SERAINA'S REAL ESTATE MARKET OUTLOOK

Since our last report in December 2008 it is evident that the market report has not changed significantly for January 2009. While Pending, and Sold activity is still down in comparison to the same month last year, we were encouraged to see that the inventory has decreased from a staggering record high in November from 15 months of inventory to 14.1 at the end of December. For all those in the market to purchase, note that the average sale price has decreased in the Metro-Portland area from $342,900 to $330,300. 

               To summarize the 2008 report; when comparing the market activity to 2007, new listings decreased 8.7% while Pending sales dropped 30.9% and closed sales were reduced to 32.1%. It is evident that lender guidelines and tighter regulations in the banking world are affecting these statistics. It certainly isn't the seller's market that it used to be because fewer buyers are truly qualified and approved to purchase. Debt to income ratios required by the lenders has tightened and many of the loan options available in 2005 and 2006 are a thing of the past.  That is why I believe it is absolutely crucial that seller's consult with a Realtor for competent representation when selling their home. Sure, anyone can list their home for sale and advertise their property in the local newspaper, but sellers are not going to waste their time with unqualified buyers. Your Realtor will act as your advocate by screening out the chaff for buyers who truly want your home. It is more important than ever to have your home nice, clean, and well staged for their 20 minute walk through. Anyone who has sold a home knows how frustrating it can be to be continually leaving your home for showings. If you have to be inconvenienced, wouldn't you want it to be as a result of a real borrower coming to your home or just a "Looky Lou?"

               If you have followed the trend of our earlier reports it is obvious that very specific areas within the Metro/Portland area have continued to outperform other markets.  Not surprisingly, West Portland continues to be our most consistent and best performing market area with appreciation at a positive 1.9%, average sale price of $478,500 and 2,258 closed sales at the end of December 2008. North Portland moved from the third position to second replacing Lake Oswego at -0.1% appreciation, average sale price of $266,100 and 971 closed sales ending in December 2008. Our third best performer is Northeast Portland which bumped Lake Oswego completely with appreciation at -0.4%, average sale price of $320,000 and year to date closed sales at 1,972 homes in 2008.

               Dave and I are excited to announce that things are moving in the more positive direction for buyers and sellers. We have noticed that while the inventory is down from the previous month, we are now seeing more "qualified buyers" initiating the loan, and property search process this month more than any other previous month this year. What is happening for many of our investors is that they have been waiting on the sidelines for the perfect time to purchase. Home prices are down and I expect that we will continue to see further declines in prices in some areas. However, be careful of decision procrastination. We have counseled these past six months that the moment the market turns direction we will experience an explosion of sales and appreciation. There are a huge amount of homes to be purchased and eventually prices will reach a critical level and the direction will turn. When it does, the procrastinators will have lost precious time and equity.