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MailTribune.com
  • How is housing uptick affecting pricing?

  • Q: We see the residential market showing some firmness it hasn't demonstrated in years. Elsewhere in the country, there are indications houses are moving faster. Do you anticipate a spillover?
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  • Q: We see the residential market showing some firmness it hasn't demonstrated in years. Elsewhere in the country, there are indications houses are moving faster. Do you anticipate a spillover?
    A: When those market(s) see faster sales, it can make a decision to move to Oregon easier, providing the confidence they didn't have when the market was slow. When those markets pick up before ours does, it certainly helps ... in terms of pricing. Even if they are losing money on sales in those markets, they will not only make it up ... on purchase but be able to buy a better house in Oregon.
    Q: What markets outside Oregon do you follow?
    A: Typically, the Bay Area, and that is a vast marketplace, and some areas are hotter than others. That's where the biggest influx of out-of-staters come from. But they come from Colorado, Southern California and any number of places. So much information is transferred through social media, LinkedIn and Facebook, and I'm friends with a lot of Realtors I've met at national conferences who are part of either associations or other large companies. When you see an influx of agents into markets, it's typically after you've seen an increase in sales. Realtors are slow getting out when a market slows, and slow to get back in when it picks up.
    Q: In light of the recent uptick in Jackson County residential sales, do sellers still have to be careful when they price houses?
    A: With very few exceptions, it all depends on pricing well. (There) are probably only a handful of houses in the valley — a couple of special homes — where price doesn't matter, but they are few and far between. Other than Realtors, no one knows the value of a home (better) than buyers. They know more than sellers because they are looking at homes that are close and comparable, and they inherently know a good deal when they see it. They'll also be the first ones to say, "I wonder what the seller was thinking" when a house is overpriced. They can tell right away if it's not priced competitively.
    Q: Are sellers pricing more grudgingly now?
    A: Anytime you sell when you're losing money, it's grudgingly. The real cost, though, is if they don't price it right from the beginning. By pricing it higher than what their Realtor recommends, they may ... hurt themselves. Ultimately, we will do what the client wants to do. My own clients can price a house wherever they want, but I will tell them this is what I recommend. In doing a market analysis, the longer a house is on the market, the more pressure there will be in the long run for pricing. Even if you come down in six to eight weeks, you are still chasing the market. If I recommend pricing at $250,000, and they price at $270,000, they probably won't get $250,000 anymore. Buyers look through the inventory, and it's quite shocking sometimes to see houses that have been on the market for 100 days and see how much less they sold for than what they were originally listed. Houses sold in 30 days are much closer to the list prices. After six to eight months, you're not going to get $250,000 but be lucky to get $200,000 to $210,000.
    Q: What do you think of reports that houses needing short sales have been listed at low-ball prices to create bidding wars.
    A: It's crazy to do that in other situations, and it's really risky for a seller because they are not making money either way. It doesn't matter if you are losing $60,000 or $100,000 — and risky for a number of reasons. Does the Realtor have absolute assurance that a lender-seller won't seek a deficiency judgment? The first (mortgage) might be satisfied, and the seller gets a 1099 (tax form). But there are seconds, thirds and any number of situations where liens can be filed. It's really important for both seller and Realtor to really think those things through. It's important to price accurately. It's one thing to list $10,000 under, but $80,000 or $90,000 under market value is setting false expectations for the buyers and hurting the neighbors' value.
    Q: If the market moves up over the next two months, will we see more aggressive prices in the upward direction?
    A: Probably not. In 2005 and 2006, we were at the peak of the market, yet it took until 2007 for sellers to recognize they were not going to get what they thought they would. When a turn happens, buyers are nowhere near ready to pay more because expectations have been down and down. But when you have a lower inventory and multiple offers on competitively priced houses, that can change things. The first thing you will see is that a seller at $250,000 just won't have to reduce the price. It will just sell, and it will create less pressure to reduce prices.
    Reach Mail Tribune business editor Greg Stiles at 541-776-4463 or email business@mailtribune.com. Read his blog, Economic Edge, at www.mailtribune.com/economicedge or follow @GregMTBusiness on Twitter.
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