Assessing the state of real estate in Canby
Roy Whiding, principal broker and co-owner of Wilsonville-based Certified Realty Company, provided the Herald with a series of PDF files he compiled using the Regional Multiple Listing Service — a service that industry professionals use to gather a detailed snapshot of local and regional markets — comparing the local and regional residential real estate market to the first five months of 2016 and 2017.
The data shows that for the first five months of this year, January 2017 to May 2017, the median sales price of homes in Canby was $344,000 while the average sales price, which factors some homes that sold at an extremely high rate, or a lower rate, was $360,756,
By comparison, during the first five monthsof 2016 — Jan. to May of that year — the median sale price was $320,550 compared to an average sale price of $344,961.
The total number of homes in Canby sold from Jan. 2017 to May 2017 was 159; during the same period in 2016 there were 188 homes sold.
Additionally, a majority of homes with at least three bedrooms — about 115-or-so — sold more in Canby in 2017 than two-bedroom or four-bedroom homes, the data shows.
"The thing that grabbed my attention were the dates during the first half of 2017," Whiding told the Herald. "At the very top, you have an owner's selling price of more than $800,000. Drilling down, that was kind of an aberration, or an outlier. In other words, I'm looking for things that stand out, and what I saw was an owner whose average (for sale) price on that home was more than double other sold items. In reviewing that data, it appears to have been basically an outlier — it's an aberration is the best way to try to explain it."
Potential Canby homeowners getting pushed out
Whiding said there is much to this latest RMLS report he sees that is typical in Canby, but also in the Portland metro-region market, although there is a residential real estate trend that, arguably, is troubling for first-time buyers, or those looking to upgrade into a more spacious property.
"We've reached critical mass, depending on one's view, in this market as three-bedroom houses now predominate the market," Whiding said. "Four bedrooms are the second-most popular with buyers and developers, and two bedrooms are third (in popularity) from an affordability perspective — what we're looking at. People are getting priced out of Canby, so now they are looking at two bedroom houses that are available if they going down to comparison shop in Molalla or Hubbard. Buyers from Canby typically are seeing they can't afford to live in Canby."
Whiding said that for instance he just completed a sale from Canby residents who ended up buying a home in Aurora. "Canby is a great place to love but people are being pushed to the margins," he said.
Housing inventory, or the amount of time a listing stays on the market before it is sold, also has decreased to about six weeks compared to "normal market conditions" where houses remain on the market for anywhere from three to six months on average, and there's largely been a similar, sub-home-supply inventory average since about February 2015, Whiding said.
He also added that while there are many manufactured homes and town homes on both the rental and home-buying markets but people tend to avoid such properties.
"Why pay a lot for something that's not dissimilar to an apartment they're already living in just to jump into condo or a manufactured home," he said. "The cost is lower but people are willing to go to another town to (purchase) a single-family, detached home where they can get a picket fence and that sort of thing."
A mortgage broker's perspective
Canby Mayor Brian Hodson recently began a new job as mortgage advisor and loan consultant for Tustin, Calif.-based New American Funding. He said that, as many Canby residents are aware, there is a tremendous amount of single-family- and multi-family-home construction occurring throughout the city. For instance, there is a 105-lot subdivision already under construction near the corner of SE 13th Avenue and S. Sequoia Parkway, as well as several others in the planning stages, city documents show.
Each project spent months, and in some cases, such as the plight of local landowner Ralph Netter and Canby-based developers Scott Investments, Inc., several years before their proposed development received approval after the project moved through the Canby Planning Commission and public hearing process.
"Single-family homes are being built as higher-end homes that are in the $400,000 to $500,000 range," Hodson said. "There are a couple of drivers to what is pushing the prices of homes up."
The first one, Hodson said, is "statistically speaking," there are anywhere from 300-os-so people moving into the Portland-metro every day, said Hodson, referring to Portland State University's "America on the Move" study.
A lot of those people may come here to the Portland metro area, and that is pushing demand for housing up, he said. He said another regional and local issue is, again, the lack of inventory on the housing market.
"The housing crisis, at the height of The Great Recession, and tradesmen that typically support builders, or general contractors, got out of the construction business altogether," Hodson said. "For a couple of years, 2014 or 2015 — it might have been even earlier than that — Canby had just one or two housing starts each year. Because there were no homes being built there was no demand. That put housing starts behind and now that demand is back, housing starts are trying to catch up."
The third piece, both Whiding and Hodson agree, is that the driving prices of houses really center on the land it occupies.
"It's the free market at its best," Hodson said. "You look at Oregon and it has strict land-use laws, and there's a lot of building going on. Formerly — not too far long ago, relatively speaking, for many people to remember — you could buy a new home at $75,000 or $80,000 to $150,000. That's just not the price anymore, although every now and then if you pay attention you'll find something attractive in that range here in Canby, but you have to stay vigilant."
Bidding wars continue
Whiding said he continues to see bidding wars on homes in Canby, and elsewhere, especially when a homebuyer is dead-set on living in a particular town, area or region.
"A lot of sellers are reading the same articles that we are that say if they wait someone else will come along and offer more than the advertised sale price — sometimes much more," Whiding said. "Rather than simply finding something else in the market, or going somewhere else to find something closer to what they want — this typically occurs with first- and second-time home buyers, they'll often outbid their competition. Those buying for the third or fourth time typically are more sophisticated and do their due diligence — that type of thing."
Whiding said another piece of advice he would give first-time home buyers is to cast as wide a net as possible. "Make sure you understand hyper-local markets if your heart is set on a particular area or neighborhood," he said.
Tips for first-time home buyers, or those who feel they need a refresher course, can read a NerdWallet article online by visiting www.nerdwallet.com/blog/mortgages/25-tips-for-first-time-home-buyers/.
To view Portland State University's America on the Move study go online to www.americamoves.org/.
(Reporter's Note: The PSU study found that from 2012 to 2104 about 300 people moved to the Portland metro region and 234 moved out for a net gain of 66 migrants each day.)