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!

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