Beach Blog

Looking back at my last post I find it hard to believe the last post was in 2012.  Wow.  A lot has happened since then. 

Instead of trying to catch up, I'd rather pretend I am just starting this, with the intent of posting more frequently.  We'll see how that goes!

To summarize the last 5 years for the local real estate market:  We finally came into a balanced market.  We really didn't start coming out of the great recession until 3 or 4 years ago.  And now we have Covid to deal with. 

It's a frightening world we are living in, but frankly I am fascinated that the pandemic did not bring the local real estate activity to its knees.  In fact, it has been extremely busy here.  Granted, every thing I do takes 3 times longer than normal because it takes planning, explaining, and preparing for safe practices.  But that's okay.  I am happy to invest the time and effort to keep myself, my family, my clients, and the community, as safe as possible. 

Since the "Ides of March" I have had a few new listings which had multiple offers competing within the first week, and I have made a few sales "sight unseen."  Surprisingly, only two buyers have wanted to try "lowball" offers, assuming Sellers must be desperate due to the pandemic.  However in both instances, Sellers held their ground.  People do not seem to be panicking about the economy, here, though I know there are tragic stories all over the area due to business closures and unemployment.  At this time, thankfully, it has not seriously hurt the real estate market in this area.   Maybe people all over are realizing more than ever the value of having a home at the beach to get away to when things like this happen. 

Knocking on wood as I write this, but it's a blessing to look out on our beautiful, fresh air environment knowing that in this entire county only 6 people were diagnosed with Covid since the inception.  Living in Rural America has huge benefits... today I am counting my blessings.

Are we there yet?  No question in my mind that we are there...at the bottom of the price slide.  Unless something drastic happens in the world or national economy, we surely are seeing a turnaround.  There is a lot of interest in buying beach property and there are many multiple offer situations these days.  When a foreclosure comes on the market it seems to sell right away.  Developers are buying up land. Yet, 90% of the buyers who contact me are still looking for a fire sale price.  We seem to be stuck with that for a while.  However, there are unfortunately many fire sale priced properties out there, though the pickings are getting slimmer by the day.  Once we work our way through that, there is nowhere to go but up.  Hold that thought.

The market has picked up, there is no question.  No price increases yet in this neighborhood, but at least there is more buyer activity. 

I own a house in Portland which I refinanced recently.  It appraised 3 years ago and then again in December for this refinance.  The new appraisal was 10% higher than the 3 year old appraisal.  That was a refreshing indicator.  Since 80% of my buyers for this area of the coast tend to come from the Portland Metro Area, then the first step is seeing Portland Metro values stabilize.

Not surprisingly here, buyers are still primarily interested in buying houses which are being sold at fire sale prices.  And, since that's what everyone is looking for, the result is that we have frequent multiple offer situations (aka bidding wars) which do tend to push prices higher.  So that will actually help the overall pricing trend.  Unfortunately, homes for sale by owners who are not willing to accept a fire sale price still languish on the market.  Once in a while a buyer falls in love with a particular house and agrees to be reasonable on the price, so little by little that should help the recovery.

Lot sales are still the worst of the worst.  You can understand why.  As long as there are distress sale houses coming on the market, buyers will be swayed toward the immediate gratification of a house they can start using right away, especially when it costs less to buy than it would to build one.

 

Here's what's happening in this area.  An investor has purchased all the unbuilt lots at Ocean Highlands (the development of new homes just as you are coming into Netarts which was started by Centex, then came to a halt when the market dropped).  He has been selling them, mostly to adjacent homeowners in that development, for between 19,000 and 69,000.  Actually, only one sold for 69,000 and it was a prime lot with a fabulous view.  Most of the other sales have been <39,000. 

 

Here is a list of all the land pending and sold during the last 12 months in Netarts and Oceanside, and most of this activity has been in the last 60 days:

(CLICK HERE)

This link is valid until 5/8/2012.

 

Don't get too excited about the $1.5M pending sale (the 3 lots at the top of Maxwell Mountain in Oceanside where the hang gliders jump off).  It is my sale, woohooo!   However, this property is not typical of the lots for sale on the coast.  These 3 lots are what I call "trophy properties" because they have the rarest of views from high on a bluff, and the building pad is actually flat on two of the lots and the third lot is an oceanfront acreage. 

Anyway, even though these 3 lots are not the norm, and neither are the bargain basement sales, all this activity is a giant step in the right direction. 

 

I remember a couple of years ago attending a seminar by someone who used to head up the foreclosures department for IndyMac.  His outlook/forecast suggested that the way we will know when we are coming out of the slump is when investors swoop in and start to buy up cheap lots/land.  Well, that's exactly what is happening.  So, that alone makes me feel very very optimistic about where we are headed: Not toward stellar price increases, yet, but at least that we are making our way out of the abyss!

Have a blessed day on this beautiful and incredible and hopeful Easter Sunday.

Pam Zielinski

November and December 2011 were the busiest sales months I have had in several years!  I was convinced that January would find buyers lined up to buy, but we are not quite there yet.  Still, it's clear to me that the worst is over and we have growth to look forward to.  A seminar I attended a few years ago presented by a cadre of Oregon real estate experts, including a well known economist and a prolific commercial real estate appraiser, suggested that we will know when real estate prices have bottomed out by watching the land sales. When prices are going down, nobody wants to buy land because you can find such great buys on homes already built.  When prices are going up, that's when people buy land.  Land sales have been almost nonexistent in this area for the last 6 years, but interest has begun to grow.  Not seeing much yet in the way of actual sales, but the level of interest has increased noticeably.  We are on the cusp!

Like the song says, "What it is ain't exactly clear."  Getting mixed messages from every direction:  roller coaster stock market, marches on Wall Street, historically low interest rates (in the 3's!!!), and best of all people actually paying cash for houses and land lately.  The last month has been very busy with buyer activity in this area.  Of course, October usually is busy with buyer activity at the beach.  But October 2010 was not.  So, it's very heartening to see some hints of return to normalcy around here.


X  O

Having a blog is like having a baby or a pet.  It's a duty and responsibility, once you start, which you cannot neglect. I've been a lousy and neglectful blogger and don't expect to do much better anytime soon, I have to admit! 

For today, though, just couldn't turn in for the night without saying a few words about the little rays of sunshine peeking through over the last couple of weeks.  This Summer seemed to heat up fairly well, considering.  In fact, until about a month ago, I was having a better year in sales than any in the last 5 years.  Then the country's budget fiasco put the fear into people and buyers seemed to freeze in their tracks, wondering what happens next.  The stock market roller coaster at first fueled more fear and consequent paralysis. I checked the website hits, but the hits didn't go down so I knew people are still thinking of buying...wanting to buy...but afraid to move. 

Then little by little over the last couple of weeks, I've been seeing people put one foot in front of the other and actually put cash on the table to buy property.  The latest phenomenon is people trying to diversify their assets, taking cash from their investments and looking for bargains in real estate where they can have some hope of seeing their money grow over the next few years. 

This is what the economy needs.  As people break free from the frozen restraints of their fear, and take decisive action, the logjam starts to loosen as others feel compelled to do the same.  The demand is out there, but "pent up" is an understatement for describing it.  Let's open the floodgates and let it flow.

Amazing how many cash buyers are rattling around lately.  Money coming out of stocks and into real estate.  Sell high and buy low, as they say.  Someone is paying attention!  Interesting that the biggest increase I have personally noted lately is the increased interest in the higher priced homes. 

The last 3 offers I have written on affordable homes have each met with competing offers.  That has to be a good sign.  Well, it's a good sign for sellers, anyway.  Buyers come around assuming they can make low offers and have some hope of at least getting a counter offer, but instead they are surprised when someone else offers at the same time and buys it out from under them.  REO responses these days are just as likely to be a Multiple Offer Addendum as a flat out rejection. 

According to MLS stats, the average list price to selling price today, as compared to 6 months ago, has gone up from 92% to 96%!  So, if you offer more than 10% below the list price, don't be surprised if you either get a rejection, or lose the house to a competing buyer. 

These are all signals, folks.  If my crystal ball is working, we have survived the worst, and are positioning to start back up again.

I'ts been real.  Seriously.  Something has clicked and the higher priced market segment and the blip (micro-blip might be a better way to name it) continues to hold air.  Inquiries, showings, offers, even sales have increased making the first quarter of 2011 encouraging indeed.  Still, the increase is noticeable, but not enough to make me shout from the rooftops.  I have been whispering from the rooftops, though, that maybe this is a good time to put the higher priced homes on the market.  There aren't a lot of buyers, but all you need is one. 

Mid-range is getting a little more activity, surprisingly so considering it's been winter until several days ago.   If we could just get some convincing sunshine, we'd be sitting pretty.

Low end properties, foreclosures, distress sales - still cooking.  Buyers are taking advantage of this great opportunity. 

I don't remember being as happy about a new year for a long time.  This year is sure to be a better year than 2010.  While my sales volume was satisfactory for the year, it was one of the toughest years ever in my 35 year career because I had so many listings that just didn't sell.  The distress sales sold for fire sale prices, and the folks who were willing and able to compete with fire sale prices were able to sell.  However, the people who needed to sell but had mortgage balances too high to let them drop their prices just languished on the market hoping for a miracle.  Some people just don't want to go the short sale route, and who can blame them? 

Every day, the financial news reports seem to contradict themselves.  One minute there is encouraging news and you turn the channel and hear a new "double dip recession" forecast.  Who really knows?

In my microcosmic environment, I have been experiencing signs that have me feeling very optimistic about this year.  Here are some of those signs:

1.  Practically no foreclosures in my immediate area, as compared to 34 in Oceanside alone just 18 months ago.
2.  When foreclosures do pop up, they seem to sell immediately and often have competing offers.
3.  A few buyers have been looking at lots lately.  That sector has been totally dead for a couple of years.
4.  Credit Unions are making reasonable loans!
5.  Construction loans and lot loans are again available.
6.  Appraisers have been more reasonable - fewer low appraisals lately.
7.  Although the high end homes have been mostly ignored the last couple of years, I've had 3 million dollar buyer prospects in the last 30 days.
8.  Two lenders I called recently had messages on their voicemail greetings that basically said they are swamped with loan applications, so it may take time for them to return calls!

Surely these indicators signal a better market environment and we will have a much better year this year. 

So...Happy New Year!

___First I have to say that it's apparent a blog is a real commitment.  Once you start it, if you don't keep it up, it nags you!

___Also, a little off topic, here's a word to the wise.  Buyers who are looking for property in this amazing time seem to think that nothing is selling and that the home they are interested in will be there when they are ready to make an offer.  When the Realtor tells the buyer she is aware of a possible competing offer, most often the Buyer is skeptical and assumes this is "sales talk."  However, it is easy to believe what is true about human beings.  We have the "herd mentality."  If a home has languished on the market for 2 years, it's so easy to assume there's no hurry to make your offer.  But here is what happens.  There may be 2 or 3 other parties out there who like that house, too, and have been doing exactly what you are doing:  hesitating just in case there's a better buy out there, or hesitating because you wonder what's wrong with this house if no one else has bought it in two long years.  As soon as your Realtor starts asking "buyer signal" questions of the listing broker, the listing broker is likely to let the other prospective buyers know there may be an offer coming in.  As soon as the other buyers think someone else is interested in this house, then the herd mentality kicks in.  If they think no one else wants it, then they are afraid to buy it.  But, if they know someone else is interested, that fear dissipates and they are ready to buy.  BELIEVE IT.  Even in this market, we do have multiple offers very frequently. 

___So, back to the topic:  This Market. 

___What's selling at the beach right now?  Cheap stuff.  In the entire Tillamook County MLS today, there are 26 pending sales.  Out of those 26, there are only 4 were listed for over 300,000 (the highest at 549K).  Over half the pending sales are homes priced under 200,000. 

___What does this tell you?  It says that if you can afford a home priced over 300,000 this is a historical opportunity for YOU.  Sellers of homes priced over 300,000 are experiencing little or no buyer activity right now,at least in this area.  It's truly a buyer's market in this price range...more so for homes priced over 500,000.  With interest rates in the 4's and a market starving for buyers, YOU ARE THE KING or QUEEN of the MOUNTAIN.  Contact me today and I'll roll out the red carpet and find you a dream home.  You may even wear a crown and sit in the back seat like royalty.