An Economic Storm Provides Opportunity Too!

The housing market has settled down in many areas of the country.  However, this in itself isn’t sufficient cause for alarm every time there’s a negative headline in the press. Artificially low mortgage rates coupled with inventory gluts and an economy that many perceived as sustainable caused home prices to skyrocket, and it was really only a matter of time before the market pendulum needed to swing back to a more normalized state. According to one recent analysis, national sales of existing homes are down 9.3% from one year ago and housing starts are down 8.7% from November of last year. But just because certain metrics are down, it doesn’t mean the market is on the verge of bursting. In fact, I would argue that a more neutral market is not only exactly what’s needed right now, but also makes for a healthy economy in the long term. A more level playing field also presents value opportunities for potential homebuyers (if they’re prepared to take initiative).

The Right Time Is The Right Time!  No matter what state the housing market’s in, buying a home is a major economic decision for many people. Trying to time the market is an exercise in futility, so what matters most isn’t what the third-party indicators say. What truly matters is your current situation. Are your finances in order? Do you have significant debt to pay down? Do you have a job that ensures you can pay your monthly mortgage bill? Most importantly, do you have enough saved up in the event that hard times do fall upon us again? These are all things to consider before you endeavor to purchase a home. The right time to buy comes down to what you can afford despite fluctuating market conditions, and (maybe more importantly) what’s happening in your life.

How Long Are You Willing To Wait?  Although prices aren’t climbing as they once were, those who continue to wait on the sidelines may be in for a rude awakening if they are waiting for the bottom to drop out. If you have the ability to purchase a home and the price is right, you must ask yourself a key question. Can you afford to wait even longer? After all, it’s widely understood that a 10% fluctuation in property value is roughly equal to a 1% change in mortgage interest rate, so by watching and waiting, your dream home could be sniffed out from under your nose just because you were hoping selling prices would come down a little bit more. Meanwhile…

What’s Happening With Mortgage Rates?  Until the recent drama on Wall Street unfolded, they’d been bucking the downward trend for the past year. However, they’re currently down a bit, and are still historically low compared to what people have paid in years past. For example, mortgage rates hit a whopping 18.5% in the 1980’s. Today they are hovering around 5% (depending on type of loan). And while that’s a slight uptick from last year, it’s nowhere near as high as when our parents and grandparents were buying real estate.

The Bottom Line?  Buying in a down market is something of a dance: Sellers want to sell at a price that works for them, and buyers want to capitalize on good deals for the same reason. Current conditions present opportunities for greater negotiability, so take advantage as long as you are in the right position.

p.s. Flipping Is Not Easy Money!  Buying property in a down market may mean you are getting a better deal, but that won’t necessarily translate into making money on flipping that property. HGTV nation portrays home renovation as something of an easy win, but this is so rarely the case. Unless you are an expert in local zoning laws and have a bevy of trusted contractors at your disposal, renovations can be costly and time-consuming. Many times, you’ll be lucky to break even. If flipping is your passion, just keep in mind the goal of making money is not often realized as quickly as many reality TV shows would have you believe.

*Data for this post sourced from Kiplinger’s, CNBC, The NAR, FHA (freddie mac) and other news providers.

Chad Meier

Broker | OR

He/Him

Hello, I’m Chad: Licensed Real Estate Broker, native Oregonian, photography aficionado, lover of old houses, friend to all animals, and powered by analytical data. As a member of the National, Oregon and Portland Metropolitan Associations of REALTORS®, I'm proud that my profession allows me to use the tools I've acquired over the past 20+ years (client advocacy, sales & marketing, conflict resolution, et al.) to help people on a daily basis. Bottom line… I love the work! Through personal experience, I understand that buying or selling a home is more than just a business transaction; In fact, it can often be a life changing event! This is why I’m dedicated to providing exceptional service for my clients when it’s time for them to make their move. On the listing side; I believe that every home, no matter how modest or grand, deserves to make the best possible first impression on a would-be buyer. This is why I’m aligned with our area's preeminent independent real estate brokerage (Living Room Realty) to offer every property the most compelling & relevant marketing available. It also means that I’ll never represent your home online with a smartphone picture ;^) On the buying side; I personally work with every client - no handing you off to a junior team member of a team - to ensure that we work toward your goals together and don’t fall prey to some of the pitfalls that buyers can face in today's heavily weighted market. In short, I can help you win! Above all else, I pledge to be a strong advocate for my client’s interests and promise to work relentlessly to help them achieve their real estate goals. After all, I believe that if you’re not left with an amazing experience, I haven’t done my job. Speaking personally, I’ve been connected to this great city and its surrounding areas since childhood. Most recently, my family (wife Shawn, son Jakob, mother Glenna, and mutts Juno & Dizzy) have lived in the vibrant Sellwood-Moreland neighborhood for the past 14 years. When not at my desk or in the field helping clients, you’ll likely find me trying to capture a compelling scene behind my camera lens, playing basketball wherever I can find a pickup game, or combining these two passions by photographing my son’s high school basketball team in action (GO WARRIORS!). And on occasion, you may even find me at any number of our city's finer dining establishments, searching high and low for a bartender who knows the recipe for a perfect Roman Holiday ;^) Whether you have a plan to buy or sell (or simply need to develop one), please feel free to contact me. I look forward to understanding your goals and helping you achieve them! I can be reached at 503-709-9600 -or- Chad@PortlandHomeBase.com

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