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Straight Talk from Albany, Oregon

By
Real Estate Agent with RE/MAX Integrity

The Real Estate Market...what the heck is going on??!  It seems I address this question daily. With the media spinning things as they will, its hard to have any confidence in any facet of our economy. Doom and gloom consistently covers the headlines.  So what is really going on? 

The big picture: Wall Street.  It affects each and every one of us whether we have money invested in the stock market or not.  Wall Street is very complex and, quite frankly, there are people who are paid quite handsomely to understand, analyze and make sense of it for the rest of us.  I am not about to attempt their job in this post.  So lets bring this down to a level much more intimate to us: Willamette Valley, Oregon.  

 Are homes selling?  I'd be lying to you if I painted the sky blue, saying that everything is fine and that homes are selling like hotcakes.  ...but yes...they are still selling.  The number of homes sold in Linn County has decreased from an average of about 130 units per month in 2007 to about 88 units per month in 2008 (YTD as of September).  Benton County has decreased from just over 71 units per month in 2007 to about 63 ½ units per month in 2008 (YTD as of September).  No matter what happens in our economy there will always be the need for homes to be bought and sold.  Its inevitable that circumstances will change.  No doubt you know people who have lost their jobs, relocated to another town/state or have needed a bigger home due to a growing family.  One thing remains constant and that is change.  So I think it's a safe statement to say that homes will always be bought and sold even if it is at a slower pace.

So sellers.... life is a bit difficult right now, but not impossible. If you prepare yourself for the inevitable, your life can be a whole lot less stressful.

1.       Time on the market in Linn County has increased to an average of 146 days on the market, while Benton County is around 133.  In either county, you're looking at over 4 months to sell your home when priced right.

2.      The price of your home has declined from a year ago.  I know you didn't want to hear that, but this is the straight scoop.  Average price per square foot in Linn County is currently 127 per sq. ft. and 160 per sq. ft. in Benton County.  (These numbers vary according to city and size of home.  Bigger homes tend to decrease in price per sq footage.)

 

a.       Average Price Home in Linn County 2007-      $194,920

b.      Average Price Home in Linn County 2008-      $194,066 (YTD)

c.       Average Price Home in Benton County 2007- $306,556

d.      Average Price Home in Benton County 2008- $301,196 (YTD)

 

3.      List to Sale Price ratios have decreased as well.  As long as you have priced your home correctly, you should expect to see an offer of about 94.4% of the list price in Linn County and 94.5% in Benton County. Of course, that also depends on your negotiations.  You could do better or worse depending on the strength of your representation.  =)

Now buyers....having heard all of that, you have to be feeling pretty good about your position.  You can see that you have a lot of leverage but only if you have taken all of the right steps. The inventory is extremely high and prices have slid a bit.  There are deals out there so whether or not to buy right now is not the #1 question on potential buyer's minds.  The most frequently asked question is....Can I actually get a loan for a house right now?  

While it is true that lender's have tightened up their requirements and many others have gone under at an alarming rate this year, loans are still available and par interest rates have been hovering around 6%.   As a buyer, the best thing you can do before beginning a search is to sit down with a lender to discuss what is available for you.  Everybody's circumstances are different so its important for you to get preapproved rather than just prequalified.  Don't get confused because there is a difference.  In very lay terms, a prequalification simply requires that you have a pulse and a job.  When you are preapproved, your credit is checked and your debt-to-income ratios are analyzed.  Since you're the one making the payment, its imperative that you are honest with yourself about the true limit of your comfort level!

Another aspect of a home purchase you should prepare yourself for is the down payment and closing costs.  The days of 100% financing are pretty much over.  There are only a couple of exceptions to that rule. One example is the VA loan for individuals who have or are currently serving in the armed forces.  While there are still some creative things that can be done to finance closing costs into the loan, you need to understand that there aren't too many lenders that will turn you loose with a substantial amount of their cash without having something invested in the game as well.  That is one of the reasons we are faced with the economic turmoil we have right now.  Loans were so easy to obtain that even people who weren't the most creditworthy and faithful in making payments could get into a home.  Thus we ended up with a lot of foreclosures.

So with all of that said, should you try to sell now or wait this out?  This really comes down to your comfort level, but I might throw out a few pros and cons to consider.  Yes, as I mentioned earlier, this is a buyer's market where buyer's are scarce, so you'll probably be waiting for awhile.  You'll need to price your home competitively, regardless of your personal attachment to the home. 

On the upside, once your house has sold, the shoe is on the other foot and you're now a buyer.  If you are comfortable with all of hoops you need to jump through, I might offer you this vantage point: What is the difference whether you sell high and buy high or sell low and buy low?  The advantage to selling now in a more depressed economy is that you may sell your home cheaper than last year, but you may also find that seller in desperation who is offering an even better deal.  So you would be selling low and buying even lower, equaling less net difference!

  So its not all doom and gloom in our market.  It has been affected, but its up to you whether you see it as negative or positive.  And remember one thing when you're watching the news tonight and you hear about how its horrible all over:  Its like looking at a weather map and it doesn't rain everywhere at once!

 

 (Statistics obtained from Willamette Valley Multiple Listing Service:www.wvmls.com/web/statistics.asp)

 www.WeinholdHomes.com

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Margaret Oscilia
Creative Concepts-Home Staging and Contracting, Salem Oregon - Salem, OR
Home Stager, Salem Oregon

Hi Brian!  Sorry I missed this blog when it was posted -- great first blog and welcome to active rain!  Would love to hear what you think about the next few months for this area as well.  (When you post, if you post to groups you will get more exposure and not get missed!) 

Am happy to give you a hand if you need help here on active rain!  Best wishes for a successful 2009!

Jan 01, 2009 11:54 AM