It Goes Up!, It Goes Down?
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.
Pacific West Appraisal Services, Inc.
pwas.net
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