West Linn Real Estate Market — Monthly Home Sales
Ron Ares February 26th, 2010
A reader recently posed a question, asking when the peak real estate market would begin in West Linn.
You might find the graph below charting the number of sales per month interesting:
I would have guessed that 2008′s trending (in red) would have been the standard curve–closed sales peaking in July.
It’s interesting to see how 2009 turned out, with almost an inverse of what you would have expected — higher sales volume at the end of the year.
First-time homebuyer credits? Pent-up demand? Your thoughts?
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“First-time homebuyer credits? Pent-up demand? Your thoughts?”
How about the simpler answer?: Lower prices.
The fundamental reason houses don’t sell is the price. You can argue about repairs, painting, location, square footage, etc. etc. but the ultimate reason a house doesn’t sell is because it’s overpriced. Used to be a time where you could overprice it and some sucker from out of State would come in and push the comps even higher. The mortgage company wouldn’t care, because they were banking on more suckers being around to borrow even more money to buy the property again and again.
But now the banks are actually starting to seriously appraise the real “worth” of homes and the ability of the borrowers to safely manage and pay back those loans (crazy concept, I know.)
In 2009, I’d hazard a guess that we saw far more REO sales than 2008, at prices that were (in some case) very attractive. So that helped push the volume up. There were also some higher end properties sold very cheap, which may serve to push the median and average pricing up, but are not necessarily representative of the realities of the broad market.
Stuart, I agree with you. Prices are definitely a key factor, but I also think the upcoming expiration of the tax credits are encouraging people to get off the fence and take action. 30% price drops from the peak, low interest rates, expiring tax credits and the beautiful weather we’ve been having – it’s all contributing to increased sales activity. Buyers are looking for value, and if they see a property that is priced right, they will act. REO’s are part of the equation and sellers cannot ignore the fact that they are competing against these bank-owned properties. One take-away for me when I look at Ron’s data is that if the home is priced right, it will sell. As a seller, if you are not getting any offers within 3 weeks of putting your home on the market – start cutting your price. Eventually you will find a price-point where your home will sell. Otherwise it is better to take the home off the market until things improve, if you can.