Summary:
Join Joe and Makayla on this special year-end episode of "Off the Record Talking Real Estate." Discover the ups and downs of the Portland real estate market in 2023, explore the changing trends, and gain insights into what lies ahead. From declining sales to a potential market shift, they delve into the numbers, share expert opinions, and offer valuable advice for buyers and sellers considering their next move.
Episode Highlights:
Joe and Makayla reflect on the past year's real estate dynamics and the holiday season.
Market Update: Dive into recent statistics, pendings, and closed sales, analyzing the current market's shift from a seller's market to a more balanced landscape.
Understanding the impact of declining pending sales and closed sales month over month.
Insight into buyer fatigue, challenges in finding the perfect home, and the impact of affordability concerns.
Positive news: A dip in interest rates might signal a favorable time for potential buyers.
Expert advice on financing options, the importance of understanding your buying power, and exploring opportunities amidst market changes.
The potential outlook for the real estate industry, predictions, and signs pointing towards a shift in market dynamics.
Tips for sellers: Preparing your home, understanding what updates might make a difference, and leveraging the current market conditions.
Closing thoughts: Joe and Makayla express gratitude for the listeners' support throughout the year and invite audience suggestions for future topics.
Links:
Financial Insights with Todd Gydesen
December 2023 Housing Report
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00;00;06;28 - 00;00;20;20
Joe
Welcome to Off the Record Talking Real Estate with Joe and Makayla. If you're interested in the Portland Oregon real estate market and want the unvarnished inside scoop, you've come to the right place. Thanks for giving us all this.
00;00;20;23 - 00;00;25;10
Makayla
Welcome. Welcome. Thank you for tuning in today. Joe, how are you doing?
00;00;25;12 - 00;00;27;12
Joe
I'm doing great. Happy holidays, Makayla.
00;00;27;13 - 00;00;32;20
Makayla
Happy holidays. Happy December. We just turned over from Thanksgiving, so.
00;00;32;26 - 00;00;33;27
Joe
Yeah.
00;00;34;00 - 00;00;36;29
Makayla
We'll make a few more episodes this year.
00;00;37;02 - 00;00;42;04
Joe
I know, I know. I'm. I'm excited for the new Year. I hope you are, too.
00;00;42;06 - 00;00;44;02
Makayla
I am. I think it's time.
00;00;44;05 - 00;00;46;29
Joe
It is time to move on from 2023.
00;00;47;01 - 00;00;47;25
Makayla
Yeah.
00;00;47;27 - 00;00;52;09
Joe
Farewell, Bitter friend series.
00;00;52;11 - 00;00;53;28
Makayla
Oh, real estate wise.
00;00;53;28 - 00;00;56;01
Joe
Anyways, everything else is pretty good.
00;00;56;01 - 00;00;57;03
Makayla
Yeah.
00;00;57;06 - 00;00;58;05
Joe
You got married.
00;00;58;05 - 00;01;07;26
Makayla
You got married. That was a I know, a big one. Lots of fun trips, but yeah, an odd year for real estate. So I think turning a new leaf is going to be good for us.
00;01;08;02 - 00;01;29;13
Joe
Yeah, this is going to be our last market update for the year. But we wanted to, before the holidays truly got into the swing. We wanted to just kind of update everyone on where everything stood, kind of give you a little bit of insight, but this will be a short one to the point. You know, there's some good news, there's some challenging stuff, but it's worth knowing where we're at right now.
00;01;29;13 - 00;01;31;17
Joe
So, uh, yeah. What do you think?
00;01;31;19 - 00;01;40;06
Makayla
I'm excited. We'll hopefully give you guys some table talk with family at the holidays. That's right. Real estate does come up. Maybe you have something to say.
00;01;40;09 - 00;01;41;25
Joe
Does it come up in your house?
00;01;41;28 - 00;01;42;23
Makayla
Yes.
00;01;42;25 - 00;01;43;23
Joe
Yeah.
00;01;43;25 - 00;01;54;15
Makayla
I have two grandparents that were short term realtors, so they are always so excited to ask me about what's going on. It's actually very sweet, but that's probably very unique to my family.
00;01;54;19 - 00;02;05;10
Joe
Yeah, yeah, yeah. And I get the question. How's the market from everyone? My response always. Well, it depends. Are you buying or selling? Investing.
00;02;05;13 - 00;02;06;13
Makayla
I like that response.
00;02;06;14 - 00;02;08;15
Joe
Are you just curious? Everyone's just curious, right?
00;02;08;15 - 00;02;12;07
Makayla
Yeah. Usually no one's actually doing that.
00;02;12;09 - 00;02;13;06
Joe
Really doing anything right now.
00;02;13;06 - 00;02;18;15
Makayla
I have my same three sentence responses That sound like a broken record.
00;02;18;18 - 00;02;19;01
Joe
What's that?
00;02;19;07 - 00;02;25;29
Makayla
Well, it depends on the quarter, but lately there's good opportunity for buyers. But there's not a lot of buyers out there.
00;02;25;29 - 00;02;28;03
Joe
Don't steal the rest of our show here.
00;02;28;03 - 00;02;31;08
Makayla
And the listings are sitting a little longer than we'd.
00;02;31;10 - 00;02;32;01
Joe
Yeah.
00;02;32;04 - 00;02;33;03
Makayla
Like to see.
00;02;33;05 - 00;02;36;24
Joe
True, true, true, true. Well, should we talk about it?
00;02;36;25 - 00;02;39;13
Makayla
Yes. Let's dive a little deeper.
00;02;39;15 - 00;02;58;19
Joe
A little deeper. So we're going to start with some stats. Just kind of run through a few things. One of the things that we look at, are pendings, which is accepted offers on homes, right? When I say homes sale pending, it means that the seller has accepted an offer. There's mutual agreement and they're choosing to move forward through escrow to a closing.
00;02;58;19 - 00;03;22;26
Joe
That's always a good indicator of, you know, kind of what's going on outside of closings and that type of stuff. The unfortunate news is that we are down looking at RMLS stats that just came out for November and November was down 11% from October. October was down 10% from September, September was down 12% from August. Hmm. That's an accumulation.
00;03;22;26 - 00;03;33;06
Joe
And it's not the reason I put it like that for us, Makayla, is that each month that you're down that amount, it's just kind of a snowballing effect, right?
00;03;33;08 - 00;03;34;29
Makayla
Numbers don't lie.
00;03;35;01 - 00;04;00;07
Joe
No, the numbers don't lie. Close sales are down 20% from October 2023. The market has obviously shifted. It's changed. There's a lot of people that have the belief that a correction was necessary. It's not a recession, you know, in the housing market, so to speak. It's just a correction that probably needed to happen, right? Yeah. Things being so skewed towards sellers, it's just really challenging for people to buy.
00;04;00;09 - 00;04;07;02
Joe
We still have a lot of other issues right now, but I think this is the place where it kind of has to be right now for it to be healthy moving forward.
00;04;07;02 - 00;04;28;08
Makayla
Yeah, I like how you phrase it. I don't like to use the word recession. I like to stay away from that. Yeah, it's not very positive, but I don't know if you can answer this off the top of your head, but that decrease in pending sales, does that have anything to do with the seasonality? Obviously, it's not like that every year, but what would you guess the percentage decreases?
00;04;29;28 - 00;04;50;14
Joe
You know, the last four or five years? That's a good question, by the way, because the last four or five years we have not had hardly any seasonality. Right. Have you noticed That's true. October, November, December, January, it was just go, go, go, go, go. Because there was such a lack of inventory and buyers had to be ready for when something came on the market that fit their needs and what they wanted.
00;04;50;14 - 00;05;12;09
Joe
They went to jump on it. Right. And now I think we've had a number of months, a quarter or two of things being really challenging Interest rate wise. We still have somewhat of a lack of inventory. Yeah, I think there's a lot of fatigue in the marketplace. I think that people are kind of at that point now where they just need a break, right?
00;05;12;09 - 00;05;38;27
Joe
Buyers need a break. Those that have been looking to buy are exhausted, exhausted from really seeing the amount of home that they can buy dwindle down because of affordability and the rising interest rates. And then those homes that haven't been in the top 10% of whatever price point or whatever, you know, segment they're in have sad you know, the top 10% are still moving pretty quickly, some with multiple offers.
00;05;38;27 - 00;05;45;22
Joe
But if you have any flaws at all or if you're not prepared, it just seems like, you know, they're sitting right now. Would you agree?
00;05;45;27 - 00;06;06;21
Makayla
Yeah. Sorry. Excuse me. Definitely. I think that goes straight into the problem with affordability. It's just, you know, people are tired, like you said. And if the house that they can afford barely isn't perfect, why would they buy.. And I feel that exhaustion on the sellers and as well because they do their best to provide the perfect home, the perfect product.
00;06;06;21 - 00;06;14;18
Makayla
But sometimes there's major design issues with the home that they don't want to put money into fixing. So it's it's really hard on both sides right now.
00;06;14;23 - 00;06;36;02
Joe
Yeah. And the market before people would overlook massive flaws just to get into a home. Right. Because it was so competitive. Eight, ten, 15 offers and now people are looking at it like I'm paying this much of a premium with interest rates and all that type of stuff. And it's tough for them right now. I think to say we'll be okay with this or that.
00;06;36;02 - 00;06;53;00
Joe
You know, a lot of them are just saying they're either going to wait or I think a lot of people are just really taking some time off and maybe enjoying the holidays, maybe not stressing about their housing situation. So that is what it is. And we kind of got a need to run with that. We do have some good news.
00;06;53;02 - 00;07;12;20
Joe
And then, yeah, how about the good news? The good news is interest rates have fallen a little bit. You know, we were up over 8% for a little bit there and they have since dropped to, you know, the 30 year conventional is right at around seven right now FHA mean check my notes at around 6.6%.
00;07;12;22 - 00;07;12;29
Makayla
Great!
00;07;13;00 - 00;07;25;20
Joe
That's without any on any buy down or any of that it's a good thing to see at 6.6% and those FHA loan limits don't quote me on that right now because we have new loan limits, but it's in the mid sevens.
00;07;25;20 - 00;07;27;05
Makayla
Yeah, high sevens.
00;07;27;05 - 00;07;28;05
Joe
High sevens, Yeah.
00;07;28;08 - 00;07;29;21
Makayla
Around 725 I think.
00;07;29;21 - 00;07;31;14
Joe
All three counties. So it's.
00;07;31;14 - 00;07;31;28
Makayla
Awesome.
00;07;31;28 - 00;07;33;02
Joe
Yeah, that is awesome.
00;07;33;03 - 00;07;50;16
Makayla
It's nice to see because for the entire year, you know, we get those live rate updates a couple times a week from our trusted mortgage brokers and oh my gosh, every new email is just up a tiny bit, tiny bit. But now we're finally seeing it tick down. So it's extremely refreshing.
00;07;50;19 - 00;08;12;03
Joe
Yeah, it is refreshing. And just a reminder, FHA loans are not just for first time homebuyers. If you have questions about what it means to be a homebuyer right now and you're really interested in the finance side of it, I would suggest watching or listening to our podcast with Todd Gydesen and from Vantage Mortgage, I thought he did a fantastic job.
00;08;12;03 - 00;08;32;07
Joe
Oh, my gosh. Of really explaining all of that and going into detail about why it's not so critical that you have these huge down payments. Everyone thinks I've got to have ten, 15, 20% down payment and that maybe isn't the case for everyone. You know, if you have credit challenges, yeah, a little bit bigger down is certainly going to help you.
00;08;32;07 - 00;08;52;27
Joe
But if you've got a decent credit score, the difference between a 20% down and a 5% down payment wise is not that much, Right. save your cash. Right. So anyways, go back and check that livPortland.com. Click on our podcast. You can see that podcast that we did with Todd Gydesen from Vantage Mortgage.
00;08;52;27 - 00;08;55;08
Joe
I thought it was really, really good.
00;08;55;11 - 00;08;56;15
Makayla
That's one of my favorites.
00;08;56;15 - 00;09;17;04
Joe
Yeah. So like we always do, we try to break it down for our listener to what it means for them, right? So all these numbers are great, you know, some not so great, but what does this all mean for me? And we talked about that fatigue in the marketplace. And I think right now there's a bit of a breath being taken.
00;09;17;04 - 00;09;40;15
Joe
But I think what we can take from some of the economic news, the strong jobs reports that just came out and some of the other economic indicators are trending positively. So it's great. You know, right now might be the trough. And the other thing and by trough, I mean the bottom of this little, you know, real estate session that we're going through right now.
00;09;40;17 - 00;10;08;09
Joe
And the reason I think that and I've been looking at some stuff Makayla and I noticed that sale prices have dropped by slightly over 3% overall in Portland Metro, but North Portland, Southwest, Portland, Southeast Portland are down around 7% right now. Everywhere else is flat. And then we look at the exception is the luxury segment, 1.5 million and above is actually doing pretty good right now.
00;10;08;11 - 00;10;20;15
Joe
In November of 2022, there were 27 sales of 1.5 or more. And this year in November, there were 32 sales.
00;10;20;17 - 00;10;25;21
Makayla
Yeah. Wow, that's crazy. And what what boundary? All Portland Metro.
00;10;25;21 - 00;10;44;07
Joe
Or all of Portland Metro. Okay. Yeah. For the month of November. And that has been trending similar that way throughout the different months this year, especially in the last two or three months. And what that tells me is, you know, like in the stock market, there's profit taking. When the market goes down, people are told to buy when it goes down.
00;10;44;07 - 00;11;12;07
Joe
So when it's up and I think a lot of people that aren't necessarily interest rate driven are buying and selling right now because they see this as a great opportunity. So profit taking or bear market purchasing in the luxury segment usually indicates we're near the bottom of what we're going through right now as an overall market. And I've seen that, you know, 2008, 2010 was a completely different animal.
00;11;12;09 - 00;11;35;19
Joe
But as we started to climb out, a lot of people that weren't interest rate driven or had the cash saw the opportunity and started making those sales and things just slowly started to spin back up. So with continued good economic news, this could be the beginning of the next quarter or two for the real estate industry to start picking back up steam.
00;11;35;19 - 00;11;39;21
Joe
And that's just kind of what I'm seeing right now and kind of what I'm feeling.
00;11;39;24 - 00;11;49;18
Makayla
So what the experts are saying, too, and the, you know, some of the bigger economists that we follow, it seems like they're all kind of saying around that mean that picture for Q2, Q3.
00;11;49;18 - 00;12;21;03
Joe
So, yeah, it's an interesting time and it's always you never know when you're at the bottom, right, until you're going up. Right. So, you know, back to what what this means for everyone. So if I were a home buyer right now and I was in a position where I could purchase and I'm just trying to either time the market or find the best possible time to do that, I would be very interested about whether this is the bottom or not, because if it is, now's the time to buy for you.
00;12;21;06 - 00;12;38;10
Joe
Right. And there's a little bit more inventory and not a heck of a lot. And once things start picking up again, we're going to find that crunch even more so than before. And it's going to be back to that supply and demand thing. And it's going to be back to it being a seller's market. Right now.
00;12;38;10 - 00;12;42;02
Joe
Buyers can call the shots. It's it's pretty amazing.
00;12;42;04 - 00;12;58;10
Makayla
Yeah, if you can if you're, you know, interested in buying at all, I would just get prepared, you know, talk with your financial experts and see if it's a maybe for you and then just watch the market and be really diligent about that because there are great opportunities out there and we're seeing it.
00;12;58;14 - 00;13;12;24
Joe
Yeah, Yeah. And there's you know, there's homes sitting on the market that I look at right now and I'm like, wow, 12 months ago that would have multiple offers behind me bidding up ten, 20, 30, $40,000.
00;13;12;27 - 00;13;32;21
Makayla
Well, I'm there's a misconception that people have, which I think they're used to from years prior, whereas they look at the days on market with the listing and they think, oh, the House has been on the market for 70 days. It must be awful. You know, other people must have passed on it. When, you know, for us we have our listings that are selling and we're just thinking, why aren’t people buying?
00;13;32;21 - 00;13;38;05
Makayla
This is a great house. If only people would get through the door, they would realize that it is a really, really good opportunity.
00;13;38;06 - 00;13;53;14
Joe
Yeah, for sure. So what does this mean if you're thinking about selling? Well, if you're thinking about selling, you really need to do your homework right now. Whatever you can improve about your house, you should be doing, right. So no deferred maintenance.
00;13;53;19 - 00;14;10;15
Makayla
I mean, if you can afford to I mean, cosmetic updates are really what people are looking for right now. Obviously, don't go completely remodeling your kitchen if you want to sell this spring, but paint and you know, certain updates can go a really long way and that's what people want.
00;14;10;15 - 00;14;44;09
Joe
So, yeah, paint is always a great one. A nice clean coat of paint does wonders, but you know, enhancing our sprucing up your landscaping, you know, getting your curb appeal, doing those things and going down that list, reaching out to your trusted professionals, your real estate broker and asking them to maybe come by if you are thinking about selling in the spring or the summer, having them come by and doing a walk through and saying, here are the top three or four things that we can recommend here, the things that probably aren't going to get you a return on your money, so don't spend it.
00;14;44;12 - 00;14;46;08
Joe
This would be a good time for that, I think.
00;14;46;10 - 00;14;47;01
Makayla
Agreed.
00;14;47;04 - 00;14;47;15
Joe
Yeah.
00;14;47;22 - 00;15;14;28
Makayla
I walked through a seller's house about a month ago and she's getting ready to list next week in Hillsboro, which is exciting. But the home has been updated, but it's not bright and shiny and I walked through and she wanted me to just like, tear it apart. And I was like, No, it's it's a great home. I would recommend painting and then I would recommend getting the appliances because her appliances were, you know, on the more dated side and it looks beautiful now her kitchen that's awesome.
00;15;14;28 - 00;15;19;05
Makayla
And she was like I would have spent triple that if you wouldn't have come through it.
00;15;19;05 - 00;15;25;17
Joe
So yeah, every time we do walkthroughs like that, I'm always amazed at how much people think they have to do.
00;15;25;17 - 00;15;27;00
Makayla
It becomes so overwhelming.
00;15;27;02 - 00;15;52;02
Joe
Yeah, 95% of the time we're always telling people, No, no, yeah, that would be good. Most of the time, paint, right? Paint, appliances or something like that. But 95% of the time, it's like, don't waste your money on that, because that's not going to help you get the top dollar right now. The other thing is just decluttering. As I look through my house during the Christmas time, the massive amount of clutter, it drives me insane.
00;15;52;02 - 00;16;17;12
Joe
I love the season, I love the holidays. But, you know, when people are walking through a house, they want to see it as their own. Right. And the more of your stuff and the more stuff in general there is, the more difficult that is. So yeah, those are definitely some of the things to be doing. But right now, going into December 23 here, you know, I think it's a great opportunity for buyers if it's the right time for you financially at this point in your life.
00;16;17;19 - 00;16;28;09
Joe
This is a might be we might look back on this at the end of the first quarter of 2024 and go, yeah, December, January, man, that was the time to buy.
00;16;28;09 - 00;16;29;20
Makayla
Mm.
00;16;29;23 - 00;16;33;03
Joe
That always happens with my stocks unfortunately.
00;16;33;05 - 00;16;33;17
Makayla
But not.
00;16;33;17 - 00;16;41;12
Joe
With housing. So that's kind of our update right now. What do we want to tell everyone. Happy holidays and enjoy themselves.
00;16;41;14 - 00;16;44;12
Makayla
Yeah, this might be one of the last time you hear from us.
00;16;44;12 - 00;16;46;11
Joe
So in 2023.
00;16;46;13 - 00;16;50;03
Makayla
Yeah, that's. Yeah. Thanks for finishing this.
00;16;50;06 - 00;16;52;00
Joe
I'm not going anywhere. You're going anyway.
00;16;52;07 - 00;16;53;05
Makayla
Oh, okay.
00;16;53;05 - 00;16;54;17
Joe
Okay. All right.
00;16;54;20 - 00;17;04;22
Makayla
We started this. You know, we sat down January 3rd of 2023, and you said, I think we should start a podcast. And I thought you were crazy.
00;17;04;25 - 00;17;06;20
Joe
I thought you were the one that wanted to start it.
00;17;06;20 - 00;17;22;25
Makayla
No, it was all you, really. I had sheer panic moves. I think it took a couple of weeks for me to wrap my head around it. And then I was like, You know what? This could be fun. And it's been a really fun year getting to do this. Even just our our little bit of listeners, we appreciate the support and a.
00;17;22;28 - 00;17;25;21
Joe
Little bit we get massive support.
00;17;25;26 - 00;17;27;23
Makayla
You know, millions of listeners.
00;17;27;23 - 00;17;50;26
Joe
Billions of listeners broadcasting live. Yeah. Now we're very appreciative. And if you guys have any questions or if there's a topic that you'd like to hear us talk about, you know, feel free to go on our website, LivPortland.com, reach out to us. We'd love to hear what you have to say, but other than that, I would say Happy holidays.
00;17;50;26 - 00;17;59;08
Joe
Thank you so much. Enjoy the people in your life. Take some time for yourself and really appreciate all the things that we have to be grateful for in this life.
00;17;59;10 - 00;18;04;03
Makayla
Well said. Oh, thank you. Well, yeah. Thanks for listening, you guys.
00;18;04;11 - 00;18;06;15
Joe
Thanks, guys. Take care. Bye.
00;18;06;17 - 00;18;19;13
Makayla
Thanks for joining us today. If you're interested in finding out more about Joe, myself or the LivPortland team, you can go to livPortland.com. Thanks for giving us a listen and see you next time on the Off the Record podcast.
