Comments on: West Linn Real Estate Market Activity — January 11 – 17, 2010

By: RBM

RBM — Thu, 21 Jan 2010 18:24:47 +0000

My take on the analysis I have done for the current market of properties above $500K is that they are returning to 1999 – 2003 pricing, pending condition and price point. Homes that needed work and sold at the height of the market are now sitting as they have not had the upgrades, sold for too much and there are less Buyers in the market with the where-with-all to purchase these homes; the ones that can, are picky, and should be. Homes that are move in ready and appealing will sell, but at the 2002+- pricing. This could change, but maybe not in the best interest of sellers. If rates tick up and jobs remain scarce, there will be more reductions in this price range to balance affordability. My gut is that sellers should price to sell now; waiting for a Spring Buyer will be disappointing. My advice to Buyers is to be sure you can afford what you buy and prepare to stay put for 10+ years. Also, stick with a fixed rate product at all costs. The American home is where you live, not where you make money; back to Real Estate Reality. Buyers should be keen on demanding all comps in the area they are buying, including short sales and REO’s. The market is the ‘whole market’ when purchasing. I know some Brokers would differ with this opinion, but the market is what it is. When the market went up and people overpaid for property, there was no discounting/adjustment for this. The comparables were all taken into account and drove the market higher, the opposite should be the norm now; allow prices to go in the other direction, affordable – it will all pan out in the long run, 10 – 15 years.

By: dj

dj — Thu, 21 Jan 2010 01:39:29 +0000

Hi Ron, thanks for your insights. I agree with your comments. The big “if” is what happens when all the stimulus programs expire. The public’s appetite for deficit spending has soured considerably, so I’m not sure if the government has the political capital to continue these expensive stimulus programs. I really hope that the economy and overall consumer optimism stabilizes after the government removes life support.

By: Ron Ares

Ron Ares — Wed, 20 Jan 2010 17:10:25 +0000

DJ,

My take is that we are in slow-thaw mode.

In the general metro market, properties below $300,000 seem to see plenty of activity due to the tax credit. But there aren’t that many single-family homes in West Linn under $300K and there aren’t many local move-up buyers. In West Linn, the only buyers I’ve talked with are coming from other states.

However, I think there IS pent-up demand and that it will slowly turn into active buying behavior — IF economic conditions stabilize, IF we stop bleeding jobs, and IF it translates into consumer confidence.

Then again, after government stimulus programs expire and as rates creep up in the second half of the year, who knows?

My $.02.

By: dj

dj — Tue, 19 Jan 2010 17:29:52 +0000

Thanks Ron for posting the numbers this week. Really appreciate it. I wanted to ask your opinion on whether or not you felt the market is picking up. Are buyers coming out and looking at homes ? Is there pent up demand ? I’m guessing that the combination of new listings and the upcoming expiration of the tax credit, there are probably more people entering the market. But, it’s easy for me to be an armchair real-estate analyst. I was wondering what you’re observing on the ground. Thanks !