January 2009 Market Action Report
February 1, 2009
Market Action Report for January 2009
The new report is out in a fuller form and better design. We now have access to individual reports for all over the state and SW Washington. This report covers the greater Portland markets including our focus area, Yamhill County. If you would like a report for another area, I would be glad to get that to you upon request.
The news for January is excellent, but to hear the media talk about it, we continue to sink to new lows and should really go find a high bridge for consolation. This is not true. We are all abuzz with buyer activity and our websites are getting hits like we have not seen in 2 years. Anecdotally, this week I received two offers (good offers) on the same day for the same property which has been on the market for over 9 months. We have another 4 buyers who were seriously looking at this property. This week our daughter, Megan, put an offer in on a new listing in Salem just two days after viewing it and it was already pending. In January Molly put offers in for two clients only to find she was in a multiple offer situations in both. 100% of the many brokers and industry professionals (mortgage and escrow) I have spoken with since early January tell me the same thing (and I always go out of my way to ask everyone I meet). There are lots of buyers looking and offers are starting to flow again.
In this report you will be told that closed sales have hit a new low since records were maintained by RMLS in 1992. They are down 26% since December and 33% lower than one year ago. The data is true, but the interpretation of the media is ignorant at best. Who cares what the difference is since December? The reality is that the market was on life-support from October through December 2008 because of the financial sector meltdown of September. Complete paralysis characterized the market during this time and we could not even buy a showing, let alone an offer!
January’s news is exceptional because the comatose patient awoke with a jolt and is recovering nicely. Although we are at a low point for the past 2 years, it seems clear to me that the bottom of the housing market has come and gone. Pending sales were way up, 52% over December; the significance being only that the patient is responding and is getting better day by day. Pending sales nationally were up 6% in January. This includes all the legendary bad markets we have heard so much about for so long. We hear good things out of California! When you see the percent changed in the area report on page 2, keep in mind that this is a rolling overage for average sales price for the last two years. Though times have been tough and sales very slow, note that percent changed for Yamhill County is just down 5.4%. Is that what you have been hearing in the media???
There is strong pent-up demand among buyers right now. Buyer are finding historically low interest rates, as low as 4.25% on 30 year fixed mortgages and bumping around mostly under 5%. There is currently a $7,500 interest free loan for first time home buyers, or buyers who have not owned a home in 3 years. The stimulus plan, now approved, changes this to $8,000 and it is a gift, not a loan! Call us, or your favorite mortgage broker for details. Buyers also have a smorgasbord of inventory to select from and some of the best prices in years.
There is plenty of bad news for the media to feast on, and they will have a heyday with the economy for some time to come. But the housing market will buck the economic trend and eventually, many believe this year, will pull the economy out of the ditch. Many sellers have suffered greatly in this market and although we have been relatively stable, time has not been kind to us. We have seen more foreclosures and bank owned properties recently, and we continue to see dropping prices, especially among new home builders. But even in these dire circumstances, we have finally seen significant forbearance by lenders and flexibility in dealing with struggling people.
For our buying clients we are excited and will help you find the best opportunities for what will prove to be great investments. For our sellers, we continue to be faithful and aggressive in our marketing and services. We all need sales to remedy our wounds and give us a fresh start. For all those affected by job losses and struggling businesses, we trust that a recovering housing market will aid us all and return us to normalcy.
Right now I see the media pouncing on the economy just as savagely as they did for the last 1.5 years on the housing market. It should motivate me to finish that email about “How to Listen to Bad News”. The reason for the delay is not the lack of fire in my gut but the busy-ness of re-inventing our business model and taking care of lots of clients who really want to sell and buy!
We will continue to report on the reality on the ground to give you the local data and a boots on the ground perspective, not the speculation of the talking heads, or the ignorance of many journalists.
Market Action Report for January 2009
