It's no surprise that there is a shortage of housing around the Pacific Northwest, and not just in the Portland area. Seattle is seeing a huge demand for housing and very limited inventory. Absorption rate is about 30 days right now, which means that if no more listings hit the market as of today, all listings would be completely sold within about a month. Usually, a balanced market is about a six-month absorption rate so, inventory is way down, which puts a lot of pressure on buyers to increase their offers, use escalation clauses, and get aggressive with their terms.
So what's causing this housing shortage?
Since 2008, the average time homeowners have stayed in their homes before selling has doubled to nearly 8 years. With not that many people selling anymore, there simply not that many homes on the market. There are still around 3 million homeowners that can't sell because their homes are worth less than what they owe on them.
Many investors that have purchased property over the last five years are now enjoying the rewards of rising rents and property values throughout Portland and Vancouver. The same home in Vancouver is quite a bit less to rent than in Portland, but Vancouver is also seeing its fair share of increasing values. Plus, developers are simply not making enough homes fast enough to replenish the inventory.
So what's a buyer to do?
The important thing to remember is that because the competition is high you have to have the right buyers agent to negotiate and advise you throughout the home buying and offering process. If you are already preapproved, this could work to your advantage. Having a higher down payment and fewer contingencies can also make your offer much more attractive.
It's important to get preapproved before making an offer on a home. Sellers want to know that you are not wasting their time and that you can actually afford the home in which you are offering. Plus, you could talk to your lender about a conditional loan commitment based on a full underwrite of the credit package. This makes you even more qualified to purchase the property.
Some homeowners are even waiving home inspections but we strongly advise against this. You don't know what type of home you're buying without that home inspection and it is a crucial part of the home-buying process. However, in these high competition markets, waiving the home inspection is not that uncommon. It's important to talk to your real estate agent about any contingencies and how you can make a solid offer in order to get your offer accepted.
Because we work solely with buyers within the Portland and Vancouver area we can help you make an informed decision on the best home and we have negotiating strategies and secrets to help you get the right home at the right price. Feel free to call us today.