Clients and Friends,
After an incredible run-up in the Portland real estate markets since 2012, it is not surprising, not even a bad thing, that this month’s numbers leveled-out, even declined. The pace of recovery was unsustainable. Sales continue to be quick. Inventory went up a tick because we are posting better numbers for new listings coming on the market (which is exactly what is needed). While new listings were up this month, the inventory is still down dramatically over the past couple of years. Record low time on the market continues to decrease even more, but prices are high and getting higher. There is no bad news here- just different news.
The Quarterly Affordability Index is on the last page of this report. Our metroplex remains amazingly affordable in spite of prices which on average are dramatically above the top of the market prices of 2007. This is in large part because stunningly low interest rates continue. This has a powerful impact for low monthly payments.
Yamhill County: It was only last April that we passed from a buyers’ market to a sellers’ market for the first time in 8 years. This April we have a strong sellers’ market with less than 2 months of inventory to sell off, and all aspects of our marketplaces improving each month. We were among the last areas of the metroplex to recover and we remain one of the most affordable areas but with progressive numbers in every category.
Oregon’s wine country is now a hot place to buy because of its affordability. The most basic dynamic is that first time homebuyers push out farther to be able to enter the housing market and ride the appreciation up. We have been seeing this build for a couple of years but this year the Newberg/Dundee market went from competitive to aggressive. We are even now seeing multiple offers and quick sales in places like Dayton, Yamhill, and Willamina. Gone are the days of low offers and vigorous negotiations. Be prepared to pay full price (and more) and get ready to buy properties ‘as is’. The fear is real that you might get locked out of the housing market so be humble but active.
Buildable lots inside our towns sold-out in 2014 but rural land sales lifted-off just this year. Prices have corrected to a high level yet buyers are stacking up when rural land becomes available. Another dynamic about a hot market is that the worse it gets for buyers the more, and more, buyers will come and buy. At the bottom of the market, we begged people to ‘buy low’ while they have time to do so. Today with high prices and aggressive competition buyers are coming out of the woodwork and piling on properties as they come on the market.
Expensive homes in Newberg and McMinnville are like a rising tide and selling at high prices. Not long ago, $400k was a tough threshold to break through, then $500k, now $600k+.
Rural properties are moving fluidly now. 33 properties sold between $600k and $1m this year already! While only 8 properties sold over $1m in the MLS in Yamhill County last year, we have 39 properties above that mark expecting (really hoping for) an imminent sale; more than half of these are over $2m up to $12m.
Recently, I read an article in the Statesman Journal (USA Today), entitled: Oregon Vineyards Are Hot Properties Again (see: http://stjr.nl/27O5Lnm).
The vineyard and winery industry is moving rapidly because out of state money is again pouring into Oregon. This industry continues to expand and improve its world class standing.
All this ‘Good’ news begs the question: Are we in another bubble? We might otherwise ask whether this is just making up for lost time, the many years of famine, and putting us back where we might have been without the crash. I have suggested in a previous email that Portland is following every other metro area on the west coast and becoming an expensive place to live. We may just be moving to a higher price tier like Seattle did years ago.
The final dynamic is that the housing market is cyclical- it ebbs and flows. The last comparable ‘famine’ in real estate was 1981 – 1987. There have been many ups and downs since then but we hope not to see more ‘dark years’ for another 25-30 years!
I hope this helps keep you up to date. Our professional cooperative of many of the most accomplished brokers in wine country are at your service with knowledge, wisdom, and exceptional service. Call us for help in navigating in a good but complex marketplace.
Included in this report is: