State of the Market

Tuesday, November 18, 2008

State of the Market

I work and live in the small town of Hood River, Oregon. My selling area is the Mid- Columbia River Gorge, which is a Bi State area. South Mid-Eastern section of Washington State and Northern Mid-East section of Oregon.We are in the Columbia Gorge National Scenic Area, know for it's volcanoes, waterfalls, rivers, ancient forests, fertile valleys and our eastern desert basalt rock landscapes. Oh and did I forget the world famous summer winds that draw windsurfers and kite boarders from around the world.Small town RE markets are somewhat protected from the more dramatic market changes you hear about in the larger areas. Our foreclosure rate has gone up but not like it has in California, Florida or Arizona.Our prices have come down about 30%; more in some price ranges less in others since 2006.I remember the first listing I had that was affected by the coming changes. We listed in the fall of 2005 and by spring 2006 we started to lower the price. We chased the market for months until finally $50,000 less later we had it sold. That was my first sign that the market had peaked and has started to drop. Our drop was slow but consistent. Not the free fall of some markets.Homes coming into the market place priced right are selling well. Others that have been on for awhile, years in some cases, once they are priced right are selling too. But all this being said sales are down in our area and inventory is still high. We have about a years worth of inventory on average. Less in the lower price ranges and more in the high price ranges.Our hottest residential market is $250,000 and under.Land is abundant. There are hundreds of building lots available in every part of our area. Good for buyers not so good for sellers. Prices are apparently still to high for the buyers to bear. Financing has become problematic too. The land must be paid for prior to getting a construction loan. However you could probably get a small bank that portfolios their our loans to underwrite it for you but it won't be cheap.Someone said to me yesterday that they heard on the news that prices are starting to go up again and maybe in some parts of the country that is true. Good news for sure.I think in our area prices are stabilizing. But what needs to happen for prices to go up again, is for inventory to go down. At least that is what makes since to me.My logic runs along this line: If we have more houses on the market than we can sell in 12 months; then there is downward pressure on prices, Once inventory gets to a 6 month or less supply that puts pressure on prices to go up. Our hottest market right now is $250,000 and under. As of today, in the Mid-Columbia we have 281 homes on the market priced at $235,000 or under and in the past 30 days we have had 24 closings ( same criteria)that rounds up to 12 months of inventory.It's better than is has been but it is still a buyer's market. And a great one at that. It is a GREAT time to BUY!! Low interest rates, tax credits, motivated sellers. What more could a buyer ask for?

Welcome to my blog

Greetings and welcome to my blog.

I am looking forward to reading your comments, questions and feedback.

Let's start with a question?

What effect has the market had on you?