After the usual slow down in property viewings for the last month or so, potential buyers are back out in huge numbers here in Portland. RMLS reports that home views increased almost 20% last week in the Portland metro area. This home buying frenzy is likely to continue until the Thanksgiving holidays if this year is like the last few years. Between Thanksgiving and and the end of the year holidays, the number of “I’m not in a hurry” home viewers tends to decline, while serious buyers continue to seriously search for that perfect home.
To make matters even more urgent for prospective home buyers, it is anticipated that mortgage rates will begin to rise beginning in October 2017 as the Feds begin selling off their $4.6 trillion inventory of Mortgage Backed Securities and Treasury bonds. The rates are expected to increase monthly through 2018 because the number of bonds being released by the Feds will increase monthly for at least a year. Rising interest rates will price many buyers out of the market as prices continue to rise.
Unfortunately the low inventory numbers of homes for sale continues to weigh on home prices in Portland. The median sales price for homes sold in August climbed to $385,000, up 9.1% from a year earlier but $10,000 less than the median price in July.
Average home prices climbed above $420,000 in July for the first time in Portland’s recorded history, and with an ever growing population, this trend is likely to continue. Prices are rising faster in the Pacific NW than in any other area in the country. Portland ranks 2nd only behind Seattle for fastest rising prices.
All these statistics are a bit slanted though because the truth is that home prices have stabilized in homes valued at $500,000 and up, while homes valued below $500,000 are really rising faster than 9.1% year over year. There are so many buyers almost desperate to lock in a home purchase priced under $300,000 that unfortunately we have seen the return of the “lipstick on a pig” type home flippers. These flippers will purchase those properties that are in really poor condition; slap some paint on the interior and exterior, perhaps update the kitchen with new but inexpensive cabinets and appliances and raise the price to at or just below $300,000 to cash in on huge profits. However, a lot of essential repairs are left undone.
Since the under $300,000 price range is where most buyers are becoming more disheartened and a little bit desperate, it is critical to do your own limited home inspection to make sure that you are not risking your limited funds on a home that has too many problems to even qualify for financing. Issues such as dry rot, appliances and furnaces, water heaters etc. that are unsafe, roofs that cannot be certifiable for at least 2-3 years life, windows throughout the house that do not open or lock, and so much more can often be detected by the prospective home buyer.
While your earnest money deposit should not be at risk during the early stages of the purchase IF you purchased through a realtor with all the buyer protections written into the contract, you could lose valuable time searching for a better investment. Please read Tips to avoid buying a money pit to help you do your own quick inspection of any home you are considering making an offer on.
Finally, buyers should always be working with their own realtor, rather than the listing agent to make sure that their realtor is working for them, NOT the seller.
Good luck out there.