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Yes, Virginia, homes are selling

Area real estate pros are optimistic about sales at many price points


As we get closer to Christmas, it’s time to finalize that Santa list. Have you thought about adding a new home to the list? It might sound like a pipe dream for many, but there’s increasing optimism in the real estate industry as houses continue to sell in the Portland area and home prices still climb, compared with the same period last year.

Is this an indication that we’re getting out of the economic doldrums? It’s hard for anyone to make a prediction with iron-clad accuracy, but area real estate professionals are feeling good that homes locally, thanks in part to low interest rates, are selling in a variety of price ranges.

“In high-demand areas, we’re starting to see prices move up and sellers able to negotiate strong contracts, that are seller-favorable,” said Joelle Lewis, principal broker with RE/MAX Equity Group in Lake Oswego.

Glancing at our area, homes are selling at various price points.  “Anything affordable, or under a half million, is moving quite quickly as the financing terms are very favorable,” Lewis said. “Certainly anything between $250,000 and $300,000 is a real strong price point. In Lake Oswego, anything between $400,000 and $500,000 will sell rapidly.”

Justin Harnish, principal broker with Harnish Properties in Lake Oswego, notices an increase in high-priced homes selling in 2012.

“We’ve had quite a few $3 million-plus sales in 2012 — we didn’t have any in 2011,” Harnish said, adding that the market, not only in Lake Oswego but metrowide, has been very strong in the $1 million to $2 million range. “It’s really encouraging across the board.”

‘Incredibly strong’ sales

Chris Larsson, broker with Coldwell Banker Barbara Sue Seal Properties in Lake Oswego, is encouraged at what he has seen in recent weeks.

“If you go back and look at the last 30 days, and you take a look at sales for market 147 (Lake Oswego-West Linn) and market 148 (Portland in general), across all price points — in the last 30 days, there have been 269 homes sold,” Larsson said. “That’s incredibly strong. . . . I would say probably 80 percent of those sales are going to be under a half-million dollars.”

Larsson pointed out that closings are typically a bit slower in the colder weather months, compared with spring and summer.

While homes are selling in a variety of price ranges, the more affordable homes are helping first-time buyers.

“Throughout the region, affordable neighborhoods are doing quite well as first-time buyers are getting back in the market and they’re not as fearful,” Lewis said, noting that low interests rates help these buyers qualify for homes.

One factor helping the market is the appraisal process, which, according to Mary Jo Avery, principal broker with RE/MAX Equity Group in Lake Oswego, is improving from earlier this year.

“The airplane wings have seemed to level out on that,” said Avery. “It appears that appraisals are coming in, basically, where one needs to be, at least that’s been my experience. I had a little bit of trouble with that at the beginning of the year, but I haven’t had that trouble for probably a good six months.

‘A beautiful transaction’

“You can have a seller and buyer agree on a price and just have a beautiful transaction,” Avery added. “But if it doesn’t appraise out, the transaction unravels. Appraisals are very key.”

Another factor to consider is low inventory. Harnish points to that as a stabilizing factor in an improving real estate market.

“Inventory is down, just over 10 percent, year to year — I’m generalizing over the broader market, but this is a good sign,” Harnish said. “When inventory goes down, you start to gain stability, because when you have high inventory, even if demand remains constant, it’s going to mean longer days on the market and, ultimately, lower prices.”

Depending on whether you find an affordable home or choose a high-end house, financing remains imperative. Harnish said the process is loosening up.

“You still walk in and take your shirt off for a lender. They examine everything you’ve got,” Harnish said. “You have to be prepared to come to the table with everything. They go retro to look at the last two years of your financial life. They want to know that you’re a solid buyer.”

Just where are the hot areas for home buyers in our region? “Close-in Northeast Portland, close to the city, that’s just cooking. Sellwood, these little walk-to neighborhoods (close to the city or services),” Harnish said, noting that downtown Lake Oswego is attractive because of it’s “walkability.” People are seeking, Harnish said, a community feeling.

People don’t want to drive

Home buyers also want to stay close to work. According to Larsson, location, location and location are the three basic rules of real estate. “People don’t necessarily want to drive an hour or 45 minutes to get to work.”

While there’s plenty of optimism to spread around, Larsson expects interest rates rise, pointing out that now is a great time to take the plunge and buy a home.

“If you’re in a position to make that purchase happen, my recommendation to my buyers is, don’t wait. Don’t wait until next spring. Don’t wait ’til next fall,” Larsson said. “Prices are going to continue to go up, and with the national debt (situation) that’s going on, interest rates will have to go up.

“Inflation is probably coming, to some extent, which means your dollars will buy you less...If you find something that you like,” Larsson added, “and it’s a fair deal, and you want to bring your family there, and you want to raise them — I think the time is now, not in 12 months.”

When it comes to the housing market, Avery sees most people as positive.

“I sense that everybody is relieved with the election being over, because there was definitely a pause going on prior to that,” Avery said.

Lewis, glancing to 2013, hopes even better days are ahead. “I’m optimistic that next year is going to be the best year we’ve had in five years. That requires rates to remain low and our economy to stabilize a bit more in this post-election cycle. So, it should be good.”