Astoria home sales rise 11.8% for the year

In our relatively small coastal market it’s not uncommon to see peaks and valleys when looking at units sold from one month to the next. This makes it a little tricky to figure out if a peak is the start of a trend, or just a peak. Most housing experts would agree that while the market tries to find the natural bottom we will have small bumps from one month to the next.

So far homes sales have risen 11.8% this year in Astoria, and April sales alone were up over 16% compared to a year ago. I could speculate as to why, but from what I’m hearing from home buyers most feel that the market has mostly bottomed and buyers don’t want to chance missing out on very low interest rates.

Pending homes sales rise a whopping 79.4%

Wow.

That’s the G rated version of my reaction when I reviewed the YTD pending home sale numbers for Astoria. I knew the market was pretty active and it ‘feels’ like pending sales and buyer activity is way up but I had no idea how much. Pending home sales for April alone rose over 90% compared to last year. Incredible.

I don’t normally like to gauge the strength of our market by pending sales as a number of them don’t actually close for various reasons. However seeing a surge like this tells me strong closed sale numbers will be coming over the next 2 months.

What is means to you

For buyers the strong closed and pending home sale numbers should you the market is continuing to find it’s natural bottom, and good times won’t last forever. I don’t think you need to worry that prices will noticeably rise anytime soon, but if this trend continues the inventory will being to return to more normal levels… Meaning fewer homes to choose from and increased competition from other buyers. Possibly more multiple offer situations on traditional re-sales like we’ve seen on many of the bank owned properties. But again, I’m in no way saying you need to buy something today. Watch interest rates and if they begin to climb it’s time to get serious.

For sellers there is mixed news in these numbers. Stronger than normal buyer demand is great news for anyone with a home to sell. If your home has been on the market during the past few months and you haven’t had much interest you may need to review your marketing strategy and ensure there’s no serious issues with the home that turn buyers off. If you are planning to sell your home this year keep in mind that not only are there a lot of buyers out there but the Astoria market usually peaks in June and begins to slide from mid-summer on. If you’re in a position where you need to sell this is the best opportunity you’ve had in a while.

An absolute gem! Almost 8 acres of the best real estate in Clatsop County, tucked away in the Nehalem River Valley just 12 miles East of Astoria on Highway 202. Nicely updated 2,820 sq-ft split level home with tile floors, 3 fireplaces, wood stove, 95% efficient propane heating system, generator ready, high speed internet, stainless appliances, sauna and tank less water heater. There are numerous ponds on the property in addition to the river frontage and water fall and wildlife every where you look.

On a recent visit to the property with my photographer we saw a pair of ducks lounging out in one of the ponds. They took flight when the photographer got too close but luckily he had his camera ready. It’s not uncommon to see the local elk herd passing through, and several deer frequent the property. Truly a paradise for nature lovers and sportsman.

Aside from the fully appointed house and national park quality scenery this property includes an approx. 1200 sq-ft detached studio complete with wood burning stove, electric heat and dedicated electrical panel. The possibilities are endless!

Full details and lots of photos of 87824 Hwy 202 in Astoria, Oregon MLS 12-393

We have often advised buyers to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming you are not an all cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. Recently, there are more people talking about the possibility that mortgage rates could begin to increase.

This is a great point… You won’t win by trying to time the housing market. Watching home values alone doesn’t take into account the potential cost differential (your monthly payment increase) if mortgage rates rise. The graphic below shows the 5% decrease in your buying power with just a 1% rate increase, and a 10% decrease if rates return to (still historically low) rates of about 5% APR compared with rates today.

image courtesy of the KCM Blog

Is now the time to buy?

We’ve all heard the ads from NAR that repeat “now is a great time to buy” for the past decade through the rise and collapse of the housing market. I refuse to tow the party line in that regard, but if you are considering buying a home at or near the bottom of the market I would suggest you give it serious thought right now. Even if values were to decline a little further the potential savings would easily be absorbed in the first year if you wind up paying a higher interest rate on your mortgage.

chart from bankrate.com

Historically as the economy begins to grow interests rates also increase. I’m no economist, so I couldn’t give you a factual explanation why… It just happens. We are already seeing rates climb a little, although the market is pretty volatile right now so I wouldn’t panic just yet. But, now is the time to seriously consider taking the next step IF you think buying a home is in your immediate future.

Waiting a year or two could mean higher interest rates in your best case scenario, or at least higher interest rates.

Home owners, this effects you too

It really can effect you in two ways, both on the sale of your home and if you purchase a replacement with a new mortgage. Waiting for higher prices could mean holding your property for an extra year or two of positive appreciation to offset rising rates.

This home is a little over 2500 sq-ft and includes a HUGE kitchen with pantry, formal dining room, living room with fireplace, large master suite with attached bath, walk-in closet and sitting room. A nice feature of this home is the high efficiency heating system that uses a heat pump for low electricity bills, and a free standing woodstove can be used to supplement or for a backup heat source in the event of power loss. The home is situated on a country acre just off Hillcrest Loop.

Formal Entry, sitting room on the right and living room behind the camera

Living room, half bath visible, fireplace just left of camera

Bright and spacious kitchen w/eating bar

Formal dining space off the kitchen

master suite, walk-in closet, soaking tub, tiled shower, sitting area

Full listing details and photos for 42090 Hillcrest Loop.

So far it looks like we won’t be seeing any drastic changes in the Astoria housing market, hopefully a little increase in demand and some of the excess inventory will be absorbed. It’s premature to speculate just how the inventory will look come late spring or early summer at this point, as the chart shows below the number of homes on the market starts at the lowest point in January and swells gradually until peaking during the summer months before returning to lower levels at the end of the year.

The chart above represents the number of single family listings active during each month of the past year. You will see a similar trend in just about all of the coastal communities in Clatsop County as homes tend to flood the market in late spring and those that don’t sell go off market late in the year. This can be an advantage to a motivated seller because the number of homes in direct competition is reduced significantly during this time. All in all it’s business as usual, with the one positive note that inventory didn’t drastically increase year over year.

While the number of active listings represents supply (inventory) the demand side of the equation would be the number of contracts written and the closed sales.

It’s pretty obvious that the swell in new listings during May and June matches almost exactly with the overall increase of active listings during the same period. In fact the charts match up almost exactly. You can also see that the number of sales is fairly smooth bell curve when you disregard the lows of May and October, showing there are some seasonal influences in demand. This is more typical of the second home markets in Gearhart, Seaside and Cannon Beach but nonetheless it’s one factor in how our market behaves in Astoria.

I took a quick look at the number of currently pending sales in Astoria, which at this moment there are 30 homes pending. Of those 30 pending sales, a quick look showed 11 contracts accepted in January and 9 so far in February (as of 2/16/2012). The others are showing under contracts dates prior to January 1st according to the MLS.

As we are already half way through the 1st quarter I would expect the market will continue to do it’s thing as usual and don’t expect to see any major changes one way or the other for the next 90 days. I’m hopeful that the current interest rates will motivate those buyers that have been waiting on the sidelines for a year or two to jump in and buy now. We could see a little more value decline but I don’t expect to see anything north of another 5% unless we have another financial crisis.

On a side note: Many buyers have been watching the market, doing analysis of their own trying to time the exact bottom. The problem with trying to time the housing market is closed sales are a lagging indicator by the time they are reported. A property that goes under contract today won’t close for 30-60 days in most cases at which time the sale is completed and recorded. However the actual sale as far as the market is concerned takes places when the contract is accepted by all parties and the completion of the sale is the completion of the agreement. So by attempting to time the bottom of the market but analyzing the value trends of closed sales you are actually evaluation data that is at least a month or two out of date.

Geographically it’s much less of a change, my new office is located 587 Pacific Way in Gearhart. Lots of people scratch their heads when I tell them my office is in Gearhart… For me it’s pretty simple, I focus on selling real estate from Gearhart to Astoria. Being located in Gearhart saves me lots of time traveling up and down Hwy 101 in the Summer months and it’s only 10 minutes from downtown Astoria. Plenty of people with an Astoria address live further from downtown than that.

If you’re out and about feel free to stop in and check out my new office.  Here’s a sneak preview

preview of the Gearhart office

I determined my top 5 from the highest sales price only. This of course doesn’t include any sales of commercial properties or other homes not reported in the MLS.

Top 5 Astoria Homes Sales in 2011

5.

230 Round House Road, Mill Pond Village, Astoria

Originally listed at $399,950 and sold for $365,000 on 09/02/2011.

4.

765 30 Street, Astoria

Originally listed at $399,000 and sold for $375,000 on 6/30/2011.

3.

36687 Christians Lane, Olney Area, Astoria

Originally listed at $570,000 and sold for $380,000 on 2/02/2011.

2.

2895 Mill Pond Lane, Mill Pond Village, Astoria

Originally listed at $499,500 and sold for $450,000 on 7/01/2011.

1.

1656 Jerome Avenue, Astoria

Originally listed at $1,225,000 and sold for $797,000 on 4/15/2011.

Some impressive homes for sure, but in my opinion there are few properties in Astoria that come close to the “Henry Hoefler Estate” at 1656 Jerome. This truly spectacular property had good bones to start with and was treated to a top notch renovation.

Another positive sign is the sales in the Mill Pond Village neighborhood. There’s been a handful of homes for sale in Mill Pond off and on for the past 3 years and only a couple have sold. These two sales took place in much less than than the average marketing time which shows demand for homes in the Mill Pond remains strong.

Let’s all hope the coming year brings more of this activity.

source: Clatsop MLS 1/10/2012. information deemed reliable but not guaranteed accurate. 

We didn’t see big changes in 2011 compared with the previous year, mostly more of the same. The overall number of listings in Astoria did decrease a little (a good thing) while the overall number of sales and the respective sold prices also decreased a little (not a good thing).

Many metro areas around the county that were leading indicators of the coming collapse back in 2006 are beginning to show signs of price stabilization and decreased inventory levels- all signs that point to a recovery of some kind. While nobody can accurately predict what a recovery looks like or when one might occur in the Astoria area I do believe we are getting closer. The next 6 months could be rough as a surge of bank owned properties hit the market but once those are cleared out (sold) there’s a good chance the second half of next year will begin to look brighter.

Here’s a big picture look at how last year compared to 2010:

I should also note that the average number of active listings also decreased by 8% in 2011. The main thing I take away from those stats is decreasing inventory levels and a slower rate of decline.

The stats above take in to account every single family detached sale reported in the Clatsop MLS for the 97103 zipcode Jan. 1-Dec 31, including outlying areas like Knappa and Olney.

2010 vs. 2011 Astoria real estate statistics broken down by neighborhood:

No monumental changes at the neighborhood level either with the exception of fewer sales in the outlying areas overall. I did compute changes in median sold price for these areas too. The low number of sales means the output is very easily skewed and the result is misleading so I won’t post it here.

Of the 122 single family detached homes sold in Astoria during 2011 I did dig up a few fun facts:

• Oldest Home: built in 1865
• Newest Home: built in 2010
• Most Expensive: $797,000
• Least Expensive: $10,000
• Largest Home: 5,500 sq-ft
• Smallest Home: 600 sq-ft
• Quickest Sale: 15 days list to close
• Longest Sale: 997 days list to close

Download the complete report

Included in the 2011 Astoria Oregon real estate report:

1. address, list price and sold price for each Astoria home reported in the Clatsop MLS
2. charts showing trends over the past 12 months including asking and sold price
3. changes in the number of listings are sales by month for all of 2011
4. lots of great info for home buyers and current home owners

2011 Astoria real estate blog reader survey