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Numerous buyers for properties that are a bargain

It’s interesting.  Listen to the local and national news coverage and you’d swear that the sky has fallen in the Portland real estate market.  Just this week I ran into 3 examples of properties where home my buyers saw value.  Two listed homes were short sales and already had offers on them within days of input into RMLS.  The third went into a sale pending status before they could even look at the house but RMLS had not yet been updated.  My clients were bummed.

This situation is not uncommon in today’s market.  Countless buyers are sitting on the fence waiting for that great bargain to come along.  Once it does, several of them jump on the opportunity and force a multiple offer situation.  Is our market really that bad?

Portland’s housing market is experiencing a significant adjustment

Home prices have slid in all areas.  Higher end locations like Lake Oswego, West Linn and Forest Heights are seeing adjustments back towards pricing seen in 2005.  Many of the homes in these areas are listed in the $600k price range.  A quick look at tax records will show assessor’s values over $750k.  Not that too buyers should be concerned with what the county thinks but rather note that home prices are adjusting from market peaks.  Looking at tax statements is one key way of evaluating home prices.

Prices have decreased 10% this year alone.  Recently I evaluated a Lake Oswego home for sale.  Sellers purchase the home in 2001 and were looking to relocate.  Taking a broader look at appreciation rates showed a tradational 6% overall increase (comparison of purchase price in 2001 to today’s potential sale price).  Buying in Lake Oswego proved to be a decent investment overall.

Unrealistic sellers need to lower price in order to compete

A huge factor in what’s driving down Portland real estate prices is the shear amount of short sale and foreclosed upon properties.  Banks actually taking homes back through foreclosure are very few, relatively speaking.  Owners who have the fore site to see their financial position may find it beneficial to do what’s known as Deed in Lieu of Foreclosure (give their house directly back to the bank).  This allows banks to unload homes quickly through the Portland MLS.

Whatever method is used to obtain the property doesn’t really matter.  Point is that bank owned real estate will be marketed at an aggressive price.  Benefit is to the buyer.  Buyers purchase properties at very attractive prices and are able to close within a standard 30 day period.  Short sale properties very often take 3 months to actually close, if they ever do.  Bank owned (foreclosures) and short sales are competing against the average seller, driving down their market value.  Sellers have to step up to the plate and lower their price to stay competitive!

Search all Portland Real Estate for sale at www.MaxwellSinclair.com

It’s an interesting real estate market here in Portland and one that heavily favors Portland real estate investors.  Depending upon whose real estate study you’re looking at and where in the country it was generated you can expect somewhere between 5 – 7% annual appreciation.  Keep in mind that appreciation is not linear.  That is to say price does not necessarily go up 5+% each and every year.  15% appreciation one year, -5% the next…

Take a look at what’s happening now.  We’re experiencing a buyer’s market where prices of Portland real estate have dropped very little compared to just one year ago.  Being immersed in the field I can tell you that prices have declined more than statistics show.  In 2006 buyers were very hard pressed to find homes for sale in Beaverton anywere under $220k.  Now those same homes are running close to the $200,000 point.  About a 10% reduction in 2 years.

The great thing about being an investor is that you’re looking at the long term return.  Single family investments yield better returns on the lower end, such as a $200k home in Beaverton Oregon.  An average condition ranch style home will fetch an easy $1100/mo in today’s market.  Do a little remodel and $1200/mo is not a problem.  Try that 3 years ago and you’d be looking at big vacancies.

Rents are heading north.  They’ll continue to do so as long as our housing market remains in a slump.  Great time to be a landlord and invest in real estate.  Prices are down, inventory is up, mortgage rates are increadibly low today.  At 5.375% for a 30 year conventional loan money is cheap.  Add .5% roughly for an investment.  No one has a crystal ball but signs are very promissing that now is the time, buy low.

Capitalize on overall return, not cash flow.  Here’s a rule of thumb you possibly haven’t heard before; Buy entry level investment houses with 100% financing (or as close as possible to) where rent covers the mortgage payment (principle and interest only).  There will be negative cash flow because you’re paying taxes and insurance out of pocket each month.  It is possible to do this.

100% financing is still available through various sources but most easily structured through a home equity line of credit on primary residences plus 80% ltv on the purchase.  Very few houses qualify, in my opinion, as good candidates for this formula.  They’re usually fixers in need of about $10k worth of work (sweat equity).  So, with $10k invested in this property and the rest financed you’re only negative roughly $200/mo (taxes and insurance).  Pretty bad right?  Maybe not.

Cash flow can be a very short sided approach for some people.  There are 3 major factors to keep in mind; tax deduction, depreciation, and return on investment.  Overall, in today’s market, you’re probably not coming out ahead due to the direction of prices.  When our housing market turns around such an investment will return a very attractive number overall.  Prices have not gone backwards like this in approximately 40 years.  It’s not going to continue!

Like always, I encourage your comments and objections.  Is investing in this market right for you?

Feel free to check out Portland Real Estate for Sale and investments guides at www.MaxwellSinclair.com

Portland home prices have slid a bit and are mirroring the rest of the U.S. housing market.  Albeit not to the same extend but we were bound to feel the push towards price reductions and sluggish home sales eventually.  As of this moment RMLS numbers are showing a decrease of 4% over this time last year.

New construction sales fall in sync with resale and builders are having to come up with creative incentives to move product.  Most are no longer pouring foundations without a sale agreement in place.  Buyers can typically not make new builder’s sale agreements contingent upon sale of an existing home.  Time for construction to be completed is roughly six months here.  At the point where final occupancy permit is available buyers are required to have financing in place and close the deal.

The light turns on for some buyers after waiting six months for their new home and watching prices slide.

“Why should we pay the price agreed upon 6 months ago when the builder is now offering more incentives for the same house!?”  Good question.  What has to be weighed is what the loss or gain will effectively be.  Most likely buyers of new construction have released earnest money to the builder for upgrades, etc.  It’s not refundable.

Choice is to go forward with the existing sale contract, attempt to negotiate a new price, or walk away from the purchase and any funds already paid.  Tough one.  Going forward as planned means a buyer is potentially paying a premium compared with today’s pricing.  No one wants to do that but an agreement is an agreement.  Keep in mind that a builder takes the same risk in seller’s market.

Purchasing pre-sale homes in phase one of a development can potentially be very profitable in an up market.  Locking in a price early on and watching phase two prices climb in a quickly appreciating market is fun.  Buyer’s love it.  Flip side is the case now and buyer’s hate it.  Builders want to maintain good report in any community and may have suggestions.  Probably the best advice is to evaluate options with your real estate broker.

Check out www.maxwellsinclair.com for awesome tips on negotiating real estate purchases or possibly re-negotiating with builders!  Search Houses For Sale in Portland that have come onto the market recently and compare resale with new construction.

Data: June 30, 2007

Source: RMLS Area Report Metro Portland & Adjacent Regions

Commentary on the Portland Real Estate Market:

The Portland real estate market appreciation, for the first time in the last 36 months, has dropped below 10%. The market has turned into a buyer’s market. That’s great news since our market definitely needs some correction to get soft landing. The Portland real estate market grew 8.9% in the month of June as compared to the same period last year. Though it is not good news for home sellers that the market has slowed and that there’s excess inventory out there, it is great for buyers and for the economy in general. Reason, a gentle slow down is way better than a crash. This soft landing gets our real estate market back to normal.

However, if you were to compare our market with other markets throughout the US, our performance of an almost 9% growth is still stellar.

Cities that were hit hardest were predominantly on the west side including West Portland, Beaverton, Tigard and Wilsonville (around 4.5% growth). These areas had had rapid growth in the last few years and it’s finally calming down.

Despite our cautious tone, we still estimate that the 2007 real estate market will continue to be strong for Portland. We are projecting a growth rate at around 8% throughout the year instead of the 17% of the last few years. Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Dave now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Call us at 503-805-5173 (cell) or email us to see how we can help you with your Portland home buying and selling needs.

Data: April 30, 2007

Source: RMLS Area Report Metro Portland & Adjacent Regions

Commentary on the Portland Real Estate Market:

The Portland real estate market in April 2007 grew another 11.1% for from the same period in April last year. This follows the similar trend we’ve seen in the last few months. We’re still seeing some healthy appreciation overall. Closed sales increased 1.4%, but the number of new listings also grew 23% and pending sales dropped about 7%. At this point, our inventory will last approximately 4.4 months.

Undoubtedly, price increase is going to slow down in light of the increased inventory. Having said that, the Portland real estate is still stellar as compared to the national average at 2.9%.

Despite our cautious tone, we still estimate that the 2007 real estate market will continue to be strong for Portland. We are projecting a growth rate at around 10% throughout the year instead of the 17% of the last few years. Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Max now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Call us at 503-805-5173 (cell) or email us to see how we can help you with your home buying and selling needs.

Data: March 31, 2007

Source: RMLS Area Report Metro Portland & Adjacent Regions

Commentary on the Portland Real Estate Market:

The Portland real estate market in March 2007 grew another 12.2% for from the same period in March last year. This follows the similar trend we’ve seen in the last few months. We’re still seeing some healthy appreciation overall. However, here’s a cautious note: the number of new listings went up by 24% and closed sales declined by almost 10%. Undoubtedly, price increase is going to slow down in light of the increased inventory. Having said that, the Portland real estate is still stellar as compared to the national average at 2.9%.

Despite our cautious tone, we still estimate that the 2007 real estate market will continue to be strong for Portland. We are projecting a growth rate at around 11% throughout the year instead of the 17% of the last few years. Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Max now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Data: February 28, 2007

Source: RMLS Area Report Metro Portland & Adjacent Regions

Commentary on the Portland Real Estate Market:

The Portland real estate market in Feb 2007 follows the similar trend we’ve seen in the last few months. We’re still seeing some healthy appreciation of 12.8% overall. However, here’s a cautious note: the number of new listings went up by 18.9% and closed sales declined by 7.9%. Undoubtedly, price increase is going to slow down in light of the increased inventory. Having said that, the Portland real estate is still stellar as compared to the national average at 2.9%.

Despite our cautious tone, we still estimate that the 2007 real estate market will continue to be strong for Portland. We are projecting a growth rate at around 11% throughout the year instead of the 17% of the last few years. Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Dave now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Call us at 503-805-5173 (cell) or email us to see how we can help you with your Portland home buying and selling needs.

Data: January 31, 2007

Source: RMLS Area Report Metro Portland & Adjacent Regions

Dave’s Commentary on the Portland Real Estate Market:

The Portland real estate market started off with a cautious tone at the beginning of 2007. We’re still seeing some healthy appreciation of 16% overall. The actual closed and pending sales actually went down as compared to last year of the same period. This signifies that our property market is hot, but it’s unlikely to be as hot as the previous two years. Undoubtedly, price increase is going to slow down in light of the increased inventory. Having said that, the Portland real estate is still stellar as compared to the national average at 2.9%.

In January 2007, the number of closed saled decreased by 9.4% and pending sales fell by 2.2%. These numbers are still within a resonable tolerance level given the slower winter months.

From the encouraging results in January, wWe estimate that the 2007 real estate market will continue to be strong for Portland. We are projecting a growth rate at around 11% to 12% throughout the year instead of the 17% of the last few years. Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Dave now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Data: December 31, 2006

Source: RMLS Area Report Metro Portland & Adjacent Regions

Dave’s Commentary on the Portland Real Estate Market:

2006 has been an interesting year. The first 6 months started off with a big bang. The market experienced huge increases in almost every price category. Then Intel announced the big layoff, coupled with the rapidly cooling national market, the Portland real estate market slows down somewhat during the second half of the year.

Despite the gradual market correction in Portland real estate, Portland home prices appreciated by another 14% in December 2006 over the same period last year. Our real estate market continues to buck the national trend. Considering the national average at 2.9%, Portland is doing extremely well.

In December, our home inventory suddenly shrank to 4.5 months from about 5.5 to 6 months in the previous months. Fewer homes on the market means a tighter supply. This is likely to apply pressure on prices to rise.

The overall average sale price for the year of 2006 is $322,600 with a median price at $270,500. Compared with the average home price in 2005 at $282,900, the Portland real estate market broke the $300,000 mark in no time.

We estimate that the 2007 real estate market will continue to be strong for Portland. However, we are still projecting a slower growth rate at around 10% instead of 17% of the last few years. Call us and find out more about the Portland real estate market. We have specific strategies to guide both buyers and sellers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Portland Buyer Services. Contact Dave now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.

Call us at 503-805-5173 (cell) or email us to see how we can help you with your Portland home buying and selling needs.

Data: October 31, 2006

Source: RMLS Area Report Metro Portland & Adjacent Regions

Dave’s Commentary on the Portland Real Estate Market:

In October 2006, the Portland real estate prices appreciated by an average of another 15% over the same period last year. Our home supply, however, has gone up considerably. New listings are up 14.9%, closed sales dropped 12.6% and pending sales also dropped 12.6%. These are clear signs that our prices are going to stablize and giving buyers a break in rising prices. In fact, according to the National Association of Realtors, Portland homes are affordable again.

This certainly is great news to buyers. For one, there’re more homes to choose from without having to get into bidding wars like what we’ve seen the last 2 years. Interest rates are still at all time low, so buyers can get more home for the same buck.

Sellers finally recognized that they couldn’t continue to demand high prices without being one of the best homes in the neighborhood. How exactly should sellers move their homes then when the market seems to be cooling off? Call us and find out. We have specific strategies to guide sellers how to make their homes appealing to buyers.

To search for your home in anywhere in the Metro Portland area, use our FREE Portland Home Search tool. For more information about living in Portland and finding your dream home, call Max at (503) 805-5173, Toll Free (877) 629-5825 or email.

Learn about our Exclusive VIP Buyer Services. Contact Max now. Make informed decisions; make smart choices. Call Max now at (503) 805-5173 or Toll Free (877) 629-5825 ext. 7.

Relocating to Portland, Oregon? Let us help with your Portland Relocation.