The condominium market in Clackamas, Oregon has been showing some interesting changes. A review of all the data in the MLS for that area (zip code 97015) has been included in this analysis. The questions had been asked if property values were going up or down, if supply and demand were in balance and if marketing times were reasonable. Let’s see.

In the six months from December 1st 2006 to June 1st 2006 the average sales price of a condo in Clackamas was $134,887. In the six months from June 1st to December 1st 2007 the average sales price was $140,030. This is a 4% rise in sales price. So, we could say the market is up. However, the market has taken a turn and these statistics are past based. They can not look forward. We must keep in mind that as the market turns an “increase in the rate of decrease” may be occurring that the recent statistics do not show. I say that around April 1st 2008 this analysis might be done again and then we will have a much better reading of the market’s direction. Right now it is pointed downward, but this could be short lived. Also, there is a bell curve of activity over a typical year. It is cold in January and the market activity is lower. It is hot in July and the market activity is up. It is cold in December and market activity is down again. With this standard bell curve of activity in mind, it is understood that this time of the year would show lower activity than the summer. Yet, all signs appear to be down for now.

In the last six months there were 40 sales of condos in Clackamas through MLS listings. That equates to 6.67 sales per month. There are now 70 such listings. That suggests a ten and a half month supply on the market at this time.

And what is happening with marketing time??? Well, it looks like this. In the six months from December 1st 2006 to June 1st 2007 the average marketing time for condominiums in Clackamas was 11 days. Since June 1st 2007 the average marketing time was 36 days. AND, there are now 70 listings. AND, they have been on the market for an average of 129 days. Now that is an upswing!!! Or, should I say, downswing?

(It should be noted that none of the statistics in this analysis have been gleaned to remove anomalies. It is all the raw stuff.)

Ralph Olsen, Appraiser

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What’s new along the river front?  All the data presented in this discussion is from the MLS records.  Property sold outside the MLS is not included here.

The land on the river front is all unique.  Some sites have sandy beach.  Some have rip-rap frontage.  Some are in developed residential plats, some individual home-sites.  Because of the uniqueness of all these sites it would be necessary to interview the owners and/or sellers to find out the unique characteristics of each.  In this analysis no interviews were conducted.  The notes in the MLS listings were relied upon together with county maps.

Remember when Columbia River frontage was $1,000 per front foot?  I do.  It hasn’t been a long time either.  Of the sales I saw that occurred since the beginning of 2007 the rates per front foot ranged from about $4,600 to $6,000.  At the upper end of this range is a sale that took place this month, and is now listed for just under $12,000 per front foot.  It had been listed at the lower price for almost two years.  The buyer is an investor that looks to the long term.  We’ll see how that listing does.

The active listings provide a mix of properties.  One, at the upper end of the rate per front foot is one in Steamboat Landing.  It is listed at $1,000,000 or about $20,000 per front foot.  Steamboat Landing is a gated community with a boat dock open to the public for slip rentals.  Around 15 years ago a river front lot in Steamboat Landing was about $50,000.  And, sales were slow.  Things have changed.  At the other end of the spectrum is a small lot off Image Lane.  It is currently listed at $4,250 per front foot.  Another in the upper part of the range of prices per front foot, there is an acre of sandy beach front available for $1,249,000 or about $10,000 per front foot.

As the frontage of the north shore of the Columbia River continues to be built upon the value of the land grows and grows along with the purchasing power of the dollar shrinking and shrinking.

Ralph Olsen, Appraiser

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This publication covers the downtown Vancouver, Washington condominium market.  It addresses only those units that are in buildings of four stories or higher.  It addresses units that are 1,250 square feet or larger.

There are four buildings that fit this description.  Amongst them (by my count) there are just under sixty units that fit the above description.  All have sold since their coming available on the market.  Of these it appears that about 50 of them sold while listed with the MLS.

A cursory look suggested that only one of these is bank owned (REO) at this time.  However, the road to REO takes time.  First there is delinquency in payments.  Then notice of trustee sale (NTS), then the sale, then the transfer of title and listing in public records.  All this is to say that more could be on the way.  One would have to read all of the NTS  recordings to find out.

In the last 12 months there were nine units in this study category that sold in downtown Vancouver.  The low sale price was $435,000.  The high sale price was $862,000.  The average was $600,500.  The low days on market (DOM) was 23.  The high was 625 and the average 354.

In the previous 12 months (November 2005 to November 2006) there were six sales.  The low was $379,500.  The high was $670,000.  And, the average was $539,131.  The low DOM was 5, with a high of 335 and and average of 103.

In the November 2004 to November 2005 time frame there were 13 sales.  The low was $375,000.  The high was $543,840.  And, the average was $449,165.  The low DOM was zero.  The high was 274.  And, the average was 122.

The days on market went from 122 in 2005 down to 103 in 2006.  And, in 2007 has risen to 354.  Wow, what a difference.

Another element of interest was the list price to sales price ratio.  In 2005 it was 102%.  In 2006 it was 97% and this year is at 86%.  Wow again.

In the last 12 months the rate of sales per month for this product was .75 per month.  There are seven current listings.  This suggests a supply of over nine months currently on the market.

The data available is too limited to say that the prices of these condominiums are falling, stable or rising.  In the last 12 months the average sales price was $600,500.  In the previous 12 months it was $539,131.  And the 12 months before that it was $449,165.  This looks like a steady rise, however, there are a number of very large units (over 2,200 square feet) the presence or absence of which in any data group, greatly influence the statistics.  A much more in depth study would be needed that includes sale date, sale price, square footage, floor location, view, etc. to get a clear picture of the real direction and velocity of the market.  That kind of study is beyond the scope of this publication.  If you want one done, give a call.

All the data presented here is from the county records and/or from the RMLS.

Ralph Olsen, appraiser

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The way the law is structured it goes without saying that all that is published here is copyrighted. I have always wanted to begin the closing paragraph of an appraisal with “As any fool can plainly see………” How could anyone contest my conclusion with an intro like that???

Anyway, you have my permission to use anything you find here for you own use. And, if you use what you see here in any kind of publication, like an appraisal report, give credit to pwas.net. That is where you found it. That is its source. And, please hyper link it. Easy.

As time goes by more in depth analysis of local real estate markets will appear here. You are welcome to the info presented and encouraged to let me know what else you’d like to see examined (i.e. different market segments or product types). As our nervous markets continue to shake, rattle and roll there will be lots to talk about.

As a matter of fact, I was visiting a local appraisal office the other day. As you might expect, the topic of the condition of today’s residential real estate market came up. One of the appraisers said she had so little confidence in the market that she would not consider buying a US Treasury Note with a maturity of more than 12 months. Hearing this, another appraiser in the conversation said he had even less confidence than her and would not consider a Treasury Note with a maturity of more than six months. It was then the office manager spoke up and said that both of them had more confidence than she had. And, in fact she wouldn’t buy green bananas!

We all have our own crystal ball. The question is “how clear is it?”

My next posting will be a study of the high end, downtown Vancouver condominium market.

Ralph Olsen, appraiser

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Recently I was asked by two different appraisal management companies (AMC) to submit miscellaneous information to them so I could be put on their list of approved appraisers and receive appraisal assignments from them. In each case I sent them the copies of appraisal certifications, applications, phone numbers, addresses, etc., etc. In each case they wanted a work sample. In each case they disqualified me based on their review of the work samples. In each case I had looked into my files, found the report that required no thought whatsoever, and sent a copy along. They rejected the reports.

These were reports accepted by other companies without follow up requests for further data or clarification. They were good reports; they were easy reports. Any of us who submit such work for “samples” know from experience that the lender or AMC is not interested to see how we think and analyze, they just want to know if we can fill in the form and produce the necessary attachments that complete a residential appraisal report. (The very first time I was asked to submit a work sample, all those years ago, I submitted a report on a property that was very difficult to analyze, and I thought I had done a very good job of applying appropriate appraisal techniques and sound logic producing a defensible result. “REJECT”

So, these two recent times I sent the very easiest I had recently done. The subject was less than a year old. Each of the sales, of which there were about forty available, were within a half mile of the subject. The only adjustment that was needed was for a patio. The subject had one, the others did not. “REJECT”

By now you’re probably wondering why I am taking up your time whining about it. Well, this is why. In each case, when I was notified that my sample report had been rejected, I contacted the company involved and inquired what was wrong with the report. Why had they rejected it, I asked????? In each case they told me that it was company policy to not tell the appraiser what the concern was. And, in each case I asked them to provide me with their report writing criteria so I might follow it and re-submit. And, in each case they refused to provide such criteria.

When I became an MAI and when I became an SRA, the Appraisal Institute was forthright enough to provided me with a statement of what they required to pass the “demonstration report” requirement to receive those designations. And, in each case I followed their guidelines and passed. (Far more difficult than any business report.) Yet, a business looking for appraisers to provide appraisal services to them play this odd cat and mouse game with the prospective appraisers. I can not figure out any possible advantage to the company looking for appraisal services to be so guarded in allowing the prospective appraiser to know what the report writing criteria of that company is.

If you do, please send an e-mail and let me know.

Ralph Olsen, Appraiser

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The topic of this post is the area known as Sifton in the northeastern part of the Vancouver, Washington metro area. Sifton is generally covered by the MLS area 25 and all the statistics presented here are from area 25. In this analysis properties built in the last 20 years, on typical residential homesites (not acreage), detached two story construction were used as the market indicators. In the chart below the average sales prices and average days on market are presented for the last three years.

SIFTON

As can be seen the average sale price grew about 22% in the 2005 to 2006 time frame and about 5% in the more recent time frame. The rate of growth has slowed considerably. Also, the days on market have increased greatly. In the 2005 to 2006 time frame the days on market grew about 75% and in the 2006 to 2007 range grew another 75%. Looking only at data from the last two months the average days on market is about 87 days. This compared to 83 days on average in the previous two month period and 74 days in the two months prior to that. So, the days on market has been growing in the last year and a half, but it appears to be stabilizing in recent months.

Average sales prices in the last two months were $293,782. In the two months before that were $293,223. And in the two months before that were $291,688. This is a very stable price trend while marketing time has expanded considerably, yet is not extraordinary at 87 days currently.

Overall the Sifton area appears to be representative of the market in general. The rate of inflation has slowed. Marketing times have lengthened. There is a lot of talk about the market collapsing and being in bad shape. It appears to me that the market is much more normal. It’s like when you are driving down the freeway at 90 MPH and you see a police car at the side of the road. You slow down to 60 MPH (the legal limit) and it seems very slow. But, in reality, it is normal and only seems slow by comparison. It looks to me like the market is correcting and getting back to normal. And, with all the “liquidity” the Fed is pumping into the system and with the lower interest rates, we should see the value of the dollar continue to slide (or did I mean to say property prices continue to rise [Is there a difference?].)

I also note that there were, on average, 6.25 sales per month in this area for the property type under review. There are 53 current listings. That suggests an eight and a half month supply on the market. If the “liquidity” factor and lower interest rates have their intended affect, the market should start popping along after the first of the year. We’ll see.

Ralph Olsen, Appraiser

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