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Portland Real Estate Update By Rob Levy

Portland Real Estate Update December '15

The Portland metro area saw gains this November compared to last, despite seasonal cooling. Pending sales (2,504) had the strongest November since 2005, when there were 2,541 offers accepted for the month. These pending sales rose 19.8% over the 2,091 offers accepted in November 2014, despite falling 16.4% short of the 2,996 offers accepted last month in October 2015.

Closed sales (2,153) ended 11.2% ahead of November 2014 (1,937), but slipped 20.8% from October 2015 (2,717), but still represented the best November for closings since 2006, when there were 2,163 closings recorded for the month.  New listings, at 2,148, ended 11.8% ahead of November 2014 (1,922) but 29.9% under the 3,063 new listings offered last month in October 2015.  Inventory in the Portland metro area increased in November to 2.0 months. During the same period, total market time increased to 52 days. There are currently a total of 4,252 active residential listings in the Portland metro area.

Pending sales (32,783) are up 23.0%, closed sales (30,415) are up 19.8%, and new listings (39,180) are up 8.7% for the year thus far. Prices continue to rise in 2015 compared to 2014. Comparing each year through November, the average sale price rose 6.1% from $333,200 to $353,400. In the same comparison, the median sale price rose 7.4% from $285,000 to $306,000.

Our home of the month is a stunning remodel on a single level home in the coveted and close in community of Forest Hills, close to Nike, and Highways 26 & 217.  This approximately 2,000 square foot mid century home sits on a large lot, and boasts gleaming hardwood floors, new kitchen with granite counters and cook island, stainless appliances.  Formal living and dining rooms with firepace, and a large family room also with a big brick fireplace and a slider to the large back yard.  This house is gorgeous, and single family homes like this are hard to come by.  Click on this link to check it out!

Buy Soon, Rates are Rising!

The biggest factor that will most likely be affecting real estate sales in the US in 2016 will be interest rates, or the anticipation of higher mortgage rates to be specific.  But the reality is the affect should be minimal.   The other factor is some people are fearing a bubble in some markets and if the prices do drop, the protection is interest rates.  Let me explain.    First many lenders are saying the long anticipation of a small rate hike is "built in" so the rate hike in real mortgage rates should only take average rates to about 4.25% which is still historically low.  A 250k mortgage at 4.25% vs. 4.0 is a $36 a month difference, not enough to really stop most people from buying a home.  Also, for those worried about a bubble, most experts don't see it coming.  But for arguments sake lets say it does and prices drop 5% but rates go up over a year by 1%. For this example you are buying a $312,000 home with an 80% mortgage and borrowing approximately $250,000.  At 4% that principal and interest is $1,194 a month and at 5% it's $1,342 for a higher payment of $148 a month if you wait.  If the $310k house drops in price by 5% and the rate is 5% then the loan on what is now $236,000 (80% of the reduced price) would be $1,267.   So the $1,257 payment is clearly more than the $1,194 a month for a "more expensive" house.  This is a long method of explaining its better to act now to cover yourself for possible rate increases or price drops, if you think the latter will happen that is. 

Top 10 Updates You Can Do For Resale

This list recently from survey results by the National Association of Realtors in partership with Remodeling magazine shows which items get you the best bang for the buck.  Clearly the front door is best due to the old adage "you never get a 2nd chance for a 1st impression".  I participated in this survey and am surprprised at the results because I am a kitchen guy, and have always noticed in the 27+ years of selling lots of homes that people are drawn to kitchens.  I still think a kitchen makeover (not remodel) will most always get your house sold faster, and for more money.  If you are thinking of updating your house for resale, please let me know and I would be happy to consult with you letting you know what I see, in our market that helps a home sell fast and for more money.