December Market Action: What the Future Holds

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The tea leaves of the coming year must be read by looking over the past 12 months, and even the years before. A striking note is the decrease in inventory over the last 3 years. Inventory simply means that if no other homes were allowed to enter the market place, how long would it take the existing homes, or inventory, to sell? A past truism is that the market is evenly divided between buyers and sellers at 6 months of inventory. A simple comparison showed 2012 with the lowest level at 3.6 months up to 7. 2013 gave us 3 months of inventory below three months with a high of 4.7. 2014 gave us 6 months of inventory below 3 months. Clearly the tide has turned and as Warren Buffet so graphically put it, the time to buy real estate is when the "blood is running in the street", as the lower inventory and improving market have increased our prices.

For the mortal souls among us whose real estate holdings are our primary residences, one does not go flying about buying and selling, trying to time the market. One buys and sells as our lives evolve. For buyers in this market, it requires a great partnership with a realtor who can get you in a property the first day it's on the market, guide you in writing a skilled and compelling offer, and helping to get on the other side of the inspection period without medication.

On the listing side, one must maximize a homes strengths while trying to diminish possible objections ahead of going on the market. While the inventory is very low, buyers are more discriminating than in 2006 when anything went because values were going no where but up. Today's buyer knows that is not so, and poor locations or conditions that are not addressed will end up creating a property to push DOM (days on market) beyond the norm.

We expect steady appreciation, and hopefully on a more sustainable level over the next several years. Portland is proving to be an attractive place to live, as our burgeoning traffic suggests. It does cause one ponder strategically the next big move. Urban and walkable? Or bucolic suburb and a longer commute?

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