Housing Market in Portland: Selling

[cdelena]

I have been pleased with the performance of realtors in three of the four houses I have sold. In fact two of the individuals put out more effort than I expected in the sale and made the deals happen. On the other hand I have always been very disappointed in the cost/performance or realtors when I was buying… I did all the work but I had to have them to see properties and close the deal… 3% wasted.

As far as prices it seems that they are off 7 to 15% in this area over the past year or two which is better than many parts of the country. Do make sure you screen buyers before accepting a deal as financing is tougher than in the past... I had three deals in a row fail in recent years trying to sell which delayed the sale and was costly to me.

[scone]

The local RMLS Market Action report has been published and the results are available in several of the prominent local real estate blogs. The numbers are extremely grim, IMO, and there is a growing consensus that it will get worse in 2009. The PMI report predicts another 10% (or so) over the 10% drop we have already had. The NYT published an interesting graphic from the Case-Shiller people that shows the Oregon drop is time-delayed relative to the rest of the country by about a year. That means we haven't dropped as far as many other regions, but only because we are behind the curve, not because we are protected by some superior advantages. If that's true, we could be looking at a total drop of 20%, perhaps more, from the peak of the bubble.

IMO, there is a severe slowdown in buying, partly because the credit crunch is preventing "chain reaction" sales and slowing down the net in-migration that has helped drive Oregon real estate so high. Combine that with a lot of foreclosures, job loss, fear of job loss, and several rather spectacular builder bankruptcies, such as Renaissance and Tony Marnella, and you have all the ingredients for a capitulation selling season this spring and summer.

I'm very sorry to say all of this, as I am a homeowner and was hoping to sell and move myself. But I don't think the reality can or should be sugar coated. The current situation is the worst I have ever seen in my life, and I'm not young. YMMV, of course, and miracles do happen, but proceed with extreme caution. Go read Crazyma's threads over at the real estate forum. It's a sobering, scary series of threads.

[kimhamblin]

Originally Posted by BLAZER PROPHET

The reason for realtor angst is that realtors played their part in the housing collapse with dishonest tricks. Intentionally overstating the square footage of the house to prospective buyers, over pricing the house value to prostective sellers in order to get their business... No offense to realtors, but frankly it's a cut throat business and I wouldn't take their word on very much these says. Sadly, the seller & buyer have to do a lot of extra due dilligance to ensure the real estate agent isn't ripping them off.

Not that all realtors are dishonest, but the facts are clear that realtors need the same scrutiny as mortgage brokers, contractractors, subs, home inspectors...

I actually liked his post and thought it contained some good stuff.

If it were me selling my house, I'd go FSBO (For Saly By Owner) and offer 2.5% to any agent who brought me a buyer. There are several ways to get the house "listed" and I make more money. Now, that said, I do realize real estate agents do other things I cannot, but at least it's the way I'd start.

So it's clearly a two way street and one has to be very shrewd. That's why I advise people who are buying or selling to retain an attorney.

I agree with you that ethics need to be brought back into real estate. The Code of Ethics for Realtors is quite interesting- the Preamble is my favorite part, almost makes me teary.
[SIZE=1][LEFT]Under all is the land. Upon its wise utilization and widely allocated
ownership depend the survival and growth of free institutions and of our
civilization. R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]® [/SIZE][SIZE=1]should recognize that the interests of the nation
and its citizens require the highest and best use of the land and the
widest distribution of land ownership. They require the creation of
adequate housing, the building of functioning cities, the development
of productive industries and farms, and the preservation of a healthful
environment.
Such interests impose obligations beyond those of ordinary commerce.
They impose grave social responsibility and a patriotic duty to which
R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]® [/SIZE][SIZE=1]should dedicate themselves, and for which they should be
diligent in preparing themselves. R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]®[/SIZE][SIZE=1], therefore, are zealous to
maintain and improve the standards of their calling and share with their[/LEFT]
fellow R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]® [/SIZE][SIZE=1]a common responsibility for its integrity and honor.
[/SIZE]If more agents followed these guidelines, we would all be better off. I wish greed wasn't so influential. I think this down market will weed out some of the lazy and unethical. You absolutely need to be shrewd in who you hire to help you; you wouldn't just hire any 'ol contractor, you want to make sure you can trust them.

I don't think it hurts too much to try it FSBO first, just make sure you price it right and I would offe a 3%. Many agents don't like working with homeowners vs. realtors because they end up doing twice the amount of work for half the pay (paperwork for both sides) and homeowners can be very emotional if they deal with a buyer directly. If you don't have much time, then just list it with a good agent.

If you sold a house during the boom, you certainly aren't complaining about realtors overpricing your home! Market conditions come and go, buyers who bought above their means are to blame too. Personally, I think mortgage brokers were the most to blame because there were some who were simply dishonest and extrememly greedy- too many kickbacks. The honest ones are still going to be in business.

The checks and balances were out of whack too. Usually, a house must appraise for the stated value and a mortgage lender uses that info to be able to lend. Appraisors measure and document square footage and assess value more thoroughly than a realtor can. In the next couple of months, the national guidelines for appraisors are getting more stringent and will be less likely to be abused. In fact, I think they already have- more seem to be doing their homework and searching thoroughly for comps. Unfortunately, this can be detrimental if you're in a small town with lots of foreclosures as comps!

[BLAZER PROPHET]

Originally Posted by kimhamblin

I agree with you that ethics need to be brought back into real estate. The Code of Ethics for Realtors is quite interesting- the Preamble is my favorite part, almost makes me teary.
[SIZE=1][LEFT]Under all is the land. Upon its wise utilization and widely allocated[/SIZE]
[SIZE=1]ownership depend the survival and growth of free institutions and of our[/SIZE]
[SIZE=1]civilization. R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]® [/SIZE][SIZE=1]should recognize that the interests of the nation[/SIZE]
[SIZE=1]and its citizens require the highest and best use of the land and the[/SIZE]
[SIZE=1]widest distribution of land ownership. They require the creation of[/SIZE]
[SIZE=1]adequate housing, the building of functioning cities, the development[/SIZE]
[SIZE=1]of productive industries and farms, and the preservation of a healthful[/SIZE]
[SIZE=1]environment.[/SIZE]
[SIZE=1]Such interests impose obligations beyond those of ordinary commerce.[/SIZE]
[SIZE=1]They impose grave social responsibility and a patriotic duty to which[/SIZE]
[SIZE=1]R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]® [/SIZE][SIZE=1]should dedicate themselves, and for which they should be[/SIZE]
[SIZE=1]diligent in preparing themselves. R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]®[/SIZE][SIZE=1], therefore, are zealous to[/SIZE]
[SIZE=1]maintain and improve the standards of their calling and share with their[/LEFT][/SIZE]
[SIZE=1]fellow R[/SIZE][SIZE=1]EALTORS[/SIZE][SIZE=1]® [/SIZE][SIZE=1]a common responsibility for its integrity and honor.[/SIZE]
[SIZE=1][/SIZE]If more agents followed these guidelines, we would all be better off. I wish greed wasn't so influential. I think this down market will weed out some of the lazy and unethical. You absolutely need to be shrewd in who you hire to help you; you wouldn't just hire any 'ol contractor, you want to make sure you can trust them.

I don't think it hurts too much to try it FSBO first, just make sure you price it right and I would offe a 3%. Many agents don't like working with homeowners vs. realtors because they end up doing twice the amount of work for half the pay (paperwork for both sides) and homeowners can be very emotional if they deal with a buyer directly. If you don't have much time, then just list it with a good agent.

If you sold a house during the boom, you certainly aren't complaining about realtors overpricing your home! Market conditions come and go, buyers who bought above their means are to blame too. Personally, I think mortgage brokers were the most to blame because there were some who were simply dishonest and extrememly greedy- too many kickbacks. The honest ones are still going to be in business.

The checks and balances were out of whack too. Usually, a house must appraise for the stated value and a mortgage lender uses that info to be able to lend. Appraisors measure and document square footage and assess value more thoroughly than a realtor can. In the next couple of months, the national guidelines for appraisors are getting more stringent and will be less likely to be abused. In fact, I think they already have- more seem to be doing their homework and searching thoroughly for comps. Unfortunately, this can be detrimental if you're in a small town with lots of foreclosures as comps!

Nice post.

I know this is off topic, but it really sucks selling a house right now. I also agree that housing prices in the Portland area still have a ways down to go and 10-25% seems reasonable. Houses in similar areas (like Atlanta) are selling for under $100 SF (not all areas, but still some nice gated areas) while Portland is probably in the $180 SF range. Just a personal opinion, but we're still one of the highest priced markets and I think with the phoney loans gone we should drop to the $135-155 SF area (overall).