Sales to List Price in Southern Oregon

Different areas in the country have different ways of negotiating sales prices.

For example, in the Bay Area recently, the listing prices have been artificially low to encourage bidding wars. So List to Sales price can be way over 100%

I have heard of other areas that list the houses high, knowing it isn’t uncommon to take 75% of the list price.

So it is important to know the area and the norms when working on negotiating.  So your expectations are set appropriately.

Our market typically sees all home sales occurring between 95-100% of asking price.

The breakdown for 2017 for houses in Jackson County between $200-400,000 is this:

0-30 days         99.36%        1450 houses sold
31-60 days       98.06%         337  houses sold
61-90 days       97.78%         180  houses sold
91-120 days     97.74%         122  houses sold
120+ days        97.39%          169  houses sold

Note that in that price range, almost 65% of the houses sold in the first 30 days.  So in a competitive price point, one needs to be ready to make an offer quickly. Which might get you thinking about what it looks like on the upper end of the market.  Interestingly enough there is statistically more negotiation rooms in the upper price ranges.  This is how it breaks down for houses priced over $800,000

0-30 days         98.16%         31 houses sold
31-60 days       97.97%          5  houses sold
61-90 days       98.58%          5  houses sold
91-120 days     92.09%          7  houses sold
120+ days
        94.00%         24  houses sold

So think about that.

A house priced at $300,000 that has been on the market for 100 days statistically will sell at $293,000 or $7,000 less than asking price.

A house prices at $1,000,000 that has been on the market for 100 days statistically will sell at $921,000 or $79,000 less than asking price.

And just because I recently ran the numbers, one more set of stats.

Ashland between $300-500,000 sales price.  Or the “affordable” Ashland homes.

0-30 days          99.02%       62 houses sold
31-60 days        98.39%       25 houses sold
61-90 days        98.49%      16 houses sold
91-120 days      99.43%      12 houses sold
120+ days         99.34%       20 houses sold

Down Payment Assistance

Did you know that there are great down payment assistance programs in Southern Oregon?  We have regular fundraisers to help fund the Home Foundation First Time Home buyer Grant Assistance Program.

In 2016 we surpassed $100,000 given to over 100 home buyers, and we still have more money to give. In fact we just raised an additional $30,000.

How do you qualify?

First you need to use a local Realtor (such as myself).

2nd, you need to use a local lender (I’m happy to refer you to one of the good ones who understand the program)

Your household income does not exceed the State of Oregon median income level (this number varies based on family size)

Be a first time home buyer, or have not owned a home in the past 3 years.

If you think this might sound good to you, contact me and we I’ll get you the information to get started.  clientsupport@tenrealtygroup.com

Thought Leader Post

I wish I had more time to write more of these Thought Leader blog posts for other sites. I find them fun to do. But don’t always have time to do them. This article was for a company that provides online continuing education for Realtors® across the country. While I take almost all of my continuing education in person, companies like PDH are a valuable asset to Realtors who prefer to take some or all of their continuing education classes online.

Here is a link to the article I wrote for them.

Winter, When the Serious Shoppers Come Out

While it is true that many home shoppers stop looking during the winter, many shoppers still are active. 

In the Rogue Valley, we usually do not have to deal with snow or slick roads to hamper home shopping.  The biggest issue I usually face in the winter is having enough daylight to show properties to those people who work full time jobs. Starting right about now, by the time it is 6 O’clock, it is hard to see outside. And that will only continue to be a smaller window of time as we approach Winter Solstice. 

Reasons why shopping in the winter is tricky

  • Roads are slick
  • It gets dark early
  • Don’t want to change schools for children mid-yearRed bird house hanging outdoors in winter on tree covered with snow


  • Fewer homes on the market than in the spring
  • Properties are looking their “worst”

Advantages to shopping in the winter

  • Houses look their worst…they only get better from there
  • Sellers may be more motivated
  • Less competition from other buyers
  • Might be more likely to take contingency offer
  • Home inspections more likely to find bad gutters or water in the crawlspace

Expert Interview Series

ica-logo1 (1)

I was recently interviewed by ICA School as part of their Expert Interview program. 

It is crucial in the real estate industry to have good partners with lenders, appraiser, title companies and home inspectors. It was an honor to be interviewed by the ICA, a premiere training center for home inspectors.

Click here to read the interview and let me know what you think!

Cash Is King — Unless it is literally Cash

I really hope this blog post is AWESOME. Because I am re-writing it due to an accidental deletion. It is amazing what accidentally hitting “Command V” instead of “Command C” will do. And believe me, the last post I wrote was pretty darn good. (Good news though is it got me to invest in a new clipboard program that saves multiple clipboards…probably going to end up being a net positive gain in time spent)Cash Is King Pic

The old saying that Cash Is King is generally very true when it comes to real estate. In the case of multiple offers on a property, a seller will frequently take a cash offer over one that requires financing. Even if the one with financing is a higher offer and will net the seller more money in the end. 

The reason is that there are fewer uncertainties when it comes to cash. You don’t have to worry about what an appraiser says, nor do you have to worry about the lender’s underwriter coming up with some final requirement of extra bank statements or pay stubs….etc….that can slow things down. 

This doesn’t mean that a seller will just accept an unreasonable offer because it is cash. Sometimes cash buyers feel that their cash is worth more than it actually is. A seller who has their house listed for $300,000 will not entertain a $200,000 offer just because it is “cash”. 

But that isn’t even the point of this post. Because in most cases Cash Is King. 

The particulars I am referring to is Literal Cash. If someone wants to buy a house and use actual cash or use cash even for the earnest money. That’s when there are going to be issues. Something about wanting to make sure the money has been legally obtained. Banks report transactions over $10,000 to the government. That seems to be a threshold they have set to keep people from money laundering or avoiding paying taxes. 

It gets a little strange now in Oregon where marijuana has been legalized, but banking with the money is hard to do. So while legal, it ends up being a cash business for a lot of people. 

Now I have never had anyone wanting to come in with a briefcase of 100’s wanting to buy a house…but I’ve heard about it. 

Where I have run into complications in the past year is clients who do not believe in the need for the banking system and pay all of their bills with cash. It seems strange and unusual to me, but it happens and seems to be a completely fair way to conduct one’s personal affairs. 

However, the lenders are required to source all of the money a buyer brings in to purchase a house. And with cash or even cashier’s checks they can’t trace the source of the money. Earlier this year I had a transaction that was held up for 2 weeks because of this sourcing issue. So when it came up again, I was prepared and had the knowledge to see the warning sign and make sure that the client used money to make their earnest money deposit that could be sourced. 

This is just one of the many tidbits of knowledge that one only gets from being in the business for a long time as a full time agent. 

MILLENNIALS BUYING HOUSES

 

Wow, I just got the most extensive research I have ever seen on the effect Millennials are predict to have on the housing market.
I could spend a day just digesting all of the info included in this report.
Some of the most interesting facts have to do with Income projections. Wages have been flat, but show an increase in one category. Women ages 25-34 with college degrees. I like that news since I have a child headed into that demographic. It also seems to show that due to the economic crisis they were raised through that they are more risk adverse than the previous generation. So they will be more cautious when they do enter the housing market to not overextend.
90% of young renters say they want to purchase a home.
Millenial Housing

 

I think the report is summed up pretty well in this infographic.

 

I personally am excited to work with the Millennial Generation. I have a few clients I have worked with in the past year in that demographic, and they are a pleasure to work with.
In many ways I think the Great Recession was a benefit to this upcoming generation, and that the lessons they learned by being young during it will help them be successful going forward.
And the technology that they grew up with I believe helps with the real estate process, and I am looking forward to many years of working with the younger buyers and sellers.

State of the Ashland Market

After a number of years of downturn, it is refreshing to see a rebound in the real estate market in Ashland and Jackson County. The hard economic times that we all weathered through that started with the crash in the real estate market that was caused in large part by the lending practices and gambles made by investment firms on Wall Street seem to have run their course…this time.

We all hopefully learned from this cautionary tale, although when greed abounds I’m sure we are destined to make the same mistake again. But as individuals, we can all make decisions that are based on our personal needs and goals and stay within the bounds of safe real estate purchasing.

I anticipate based on my own research, and that of the head economists from both the Realtor and Home Building associations, that we have started a recovery that is expected to last many years. While I am personally hoping that the frenzy doesn’t lead again to another bubble and responsible purchasing and lending are the rule, we all need to be cautious and not overextend with the same misconception that real estate prices “NEVER” go down.

So where does that leave us today? The market here has definitely picked up steam and sales have been very strong. I said for years to people who asked me if we had hit the bottom of the market yet that the only way we would know would be 6 months to a year after it happened. And according to the numbers, I would say the bottom occurred back in the summer of 2012, although it could be argued easily that it was the summer of 2011.

Now that we have a full year of a strengthening market under are belts, it is a good time to look at what the numbers are.

In the summer of 2012, 49% of houses sold in Jackson County were distress sales, meaning either a foreclosure or a short sale.  In 2013 that number dropped to only 19%. While still significant, it is a huge one year improvement.

 

In the summer of 2011, the median sales price for a home in Ashland was $275,000. In 2012 the median sales price was $292,000. In 2013 that price jumped to $322,000. That is a 15% increase over 2 years. While I would be hesitant to call it appreciation, it does show the strengthening of the market due in large part to the reduction of distressed sales whose competition drag the market price down of all homes.

 

In 2011 there were 1650 houses for sale in Jackson County, and 300 houses for sale in Ashland. 2012 saw those numbers drop to 1210 and 238 respectively. Those numbers in 2013 held fairly stable over the year at 1181 and 230. This shows what looks like some stability in the supply side of the market.

 

The number of sales in May-July of 2012 in Ashland was 83, whereas the same period in 2011 was 62. That number increased to 100 sales in 2013. That is a 40% increase in the volume of sales in a 2 year period.

 

Now the final number I will throw at you is the absorption rate, which is just a fancy way to say supply vs. demand. In the 3 month period stated above, an average of 33 houses a month sold. There are 230 houses on the market. If no new houses came on the market, and houses continued to sell at the same rate…there would be no available inventory left in 6 months. Common wisdom states that a 6 month supply of housing is a stable market. Less than 6 months is a sellers market, more than 6 months is a buyers market.

 

So the conclusion is that we are looking pretty good at the current time in the housing market. There are buyers out there looking, and sellers are feeling that the market is healthy enough to sell. Those looking to move up or downsize feel the ability to do so. But if there is one thing the last 10 years has taught me is that anything can happen. All we know for sure is what is going on today, and we must all make out best decisions based on that point in time reference.

Are Low Appraisals Next?

 

I’ve been reading reports from other areas of the country about low appraisals. Basically, the appraisals are coming in low because they are not recognizing the shift in the market, and that because of excessively low inventory that prices are on the rise.

I have not experienced it yet in our market, but I can see it as a possibility. Like flowers in the spring, one feels right now if they look closely enough that they could actually watch them grow. That is how I am feeling about the prices of homes in the market at this time. I can almost see them rise.

So are low appraisals coming here next? And when the appraisers model is to look back 6 months, how do they adjust for prices that appear to be visibly rising? First thing that they need is to justify the price with multiple offers. That we are getting. Next there need to be all cash sales. These are typically investor buyers, or relocation buyers. We are getting both of those. Or, there need to be buyers who can afford to pay the difference between the appraisal and the purchase price (and want the house enough to “overpay”).

The people that will be impacted if appraisal start coming in low will be the first time buyers, or those with low downpayments.

While we definitely need a recovery in the market and I do believe that home prices dipped abnormally low on their correction. I do not want to see another bubble like we had in 2004-2006.

Where are the buyers searching

Common sense tells us that the lower the price, the more people who are in the market looking to buy.

Some statistics that I just got demonstrate what price ranges are being searched by consumers. These are numbers provided by the major players, Zillow, Trulia, Realtor.com, etc.

Last month, there were 28,171 views of 3 bedroom properties listed between $100-200k. There were 23,551 views of 3 bedroom properties between $200-300k.

And then the drop-off begins. Between $300-400k the number of 3 bedroom property views dropped to 11,132.

Just an interesting thing to keep in mind when looking at how much competition there is in the market with you. As a buyer, if you can raise your price range, you become a bigger fish in a smaller pond. And as a seller, if you can lower your price, you are in a pond with a whole bunch more fishes.