With new listings decreasing steadily through the last part of 2011 and sales spiking in December, inventories of homes have dropped to levels not seen since 2006. This is creating a seller’s market and in many close in neighborhoods most new listings are getting multiple offers. Even suburban markets are returning to balanced levels.

This localized home inventory report helps give context to the metro statistics that often make headlines. Real estate is a local affair and this report shows which parts of town and which types of property are selling and which ones are sitting. Inventory is figured in months with 6 months being balanced, less than 6 months favoring sellers and more than 6 months favoring buyers. I use current active listings and 6 months of sold data from the RMLS to create this report.

Q. A few weeks ago you said 2012 would be the year the market starts to recover, is that already happening?

A. It feels like it. Inventory is at a 5 year low right now and many homes are getting multiple offers within a few days of being listed.

Q. Does this mean prices are going up?

A. In most of the close in market properties are being bid up! I just looked at comps for a home that averaged a sale price that was 103% of list price.

Q. What effect do you think the big bank settlement over foreclosures will have on the market?

A. I think that we’ll see more bank owned homes listed but I don’t expect it to be a tidal wave. There are so many investors looking to flip right now I think that most of the bank owned homes will be fixed up and resold and that could have a positive effect on neighborhoods.

416 homes were sold in Portland in January, down from 618 in December.

Wild cards: Multiple offers are back with inventory at a 4 year low. 2011 looks to be the first year in the last 3 years to have a typical sales peak in Summer. Investor activity is hitting new highs with multifamily still the favorite among buyers.

I’m predicting around 450 closed sales in Portland (RMLS areas 141, 142, 143 & 148) in February. Seasonally speaking, average prices generally start to drop after the summer peak, bottoming out in winter.

Sales volume is a leading indicator for price. To help predict where the market is going I publish this sales volume trend report. The wisdom is that price follows volume so when you see a market trending higher in sales, prices will soon follow up and when sales volume is low, prices will stay flat or fall.

Read more about HAMP and the current guidelines at PortlandShortSale.info

1. Clean up the yard for curb appeal.
2. De-clutter and clean the house. Look at other homes for sale online and it will become very clear what looks good and what looks cluttered.
3. Paint the outside – especially porches and the front of the house if you’re just doing touch ups.
4. Paint the inside and pick neutral colors.
5. Price your home to the middle of the suggested market sales price range in your CMA. This can often get you multiple offers or at least an offer quicker which can save you thousands or tens of thousands in negotiations and repairs at the end of the day.

If your wondering about cost I think that most of my clients can get a house in GREAT shape for less than $5,000. If you’re willing to do most of the work yourself that number can go down dramatically but don’t delay getting on the market since that might cost you more at the end of the day.

With new listings decreasing steadily through the last part of 2011 and sales spiking in December, inventories of homes have dropped to levels not seen since 2006. This is creating a seller’s market and in many close-in neighborhoods most new listings are getting multiple offers.

This localized home inventory report helps give context to the metro statistics that often make headlines. Real estate is a local affair and this report shows which parts of town and which types of property are selling and which ones are sitting. Inventory is figured in months with 6 months being balanced, less than 6 months favoring sellers and more than 6 months favoring buyers. I use current active listings and 6 months of sold data from the RMLS to create this report.

For many people one of their new years resolutions is to invest more this year. We talk with our real estate expert nick krautter about the basics of investing in real estate.

Q – What’s the most important part of investing in real estate?
A – Cash flow is the most important part whether you’re paying cash or getting a loan. CAP rate and Gross Rent Multiplier are just ways to compare on investment to the next.

Q – Can you get a loan if you’re an investor?
A – Yes! in some cases for as little as 10% down. Most investor loans require around 20-30% down and rates are fantastic. One of the best things happening now is positive leverage.

Q – Explain positive leverage to us…
A – Positive leverage means that the property is giving you a return that is higher than the interest rate of the loan. This multiplies the return on investment and can take an 8% return property and make it a 17% return or higher!

One last piece of advice: If you buy a fixer you need to factor in the cost of repairs AND the lost rent for the time the property is under construction in order to really compare it to the cost of a turn-key rental.

Wild cards: Multiple offers are back with inventory at a 4 year low. 2011 looks to be the first year in the last 3 years to have a typical sales peak in Summer. Investor activity is hitting new highs with multifamily still the favorite among buyers.

I’m predicting around 450 closed sales in Portland (RMLS areas 141, 142, 143 & 148) in January. Seasonally speaking, average prices generally start to drop after the summer peak, bottoming out in winter.

Sales volume is a leading indicator for price. To help predict where the market is going I publish this sales volume trend report. The wisdom is that price follows volume so when you see a market trending higher in sales, prices will soon follow up and when sales volume is low, prices will stay flat or fall.

Q – What will be the number one story on the real estate market this year?

A – I think this is the year Portland hits the bottom and starts to bounce back

Q – What’s different about this year?

A – Inventory is at 3 year lows, a lot of the distressed market has been sorted out and more and more people are investing in real estate again. The mood of agents and clients seems to be decidedly more positive.

Q – Whats your advice to sellers?

A – List now! There is hardly any competition for sellers – especially close in

Q – What is your advice for buyers?

A – You might have to compete with the inventory so low and right now is the time to buy investment properties.

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