Remember only 2 years ago there was almost a mob scene on the streets of the Pearl District as buyers vied for the possibility of a unit in the Lexis Condo conversion? Shortly after that fiasco, the developer saw the wisdom in a “lottery” (as opposed to a “street brawl”) when selling their newest project which would be called the Metropolitan Condos. Okay, so that was then and this is now! What happened to the seemingly endless parade of condo buyers? I think most of us living & working in the downtown Cultural District, Pearl District, Goose Hollow and the mostly vintage Alphabet District (NW Portland) saw this coming awhile back. I guess you never know when the “light will turn red” exactly, but the overbuilding did seem obvious to me. However, I own 3 condos and it’s a lifestyle choice for me! “Easy Living”: so, when you finally (maybe) get some time off, you simply “lock & leave”!! You don’t look back! And, there’s the benefit (with downtown condos) to walk out your door, catch a streetcar or walk and enjoy a few minutes without a huge time commitment. They also make easy rentals with very little maintenance or hassle. So, I think we just have to “ride this one out”! The NW cities of Portland & Seattle are still considered prime destinations for retirement & relocation. We have a vital & relatively safe downtown and we continue to enjoy really good press throughout the country. If you want to wade through the latest market stats you can visit www.reresource.biz and click on “Market Stats” (last entry on the left side nav bar)….enjoy
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Ok, this was written by a Real Estate Broker in Phoenix, AZ , but the basic concepts definitely apply to our present market. It’s a “Buyer’s Market” and I’m looking for opportunities to realize in the present Portland area market…jj
TOP TEN REASONS IT’S A GREAT TIME TO BUY REAL ESTATE!
by Paul Pastore
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Selection, selection, selection. there are an abundance of resale homes on the market in the area. Regardless of the price range a buyer desires, thee are plenty of houses from which to choose. Just a few years ago the resale inventory dropped very low. a buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of detached homes, condos and townhomes. There are lots of options in this market.
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No Bidding Wars. In 2005 we had many clients that made offers on multiple homes only to be disappointed. Other buyers often bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers made. There is seldom competitive bidding in this buyer’s market.
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You can make an offer. A few years ago when you made an offer, usually the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96% (differs by locations). A seller will not be insulted if you make an offer.
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Patience is tolerated. In the hot seller’s market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
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There are plenty of new spec homes. In the not too distant past a buyer had to “play games” if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines in some areas. Now builders are offering incentives and making deals.
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Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection and any other inspections deemed necessary. In 2005 some buyers waived these contingencies in order to gain an advantage with multiple offers.
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Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to most sellers. In the past a seller might insist the home was sold “as is”. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
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Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyers caused the market to inflate and affordability to decline. Mortgage fraud became somewhat commonplace in some arenas. It’s a great time to buy without having to compete with hundreds of prospective landlords.
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Location, location, location. Today’s buyers can find homes closer to work. In the past buyers were forced to move out further to find affordable homes. In the market, reasonably priced homes are more in line with buyer’s lifestyles.
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Real financing is available. The “wink, wink” zero down, no doc, adjustable, sub-prime loans are still available but with more stringent guidelines. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers & police officers are back in business. It’s a great time to buy real estate!!
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So, our real estate market is an endless source of fascination, isn’t it???!!! What is going on in the Portland area real estate market anyway? You pick up the paper and, then, look up because you’re certain the “sky if falling”. Is the change in our local market a “downturn” or a “correction” (this is a trick “half full/half empty” question). Downturn is so much more sensational, but is it an accurate depiction of our marketplace? I started selling real estate in 1985 when interest rates were 12-13%….ouch! So, I’ve seen a variety of markets in “my time”! I’m constantly asked are housing prices dropping?? And, of course, I’m full of opinions. The answer (aka: my opinion) is not simple. There is definitely a perceived loss of equity. The answer is conditioned on exactly when you bought & how much you may have thought your equity had appreciated “on paper”. Some people absolutely got caught in the “vortex”. Some who bought towards the end of the local frenzy and who wanted to quickly turn the properties, may find themselves temporarily in the “red”. The condo market is definitely struggling, as record inventories of condos & townhomes hit the market. I own 3 condos and do I think I could sell for the same as 1-2 years ago? The answer is absolutely not! But, have I lost money? The answer is only on paper! The Pearl District has gone from sellers holding lotteries to handle the number of buyers to sellers offering incentives to entice those buyers. We are back to over 8 months of inventory, which, by the way, would’ve been the average for many years of my illustrious career. Isn’t the idiom “buy low, sell high”? Wouldn’t that make this the perfect climate for your next real estate investment? I am definitely not discounting those that were trapped by unsavory loan officers and are now struggling with inappropriate loans for their income level. Those were dispicable practices sanctioned by a minority of professionals in the lending industry. I just finished reading an “oldie but goodie”: “Creating Wealth” by Robt G Allen. Some of his tax laws are outdated, he mentions price points in real estate we could only wish still existed and the eyeglasses he wears in his PR photo should have him arrested! However the basic concepts in the book are priceless!! Real Estate is one of the anchors to creating wealth! Real estate offers a combination of solid (not instant) appreciation, the fabulous tax benefits and other associated strategies that you can combine to protect your money!! You can argue with me if you want, but I truly believe it’s the kingpin to any long-range financial planning (and not just because I sell it for a living) 
jj
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welcome to my world of real estate. Exciting, definitely interesting, always changing and can be a portal to developing personal wealth. Join the exploration, we’d love to have you aboard!
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