Wait for it... Wait for it... Too late

By the time you know the market had turned the corner, you are too late. Because it already happened.

The article below is about what's happening across some cities in the US. And its happening in many parts of Portland right now too.

As reported in the Bloomberg/Businessweek article today 3/27/12.  see full article

Bidding wars, absent from most parts of the U.S. residential market since its peak in 2006, are erupting from Seattle and Silicon Valley to Miami and Washington, D.C. The inventory of homes hovers close to a six-year low, while an increase in jobs and record affordability are tempting more buyers. The number of contracts to buy previously owned homes jumped 14 percent in February from a year earlier, the National Association of Realtors reported yesterday.

Here's an interesting portion of the article talking about Palo Alto and the Facebook millionare hype.  By the way, I've seen this Realtor speak at a conference 2 years ago, and he's not what you'd expect from a stuffy luxury home Realtor.  But he is exactly who you would expect Mark Zuckerberg to have as his agent.

Competition Increases

Agents encountered multiple bids on about half of offers in Seattle, Boston, Washington, D.C. and Oregon this year through March 15, said Tim Ellis, real estate analyst for online brokerage Redfin. In the San Francisco area, Redfin agents reported that three of four offers involved competition, he said.

One home in Palo Alto, California, received 38 offers and sold for $1.65 million, or $452,000 more than its asking price, said Ken DeLeon, a real estate broker in Silicon Valley since 2002. Another client paid $2.56 million for a home in 2007 and is listing it for $3 million, with the expectation of receiving higher offers, he said. The seller wants to use the proceeds to buy a home in Saratoga, about 18 miles southeast of Palo Alto, where the market hasn’t heated up yet, DeLeon said.

Prices are hitting all-time highs, above Palo Alto’s 2007 peak levels, in the 94301 and 94306 ZIP codes, as buyers rush to purchase in advance of an expected flood of newly minted millionaires when Facebook Inc.

February 2012 Real Estate Report

The latest real estate market report for Portland has come out and this is exciting enough to have to share.  Here are the key points:

• Sales continue to keep rising.  This means more buyers are entering the market place.  Also important to note, that if buyers enter the market and buy, that means lenders and banks are actually making more  loans.  Which was part of the sluggish past 5 years, they were issuing more declines than before.  It takes 1 year to recover from bad credit.  It takes 2-3 years to recover from a short sale.  It takes 4-7 years to recover from foreclosure. 

Could we now be seeing buyers re-enter the home buying market that perhaps were some of the first casulties of the recession?

• Less listings again this month.  As this supply and demand ratio continues it will put pressure on prices.  It didn't affect prices much for 2011.  Mostly because the trending didn't begin until 4th quarter.  I think what we are also seeing is short sales being approved.  And the short sales are being approved at lower prices, and as the bank owned enter the market they put their value based on what the short sales sell for.  Short sales take 3 months to a year to approve.  So many of them have had their prices set more than 3 months ago.  It's hard to see movement in current prices when we have stale listings such as short sales firmly holding on to yesterday's prices

• Lastly, well, prices have decided to bump up after all the supply and demand talk. The average sales price in Feb 2012 was 4.3% higher than Feb 2011. The year to date average sales price is up 1.8% over the same time frame 2011.  And, finally, a month to month increase from Jan 2012 to Feb 2012 of 2.4%