I think Mark Twain said something along the lines of the most dangerous lies are the ones we believe to the be truths. The truth is sellers are accepting contingent offers in this market. I can walk you through the process, but first, let's take a look at what's happing in the market.
According to data from the National Association of Realtors’ Profile of Home Buyers & Sellers, the average amount of time that a family stays in their home remained at 10 years in 2017. This mark ties the highest marks set in 2014 and 2016. Back in 1985, when data was first collected on this subject, homeowners stayed in their homes for an average of only 5 years. In my opinion, based on local experience and professional knowledge of the Portland Metro market, that number for us is 5-7 years. None the less, the challenges and struggles are the same in a fast-paced and growing market like we have.
There are many reasons why homeowners have decided to stay and not to sell. A recent Wall Street Journal article had this to say,
“Americans aren’t moving in part because inventory levels have fallen near multi-decade lows and home prices have risen to records. Many homeowners are choosing to stay and renovate, in turn making it more difficult for renters to enter the market.”
Sam Khater, Deputy Chief Economist for CoreLogic, equated the lack of inventory to “not having enough oil in your car and your gears slowly [coming] to a grind.”
Historically, a normal market (in which prices increase at the rate of inflation) requires a 6-7 month supply of inventory. There hasn’t been that much supply since January of 2012! Over the course of the last 12 months, inventory has hovered between 1.3 and 2.3 months of supply, meaning that prices have increased and buyers are still out in force!
Challenges in the new-home construction market have “helped create a bottleneck in the market in which owners of starter homes aren’t trading up to newly built homes, which tend to be pricier, in turn creating a squeeze for millennial renters looking to get into the market.” Another challenge the Portland Metro area has been facing on new construction is the slooow permitting process creating a significant lag time to completion and not getting to market quick enough. Will 2018 see a glut of finally completed new construction? Perhaps. Will that supply satisfy demand? Could be.
“Economists said baby boomers also aren’t in a hurry to trade in the dream homes they moved into in middle age for condominiums or senior living communities because many are staying healthy longer or want to remain near their children.”
Don’t give up! There are options. If you are looking to move up to an existing luxury home, there are deals to be had in the higher-priced markets. That inventory is balancing out. Demand is strong in the starter and trade-up home markets which means that your house will sell quickly. If you are targeting one of those trade-up homes, understand that home may have sellers in the same situation you are in and expecting to achieve "pending" status before they start their search. They need you. Call me and I'll explain how I can get your contingent offer accepted.