It seems I often find myself in conversations where someone is pointing at the media claiming they are the cause of the real estate slow down. Clearly that is not the case as they are simply reporting information about the various down markets country. The cause of the slow down comes as a natural response to what seemed to be an unbelievable run up in various markets. This run up was enhanced by uncontrolled use of things like sub-prime mortgages, stated income loans, option ARMs and numerous financing instruments which seemed to be available to just about anyone with a desire to purchase a home.
While the cause came partially as a result of what I describe above, we are seeing an effect from the continual reports from the news media that the market is in turmoil. The market in the Portland Oregon area, while frustrating at times, is very healthy when compared to the rest of the country. Latest market statistics show the average sales price in Portland increased 6.3% in 2007 from $322,600 to $342,900, pretty respectable for a housing market in turmoil. It seems however that I continually get questions from people who expect me to respond with just how bad the real estate market is. Today for example while holding a listing of mine in the Tualatin area I had a visitor ask me questions such as: ” How many people have been thru your Open House today?” and ” what is your view of the down market?” This persons motivation for asking these questions was she was preparing to put her own home on the market and just knew this is the wrong time to be doing it. The bottom line, if your home shows well and is priced right, it will sell. This however may not be the case in Las Vegas Nevada and Naples Florida. This visitor to my Open House had a jaded view of real estate, caused by watching the national news at night.
Just how bad is the US housing market? Here are a few data points we don’t tend to see on the 6 o’clock news:
Existing Home Sales (# homes sold in US, Source: NAR)
1998 – 4.2M
2000 – 4.6M
2004 – 4.7M
2005 – 7.1M
2006 – 6.48M
2007 – 5.66M
2008 – 5.7M (forecast)
Hardly numbers associated with a market where “nothing is selling”. Now don’t get me wrong, my phone does not ring like it use to. November and December of 2007 were also uncomfortably slow for me, but here in early January, this market is showing signs of life.
