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John Ross Auction Results!
Yesterday The John Ross Condominium in South Waterfront held an auction to accelerate sales of the remaining developer units. 47 homes were sold in a day – a big win for the seller . . . at very attractive prices between 8% and 26% below the recent price – a big win for buyers! That’s right, I said “win/win”! In one case, a buyer managed to buy a NW facing penthouse for only $426,000! That is a 26.5% discount from the most recent asking price and a cool $220/SF on a model home that had window coverings and closet packages already installed! That one is a steal, even though the buyer’s compromise is the impact of freeway noise. The seller’s big win came from selling a large number of small lofts. They sold at prices from $161,000 -$206,000 which meant sales at the highest price/SF of all the homes.
You might be confused if you listen to the buyers and sellers talk about it today. While buyers bought for substantially reduced prices, even by today’s standards, there are some who will tell you that they are happy, even thrilled, with their “deal” but they had hoped to buy for less. And, the seller had hoped to sell homes for 180% of minimum, but the auction resulted in prices of about 155% of minimum. Not rich, but also not bad for an auction, and they did sell 47 homes so sales velocity was achieved! Sorry, guys, you can’t have it both ways, except to say “win/win”!
The moral to the story is two lessons, actually. The first is one of human nature – no matter what we want, when we get it we can still have remorse for what might have been. The second lesson also speaks to our human psyche – when the market is uncertain (have we hit the bottom yet, or not?) people obsess about their choices and second guess their decisions. In this case, all sales are final!
Here below is a sampling of some sales from the auction. Call or email us for a full spreadsheet in Excel.
| Unit # | Unit Type | Unit Square Footage | Winning Bid | Last Asking Price | Price per SqFt for Winning Bid | Percentage of Winning Bid over Starting Bid | Percentage Discount from Last Asking |
| 313 | 2 bedroom, 2.1 baths plus Den
Podium Unit Facing the Park |
2269 | $406,000 | $549,000 | $179 | 140% | 26% |
| 1816 | Studio 1 bath,
SW Facing |
637 | $162,000 | $188,000 | $254 | 147% | 12% |
| 2008 | 2 bedroom, 2 baths Study,
NE Facing |
1831 | $382,000 | $499,000 | $209 | 141% | 23% |
| 2905 | 2 bedroom, 2.1 baths plus Den, SE Facing | 2700 | $673,000 | $849,000 | $249 | 157% | 21% |
Priced to Sell and Show Well
The direction of pricing in our current market is no longer “priced right and looking food.” Rather homes that are “priced to sell and show well” are compelling buyers to take action.
What I have seen a lot of in this ‘recessionary’ market is that buyers have become even more demanding than they ever were before. They almost have an attitude of entitlement – like it is their turn to be the winners in negotiations. They take it for granted that they are going to get a good buy and wait and they have no compunction about making low offers and standing firm.
The problem is that with all the choices and the many houses on the market these buyers are often successful with their posture, and if they are not it is not uncommon for them to wait on the sidelines for a better deal on the next one. Sellers- do you want to wait for a better market or sell now in the market you have? All homes for sale get “priced” in the marketplace, and the ones we see selling are priced at very compelling values. Otherwise, there are many houses on the market that are waiting for something to change. And the problem is that we have learned that change in this market has mostly been moving lower, not higher.
Value seems to be the primary focus of current buyers and can you blame them? With the present fear in the financial market- everyone is acting more conservative with their investments. Property condition has become secondary to property value. Perhaps this market has allowed buyers to seek more potential in their home’s condition rather than the appreciating value of the home.
Sometimes it takes a village to close a transaction
Our team closed a transaction yesterday that proves that even in a tough market, difficult transactions close– it just “takes a village!” We faced and overcame the many surprises outlined here, and if you’d like to read the whole saga – the narrative is below.
Sequence of surprises for Grant Park Duplex transaction:
- Buyer chose a duplex after seeing mostly single family homes
- Seller accepts offer as written – no counter offers – signed on the spot
- Home inspector finds that significant repairs are needed throughout the entire house. There were issues with a cracked sewer line, defective LP siding, cracking foundation, rotted sill plate and posts in the crawl space and basement, old roof, bad plumbing and electrical throughout the home, and the list went on and on
- Seller accepts the buyer’s repair addendum as written requiring over $40,000 in total repair costs
- Lender requires clean pest and dry rot report and the work turns up even more dry rot behind the siding, under the porch and in the crawl space. Seller says they’ll fix it.
- After 3 oil tank scans, soil under the foundation is found to be contaminated by underground oil tank – over $6500 in DEQ required repairs. Seller says they’ll fix it.
- Appraiser requires all peeling paint to be removed and repainted on the inside and outside. Seller says they’ll fix it.
- Siding company gets behind on siding installation due to the extent of dry rot repair and weather. Closing has to be extended.
- Price has to be changed because the exterior paint will not be done by closing so the buyer has to pay for painting after closing
- The transaction actually closes with no last minute mistakes to manage
The Jackson Group relationship began with these clients about 2 years ago when they started searching for homes with classic charm and character in NE and SE Portland. We focused our search on homes that were in great neighborhoods like Clinton, Abernathy, Hawthorne, Ladd’s Addition, Grant Park, Alameda, etc. and most of what we were finding was older homes that needed some work. We even had an escrow on an REO property that ended up being a little uneven on its foundation. When that one failed we took a break for a while.
We started our search months later and prices had come down. We expanded our search to duplexes with the possibility of renting out the second unit until the buyers could someday expand into the entire home. One hot summer Sunday evening, we looked at 3 properties and the last was a duplex in Grant Park right behind the high school. From the outside with the peeling paint, vines growing up the chimney, old roof, cracked foundation and original windows, it was an obvious fixer. But on the inside the original charm was still there. The rooms were large and stately but there was still a lot of work to be done. We were surprised when the clients wanted to write an offer.
The sellers had owned the home for many years and had never lived there but had a steady stream of loyal tenants in both units. The home had gone through quite a history since it was built in the 1910s- it was even converted into a boarding house in the 1950s. It had only been on the market for a few weeks and our offer was below the asking price, so we made the extra effort to present the offer to the listing agent and the sellers in person.
Our client was a very strong buyer with a solid loan approval through one of our favorite mortgage brokers, Mike Hall of Pacific Residential Mortgage. The presentation of the offer went well and on the way back to the office the call came that our offer had been accepted as written. I was so surprised that I almost hit the car in front of me! I called the client right away to deliver the good news. But we all knew that we had quite a ways to go to get through this transaction because of the extent of the needed repairs.
After the 5 hour inspection, Don Hatch of Assurance Home Inspections discovered that almost every element of this home needed some repairs. And, we’re not talking about “the kitchen sink leaks when the hot water is on”. No, we’re talkin’, this home needed a new roof, new siding, new foundation supports, new posts and beams in the basement, code violations in staircases, peeling paint, electrical and plumbing, and more. We could not even find the underground oil tank that we knew existed somewhere. So our work was cut out for us.
Over the next week, I went out to that house at least once a day to meet contractors to get proposals on the repairs. And after about 2 weeks we had most of our numbers in order. We were ready to draft the repair addendum. I presented the repair addendum in person again due to the extent of the request (over $40,000 in repairs). We continued to re-iterate our client’s wish to be as reasonable as possible and focus on repairs that the lender would require as a condition of closing such as structural and safety hazards. The buyer was even willing to raise the purchase price to help with the cost of some of the repairs.
The seller accepted our repair addendum as requested. We then had to mutually agree to choose the contractors for each job. Sorting through those numbers took another 2 weeks and 5 additional addendums but we finally set the dates and chose the contractors to do the work. Now there was only the work to be completed and to close.
WRONG! Another surprise hit us when we finally found the oil tank using a geo-tech specialist. The underground oil tank was leaking underneath the foundation of the home. DEQ requires that the soil not be contaminated by leaking oil and, if found to be unsafe, the tank and soil around the tank must be removed. The sellers took charge and found the right contractor for the job and cleaned the site – phew!
The siding company got behind schedule with the installation of the new hardy plank because of poor weather and more dry rot found behind the siding. The lender was requiring re-inspections by the appraiser, the pest and dry rot inspector and our home inspector so we scheduled them all for the same day. But because of the extent of the repairs, there were still some items that needed to be addressed during our final week of escrow. The seller went to task on the remaining list and finished 4 days later. I gave him my pink camera to document the additional repairs to send to the inspectors. Finally, all that was left to do was to get the okay on the paint from the appraiser and push a little paper.
The transaction officially recorded yesterday. Our clients were out to the house last night measuring rooms and creating their “to do” lists for moving in and making the home “theirs”.
I give the most credit in this transaction to the sellers. They were there at every step of the way to make sure that we had everything covered. I even had the seller’s phone number plugged into my phone because we were in such good communication. Our team has never done more paperwork or had a thicker file. This closed real estate transaction shows that even in a really difficult market, tough deals can come together if everyone works together to make it happen. The buyer never stopped wanting to buy, and the sellers never stopped wanting to sell, so everyone did their part and made it work.
Thanks to everyone that helped make this long shot become a success for all!
Back Inside the Bubble!
by Becky Jackson
First time home buyers are the action area these days, and I have had great fun working with a few of them. This weekend I found myself writing an offer for a “FTHB” client and our offer was the 5th to be written! It’s a cute bungalow in Southeast Portland, so naturally, it’s a popular property. Fortunately, this client is well qualified, has a generous down-payment and a great job. Her offer should be competitive with the best.
But it may not end with 5 offers. The seller, a lending institution, has made it a policy to list the house for 10 days, collecting offers, before deciding on a buyer. So we will be on pins and needles through another weekend before the client has her answer!
In this buyer niche it’s like 2005 all over again!
Atwater Place To Auction 40 Homes!
The owners of Atwater Place in South Waterfront announced recently that 40 homes in the building will be sold at auction on September 20th. Many of you have called or emailed with comments and questions, so I thought I would speak up about this to help others understand what is happening, what it means for the marketplace and what you need to know if you want to participate.
Many people are talking about this auction as if it were a sorry situation, but that is absolutely not the case. The best thing for the marketplace is to have these condo buildings with many unsold homes have an auction to sell condos at prices that buyers are willing and eager to pay, rather than continue to sit with unsold homes that are priced as if we are going to go back to $400/SF! Well, that ain’t happening any time soon, and when the owners of condos understand that, we will have a healthy and active market again. The best thing for the current owners of homes in these buildings is that the rest of the homes get sold and the buildings get fully occupied by new homeowners who move in, shop in the nearby retail, take walks in the neighborhood and help make the building and neighborhood a vibrant place to live.
Atwater Place Condominiums at South Waterfront
The auction for Atwater Place is the first to happen in Portland’s downtown area so we will be learning on this one how the marketplace will respond. I believe it is a terrific opportunity for condo buyers to buy premium homes in a stellar building and a top quality neighborhood. These are all good features of A-grade property, the kind that every homeowner seeks, and the only reason these homes are not already sold is that they are priced too high on the builders’ price lists. The auction should give buyers the chance to set prices they are willing to pay, which may not be as low as the minimum bid, but which will be appropriate for the current economy and today’s market environment.
Here’s what you need to know if you are interested in attending the auction – and The Jackson Group is well prepared and available to assist you with any specific needs, from plain old information to full blown representation for a purchase. The seller will pay the fee for our services to represent you to buy at the auction, though there are some rules attached to that. Call us if you have questions, and plan to have one of us accompany you to visit the Auction Showroom to register you as our client.
Facts to know:
Auction Date and Location: 4:00PM Sunday, September 20, 2009
Marriott Portland Downtown
1401 SW Naito Parkway
Portland, OR 97201
40 Homes are offered for sale at the auction, with pre-set minimum bids which, if offered, will be accepted. The seller reserves the right to change the units offered at the auction and may do so based on buyer interest. The homes range in size from a 931SF 1-bedroom to a 2355SF premium home with minimum bid prices from $169,900 to $899,000. We have the complete list of homes plus floor plans, so call us if you want more details.
All potential buyers must be prequalified with one of the pre-approved lenders (Bank of America or MetLIfe Home Loans) prior to the auction – even if you intend to use your own lender. Cash buyers must provide proof of funds prior to the auction.
All buyers who wish to participate in the auction must be registered by submitting a completed written form by 7pm on September, 18th. On auction day, bidders must have a cash equivalent (cashier’s check payable to yourself) of $2500 for each home they may purchase. Upon successful purchase, buyers must endorse their cashier’s check to Ticor Title Company and agree as part of their purchase agreement to increase their deposit to 3% of the sales price, which must be paid with a personal check payable to Ticor Title that evening.
Closing of all successful purchases shall happen by October 19th, unless an extension is agreed to in writing with the seller.
There are at least a dozen other special conditions, so if you need more information, please call us and we can go through all the fine print with you. Again, we believe this is a positive event for the marketplace and we encourage people who may be interested in buying a downtown condo to get involved if only to learn and then determine if there is a positive possibility for them in this auction.
Have a great holiday weekend!
Becky
Update on First Time Home Buyer $8000 Tax Credit
2009 is the time to be a new home buyer! The government is making a strong effort to boost the housing market and the presence of first time home buyers with this update on the tax credit. Last year- the credit was worth $7500 and you had to pay it back each year in $500 increments- basically an interest free loan from the government for 15 years.
But as of January 1st, 2009- the credit was increased to $8000 and you no longer have to pay it back! What a deal! And just this week- the government will now give you the $8000 at closing to put towards your downpayment. Therefore you could get away with little or no cash needed to purchase a home.
Here is an example of what it would look like to buy a $200,000 loan. FHA requires a 3.5% downpayment right now so that’s $7000 on a $200,000 house. Your closing costs might be around $6000 so the cash needed to close the loan would be around $5000. And the tax benefit that you will receive by being a home owner is significant- you get to write off your interest, mortgage insurance and the property taxes that accompany your home payment. You will likely come out ahead compared to renting.
Prices are low. Interest rates are WAY low- 2009 is the time to buy your first home. Our team is experienced and has help many new home buyers be successful in this market, so give us a call and we can detail your numerous options.
Call Sarah at 503-416-4178 or email at snorton@realtytrust.com
March Statistics for Portland area Home Sales
Here is the latest march-2009-market-action report from the RMLS. This is the monthly summary of the real estate sales statistics for our region published by the Regional Multiple Listing Service.
In February both the increase in sales and the decrease in listings relative to last month (January) had a positive influence on the amount of inventory for the Metro area. Inventory now is just over 16 ½ months, down from the record breaking high of 19.2 months in January. While this is both good news and a positive change, we are still in a market that is hugely biased in favor of buyers due to high inventory and very low demand. Until this imbalance changes we can only expect that pricing pressure will continue to be on the downside. This means that for selling listings our strategy must continue to hold to these tenets: very competitive pricing, excellent condition and showing preparation, showing convenience for buyers’ brokers and multi- focused marketing strategies for reaching all possible prospects. We also keep clients well informed by offering regular reports on the number of showings for properties and feedback from the brokers or buyers about those showings, plus the competitive picture specific to each listing.
Another report we provide is the “market analyzer” which shows market demand and inventory absorption in a specific property area and type, among other things. This report is key to understanding why pricing much be considered in terms of demand as well as property comparison. For example, we may be able to determine that a property is priced competitive to all other listings, but still have sales challenges because there simply is such light demand.
For buyers we provide all the same detailed information for the areas and specific properties that are of interest in their home search. Knowledge is power!
Our intent is to provide legitimate statistical information that i useful to you for taking care of your plans for moving. We know that a big decision like buying or selling a home cannot be done without the analytical information possible to help with those decisions. There are a lot of good things about our business that are emotional and subjective – we need to have personal and emotional connections to our homes. Added to that ‘emotional connection’ I welcome the ‘proof’ of statistics to help us with strategies and decisions. This is true for both buyers and sellers alike.
As always, if you have any questions or want to discuss something specifically, please give us a call at 503-416-4177.
Becky
Best of Tour 2.3.2009
Today we begin again the “Best of Tour” series our old blog site featured last year. We’ve included a couple of the old posts to continue the ’conversation’ about what makes a good listing on tour. This column is all about the notion of what makes a good house . . . . Period!
In these posts we’ll show you the best homes we see on our Tuesday tours – (that’s Portland’s day for brokers to visit and view new listings to be informed and knowledgeable about the current homes for sale). We may pass from time to time, if nothing is worthy of compliments, and some weeks you may see multiple selections we find compelling. Our intent is to share a broker’s view of what make a good home: a well prepared listing, a price based on market realities and a professional presentation of all the best aspects of the property. In short, a solid home, priced right and ready to sell.
Brokers must see – in person – homes for sale to know what is available to show and sell, and to know how best to match properties with clients. The old practice was to “caravan” as a group to numerous listings every week. This model lost favor with the use of the internet and now, many brokers, just like consumers, tour homes online while sipping tea in their jammies. But we contend that there is no substitute for a physical visit.
All buyers must eventually step inside a home and walk the neighborhood to really know if it is ‘”the one!” The Jackson Group continues to tour homes on Tuesday because it is worth the effort to stay informed and in tune to market nuances. We may miss an occasional tour if our clients’ needs are more immediate than two hours out-and-about, but our promise is to stay plugged in to what is available, attractive and worthy for our clients.
Today’s report. It was a long tour and I concentrated on the west side and still couldn’t get to all the properties I had marked as interesting. A sign of the season as well as the times.
Today’s post is a comparison of two nearby homes in Portland’s Westover Heights area.
The first is a fixer-upper at 2833 NW Cumberland listed by friend and colleague Kathy MacNaughton of Realty Trust Group. It’s a great old Mediterranean designed by one of Portland architectural fathers, Lawrence Ellis. This house needs absolutely everything – an easy $2-$5 hundred grand on top of the $869,900 asking price! Why, you ask, do I recommend it? Well, it has those elements I love; great neighborhood and location, great architecture, untouched original handcrafted character and it is ready to restore so you can do it right. Buy it and rebuild it, it will be worth the effort!
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- 828 NW Summit, Portland, Oregon
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- 2833 NW Cumberland, Portland Oregon
If a project is not your style, an alternative just a few blocks away is 828 NW Summit listed by Bradley Young of Winderemere/Baldwin Properties. This one is also a classic architectural style and it has already been renovated to “the nines” so you won’t have to lift a finger. The price is $1,250,000, so between the two houses you’d probably spend about the same money.
So, which are you, the “fix-it-up-and-make-it-your-own” type, or the “move-in-now” to a beautiful home where the work has already been done for you? Two good choices!
Becky
How are you doing in this real estate market?
Our neighbor states in The West have been known for their high market volatility, yet we know that here in Portland our markets are characterized more by slow, steady and small changes. Have a look at our recent report. statistics-by-zipcode
We show you the real statistics about your own neighborhood in charts of homes sale values by zip code for the last four years for many of the areas of Portland that we know matter to you. There are some ups and some downs, but the high volatility we associate with the busting of the housing bubble is not the reality of our Portland area. The information comes from sold data from the RMLS and may not include sales that were done privately.
If you are interested in our report, please contact us with a request and we will send it on. Or, if you have received our report and want more information, or want to learn about a zip code or area that is not included, that’s another good reason to get in touch. .
In recent conversations, many of our friends and clients have asked how we are doing in this credit crisis. While the current market has brought us significant challenges, we are managing through it. We have worked with several buyers recently for whom new loans could have been a challenge, but we have sourced stable lenders with programs that have enabled us to do some loans with 5% and 10% down payments. Credit is available if properly documented and sourced with good lenders. Additionally, we are working with a number of buyers who see this part of the economic cycle as an opportunity to be exploited and they are actively seeking the right property at advantageous terms.
For our sellers we are doing our best to promote properties – especially online, where most buyers are looking – with quality photos and virtual tours and we recommend staging or top notch condition for all showings. We are advising sellers to do everything possible to prepare their homes to ‘shine’ compared to the competition and to price them to be positioned strategically and offer value relative to other homes for sale. We keep our sellers informed about market activity and buyer feedback with weekly reports as we know good communication and information is essential for all of us to make important decisions about how to take care of business today.
We have great properties for sale – and if you see anything on our website that may be of interest to you or a friend of yours, just let us know how we can help. 503-416-4177
Becky
Buy NOW First Time Home Buyers!
Although the headlines would lead you to believe that credit is no longer available for first time home buyers, the Jackson Group has helped a number of first time home buyers this past summer - working though the challenges to reach a happy closing with each client.
There are misconceptions about the market these days, the first being that first-time home buyers no longer qualify for a loan. Au contraire! This summer, we helped 4 first-time home buyers purchase their first home. Each buyer had a down payment and the sellers helped out with the closing costs. In the end, the buyers are enjoying pride of home ownership, lower prices, low interest rates and a quality home in a desirable area. They are also going to benefit from a $7500 tax credit for 2008 for first time home buyers only. What a deal!
Our buyer clients found deals that were NOT foreclosures. Distressed properties are not always the best place to look for a deal. Many individual sellers have the capacity to accept an offer lower than their asking price. The truth is, most sellers active in this market are aware of the new dynamic in prices and are willing to accept less for their home than they would have last year.
Our advice to buyers in this market is to get your finances in order- talk to a mortgage broker (and class us if you want a good referral) and learn what you can afford today. See if the picture today makes a difference, and if so, buy now! Prices are low and interest rates are lower and there are many good homes on the market in Portland to choose for your own.
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A super traditional family home in a most ideal of family neighborhoods, this new listing at 1462 Greentree Circle is a perfect place to settle. An open floor plan with warm hardwood floors, fresh updates and a bonus room over the garage. The home has four bedroom home including a sexy master suite that has [...]John Ross Auction Results!
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