Home Selling in Portland>Question Details

Insurance Pro, Real Estate Pro in Portland, OR

The $3.3 trillion hole, what is your personal experience in Portland?

Asked by Insurance Pro, Portland, OR Tue Feb 3, 2009

Bloomberg is reporting that Portland has finally been caught in the downdraft.

“Seattle and Portland, Oregon, values tumbled 12.1 percent and 11.7 percent, respectively, the first time those cities dropped more than the nation, Zillow said.”

What are you finding out there?

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Answers

9
Based on the very high unemployment rate in the metro area it's hard to believe that the number of defaults won't continue to rise and as a result prices are destined to continue to decline for sometime in to the future.

When everything is done and over with I believe Portland will fair much better than the national average.
I personally believe this area is set for a significant boom when things begin to rebound.

We are the most affordable city on the west coast, with the third largest port and we have the second lowest corporate tax rate in the nation. The high unemployment rate translates in to a large skilled/creative labor pool, creating an employers labor market. Additionally I think Oregon is on the right track with all the subsidies and incentives for green enterprises (some of these business' are likely to be the next big thing)

Norris Monson
John L. Scott real estate
http://www.portlandareahomeinfo.com
503-729-4321
1 vote Thank Flag Link Mon Aug 3, 2009
I think Portland is unrealistically overpriced and I am trying to education the sellers accordingly so their prices reflect reality- with one purpose in mind-they can successfully sell their homes without huge delays. But this (education) does not come easily. Getting anything that's difficult to sell to actually sell is going to require motivation on the part of the buyer. Buyers are motivated to a willingness to purchase something that is clearly a value. There's no desparation right now in buyers -- the buyers are scrutinizing everything that is out there-they have learned to wait and see if things go further south-there is a determination to find the best values, not to mention the fear of buying at the top of the market (again). There is a healthy hesitancy in buyers. That shouldn't be discouraged (not a typical Realtor approach).

Sellers need to act like buyers(really look the market over) before they get ready to sell (actually the listing agents should make sure the sellers know what buyers are seeing), afterall, it's to noone's benefit to give false hopes to sellers. When the comps come up which dissuade the seller and prove to be mostly shortsales we, as agents need to address the issues of how those comps will effect the seller's bottom line, as they directly effect the market. Sellers need to understand how that works. I use to think it was ridiculous to show the short sale comps when determining valuation for a listing. However, with so many short sales we have to realize they will directly affect a seller's effective list price. Buyers will go after the lowest priced listings matiching their criteria even if it means they have to wait. They want a deal. We were initially seeing a relatively low amount of short sales- not so anymore!...it's time to smell the coffee. The market will determine the value, so we will need to continue to enlighten sellers. There is a lot of business out there but getting that 'reality mindset' adjusted in both agents and sellers is absolutely crucial to getting the market turned around. The sad part is that there will be a lot of sacrifice to get it turned. And without that sacrifice I don't see it turning too quickly. It's challenging to say the least.

So, as a Professional Real Estate Broker, my advice to other agents is to get realistic and teach your sellers to be realistic; it will serve the entire community well.

June Lizotte, Real Estate Broker
Providing REAL Service
Prudential NW Properties
6400 SE Lake Rd., Suite 200
Portland, OR 97222
http://www.junelizotte.com
503-310-8032
jlizotte@prunw.com
Web Reference: http://www.junelizotte.com
1 vote Thank Flag Link Wed Feb 25, 2009
On February 20th I suggested that Portland and markets were not going to rally back and that the bottom has yet to be found with definitely no recovery in the next 12 months. News reports today continue to suggest I am correct. See below article in web references.

Please do not take advice from brokers. They need you to buy. How can they make statements about housing markets with this kind of conflict of interest. Before you buy read "An Empire of Debt" written in 2005. Trust me you will change your mind. Wait for the real bottom. Its at least 18 months away and then it won't bounce back. House prices will rise with COLA. Common sense. How many real estate brokers have economics degrees - 1%
1 vote Thank Flag Link Wed Feb 25, 2009
The response from Dirk Knudsen is classic of what I refer to as the ethnocentric viewpoint. If you are a stockbroker you want to believe stock prices will rally soon - so if you tell yourself enough times then it will happen right?

Portland has a 19 month inventory. Highest since records were taken. How can a resurgence of values in 18 months begin when unemployment continues to increase. We are spiralling in the other direction. Yes if you are in it for the long term there are some good home purchases.

In 2006 brokers were stating that Portland was undervalued compared to other US and In'tl cities. Please stop the madness. The statistics speak for themselves. Its a good time to make offers 20-40% belw asking for condos in Portland. Many people think their prices are unrealistically valid due to the poor guidance of brokers. Their hopes and dreams will fade when the listings go past 6 months and start approaching 1 + years.
1 vote Thank Flag Link Fri Feb 20, 2009
I'm seeing listings are lasting longer and longer on the market and prices have been decreasing month over month for the last 3 months more dramatically. (Market Action) Sellers are coming around to the fact that Realtors have to work harder and harder to get the listings sold. I think Realtors need to take the time to educate the sellers that it is going to take a great deal of effort in marketing and promotion of the home in this kind of market to get the home sold. More hours of promoting the home in the ways buyers are searching for a home. Thus, reducing the fees for listing in a market such as this is not a good idea. Don't undercut yourself; keep those listing fees up around 6 to 7% and take the time to promote yourself, showing you are worth the work. Because you are!! (Advise to the collective Realtor community) If you are a Realtor of integrity and hard work ethic you will be putting in many hours marketing your listings. That is hours of time to find places that will attract buyers, keeping a close eye on the market, doing comparisons frequently, generating interest in the neighborhood to get neighbors to work for you talking up the listing to their friends and family who might want to move in (giving away some of my secrets to all my competitors) Glad to!! ..At the end of the transaction you should be paid for all that work. Discount brokers are doing a disservice to their clients because the services (at least the many exclusive services I provide) are not there. Any seller who will settle for just having their listing posted in the RMLS in a market like this is crazy!! (Want me to tell you what I really think?) :)

Additionally, keeping track of market data surrounding your listings is crucial- I personally do a CMA every 3 weeks in preparation of any necessary price adjustments. If sellers are not willing to take a very proactive approach to getting their home sold a listing agent needs to be very frank with them, but with gentle persuasion and understanding of their plight, to help them realize a list price needs to keep up with the what the buyer pool is willing to pay. (and only seeing the data will change their minds). That takes work on the L.A. part. Weekly reporting of some sort to your seller is also so important. Communication about what you've done that week on their behalf will assure them you are making every effort.

There is a chance the radius around the listing shows the price is right, even tho it's sitting for quite some time. It is usually in the $350K+ bracket. That's when patience and a lot of marketing comes into play. Some price ranges are just harder than others. I find its a tricky market in the higher price ranges because buyers are fearful of losing value.

Buyers need to be agressive with negotiations and not be afraid to make those offers. The rates are good; the inventory is great! They don't need pushy agents though- they need agents with tact and assertiveness who will work hard to find those homes that would be good for their individual needs. Get offers written and in front of the sellers. A hard copy with sigs and earnest money check will speak loudly. (my humble opinion)

As reported by the RMLS here are the stats for overall listing and closed data.
Comparing the fourth quarter of
2008 with that of 2007, new listings fell
20.3% (8,326 v. 10,450*). Closed sales,
on the other hand, dropped 32.1%
(3,598 v. 5,298) and pending sales fell
35.8% (3,061 v. 4,766).

2008 Summary
Comparing market activity in 2008
with 2007, new listings decreased
8.7%. Pending sales dropped 30.8%
and closed sales fell 32.1%.
At $6.3 billion this year, total sales
volume dropped 35% from 2007’s $9.7
billion.

Thanks for asking the question!

June Lizotte, Real Estate Broker
Providing REAL Service
Prudential NW Properties
6400 SE Lake Rd., Suite 200
Portland, OR 97222
503-310-8032 mobile
503-212-2727 office
jlizotte@prunw.com
Web Reference: http://www.rmlsweb.com
1 vote Thank Flag Link Tue Feb 3, 2009
I appreciate the idea of everyone stepping up to solve the problem whether it is buying a tv or a home to improve the economy. The only problem is that we are in a capitalistic society and people have the right to try and buy at the lows of markets whether stocks, homes, toasters. Key word - deflation. Hold your cash and wait.

Bernanke can state things will turn around all he wants but if we focus just on Portland with its 19 month housing inventory I am stating that outside of altruistic purchasing, there is absolutely no hurry or need to buy a home unless you plan on offering at least 40% below asking price. Sellers have yet to truly feel the pain. Think of all the job losses, foreclosures etc. Portland will see further declines in the real estate market in 2009. You will hear from me again in 6 months when the numbers come out and I am further vindicated.
0 votes Thank Flag Link Wed Feb 25, 2009
Forbes just released this report listing Portland as #4 of the Top 5 US housing markets:
http://realestate.msn.com/article.aspx?cp-documentid=1808075…
This does not negate the pain we are feeling in the present Portland real estate market, but it does give a bit of perspective! We are doing a lot better than most. Our commitment to the urban growth boundary and to urban re-development has been a benefit as it has, at least, curbed the potential exuberant growth....somewhat. At first, I thought it was merely aesthetic or cosmetic (less sprawl, less traffic, more greenspace, etc) but, it's obviously been a benefit to our housing market (and potential housing recovery). Berneke just posted a prediction that the economy would start a rebound in 2010 (but, no one...even Berneke has a crystal ball). But, please allow me to interject this thought in response to "KLC's" answer: it's not just real estate brokers who "need you to buy", we ALL need the real estate market to mend and recover to a healthy level as I believe it's the housing market that will lead the general economic recovery. In times like these, if any of us have a reasonable level of job security or savings or financial security, we have an opportunity for great deals in a lot of areas. You have can purchase a home in an era of high inventory, low pricing and excellent interest rates. You can negotiate and contract for a multitude of services at discount pricing. We're all in this together and we need to participate in the recovery in any way we can!!!
Janeese Jackson, Principal Broker
Real Estate Resource
503-709-0802
jj@janeesejackson.com
0 votes Thank Flag Link Wed Feb 25, 2009
Let me say this.

The market is down between 15 and 40% depending on where you live. New Construction led this market up and right now it is leading the market down. In the Portland area we will see a resurgence of values in the next 12-18 months and the reason behind that is going to be the complete sell off of any remaining new homes. That is occurring now and many of the builders are in Chapter 11 and selling homes. When that is all over there will be no more new homes.

Banks ceased loaning on new homes about a year ago and we see almost no starts. Areas like Happy Valley and Forest Grove and Sherwood will take longer to come out of this. Too many home too sell. Areas like Orenco, Murray Hill, and Bethany can expect a quicker turn around as there are almost no new homes left.

But look for a battle between buyers and sellers in 2009 as we try and find a bottom that we can all agree is the turning point. I see 1-2 years of this time falling and reaching a trough and than 2-3 years to climb again. The reality is the State has some fundamental economic issues. State Income and Corporate Tax is scaring away big business. Property taxes are too high. Being green is great and desirable but we crossed the sanity line years ago and the Nuts in Portland and in Salem who have never known what it is like to live beyond the safety net of a government job will never get this right until they get a taste of what life is like beyond the "Thunder Dome".

For what it is worth.

Regards;

Dirk Knudsen
Re/Max Metro Gold
Re/Max Hall of Fame
503-799-8383
Web Reference: http://www.theknudsens.com
0 votes Thank Flag Link Tue Feb 3, 2009
Actually we've been experiencing the "downdraft" for awhile. We're back to 2005/2006 pricing in lots of areas! The properties move if priced competitively. Real estate has always been about location, condition and price. It's even more important now! The challenge is finding that "sweet spot" in the pricing hierarchy. You almost have to run the comparable data, coupled with your gut reaction and undercut the market.
Janeese Jackson, Principal Broker
Real Estate Resource
503-709-0802
0 votes Thank Flag Link Tue Feb 3, 2009
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