There is good news and bad news for the southern Oregon housing market. First, the good news: Sales volume and prices are up slightly to moderately and days-on-market and number-of-homes for sale are down. All this bodes well for a continuing recovery. Business was fairly brisk for home sales in Grants Pass and the Southern Oregon real estate market in general, and the months of March and April were very good as buyers scrambled to take advantage of the expiration of the home buyers tax credit that ended on April 30th. We had until June 30th to close those contracts and the last week of June we were very busy with closings. The house and senate both passed an extension of time to complete closings for those sales that were hung up and couldn’t meet the June 30th deadline. President Obama is expected to sign it. That’s good because I had a number of sales that were supposed to meet that deadline and couldn’t.

Speaking of short sales, our local Southern Oregon Real Estate market is still somewhat dominated by short sales and foreclosures, and that is why our average sales price is still way below replacement cost on most homes. According to the Grants Pass MLS, a quick snap shot taken of today’s market shows that the market share for distressed sales in our area comprises less than 22% of the total listings and yet they make up almost 44% of the total sales for the month that ended June 30th. To have over 20% of our inventory be distressed sales and over 40% of closed sales be for distressed properties means only one thing: distressed sales dictate the market price and the price direction. Unfortunately, there is no way around this anomaly at this time. What’s even worse is that while there were over 105 short sale listings, only 4 short sales actually closed. I call it the short sale debacle. Short sale sellers have no stake in the outcome of the sales price so they typically list there homes below a fair market price and then settle for even less once an offer is negotiated, thus establishing a new low that is below a fair market price. And then to make matters worse, with less than a 4% chance of success, these short sales become the benchmark for the rest of market pricing.

The bank-owned portion of the market, known as REO’s which stands for Real Estate Owned, remains strong with good asking-to-selling price ratios and short market times, but even REO’s must use distressed sales as comparables, and thus short sale pricing is having an impact there as well. In my opinion, they should either do away with short sales or simplify the process. And even simplified, the impact on normal sellers is still huge. Homes are selling for slightly higher prices than last year at this time, and activity for homes priced above the first-time home buyer sales range is still very slow. Most sales are still at or below the $200,000 mark which is definitely a resistance level. I predict the upper tier pricing to start moving this summer as the effect of 4.5% interest rates impacts buyer purchasing power in a positive direction.

On a national note, the May pending home sales index for the U.S. showed a 30% drop after the expiration of the tax credit deadline and we felt that percentage drop here in Southern Oregon as well. The good news is that sales seem to have picked up for June and we should turn the corner this year. Armed with this information, if you have a home for sale you have two choices: 1. You can hold your position at your current price and risk being “Shop Worn” or you can adjust your price by 3-5% and try and get your home sold. And when you do sell, you can then take advantage of the great pricing on the buyer side of the market with all the leverage.

And above all, don’t give up hope. Things are going to get better.

Michael Masters, broker, RE/Max Ideal Brokers, Inc.

A Socially Conscious Real Estate Consultant

     

More on Topics: Foreclosures, Market, Market Update, Real Estate, Sales, Short, Short Sales, Southern Oregon, Southern Oregon Real Estate

Tags: Foreclosures, Market, Market Update, Real Estate, Sales, Short, Short Sales, Southern Oregon, Southern Oregon Real Estate

This entry was posted on Friday, July 9th, 2010 at 12:32 pm and is filed under the category Grants Pass Real Estate, Green Real Estate, Michael Masters, Real Estate, Southern Oregon Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.