Southern Oregon Market Update 3/26/21

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Alice's Analysis_ Housing Market Update 3.26.21

Well, good afternoon, Real Estate fans. Alice Lema here, broker John L. Scott and Southern Oregon, here with our weekly market podcast. And what an interesting week. And yes, we're going to have stats and we're going to talk about the weather and blah, blah, blah. But I just want to point out some very distinctive changes in buyer behavior.

[00:00:17] So listen up specifically , if you're a seller or want to be seller. The buyers are not in as big a hurry. We do not have as many multiple offers as we used to. And I'm seeing more and more and not just my own business, but talking to other agents, that buyers will write an offer and they won't negotiate!

[00:00:37] But they won't tell you that ahead of time. They'll just write the offer and then if you don't take it or you come back with too big of a, a counter offer, it's like, eh, I don't think so. I'm going to move on and they move on. And so people are sitting back going, well, how can they move on if there's no inventory?

[00:00:54] Aha. Because you know what, there is inventory and it's just not being reported and counted in the way that the buyers are experiencing it. And that's really where the rubber hits the road, right? The buyers and sellers experience in the market place, in real time. I want to talk about that today. So in Medford, Oregon, Ashland, Oregon, Grants Pass and Klamath, we're all starting to see this, this subtle shift of behavior.

[00:01:21] And. I'm thinking that it is a reaction to enough inventory being out there that they just don't feel like they have to play ball. And they certainly are not rushing around trying to buy everything that comes on the market. They're taking their time. They're being more measured. What is that a sign, of that's a sign of a normalizing market, which is what I've been saying.

[00:01:45] For many months that this is what it's going to be like later spring, early summer, we're going to go back into that, you know, cycle of having inventory houses on the market for three to six months, which is more normal than three to six minutes. So, but this buyer behavior caught me by surprise because you get that every once in a while with certain people personalities, for example, but you don't get that across the board at different price range, different neighborhoods, different counties, different agents.

[00:02:15] So I think it's the beginning of a trend, but let's keep an eye on it and see if I'm right. And it's if you're a seller right now and you're having that, the situation happen you're going to take a good, hard look at your pricing. You're going to have to look at, the kind of, physical experience that the buyers are having in the house.

[00:02:33] And if you have not done an inspection up front to give to your buyers ahead of time, then there you go, you know, that is another roadblock. Because in a market where people are a little more on the fence about whether to buy your house or not, you got to give him some help, you know, to pick you. Okay.

[00:02:53] And, Jim Remley, our managing Broker John L Scott says, you know, a lot of times in real estate, it's a price war and a beauty contest. And I'm not being that, I'm not saying that that's the situation because it's not that kind of a market right now. But what if it really is the beginning of a neutral market, you're going to have to try harder and you're going to have to be the one that they pick over the others.

[00:03:19] Or, you know, you want to be the ones that they're not just sitting back waiting. Cause everything's a little I'm going to wait. And then all the weird stuff going on in the economy and the federal reserve, like did you know the interest rates are going up? So, you know, you would think that that would create some urgency, but it's not.

[00:03:36] So, so if you're a seller, here we go. This is what I was, this is what I was thinking was going to happen. I'm surprised that the buyers are being like that. They're not really negotiating that much. But we just deal with reality and you can still be successful if you're selling in this market. But if you're buying, you know, I say, pull the trigger when you find something that fits your needs, and is in your budget. And this idea of buyers trying to time the market, even professional investors are not super successful with that. And when they do, you know, play that card, a lot of times they don't get the property that would have benefited them over the long run. So here's another example. I've got a whole bunch of renters that are looking for property, but they're not looking that hard because they're renting the house of their dreams.

[00:04:30] And so I have one family in particular, they've been looking off and on I kid you not, hold onto your hat for 10 years. For 10 years, do you know how much money they would have made in appreciation? In 10 years, but because they're, well, actually we added it up. It was over $280,000 that they left on the table because they just couldn't stomach moving out of their dream home as a tenant and buying something.

[00:05:00] That sounds kind of judgmental. Huh? So to each his own, I'm not being judgmental. I'm just saying, I, I have a hard time watching people, make life choices that are not in their best interest, but I'm just here to facilitate. So, we'll, we'll get off that soapbox. The other thing that I'm noticing is, the lack of rain and the lack of snow is causing some water problems already.

[00:05:28] Here we are in Southern Oregon. And it's, it's not even April 1^st  yet, and we're already going to have to prepare for a downfall. Maybe some, some drought kind of practices. And if you are buying rural property in a way, this is actually great because I love nothing better than testing wells in a drought, because quite frankly, if your well is producing adequately in a drought, then yippie aye a, when the wet seasons come cause everything's on a cycle.

[00:06:01] Okay. Everything's on a cycle. We have our wet years. We have our dry years. So if we're in a dry year and you, and you're buying real property and your well tests fairly well not to be redundant for only well, well you're well test. Well, anyway, so that's that's a good thing. So if you're buying real property, I'm actually kind of excited.

[00:06:20] Not that I wish drought conditions on anybody, but I think that's good. The other thing I want to mention is septics.  When it is wet, your septic sometimes struggles, especially the drain fields, if there's a problem with your drain field. So this is a very good time to go out and have, an inspection of your drain field and your septic. Pumping and inspection of the tank and, inspect the drain field with a scope, have a little camera they put down there, because when there's more moisture in the, in the ground then say August. Then that's a great time to find out how everything's doing.

[00:06:57] And, today, we talked to Marty Easter, DEQ. He specializes in septics. And, he's with the state of Oregon department of environmental quality, one of our favorite people. So he's on the radio show this week.

[00:07:12] So you can tune into that Saturday at 10:00 AM or Sunday at 6:00 PM. Radio eight 80 K CMX. So that was a really fascinating conversation. We covered a lot of ground. Did you know, there's actually some new technology coming out and, in septics. So, listen to that and we will have him on more often.

[00:07:31] Cause we could just talk forever to him. Anyway, so those are covering, the high points I wanted to touch on this week. And then going back to the stats, in new listings and Klamath County, we had 63.  We had 77 pending, but we had 11 back on market. So. That little market is heating up there. And people who live in Klamath are, are telling me that.  But did you know for $350,000 in Klamath you can buy a half acre with a nice ranch style house.

[00:08:03] And, you know, maybe even a small shop, really, really big garage. So if you're in Jackson County or Josephine County, boy, we haven't seen prices like that for like several years. So Klamath County is doing well. Their inventory is definitely cycling through. They have a good clip .

[00:08:21] Josephine County. I had 30 new, new listings and they had 53 pendings. And then they had 25 closings, but they had 13 back on market. So again, you really have to look at all of the numbers in a package and you say, well, how can you have more pending than you had new? Because there was inventory already on the market.

[00:08:46] That's what I'm saying. And that's what the buyers are saying. The buyers are our best barometer for what is really going on with the market week to week. So, especially if you're watching more than one County and more than one price point, you know? So I'm just here to say there's a lot of pushback from the buyers.

[00:09:03] They're not tolerating, the kind of aggressive seller terms that they were even two months ago. So we'll see if I'm right. But I think we are definitely in normalizing stage. That's what's happening right now. We're leveling off right this second, Jackson County, Jackson County is 105 new listings, 129 pendings, 80 closings, and 26 back on market.

[00:09:33] And again, people say, well, how can you have more pending than new? Because we already had housing and you know what? We should start tracking that.  Next week. I'm going to ask, the kids that helped me get ready for this show. We're going to start pulling those numbers. Let's pull how many are on the market, because I think the way, some people are reporting these, if you don't get the whole picture, then it sounds like we're in an extreme shortage.

[00:10:00] I just, that's not my experience. I'm not saying we have oodles and oodles of properties to sell, but I just, this idea that we're in an extreme shortage is not the case. Now, if you have a real particular kind of property you want, like, it has to be a, B and C and under $300,000. Well, that's just a lot to ask for any market.

[00:10:21] If you get too particular and too specific, then you're going to have a hard time regardless. So I think if you are being broad enough and open enough to different possibilities, A little bit of squish in your price range and a little bit of squish in the kind of property you're looking at that you're going to feel like you've got more than two things to look at, plus your yippie aye a for us.

[00:10:46] You know, I have been spending a lot of time calling strangers. Talking to people, walking down the street, sending letters, some of you guys got some of my notes, you know, do you know anybody that wants to sell their house? It's starting to happen? So we have two in Grants Pass.

[00:11:04] Coming up, we have several in East Medford, and they were targeted particularly for particular buyers. And so they get first dibs, but, but this idea that people are willing to put the house on the market now is really a combination of they're safe because there's enough people vaccinated. Also, I think the numbers in our relative counties in Southern Oregon for COVID have gone down.

[00:11:30] But also they're watching their neighbors successfully sell and move on to the next life and there's profit taking, because right now we really are at the top of that crescendo price-wise.  So, I spoke to, a nice, uh, nice young man yesterday about selling his house in East Medford, wants to find a another house out in the country, the little bit of elbow room.

[00:11:53] And he's not feeling any big hurry because there's enough properties out there in his price point that you know, we can go out and look for a month or two, and then he can put his house on the market, understanding that he's gonna have a lot more competition when he sells that house. So this March, April, May, May, or June, he's going to be, it's not going to be as strong of a sellers situation when he puts that house on the market in June, but he's okay with that.

[00:12:21] And again, that tells me balance. Normal neutral markets feel like there's a little bit of breath, whether you're buying or selling, doesn't matter. You feel a certain amount of room just in your decision-making. You're not running around with like a chicken with your head cut off. I buy it. By those words, that's all good.

[00:12:41] Or I have to sell this right this second. So, so we'll see if I'm right, but when we start having this many buyers start to push back and we have sellers saying, you know, I'm okay not selling it at the top of the market. I'm just going to take my time and not let the market push me. You get enough people doing that in enough counties and in enough zip codes.

[00:13:05] I think that starts pointing to the idea that we're here. We're here in a normal neutral market. This is the beginning. So, anyway, so that's what happened this week. I'm around all weekend. If you need any help, you want to chat, you've got a special situation. You can reach out (541)301-7980

[00:13:26] You can call, you can text, you can email, just let me know what you need and we'll take good care of you. So other than that, have a fabulous Southern Oregon weekend and we'll catch you again next Friday.