, but now the market is a butterfly, still flying, but not smashing everything in its path.

We are entering the rainy season here in the Pacific Northwest and that tends to soften the number of buyers out and about looking at houses. Sellers are advised to keep their property free of leaves and other autumn debris and keep that house tidy. The old adage is rings pure: you only get one chance to make a first impression.

Clark County Sales still Robust

Despite the general feeling of a market slow down, Clark County still pushed out nearly 700 sales last month (699). The median price including mannys and condos was 356k, but 3/4 of the units were between 250k and 400k the 'meaty' median range. There is little inventory in the sub 250k range and plenty of inventory above 500k so the market remains solid and close to neutral, if you are trading in the middle.

Buyers in the entry level will continue to struggle as rising rates and virtually no inventory make that sub 250k market a rough ride. That is not to say buyers should flee the market, in fact they simply need to be patient and willing to settle for a quality property even if it isn't exactly what they want. So long as jobs remain plentiful and wages continue to rise, demand remains for homes and prices will rise over time. Getting in now lets that entry level buyer enjoy some market appreciation so that later on they can make the move up with equity in the starter home.

Buyers at the other end can kick some tires and beat down sellers as inventory levels are actually pretty high. That doesn't mean that every upper end home is overpriced. In fact a well priced home in the 750k plus range will still find a buyer in a reasonably short time. It is the large homes that are dated, odd style, or otherwise non-traditional that are filling up the inventory and remain ripe for a discount.

Sellers in the upper price range should have no delusions about the value of their home. Price per square foot is nearly useless in the upper end. Upgrades, materials, build quality, neighborhood, design, age, and numerous other factors can dramatically effect high end homes causing widespread variance in price per foot.

This market remains healthy with modest appreciation, tight but manageable inventory levels in all but the very bottom, and interest rates that are still relatively low despite constant creep up all year long.

It's all good friends.

Prepping for Fall

Autumn is here! Officially it starts tomorrow but hey pretty close, right? Those wonderful deciduous trees are just aching to drop a heaping mound of leaves all over your yard, roof, car, and lawn. Although autumn can provide a warm backdrop for you property it is wise to make sure you keep the leaves off the walkways to avoid slipping by you or the people thinking about buying your house.


Autumn is truly magnificent but homeowners need to keep those leaves out of the gutters and off the walkways. Even if you are not selling your home the plugged gutters can lead to damage on the roof, siding, gutters, and even the foundation as the ambulatory nature of water can lead to moisture in places you may not expect.

For home buyers, the fall can be an opportunity to take advantage of sellers that failed to sell in the summer and are ready to look at offers that may be a little less than asking. For sellers bringing a new listing to market, there may be a few less buyers in play but their is generally a lot less listings relative to summertime.

As we approach the holidays, both buyers and sellers tend to be serious about making a deal. Otherwise why would they bother during the hustle and bustle of the holidays?

Local market trends still remain flat. New listings are outpacing new buyers but not at a rate that will quickly turn the market from sellers to buyers favor. In fact I'd say there is still a slight leaning in favor of sellers across most local segments. I like these neutral to near neutral markets. Everyone really has to put their best foot forward on both sides of the transaction and that tends to favor all parties.

Enjoy the very last day of summer and get ready to watch nature's living fireworks. Autumn is on deck.

Market Nearing Neutrality

Our market continues to see new inventory and this is softening the seller's advantage across a variety of price ranges. Even the median price range is offering a larger selection for buyers. Locally it is only the sub-median that remains a strong sellers market, but I am seeing some resistance to high prices even in that tight market.

Pressure in the Vancouver market is still largely external. Portland, OR is still a bit tighter on inventory and is seeing price pressure upwards albeit at a slower pace. Many would be Portland buyers are looking at Vancouver as a nearby alternative. Vancouver has a variety of neighborhood styles, many that resemble popular Portland neighborhoods.

Clark County also offers up a bit of suburbia as well as a bit of country living which is all but Absent in Multnomah County.

The external market forces are keeping Vancouver and Clark County on a modest pathway in median home price appreciation but things are relatively flat compared to the steep spike of a the last few years.

Many projections are flying about from the usual suspects about growth in pricing locally and many have revised things to a much more sustainable 3%-4% for the next year. Clark County continues to add new construction units in both the rental and sales inventory. Vancouver is adding thousands of units across the entire rental spectrum from luxury riverfront apartment properties at $5000 a month to more modest properties with income restrictions in the sub-$1000 range.

Some analysts are a bit concerned about the Millennial age group as that demographic seems more likely to prefer renting than owning and that is a new twist in America's age old "dream." This coupled with increasing inventory could soften the market even more for 2019 possibly throwing us into a full neutral sales condition in the first half of next year.

Business insider had a detailed article about Millennial home buying here. 

Washington State Biggest YOY Increase in Nation

The Evergreen State indeed led all comers in real estate appreciation last year according to NAR reports circulating around. This is no surprise to locals but some relief for buyers in in sight as projections for 2018 by the typically optimistic NAR is more like 6% for this year. Sellers will still enjoy appreciation in the market but buyers can feel a little less exasperated as things are settling in.

Washington State had a 12.6% year over year increase only edging out Nevada by a fraction which was also 12.6%. Sellers looking to squeeze the most out of their resale may find a hilltop coming as rates continue to march upward and downward pressure on pricing is inevitable. Double digit market appreciation is never sustainable over the long term and we have had just about enough of it to stay healthy. I welcome a softer climb with modest average price growth in the 4-6% range as healthy and sustainable.

As reported right here recently, the market in the higher price ranges is already switching over to a buyer's advantage while the entry level sub-median range remains a sizzling hot plate of multiple offers and up-bidding. In the final analysis pricing homes properly yields the best results and sellers are well advised to not play games with over pricing or under pricing. Get it where it ought to be and the market will deliver a top dollar buyer in 30 days.

2018 off to a good start

OK I'll admit that title is anecdotal. But I am seeing a nice flow of listings and buyers poking around, finding homes, and making offers. Many analysts feel that 2018 will slow the crazy pace in the real estate market to a more healthy and normal 4-5% price appreciation over the course of the year. This is fine by me.

I think the fact that the "threat" of higher rates is now the reality of higher rates, people that we dangling their feet over the fence are starting to jump in. I have made the point time and again that rates are far more important the price. Most people will pay far more in interest than any price deal they might negotiate.

The federal tax revisions that take effect this tax year (2018) many middle income earners will no longer need to itemize and as such the mortgage deduction will no longer benefit them. A married couple paying less than $20,000 a year in mortgage interest may not have enough itemized deductions to exceed the new and improved standard deduction of $24,000 for a family.

As I always state my standard disclosure anytime taxation is discussed: always consult a professional tax prepared or CPA when making decisions based on taxation. That out of the way, the new tax law increased the standard deduction for a married couple from $12,000 to a whopping $24,000. W2 wage earners are those who have a job and the boss cuts a paycheck, withholding money for taxes. W2 wage earners will receive a standard deduction of $24,000 for a married couples and $12,000 for single filers. This is nearly double from previous years! In general this is a good thing. But in order for it to matter you must have more than $24,000 in deductions for a couple or $12,000 for single. That may be a problem for some.

Lets look at a hypothetical taxpayer for a moment, we shall call her Sally.

Sally made $40,000 in 2017 and has a mortgage of $200,000 on her home. She paid $8,700 in interest last year. The standard deduction for 2017 was $6,350. Her mortgage interest exceeds that so filing the "long form" IRS 1040 with a schedule A for itemized deductions makes sense. Why take the standard $6,350 when you have $8,700 in mortgage interest alone. Now Sally can also write off other job related and business expenses. Here is where talking to the tax pro is CRITICAL. Sally needs to make sure that she doesn't take deductions that are not supported by the IRS. OK Sally is smart and she has a trusted tax pro handling her filing each year and he helped her find an additional $2,200 in legit tax deductions. No Sally can't write off those coffee break lattes ;)

Now two 'problems' will arise for Sally this year. First the amount of interest paid on a mortgages drops each year as the balance is reduced. Let's say Sally will pay $8,500 in interest in 2018. She will likely have a similar amount of other deductions. So at the end of the year she has $10,700 in deductions which is now less than the new standard deduction of $12,000. The good news is, Sally will get a larger deduction and save the extra expenses of having to file the schedule A. Her tax guy is not happy, but Sally is. But now for many the extra bonus value of home ownership that was an effective tax break, has been eliminated for those with smaller mortgages.

This could have a net effect of slowing down some of the pressure on entry level homes and first time home buyers. Of course the idea of home ownership should not revolve around tax deductions, but rather the idea of owning real property, gaining equity by reducing the balance on the loan and enjoying appreciation in price over time. These are really the hallmarks of home ownership. It's all about the equity asset and the lack of a landlord that can kick you out or raise your rent.

Over all the new tax system will be a bonus, but it could lead to some minor softening mostly near the bottom of the market. Frankly the bottom needs a little price relief anyway. 2018 is looking good.

Autumn is Good!

Autumn is good for real estate. Sellers can capitalize on summer buyers that are ready to pull the proverbial trigger after failing to find something during the busy summer. Buyers, likewise can tap into the sellers that didn't get their home sold done during the hot months, and are now ready to make a deal.

Many sellers are anxious to avoid having their home listed during the holidays and often buyers are leery of trekking out into the cold to look at homes. Autumn is cool and crisp and prime for making a real estate deal that keeps both parties feeling accomplished and successful.

Market trends show that demand has remained steady and inventory has inched up slightly. There hasn't been a real shift in the market just a bit of settling in. We have very healthy and sustainable conditions throughout most of our local market save for a couple of lingering hot spots. I mention a while back the Beaverton, Oregon remains spicy with well priced homes getting snatched up right away often with multiple offers.

Closer to home here in Clark County the median price for a home is snuggled in just above $300,000 and that is manageable for the median household in the region if not a bit challenging for those carrying extra debt, like auto loans and such.

Since I mentioned debt, buyers that are struggling with the higher prices should use credit sparingly. Lenders will measure the amount of income a borrower has against two primary debt metrics. First their is the housing ration. This is a amount of the borrower's total income is going to be used to make the new loan payment. Depending on the loan type and the down payment amount this should not exceed 28% but sometimes can be a fair bit higher. The other metric is the total debt to income and this takes into account all debts such as credit cards, auto loans, etc plus the proposed new mortgage. Generally the standard has been 36% max, but many government backed program will allow that to stretch up as high as 50%.

A good credit score goes a very long way when debt to income ratios starting pushing the boundaries. Buyers should avoid having a lot of debt and should also avoid having too many open to buy accounts as well. I have read many reports that two trade lines on revolving credit is probably all one should have. Check with your trusted lender to get more information on these lending guidelines.
Most people need to borrow money to purchase a house so being well informed and executing a quality credit plan will help get a house or get a better house.

Condos ride the waves

The condo market has ridden the wild roller coaster over the last several years. This is not atypical in a market that follows an extreme adjustment like the one we had back in 2009.

Condos took a serious beat down in the 2009-2011 free fall. Locally there were two major factors. The first was the obvious market crash that the whole nation felt. But more localized was the over abundance of condos that had flooded the area, particularly in Downtown Vancouver.

There were luxury units in Vancouver Center and 500 Broadway that were fetching close to a million dollars in 2007-08 that got wiped out in the foul mood of real estate in 2010-11. Those units saw reductions in sales prices in the 60% range!

Condos were much slower to rebound and those ultra luxury high-rise units have not yet returned to the lofty price typically associated with lofty heights high above the city. But lower priced condos are seeing a surge. As single family detached and attached housing has soared, suddenly the traditional condo with the expensive HOA dues still makes financial sense for people in the entry level price ranges.

The charts provided represent the last 6 months of activity wherein we see the days on market coming way down. Note: you have to ignore average with this as the unit totals are too small and the average is heavily skewed by a couple of short sale or bank owned problem units that sat for years.

Negotiated prices on condos as recently as six months back were well under asking, then they popped up to meet the rest of the market averaging over asking, and now seem to be settling in at or near asking. I think the bump in available inventory cooled the jets a little on condos.

Anyone sitting in a mid-level to upscale condo may have a solid opportunity to sell now at top dollar. Starting next year the new waterfront will begin coming online with new buildings and an urban buzz. Part of that will be a phased in 3300 housing units which will be a mix of condos, apartments, and senior housing. This may tug on the values a bit in the middle to upper end of the condo market elsewhere in the area.

I have my eye closely on the condo market as I am most excited about the waterfront development. They are working on the cable suspended Grant Street Pier right now and several of the mid-rise and high-rise buildings are starting to go up.

All things considered, condos are back and they should start filling in as relief for the entry level buyers and practical for those seeking to down size as they approach retirement.  

Housing Remains Steady and Strong in Clark County

The data from the local MLS shows that sale of existing and new housing remain locally strong. Inventory is not as tight as it was in the spring but conditions still favor sellers in most price ranges. 2017 may see a slight slowdown in activity, but I believe the many analysts that have suggested moderate growth will persist and healthy conditions should continue into the next year.

One thing that remains a bit of an enigma are those potentially volatile interest rates. Rates have remained at or near the record lows despite the federal government relaxing their position. The stock market is seeing tremendous growth and the interest rate bubble may pop unleashing higher rates over the next few years. This is not necessarily a bad thing as lenders and investors may loosen their underwriting grip when the rates they can charge are higher and thus more profitable.

Historically any rate under 6% is very good. We haven't seen 6% in years. Buyers or existing homeowners should consider making their next purchase or refinance very soon as rates have begun to sneak back up. As long as the equity investment market is booming their is a natural economic pressure on interest rates.

Over the last few months sales of new and existing homes in Clark County have been in or around 600 units. This is a strong healthy condition that should continue into the new year.    

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...

Portland Transplants will continue to Drive Local Market

The City of Portland is more of less built out already. In fact a case can be made that Portland has been effectively built out for decades. When a City reaches build out and has no more room to expand, then real estate becomes tight. Portland is surrounded by other cities and protected space so as to have no more room to grow. There is no new land in Portland, only reclaimed land. This makes building in Portland more expensive and thus pushes prices on resale homes ever higher. It is a dilemma faced by many cities in America.

The rising housing prices in our next door neighbor has put pressure on the markets in surrounding areas such as Beaverton, Hillsboro, Gresham, and of course America's Vancouver. These surrounding areas have room to grow and room to build new homes and that keeps the relative price of housing a little lower compared to Portland.

For many years now, Vancouver Washington and Clark County at large has been a primary destination for Portland transplants. We are close to Portland, we have excellent schools, great highways, and a wide variety of housing types from urban high rise condos with stellar views, to Southern California style suburban neighborhoods with 4 beds in a culdesac.

Portlanders continue their exodus into the promised land of Clark County. These buyers flooding our market have pushed the entry level real estate to the brink. They have created a dynamic of puffed up low end houses but the middle market still enjoys some flex in pricing. $275,000 for a dated 1950s rambler but 25k more buys a brand new house the same size. It is an interesting scenario that there is little jump in price from a 1200 SF 3 bed 2 bath and a 5 bed 2.5 bath home in some neighborhoods.

There will always be those who want to live in the "city" regardless of housing costs. They who would live in a one room studio for $2000.00 a month before moving to the 'burbs'. Portland will always be that "city". No matter how big Vancouver USA gets, Portland is the core city for this region. So it (Portland) will continue to produce higher density housing on reclaimed land to keep the real estate market from stagnating and will continue to produce buyers for the adjacent cities like Vancouver, WA. that offer more traditional detached housing at prices that working class people can afford.

I suppose this synergenic relationship can benefit both cities. Portland continues its rise among major US cities as it become more urbanized and cosmopolitan, while Vancouver continues its mixed use approach with a rising downtown "city" core and a continuance of some of the urban sprawl.

Here in the 'Couv' we can enjoy the fact that as tight as inventory is it's not as bad as it is south of the river.

I warned about this... now it's happening.

That is a rather ominous headline. The warning to which I refer is the issue of entry level home buyers getting priced out of the market. With prices escalating at a rate of roughly 10% annually and wages rising at only a fraction of that, many buyers no longer qualify. I have had buyers hesitate sometimes against my recommendation, and now they cannot afford a home.

In the market under $300,000 it is a strong seller's market. "Seller's Market" refers to the conditions favoring sellers. Any home priced well sells quickly and often with multiple parties bidding above the listed price. From $300-$500k it is a moderate seller's market. Above $500k it is near neutral with a slight favor to sellers.

Entry level buyers need to act now before they find themselves unable to buy. These kinds of markets generally require buyers to be less picky about the home. I find many people buying their first home feel like they must get the "perfect house". That is just highly unlikely. We have an interesting market issue that is making the entry level home more competitive than in the past. Retiring baby boomers are downsizing into the same types of homes that first timers are seeking. This has put enormous pressure on the sub-median priced homes. These 'down-sizers' are often coming in with huge down payments or all cash after selling a much bigger home.

All else being equal, a seller would prefer a cash offer as there is no third party (bank) involved in the transaction. Cash sales close faster and with a higher success rate. Some buyers have just decided to sit it out. They will rent and rents are rising nearly as fast as home prices.

Here is the basic math. The oft used qualifying formulas that the debt to income ratio needs to be less than 45% (FHA) and the total monthly payment on the home including principal, interest, taxes and insurance (PITI) must be less than 33% of total income produce semi-predictable scenarios.

So a borrower(s) that earns $3,000 per month can have a house payment equal to or less than $1000 per month and no more than $1400 per month in total debt service (credit cards, car payments, house payment, etc.) How much house does $1000 a month PITI buy? About $175,000 at current rates with an FHA loan and 3.5% ($6,100) down. There are many variables in lending and this is just a typical example based on some standard underwriting guidelines. A buyer with good credit can likely rent a home at $1400 a month despite only qualifying for $1000 PITI mortgage. Landlords have more discretion in determining the ability to pay of a renter. Of of this considered, buyers need to talk to a lending professional to see exactly where they lie in the mortgage market. Some borrowers can borrow more based on a variety of other underwriting factors, some less.

Here in America's Vancouver, $175,000 doesn't buy much house. At current rates of market appreciation a $175,000 house today will cost $179,000 in just three months! Many buyers miss out on houses because they bid too low. Sometimes it is due to qualifying and that is understandable. A buyer should never bid more than they can qualify for. But sometimes they are trying to get a "deal" and in this market trying to get a deal has a 95% chance of costing the buyer more money.

So let's say you have a house at $200k and you offer $200k but someone outbids you and gets the house for 203k. Three months later a very similar house will be offered at closer to $207k. Would it have been prudent to step up three months ago? YES!

Many things can happen. Buyers could have a financial event that disqualifies them and takes them out of the market. Some say that is a blessing. I say, often it is not. One needs to rent if they cannot buy and rent is as much as a comparable mortgage in this market. Having bought a house and then having a crisis can be better than being a renter in that scenario. Why? Because a landlord can evict you long before a bank can foreclose. And short of being homeless, you have to live somewhere, living in your own house is almost always better than living in a rental when times get tough. The financial event could be unrelated to the buyer. It could be an interest rate hike that pushes the buyer out of the market. It could be bank regulatory changes. Buying now is almost always better than waiting in this kind of market.

This is often most difficult for new home buyers to grasp. For those homeowners on the fence about listing, now is a good time to list a home price at or below the median. The Clark County median home price is hovering just shy of $300,000 right now. The bottom line is this, buyers are losing buying power rapidly and sellers are losing opportunity. The future is uncertain, but the 'now' is predictable.

Pricing is Erratic on New Listings

There is an inconsistency in the market regarding new listings. Various agents are trying different 'angles' in marketing to get the best response on their listings. This situation requires buyers and their respective agents to be diligent in research before presenting an offer.

Some agents are utilizing the classic 'auction' approach with a seemingly low list price and multiple offers on day one. This can be effective but only if the house is really clean and truly move-in ready. There is always the risk of not getting the highest offer possible using this technique but for some sellers it's about a quick sale and this can be effective. These types of scenarios will often land a back up offer so the seller can bid on another property with confidence that the current property will sell.

Some agents are listing high, way high in some cases, in hopes of getting that desperate buyer that has been outbid several times and is ready with a high offer. Sellers need to be prepared for a soft appraisal and the possibility of having to reduce the price later in transaction.

Buyers need to know where the listing is in the market place before presenting their offer. The buyer's agent needs to give sound advice or the buyer may not get the house they want. If the seller is priced to create a multiple offer 'auction' environment then the buyer needs to come in strong with their offer. Some buyers have a hard time bidding a house way up above asking but that is the nature of a robust market. The buyer's agent needs to research the market and determine where the house is on the price scale.

If the house is priced up high, the buyer can use that as a means to soften the seller or get the seller to agree to concessions such as closing cost credits and such. All of these variables will determine the way the buyer needs to present their offer to get the best deal for themselves and most importantly get the house they want.

Some buyers need help with closing costs and often they puff up the offer price and ask for seller concessions. This may work but the appraiser may not bite. Sellers need to be wary of 'over-puffed' offers.

In the end, no one truly knows how the transaction will unfold. There are many variables in a real estate deal and buyers and sellers always need to be prepared to encounter some turbulence during the process. Buyers need to follow the counsel of their loan officer to a 'T'. There is no room for screw ups in the loan process and there is a good chance a back up buyer is in place should the buyer stumble.

Buyers need to realize that trying to "steal" a house in this market will almost certainly cause them to ultimately pay more for less house. I have buyers that can't seem to get the notion that they have to bid good houses up and as they wait, prices rise. We are seeing price move up at about 1/2 to 3/4 of a percent each month. That may not seem like much but on a $300,000 house a 1/2 point increase is $1500. A buyer that takes three months to buy a house will spend $5000 more than if they get aggressive now and get the house they want sooner rather than later. The market is cold and cruel and cares not about anyone's hopes, dreams, and ambitions. As prices creep up buyers lose purchasing power and sometimes are priced out of the market altogether.

Choose your agent wisely and he or she will get you the best opportunity to buy or sell a home.