Home Buying in 97035>Question Details

Sarah, Other/Just Looking in Tigard, OR

I heard that the PDX area is just now feeling the burst of the bubble. What do you think of this?

Asked by Sarah, Tigard, OR Wed May 7, 2008

So I put in a bid on a house in Lake Oswego. Now I am sorry did!
A 2 Bed room at 329,000!
I think that is much!
Now CNN Money says that PDX is now being slapped in the face and the bubble has burst?
What does that mean to buyers?
Can I pull out of the deal?

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Answers

9
First of all, with all respect to Duncan who practices in California, the information about pulling out without a reason within the first 17 days is not correct here in Oregon. I am a practice real estate in Oregon and I can tell you this:
1) it depends upon the language of your contract
2)You should immediately have a candid conversation with your Realtor about your concerns.

As regards 1): Standard Oregon Real Estate Forms, which most Realtors use for residential purchases, give the buyer several periods to discover defects in the title, the condition of the home and to have an inspection and owner property disclosures. There are different ways to get out of the purchase with your earnest money intact depending upon the result of those disclosures. You are supposed to give a reason for backing out - but the list of possible reasons is extensive and usually not hard to find. That said, as an industry we rely on each party acting in good faith. Cold feet are a fact of life, but not technically a legitmate out.

Which brings us to 2): the bigger question. What are your specific concerns? What has changed for you from the time you started the offer to now? I hear a couple of things in your comments. First, that the media has made statements that Portland has felt the bubble burst. I say, 'whatever' to that. All across the US the pace of sales has slowed. Portland, Seattle and the Bay Area have all continued to have moderate appreciation (based on Median home price) during this market. We continue to rank in the top 10 for both condo and residential markets in the nation when last I checked. Likewise, even the hardest hit areas in the US (like Las Vegas) have seen that people who've owned their homes for more than 5 years have seen equity appreciation - it is those who have been in for 2 years or less or maxed out their equity lines of credit recently that are not getting out what they put in. Do you plan to live in your new home for at least 3-5 years?

Remember, also, that if your alternative is renting, you will be foregoing any opportunity for tax benefits of the mortgage interest deduction (which for that price point could be several hundered a month depending on your income bracket), and appreciation as the market improves. A recent article in 'Time' magazine (Feb. 25, '08) pointed out that if you purchased a home now and the market declined over the next 12 months, but the interest rate increased even a small amount - your payment would be virtually the same. (See their diagram or speak with your mortgage broker/lender about how a change in the rate could negate any gains you might have in waiting to buy.)

As relates to Lake Oswego, what attracted you to purchasing a home there in the first place? Was it the award winning schools? The charming downtown with the summer hanging flower baskets on every post? The exceptional library and great restaurants? Do you plan to enjoy the live music four times a week in the summer or the public art in the down town area? Or to use the walking and bike paths all around town? What are your expections for public safety and commute - does Lake Oswego meet those?

Lake Oswego is some of the most expensive real estate in the Metro area because of it's high quality of life and proximity to downtown. If price is the bottom line, then some other nice communities might have warranted a look. However, a good agent should be able to provide you with a Custom Market Analysis on the home you are purchsing so that you can see it in comparison with other sold properties. I think you will find that that price point for a 2 bedroom home in Lake Oswego may not be unwarranted.

To conclude, if you have an agent - put them to work for you. If they won't work for you, spell out your expections of what information you need and if they won't preform speak to their principal broker about your concerns and request that they rectify the problem.

If you do not have an agent, it is never too late to bring one into the transaction to represent your needs. I would be happy to help you if you feel that would be prudent at this point. A house is such a happy opportunity- a launch pad for all your new adventures. I really hope that you find a place that serves not only as a great investment, but also a safe harbor to retreat to at the end of a busy day and a place to strengthen relationships. Lake Oswego is a great place to live (I've been here for years) and if you end up here, I hope it exceeds all your expectations.

Sincerely,
Kate Myers, Realtor
503-675-4712
katemyers@cbseal.com
http://www.cbseal.com/katemyers
Web Reference: http://www.kate-myers.com
1 vote Thank Flag Link Wed May 7, 2008
January 2010 and I still see lots of price drops. The problem with the Portland area is lack of jobs, and nothing is happening in Portland right now which will bring jobs. The "bubble" here was almost obscene. I've live my entire life in Portland and have owned several homes here, and would literally laugh when I saw what people were paying for former crack houses, just because the neighborhood had a new cute name!
0 votes Thank Flag Link Tue Jan 12, 2010
Here is a follow-up to this thread. It is now November, 2009 and the real estate market in Oregon and Lake Oswego has corrected and is still very unstable. It is just a fact. The financial/credit markets are still correcting. The comment about the Yale University economist Schiller of Case-Schiller was a very sad statement by an uninformed individual. As it turned out, the Seattle and Portland job markets were not the hottest and in fact have statistically been some of the worst in the country.

Lesson learned here is to always evaluate where the 'source' of information is coming from and what the back-story is behind the info.
0 votes Thank Flag Link Thu Nov 5, 2009
Read your contract and don't believe everything you read or hear from the media. They like to create news. Every area is different as it relates to the market place. Your agent should be taking care of you but call an attorney at your ealiest comvenience to see where you are. It would appear that you don't understand the contract terms and you need help.
0 votes Thank Flag Link Wed May 7, 2008
There is no Bubble Burst here.

We are experiencing a 1-3% downturn and homes are still selling fine provided that they are priced right.

The Bubble Burst is a self fullfilling prophecy syndrome created by Yale University Economist Shiller and he has all the bankers and Media people believing it.

The guy is an idiot.

Don't drink the koolaid. Every market is different and it is a matter of available housing and local jobs.

Portland and Seattle are in the hottest job growth area in the country and therefore we are doing better.

We are in a slow down but there is no real bubble here to burst.

Hope that helps;

regards;

Dirk Knudsen
Re\max Metro
Re\Max Hall of Fame
503-799-8383
Web Reference: http://www.nwhomcenter.com
0 votes Thank Flag Link Wed May 7, 2008
PDX= Portland OR
I put a bid on the home.
Can I Pull out?
0 votes Thank Flag Link Wed May 7, 2008
I think she is asking about Portland Oregon and not California. Anyways the market in Portland is spotty it really depends on where you are, Lake Oswego and other "older" areas like N and NE Portland are stable. Other areas like the Eastside including Clackamas and Happy Valley have been hit hard because of too many new homes being built. Portland in my opinion will continue to be steady because its a great place to live and still attracts peopls to move here. You can back out if you find something serious on the inspection report or if you dont qualify for financing.
Web Reference: http://www.EduardsHomes.com
0 votes Thank Flag Link Wed May 7, 2008
Can I pull out of the deal? Where are you inthe process? You can pull out in the frist 17 dyas without reason. After that you need a reason. Do you have the Natural hazard Report?
0 votes Thank Flag Link Wed May 7, 2008
Just? Its been going on for 9 months. Prices are down 30% to 50%, and still falling. There is a huge number of home from which to choose. Its a Buyer's market.

In any market noone knows when the top or bottom of a market happened except by looking backward.
0 votes Thank Flag Link Wed May 7, 2008
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