Max's Blog

New Ventures

Max Sinclair (Prudential NW Properties) — Tue, 22 Jul 2008 09:57:49 -0500

I want to express my sincere thanks to all the readers who've been following my real estate blogs and one of the most frequented web sites in the Portland area. As of April 2008, I've left the real estate industry to pursue a new venture in chocolate. My wife and I had created a highly successful dessert and cafe business 15 years ago. And our passion for sweets never died. This time around, we're focusing on chocolate. We'll be creating a decadent fudge caramel that's englobed in dark chocolate. So it's all ooey-gooey inside with all sorts of infused flavors and rich dark chocolate outside. Watch for us in 2009.

Thank you all again.

Portland 2007 Real Estate Market Didn't Suck

Max Sinclair (Prudential NW Properties) — Mon, 28 Jan 2008 18:17:36 -0600

Well, the December 2007 real estate data for Portland, Oregon is out. It didn't suck! Appreciation for the year based on median sale price went up another 7.2%. Comparing December 06 and same month 07, it went up 8.3%.

When the most part of the country is experiencing negative growth, Portland seems to be sustaining an ultra soft landing. This is despite an alarmingly high inventory of 8.5 months, pending and closed sales down almost 30% in December 2007.

So...what exactly is going on? Is Portland immune to the general downward trend in real estate? I believe the answer is definitely not. But I do believe that because we've never had those ridiculously high appreciation rate in excess of 35% in the booming years, that made our real estate prices stay relatively realistic as compared to the other high growth markets. And because we didn't have those outrageous appreciation rate, many opportunistic investors had stayed away from our market the last few years. It didn't give them the high return they seek. Stability means little to investors. So we don't have a very high foreclosure rate either as a result. After all, Portland remains the most affordable large city in the West Coast. So we have some buffer, so to speak.

Nevertheless, given the high inventory, Portland is unequivocally in a buyer's market. As interest rates come down a bit, I believe that buyers can pick up some good bargains in the next 6 to 8 months or until the market turns around. Now, that's great news.

It's Official: Portland Has Turned into Buyer's Market

Max Sinclair (Prudential NW Properties) — Sat, 20 Oct 2007 15:42:07 -0500

After months of sustaining a higher growth rate than any other city in the country, the Portland real estate market has finally cooled down substantially. It's official: the Portland market is a buyer's market in full effect.

When inventory hit 6 months at the end of summer 2007, most experienced real estate professionals knew that things will get worse during the slower winter months. The unusually heavy rain that we've been getting in September and almost all of October this year didn't help the market one bit. Buyers are getting cautious and taking a sit and wait attitude. During the first half of 2007, sellers were unwilling to budge on price, insisting on the higher amount. This forced the appreciation rate to be somewhat higher than the real growth. We witnessed a rapid change in the marketplace in August when a good number of buyers simply gave up on buying altogether. This forced the sellers to take lower prices. Hence, the growth rate slowed down from double digit to just shy of 8% in September 2007.

The next few months will be interesting. Our current inventory piled up to be over 8 months worth; more buyers are reluctant to move during the winter months (with the exception of corporate transfers). If the number of listings start to slow down correspondingly, then situation will be manageable. Otherwise, we'll see a market that turn into a situation worse than 2000 where we had 10 months of inventory.

I personally welcome this cool down. It's not a crash, just a correction that put buyers and sellers back on an even keel.

Portland Real Estate - First Half of 2007

Max Sinclair (Prudential NW Properties) — Thu, 09 Aug 2007 20:24:10 -0500

The first 7 months of 2007 have gone by quickly. Interest rates are on the rise. You'll hear from all the sellers today that it's getting harder to sell at the price they want. Two years ago, a 3200 SF home in Beaverton with an unobstructed mountain view, priced just under $600K, would have been sold within a day or two. Today, there're over 60 homes in Beaverton in that price range - all sitting and waiting. Looks like real estate has gone back to "normal".

The Portland market has in no way 'crashed', dare I even use that word. It is adjusting itself for a soft landing. Sellers can no longer priced homes based on the appreciation rate that we saw in the last couple of years. We've reached somewhat of a threshold. What was a 17% last year should be adjusted to 10% for this year. Our outlook is still relatively strong. There're buyers out there. It's just that they now have more options and more in a power position to bargain. Gone are the days when there's a large number of speculators and "flippers". Since they can no longer make a decent profit out of buying and selling homes within a short period of time, some of them have retreated and some have accepted a lower margin.

Though we're no longer seeing double digit growth across the Metro area, high rate growth is still there buried in the neighborhoods ready for gentrification. Due to the urban growth boundary, inner city real estate prices will almost always stay relatively stable. It's kind of like living on an island. When there's no other way to expand, prices soar.

The outlook for 2007, in my opinion, is still strong relative to the rest of the nation. There will still be decent growth between 8% and 12% depending on the area within Portland.

1st Quarter 2007

Max Sinclair (Prudential NW Properties) — Tue, 15 May 2007 18:27:47 -0500

Though there had been a lot of talk about a market slow down at the beginning of the year, it turns out that it was just mostly media's huff and puff. The Portland real estate market hit an average 12% increase over last year.

Having said that, I do want to offer a word of caution, this increase came predominantly from properties of below $600,000. Those above this price point did show a sign of slowing. In Lake Oswego, for instance, where a lot of premier properties are, you'll find that homes in the hottest neighborhood do sit for a longer period of time than last year...about 30 days longer to be more precise. Condo market is also showing some signs of weakness where there's a trend of over supply, particularly in the suburbs like Beaverton.

Like any other investments, real estate is cyclical. The Portland market is still stellar in the first quarter of 2007 by any standard (compared with national growth of 2.9%). However, a slow down of the market is inevitable. We're just hoping for a soft landing. Is the market going to crash? I doubt it, from what we've seen so far of the year. There will be growth, just not the same level of what we've seen in the last couple of years. It's a good thing.

Portland Real Estate Outlook for 2007

Max Sinclair (Prudential NW Properties) — Fri, 26 Jan 2007 11:30:09 -0600

Well, the verdict is out. Though 2006 is not as spectacular as the previous few years, the Portland real estate market still finished with a 14% overall appreciation. In some areas like Milwaukie and parts of SE Portland, the growth rate is as high as 20%.

The last quarter of 2006 was indeed somewhat slower than the other 3 quarters. The market was bogged down by the news of Intel layoff and the softening of the Californian market. As a result, a lot of buyers were holding back their purchases and listings were sitting on the market longer than expected. When listings sit, sellers panicked and started to unload at lower prices. This then caused prices to drop. Unlike the Californian market, our market price in Portland dropped only slightly creating a soft landing.

In December 2006, our inventory is becoming tighter again. There were fewer listings available and buyers aplenty. As we enter 2007, we'll likely see a market somewhat the same as 2006 - strong and stable. The market appreciation projection is likely to hover around 10%.

Portland Market Condition 2006

Max Sinclair (Prudential NW Properties) — Thu, 27 Jul 2006 18:50:20 -0500

There's been many horror stories all over the place regarding the state of our real estate market. Is it really cooling down? Has the bubble burst? You'll hear a different versions of answers. Well, here's what I think - giving it to you straight. You can also find more detailed information about the Portland real estate market (e.g. appreciation rate table) at http://www.MaxwellSinclair.com.

Yes, the Portland market, like many other real estate markets across the US, has cooled off somewhat. This is particularly true in the upscaled housing sector. Any homes with a price tag of $650,000 and above definitely sits on the market a little longer. Some homes in this sector could take up to 3 to 4 months to move. This is sort of "back to normal" of what our market was like 5 years ago.

The market of $200K to $450K is still vibrant and kicking @#$. Many homes are still seeing multiple offers. However, there's no doubt that buyers are pickier. They want to see homes that have been remodelled, with nice and new counter tops, cabinets, tiles, etc.. Buyers have been in a losing position for the last few years subject to an arrogant seller's market. The table is starting turn. Not all the way, but it's getting there.

So in short, the rumors are both right and wrong. The cooling off is in the upper segment...big time. We still expect a good year in real estate in Portland.