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MARKET NEWS
An Expert’s View on Yamhill County Housing Market
T
hese days, everyone is talking about the real estate market. That’s no different in Yamhill County. With increasing sales prices, multiple offers and houses going pending in a couple days, everyone is wondering how long this can last. Sellers are seriously considering selling but worried they will have nowhere to go. Buyers are worried they are overpaying, and the market is going to crash. In the meantime, interest rates are low, inventory of homes is at an all-time low and there doesn’t seem to be any change on the horizon. So how did we get here and more importantly, where does that leave us?
Carrie Palmore carrie@palmoregroup.com 503-415-0631 700 Deborah Rd. Ste. 200 Newberg, OR 97132 www.palmoregroup.com
OR Licensed Principal Broker & VP of Education & Training Premiere Property Group, LLC.
If we take a look at the last housing boom of 2005-06, things were significantly different. The lending world was loaning money to just about anyone. And they were doing it in creative ways destined to fail. Money sources were not documented, many loans were “stated value”, meaning you could say you made any amount of money and it wasn’t verified. A lot of the loans had ARMs (Adjusted Rate Mortgages), meaning the interest rate could be adjusted yearly. Those loans alone took a lot of people down as the market shifted. Rates went up, which meant house payments went up and people who had bought at the top of their budget could suddenly no longer afford to make the payment. It was a house of
cards that came crashing down. We all know about the mortgage meltdown. It was the perfect storm of an economic downward spiral. The banks failed, which caused job losses, which caused foreclosures, which caused increased inventory, which caused more job losses, followed by more foreclosures, and, well, you get the picture. Suddenly, you had an over-supply of homes on the market, Sellers who wanted (or needed) to sell and couldn’t, Buyers who couldn’t qualify and banks that took forever to make decisions. Those were tough years. It was heartbreaking to sit in homes of Sellers who desperately needed help and having to work with banks who didn’t care about the people, but only the bottom line. Slowly we made our way out of that market. The lending world set much more stringent guidelines. Interest rates were lowered, first time home buyer programs were put in place and people began purchasing homes again. Home prices rose very slowly at first, as everyone was hesitant to get back in the game, but the market started picking up again. But a crucial mistake had already been made. Given our population growth, we need to build NEW homes at a rate of 1.2 MILLION new homes a year. When the market crashed, most building stopped completely. For several years. Which
