Narrowing the search
Q: As we move closer to the spring home-buying season, what are potential buyers looking at to narrow their search?
A: Investors who are after a very good deal are looking at short sales and banked-owned real estate. Short sales remain strong even (when) contingencies are attached. They are looking for reasonably priced fixers and are willing to cash out and even take out a small loan. I've had several investors taking their time, looking in southwest and east Medford, because even with houses moving quickly, they see those areas having the best long-term values. People looking at rural properties are looking at Central Point because of affordability and even Eagle Point. They've been steering away from Ashland and anything associated because values haven't dropped as much.
Q: Are neighborhoods as much of a consideration when housing inventory declines?
A: Neighborhoods, along with homes that don't require a lot of repairs, remain important because there is such a vast spectrum in values and opportunities. The buyers I've been working with are choosing houses where they don't have to put in a lot of time and effort. They are looking at kitchens, quality bathrooms and yards where they can do something. They want to be able to put in a small garden or landscaping of their own choice.
Q: Why are people taking time if the inventory is trending down?
A: There still has been a lot on the market to choose from. If the inventory goes up much, it's like a stock-market blip and people slow down while they look to find the right thing. If inventory is small, then people buy out of sense of urgency and are not necessarily getting exactly what they want. When new listings are coming on, it means their property is on its way; they are anxiously looking to find it. Even when the market is not increasing significantly, some good-quality stuff will disappear. So it increases a sense of urgency to get into first position.
Q: Do you expect the inventory is going to bump up?
A: There are people finally reaching the point where they can't keep making payments, so they are going for a short sale. But there are lenders trying to steer buyers away from short sales because it takes so long to close. Loan commitments are only good for so many weeks, so they try to steer buyers away. Some agents won't even show them because of the frustration that can take place.
Q: Are buyers willing to put up with the length of time it takes for a short sale?
A: I have had some pretty negative experiences on short sales and bank-owned properties. In one case last September, the title company wouldn't sign off because the bank didn't have the right to sell the property. The buyer got frustrated and ended up going to small-claims court. For buyers, the bottom line is if they are short on time, then they need to stay away from short sales and look specifically at REOs (real-estate owned). Specifically, they need to look at sellers without complications in their mortgage loans. For somebody with time, they can get some good buys and take their time and put their offers in.
Q: How are buyers sorting things out?
A: Because of low interest rates, people who are not buying at least rental or investment property are short-changing themselves. Loans can be covered by rents. They can buy and turn things over to property-management experts. Keeping payments down to $700 a month is achievable right now. Still, when you get to property over $400,000, the market is still pretty quiet.
Q: Will we see more property coming on market for less than $200,000?
A: People are coming and going. There are still people trying to move into the area for retirement. Other people are looking for jobs and leaving the community. That range is active.
Q: How does the inventory matter for the buyer?
A: A growing inventory will create a competitive marketplace, and banks want to move those REOs. The agents working with them are in good communication. The lower end of the market is still unstable.
Q: What is the low-end price for a well-kept and maintained house?
A: It means going into the $80,000-to-$90,000 range to compete and get it sold because that's where the REOs are going. It's the driving force in our market and will easily continue to be the driving force through the rest of this year.