Just two years ago sellers were dealing with quick sale times, multiple offers and fast escalating prices. The market was so hot that some buyers were gladly discarding the use of standard contingencies such as financing and professional inspections, just so they could get to the front line of other purchasers. The past two years have brought a change from those fast times. From the start of Spring 2006 we watched the market gradually shift with the drumbeat of clichés about a “bursting bubble” and “hard landings vs. soft landings.” Ultimately consumers began to believe what they were hearing and a slower marketplace became a self-fulfilling prophecy as buyers stepped away. Clearly, today it has become a buyer’s market.
For most homebuyers, livability is the major factor in their purchase: location, schools, safety, commutes, etc. These motivations don’t change due to the economics of the marketplace. However, what seems to have occurred is that buyers are hesitant to take the plunge, believing that for some reason “this isn’t the right time.”
Buyers, here are a couple concepts to remember:
The condition of the national market does not completely represent the local market. Portland is a unique place, primarily due to its attractive quality of life. Relying on news reports about the national housing market in making decisions locally is like looking at the national weather in making plans for a days’ outing.
Profit on resale is primarily determined by what you pay for the home, not what you sell it at. Two years ago, owners were selling their homes at the top of the market, and those who made the real money were the ones who paid the least when they bought. Keep in mind, a seller usually become buyer – which means that selling at the top of the market only results in buying at the top of the market.
Finally, with more homes to choose from, prices softening, interest rates still at their lowest, and more time to make a rational purchasing decision, what more could a buyer ask for?
* Portland Metropolitan Association of Realtors and Phillip C. Querin, Partner, Davis Wright Tremaine.
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