Clients and Friends,
It has been a very good year in Real Estate. I have missed several months of communications because I could not even squeeze out the time to reflect on the marketplace. The 4th quarter is our quarter when we can slow down some, evaluate the past year, make new plans for the new year, solve existing problems, and the prepare for better success in the coming year. This email is my attempt to catch-up helping our clients and friends understand the current market conditions.
2018 has been about the housing market calming down into a more normal marketplace with better balance for buyer and sellers. New listings have been up all year, and the time on the market is longer (averaging 40 days to get an accepted offer). This is not bad news in any way because it is still a market where sellers can sell at a great price, but also where buyers do not have to make panic decisions or fear losing out.
Pending sales numbers and sold properties statistics were down consistently 2+% every month compared to the previous year’s numbers. The big picture average for the last 12 months, compared with the previous 12 months, also comes in at 2+% lower. Again, this is balancing our high flying markets of previous years. Our standing inventory has been increasing in spite of strong sales removing that inventory; we currently have an average rate of 2.3 months to sell our current inventory.
For buyers, interest rates have floated up towards 5% this year but still remain under that historically low level (and moving at a snail’s pace). 4.75% is still realistic for a 30 year fixed loan. I am told there is plenty of money available to fund all the loan demands of the marketplace and more.
The construction industry continues to sell new homes as quickly as they can crank them out. We hear of massive numbers of developments and lots coming on the market everywhere. Our roads and freeways testify to the growing demand for living in Oregon (and the Portland metro area in particular).
Prices remain the big story. In spite of the fact that home values have escalated in value since 2012, our average prices over two year increments, and our median prices continue to rise at rates over 5% per year pushing 6%. There does not seem to be a slow-down to rising prices.
The economy is as good as I have ever seen it in my 38 years in Oregon. It appears that everyone who wants to be employed is working, and there are still ‘help wanted’ signs everywhere. Perhaps the best sign is that people are confidently quitting their jobs (???) because they can now move up to better jobs with greater benefits and higher income. People seem able to buy the homes they want, and when they do, the repair and remodeling industry (and home improvement stores) are working furiously to keep up with demand.
All this begs the familiar question: Are we in a bubble or near another implosion? What I am hearing is that the market is not (yet) filled with speculation, characteristic of the past; that while there is plenty of money, there are neither the crazy loan products that were used in the past nor the lack of reasonable methods. Yes, we are subject to the national economy (and that is politics) and we can overshoot the runway regarding the recovery and go too far, but for now, we seem to have good dynamics and a good prognosis for the next year.
We are glad to assist you and talk with you anytime about real estate, your questions and issues, or about referrals you might graciously send our way. Bella Casa Real Estate Group has two offices in Yamhill County; 43 Realtors, and 253 closed sales so far this year valued over $86 million. We are grateful for your patronage.
Randy McCreith, Principal Broker/Owner