Randy's market analysis

View the January 2010 Market Action Report for the Portland-Metro areas (includes Yamhill County)

March 1, 2010

For over a year now, the sales numbers for the Portland metropolitan area continue to improve each month, although the progress is slow. Properties have not been this affordable since 2004, prices on average are at 2005 levels, and the numbers of sales continues to rise. Inventories have been reduced significantly.

One year ago we began the climb out of the pit created by the financial melt-down of late 2008. We are 25-34% better than a year ago on pending and closed sales. The drop in closed sales from December, and the dramatic increase in inventory since last month, reflect normal seasonal activity. There is low sales activity in December, and in January people get their properties on the market with the hope of selling (and buying) during this year. Continued high numbers for ‘days on market’ condition people to list their properties sooner rather than later.

"IT’S THE ECONOMY, STUPID!"
Through the last few recessions this mantra has been repeated often, but amazingly it is still not understood by those who should know better. When people are unemployed, when business sales drop, and when businesses and people are insecure about the future, they freeze and contract their activities. This makes the economy worsen. When it lasts long the damaging effects are real and drastic on people and businesses.

No longer are the housing industry problems inherent to the housing industry. Yes, there are many blows yet to come and challenges to overcome. But the industry has been thoroughly studied and the continuing consequences have been factored into future expectations. Insecurity about the economy is holding back our markets. We need increasing jobs and increasing confidence that current efforts will be fruitful for businesses, investors, and normal buyers and sellers.

While I try to be a-political with our clients, this mantra must be asserted again and again. Government is not the solution nor the savior of the economy; too often it is the actual problem! It should be especially clear in this, the longest recession, when we have had the most government intervention and the most amount of money ever thrown at the problem since the Great Depression. Reality check: we have little to show for it. Perhaps we have made everything much worse than it might have been? Government serves us best when it facilitates/frees conditions that encourage investment expenditures and profitability. It is these investments, and the freedom to be creative and profitable, which leads to greater employment and expands our economy overall and affects all sectors.

What is inhibiting buyers? What is doing the most damage to the assets and net worth of our sellers? It is the economy. When people feel that it is safe to go back into the water, when people believe they can buy and not lose value after doing so, when businesses have confidence about the future, there will be more jobs and commerce will increase.

So what about the year ahead? To the degree that the economy improves, so will the housing market. For a year now both have improved, but ever-so-slowly. Let’s hope for the best of both in the months ahead. We will chart our progress month by month with the real numbers.

Best regards,
Randy
Randy McCreith, Principal Broker
Bella Casa Real Estate Group
503-310-9147 Cell