As you can see from my previous writings I pick topics and write about different micro and macro markets in the Metro area. If you have a topic you would like explored, send it to me. I’ll take a look at it and see what can be developed. I use the MLS data and county records for my analyses. My focus is on Vancouver, WA appraisal topics, but I cover the entire Portland, OR appraisal area. Thanks

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Here are some further musings on the La Center, WA market. For background refer to the blog dated January 24, 2008.

Realtors, lenders, homeowners and others keep saying that the La Center market has crashed. I reviewed an appraisal of a house in La Center last week and the appraiser said the market was in decline.

Well, there is good news!!!!!!! Look at the following chart, and, AS ANY FOOL CAN PLAINLY SEE, the market has made a spectacular rebound. Ah, statistics. Remember the lesson about the “sick” man in the previous La Center discussion? And, in the January 24, 2008 blog I presented the graph in “Warning Red” background. However, in this presentation I have chosen an inviting “Money” green for your pleasure.

La Center, WA has made a spectacular recovery. It is setting records in market growth, rising from dead in the fall to way above its recent average in these winter months. (What was it about that “sick” man???)

Statistics are so useful. Especially when there is enough data to analyze and read sensible results. In La Center there is too little activity in a very small community to make use of such statistical numbers. The huge rise in the market in these winter months is the result of three sales. Not enough to create statistical analyses that you can hang your hat on.

So, as I said before, La Center is just slow at this time. At least that is the most you can say about it with authority. Looking at the sales data it appears there is still a market for the housing stock in La Center. There are “short sales” taking place. They are happening all over the county, not just La Center. I still think, as I said last fall, that we need to wait until April, and look at all the market activity to see if we can say the market is in the toilet or just flattened out. Remember, the recent past, with its high inflation and short marketing time of properties, conditioned us to expect that kind of activity. Those of us who have been around long enough know that the market will change from time to time. Inflation - correction - inflation - correction, etc.

La Center is ambling along at its own pace. When the short sales that are in process close, the market will appear to have dropped in value because of the lower prices (statistically speaking).

We’ll see in the spring.

Ralph K. Olsen, Appraiser

Pacific West Appraisal Services, Inc.

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I recently completed an appraisal of a house in the $550,000 neighborhood of value in the Salmon Creek area of north Vancouver (MLS area 44).  As I looked at the recent sales data and the marketing time, and the concessions made, I noticed some interesting characteristics.

The house sold in the mid $500,000’s.  It is a well constructed house with three bedrooms, three bathrooms, three car garage and lots of hardwood flooring and tile counter tops and wainscot.  The house is in the 2,500 to 3,500 square foot range of finished living area.

The above graph shows the changes in time of the average Days On Market and the average Sales Price for houses described above.

The MLS uses the most recent Days On Market number SINCE THE LAST PRICE REDUCTION.  That means that the days on market is reflective of a competitive listing price, and does not show the full length of the market exposure of the property.  The last column of this graph shows the same “Recent Past Six Months” TOTAL DAYS ON MARKET.

The average Days On Market reported in the MLS statistics was 146.82 for houses like my subject, near my subject.  The total average Days On Market without consideration of recent price reductions was 350.55.  As can be seen, as the Days On Market rises, pirces soften and sales  concessions appear.

As the market has slowed marketing time has risen.  Prices have been reduced and concessions have arisen.  In the case of my subject (which inspired this examination) the seller contributed to the buyers closing costs.  The listing agent contributed to the buyers closing costs.  The selling agent contributed to the buyers closing costs.

IT’S A BUYERS MARKET, at least in this category of house it its location.

Ralph Olsen, Appraiser

Pacific West Appraisal Services, Inc. 

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A lot of people invested in the residential real estate market haven’t been in the market for more than a few years.  And, seem to think the  market has always just gone up, and up, and up.  They were still Big Bird and Barney fans in 1979.   However……………………

I was visiting this after noon with a fellow appraiser in the Portland Metropolitan area.  He just completed an appraisal of a house in the southwest suburbs.  Nothing unusual about the house.  Typical for the area.  His analysis based on the most recent sales available (all of them very similar houses on similar sites) produced a value conclusion in the low $300,000’s.  He followed up by putting three listings/pendings in the grid of his report and adjusting them just as he had the sales.  These listings and pendings were, again, very similar to the subject in all aspects.

Each of the sales he used in his analysis were from July, August, September.  They were the most recent available that matched the subject.  The listings and pendings, after adjustments, suggested a market value in the neighborhood of $270,00 to $280,00 or so.

His conclusion was that, for that product, during that time frame, in that market; the market value had dropped 2% per month since September till now.  Interesting!

I don’t see that to be true throughout the metro area.  However, it is an indication of market softness.  The new money being pumped into the system will have some effect.  I still think that by April we will have a clear view of the condition of the local residential real estate market.  As we continue to look at days on market, foreclosures and prices, we’ll be able to see which direction the lines on the graph point.

Ralph Olsen, Appraiser

Pacific West Appraisal Services, Inc.

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Wow!!  Looks like that new money being pumped into the system is having an effect.  New orders for appraisal services to support sales and re-finances are up this month.  I visited last week with a man who is re-financing.  He said he was getting a 4.75% fixed rate on a 15 year loan.  Not bad.

New work is coming from all directions right now.  It will be interesting to track the results of this activity.  I am looking forward to lots of sales activity in this mix of activity.  Right now, when I complete an appraisal, I find that the most useful sales data is often in the June-July-August-September-October range, with little available sales data in the November-December-January time frame.  That was a lean time for sales.

Other than the disaster situations (overextended developers and builders, etc.), residential real estate prices seem to be holding on pretty well.  Yet, marketing time has continued to rise.  I will look at another micro market soon to see what it has to offer for insight into these interesting times.

Ralph Olsen, Appraiser

Pacific West Appraisal Services, Inc

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I just did a study of the recent activity in Pebble Creek Farms in northeast Vancouver, Washington.  The housing stock reviewed was ranch style houses built since 1990.

In the last 12 months there were about 74 sales, suggesting an absorption rate of 6.17 houses per month.  With about 23 houses listed there is a 3.73 month supply on the market.  That doesn’t seem bad.

Looking at the last six months activity there were 33 sales.  That is 5.50 sales per month, or a 4.18 month supply based on 23 listings.

Of those 33 sales the average sales price was $225,603.  The sale price to listing price ratio was 98.02%.  The average days on market were 40 days.  However, looking at current listings the average days on market was 74 days.  So, it is increasing.

Ralph Olsen, Appraiser

Pacific West Appraisal Services, Inc.

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