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Are we prepping for a buying binge?
Lost in the wailing and gnashing of teeth in the national media over foreclosures, mortgage liquidity woes, and slow housing starts is the fact that mortgage rates are low, low, low and Portland’s listing inventories are high, high, high (not sky-high, though).
A recipe for a buyers’ perfect storm? A run on housing inventory? Wellllll, maybe not. But conditions are certainly upbeat in Portland despite mortgage meltdowns and the national real estate picture as a whole.
Buyers with a long-term outlook should be encouraged at the prospects of locking in at wicked-low rates (~6.0% as of today!) and having a wealth of properties to sift through. Sellers, on the other hand, still hearing of the metro area’s average appreciation holding at around 7 or 8 percent are making price reductions, but not in fire-sale mode.
Even if sellers aren’t falling over themselves to unload their property at any cost, the market is as robust as ever and as balanced as it has been in some time.
The most recent Portland State University Center for Real Estate quarterly report comments on the health of the local market:
To summarize, Portland defies the national trend with continued modest appreciation. Although appreciation is much slower then the double digits experienced last year, Portland remains healthy compared to the national housing market. While there were some warning signs during the first quarter of 2007, including increasing days on market and declining number of transactions, the area rebounded in the second quarter. The median price of existing homes increased, the number of transactions increased, and days on market fell—all indicating a recovery. But, how long will it last?
Local homeowners have been relatively shielded from defaults, too. In fact, Oregon is reported to have the nation’s 2nd lowest foreclosure rate (of 0.5 percent) in the 2nd quarter of 2007.
With the good news locally, I expect a bump in activity through the early fall, siphoning off some inventory and perhaps alleviating some fear brought on by national housing anxieties. If there is a segment of the market that will on the sidelines, it will be first-time buyers with less-than-adequate credit.
P.S. By the way, if you haven’t already, lock your mortgage rate today, according to the pros.
[tags] Portland, Oregon, homes, housing, mortgage, rates, buyers, PSU [/tags]
Photo by woooooo, used under Creative Commons license.
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3 Responses to “Are we prepping for a buying binge?”
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Actually, yesterday I recommeded locking in before the jobs report. Since the jobs report was a big surprise, rates improved today.
I do stand by my advice that if you have a transaction in progress, check with your LO to make sure you’re locked. Do not assume you are. A good faith estimate is not a lock confirmation.
I respectably disagree. It’s already mid September, and the numbers that I’ve been crunching and observing says the contrary. I cannot see how buyers will suddenly materialize when more and more people are nervous about the economy and war.
I believe that the number of available houses will do down in the next few months more from people withdrawing than from sales.
There’s a good reason why there is “a wealth of properties to sift through:”
Prices are too high and are generally expected to fall.
This is a self-fulfilling expectation, just as rising prices during the boom were a self-fulfilling expectation. The same mechanism that drove prices up(mass psychology) will now drive them down. No one wants to catch a falling knife.
I would not bet on a buyer’s storm this fall (or the next).