I receive emails regularly from Portland area real estate agent colleagues saying, “Now is a great time to buy or sell real estate”. This even happened at the end of the housing bubble as the market was collapsing; buyers were advised to jump in to get the deals and low interest rates while they last. I respect my real estate agent colleagues and I refer my clients to agents often for things that I cannot or should not answer as an appraiser. However, it is fair to ask if now is really a great time to buy or sell real estate.
Hindsight and the S&P Case-Shiller Portland Home Price Index (CSPI) statistics show that if you took that advice and purchased a $300,000 home in December of 2007, your home would have been worth around $218,000 just four years later (if your property matched the overall market performance).
If a trend line is added to the CSPI data, one can see where the market should be now as though the housing bubble never happened. In general and based only on this data, autumn 2013 is indeed a good time to buy as prices are about eight percent below where they would be given normal market gains. However, submarkets vary from the overall market and should be analyzed in context with a particular property to help make better decisions.
My point is that most Portland area real estate agents are caring professionals; but because agents work on commission, their natural bias is toward a motivation to sell. If you pay an agent five percent of your home value to sell your house, why shouldn’t you consider paying an appraiser around just $500 for an independent opinion? You can and should still listen to your agent. However, arming oneself with an independent appraisal provides you with important facts and information when you need them most and is an effective negotiating and marketing tool.
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Thanks for reading,