MAY 2011 MARKET PERFORMANCE
Published July 3, 2011
By now everyone has heard that 2011 is not a good year for real estate sales! It is not a good year for the economy, the unemployment rate, or for consumer confidence. New construction remains a dead industry the likes of which have not been seen since the Depression. Speaking of the Depression, recently I read that the rate of decline in home values is greater than during the Depression. Next month in July, we hit the 4 year anniversary of the bottom dropping out of the housing industry. Last week, on a business show I listen to on the radio, the normally optimistic and upbeat host gave voice to what I have thought too many times now, “It is getting hard to be optimistic anymore!”
Those who hold to negative predictions about our future seem emboldened to be all the more gloomy. I hear their narratives and they are reasonable in light of what is going on. Yes, it could happen and they very well could be right. If so, the current conditions should paralyze anyone. The news and information media picks up on these perspectives and we get showered with depressing forecasts and disheartening anecdotes. As if compulsory, the media then salts in stories which show good signs of recovery; perhaps to limit liability and relieve guilt for sending their readers to find the nearest bridge?
The reality is that no one seems to know what tomorrow holds, and no one seems to know what it will take to slow down the economic free-fall and eventually right the direction of the economy and its attendant industries. Therefore, everyone speculates, and every minor event on any given day is analyzed for signs in the tea leaves.
What is certain is what has already happened. A couple of weeks ago at our brokerage meeting we looked back to see where we are now by comparison with the past. To illustrate, we used Yamhill County for our study. Since 2007 the sold volume/number of homes sold has dropped 37% (from 1258 in 2007 to 796 year-to-date). The dollar value of those properties dropped 52% (from $354 million to $175 million). The average sale price is down 23% and the median price is down 22%. The short sale/foreclosure industry was almost unknown to most people and Realtors®; today it is the dominant force driving values affecting all of us.
As for May’s report for the Portland Metro area:
- Inventory is down. It is difficult to find many new homes anymore and the ‘glut’ of homes to sell is down to less than a 7 month supply from a high of a 20 month supply following the financial sector meltdown of 2008 (6 month’s supply is considered in the range of healthy). This helps to stabilize pricing and balances the marketplace from being a completely one-sided buyers’ market. Although a good number, it likely reflects the public’s unwillingness to sell if they do not need to. Also parallel to the unemployment industry, it likely reflects discouraged sellers who have quit trying.
- Closed sales are the second lowest (YTD) of the last 5 years but seem to be following the normal seasonal cycle up.
- Pending sales are complicated: Pending sales are up by comparison with one year ago because the $8,000 tax credit expired on April 30th 2010 and there was a great push to submit all offers before that deadline. That made May of last year a dead month for accepted offers (pending sales). By comparison, we ‘look’ good this year.
- Market time for a sale remains consistently high averaging over 140 days.
- The average sales price is at the same level as it was in late 2004.
If you have read this far into my commentary, you have a strong constitution! What can we do about this? Professionals and business owners adapt to changing conditions and relentlessly pursue success in spite of obstacles; it is our nature. People adjust their expectations and their lifestyles to make due until there are better times. The wise hold onto a higher and historic perspective: business cycles come and go; recessions and even depressions eventually end; famines have stricken people for all human history but the famines do not last forever. Prosperity can be rebuilt. This is a particularly tough patch of American history but as in times past and in time, we will heal.
If you need to sell, we just need to find one willing buyer for your property. Last month 84 residential properties did sell in Yamhill County. Yours could be one of those. If you need to buy, the task is easier but it still must be accomplished with caution and foresight. Your needs and our job have not changed because of a different kind of a market, it is just a greater challenge.
I am truly amazed at the high caliber of Principal Brokers (14 of the area’s finest), and exceptional Realtors® (now numbering over 30), which make up our professional cooperative at Bella Casa Real Estate Group. We serve the greater Yamhill County area as well as much of Washington, Marion, and Polk counties, and several of our brokers work the Portland and Beaverton area markets. We are grateful for you who entrust your sales to us. As always, we are grateful for your referrals to family, friends, neighbors, and co-workers.
At Bella Casa Real Estate Group…
We have re-tooled and reworked our strategies for a completely different market- the real world. Our optimism continues to motivate us to get the job done. People have to sell and buy for a large variety of reasons; all you need is one buyer for your property. For buyers, you continue to have the best opportunities since the 1990s. Don’t miss it waiting for the ‘bottom.’
We are glad to assist you anyway possible and we greatly appreciate your referrals to friends, family, neighbors, and co-workers and colleagues. We cannot control the marketplace, but we can control the level of our expertise, service, and knowledge which we promise to put to work for you and those you know.
Best regards,
Randy
Randy McCreith, Principal Broker
Bella Casa Real Estate Group
503-310-9147 Cell
207 NE 19th Street, Suite 100
McMinnville OR 97128
866-281-6653 Fax
randy@thebellacasagroup.com
Who We Are
We are Yamhill County's most experienced, high-achieving, and successful real estate brokerage. We are real estate specialists in luxury properties, rural properties, equestrian properties, new construction, and residential and commercial properties. Contact us for a free customized home value analysis.
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