What a great webinar we had yesterday with guest speaker Mindy Sullivan, Team Leader at Keller Williams Portland Central. Mindy gave us a powerful presentation packed with charts and graphs detailing the history of Portland’s real estate market from 1990 through 2010. Mindy studies the local real estate market trends and has an expert understanding of where we have been, were we are and what to expect in the future.
Mindy’s graphs demonstrated housing prices from the 1990’s to 2010 and reminded us that while many are devestated by the decline in housing prices, we are actually in a normal pricing market. Looking at the charts, we could see how the housing market peak occurred during 2005 and 2006 and how the bubble burst. Those who bought during the peak were not expecting the burst to happen so quickly and may never regain the value in their home.
Mindy indicates we will not see the end of foreclosures or short sales for some time. She discussed how shadow inventory (REOs and houses that have not hit the market yet) and distressed houses affect the current housing prices. REOs (bank owned properties) on average are discounted by 41% and currently, 27% of Portland housing sales are in fact REOs. Short sales on average are discounted 19% and are also a large percent of total sales. This is hard competition for the seller who is not in a foreclosure or short sale situation. How do they compete with these drastically discounted prices?
Mindy proposes that 2011 will be more of the same as 2010. She predicts we have bottomed out, however housing prices may continue to drop depending on the area and number of foreclosures to still hit the market. Mindy does not see a great change in employment statistics until 2014. She also expects not much activity in residential housing permit applications for another two years and sees a rental shortage over the next two years as people lose their homes and are forced into renting. That could raise rental prices according to the law of supply and demand.
The good news is that interest rates are the lowest they’ve ever been and will continue to stay under 5% through 2011. She reminded us of when the interest rates were over 20%. Only motivated sellers will attempt to sell and only qualified buyers will be approved. It is a great time to represent qualified buyers!
In closing, Mindy suggest this is a great market and opportunity for new agents coming into the real estate industry. If you live in Portland and might consider working in the Lloyd Center area, give Mindy a call at 503-748-8225 or email her at mpsullivan@kw.com.
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