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September 2011 RollingsHomes Newsletter

1 County Real Estate Sales Overview 2 MLS Statistics 3 Investment Analysis—The Right Way

4 Jerry—Movie Star

If you have friends or relatives who you feel would like to be on this newsletter list let me know. Similarly if I am just cluttering up your email let me know that.

Jerry and Sara Rolling 281-8222 or 281-8333 Jerry@RollingsHomes.com or Sara@RollingsHomes.com

This is the monthly Email newsletter for Jerry and Sara Rolling, Realtors at Keller Williams Realty, 915 Broadway, Vancouver WA 98660. If you have questions about this material or wish to share your information or opinion with our email list please contact me at 360-281-8222 or Jerry@RollingsHomes.com


1 County Real Estate Sales Overview What's happening to the price of an Individual House?

Price Per finished Square Foot 30 year ranch new and large 2003 2004 2005 2006 2007 2008 2009 2010

2003 2004 2005 2006 2007 2008 2009 2010

30 yr newer

$112 $124 $140 $146 $153 $113 $103 $109

11.8 10.8 12.9 9.1 7.3 4.9 5.5 5.1

8.1 16.4 14.4 10.6 6.1 5.2 5.2 5.9

$112 Jan-11 $ 99 $118 Feb-11 $ 79 $107 Mar-11 $107 $108 Apr-11 $ 94 $100 May-11 $100 $100 Jun-11 $119

3 2 6 3 4 5

4 1 3 6 2 7

Jul-11 $101 Jul-11 $101 Aug-11 $100 Aug-11 $112

6 7

4 9

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11

$100 $114 $134 $154 $154 $141 $125 $112

# of Sales

30 year Ranch is defined as a single level home, no basement, built between 1970 and 1980, 1400 to 1600 square feet, with a double garage and on a lot between 5000 and 10000 square feet in the Vancouver, Camas, Washougal areas. The total price of all the sales is divided by the total finished square footage of the sold homes to obtain the price per square foot.

Average Average Average Average Average Average Average Average

New and large is defined as a home built between 1990 and 2005, 3000 to 4500 finished square feet, 5000 to 20,000 square foot lot, no view, in Vancouver, Camas, Washougal, Ridgefield and Battleground. The total price of all the sales is divided by the total finished square footage of the sold homes to obtain the price per square foot.


1 County Real Estate Sales Overview (Cont) Sales, Pendings and Actives all categories Clark County April 2010 Jan May June July

Aug

Currently for Sale

2811

3326

2412

3357

3344

3044

of these Bank Owned of these Short Sales

84 536

259 785

134 505

167 613

151 597

151 601

Pending this month

1064

931

774

1304

1286

1092

of these Bank Owned of these Short Sales

108 444

181 459

204 425

216 547

214 561

203 545

Sold this month

457

285

332

503

464

480

of these Bank Owned of these Short Sales

70 75

86 48

95 46

140 72

128 55

114 75

% Bank owned and short Sales of total actives 22% 28% total pendings 52% 67% total solds 32% 47%

26% 81% 42%

23% 59% 42%

22% 60% 39%

25% 68% 39%

Random explanations. Prices— This month I went back and put the average activity and prices in for 2004 and 2003. By coincidence both houses, for this month, came out to the same average price as for June 2003. The MLS Statistics in the following section show the price to be the same as June 2004. The problem with their number is that includes new houses whose initial price is much higher than the overall mix. In other words— they don’t build old houses. Pendings– This figure shows the total number of pendings, not the number that went pending this month. The short sales really mess this figure up. A regular sale takes 6 weeks to close. A short sale takes 6 weeks to about 3 months now. When we first started doing short sales it was taking 4 to 6 months. MLS Change in Reporting— For some time MLS has been counting short sale listings with offers signed by the owner but not by the owner’s lender as active listings. In my statistics to you I have always adjusted for that. This month MLS decided to do it my way. This resulted in a big increase in pendings according to the MLS figures. Of course MLS chose not to tell The Columbian who got all excited about the big increase in sales.


2 MLS Statistics

What conclusions do we draw from the numbers from the last section and this one? The market is operating at a low volume level. It would be worse except that the banks are feeding just a fraction of their inventory at a time into the market to prevent a catastrophic self perpetuating slide. Generally prices are the same as at the middle of 2003. Parts of the market will be performing better or worse than average. I will try to assess the outlook for the various parts next month.


3 Investment Analysis—The Right Way In June I sent you this. I was concerned about the math as I had to estimate the reduction in rate of return from the monthly deficit. I estimated the overall rate of return to be 28% per annum.


3 Investment Analysis—The Right Way

(Cont)

Since sending you this I discovered an internet program that does the math for you. http://www.dinkytown.net/java/AnnualReturn.html The following is the correct way to analyze this property. It came out instead to 17.5% annual rate of return on invested cash.


3 Investment Analysis—The Right Way

(Cont)

I have other examples prepared and will send them out to you next month. What I found when running various situations through the DinkyTown site was that it makes a huge difference if you have to subsidize the rent each month. Despite having a large increase in value at the end of seven years the monthly subsidy eats into the rate of return more than you would think from a quick mental evaluation. I am going to use seven years as my standard period of time for evaluating investment options for you. There are several reasons the time period is so long. These are my opinions and not something I have read somewhere else. 1. There will be a small uptick in volume and prices in 2012 when investors realize the once in a lifetime opportunity that real estate offers middle class families right now. You heard it here first. 2. The huge overhang of foreclosures and short sales will keep prices low for 3 or 4 years even when the economy picks up. 3. The extremely cautious mode that lending banks are in will last 3 to 4 years. Depressed credit scores will restrict the ability of families to participate in the real estate market. 4. The US economy is so deep and wide, our population so well educated and flexible that it will recover. At that time, 4 years, the pent up demand from unsatisfied family formation, untenable doubled up families and increased purchasing power will result in strong demand. This means, in my estimation, a return to 2006 prices in 2018. I don’t think that’s unreasonable.


3 Jerry—Movie Star

I am a member of Vancouver Rotary. Last month I starred in the first “Rotarians on the Road” series explaining what we all do for a living. I included this in last month’s newsletter but failed to understand that the link disappeared when I converted it to PDF. We are not a secret society so I will share my embarrassment with you http://www.youtube.com/watch?v=vD-opdQ4zgI&feature=email Select line above, copy and paste into your browser


Need a Handyman, Repairman or Remodeler? We have over the years developed a list of reputable, honest, talented people to help our clients. Our list includes painters, electricians, renovators, landscapers, stagers – you name it. Need help in any of those areas? Give us a call. Need an out-of-town Realtor? We can recommend those too, everywhere in North America. Need a Realtor here? Call us!!!!

Advice or information— Don’t be shy, pick up the phone We especially appreciate your referrals of buyers or sellers—We promise to treat them right. Jerry 360-281-8222

Sara 360-281-8333

RollingsHomes 2011-09  

Clark County WA Real Estate Information, Definitions and Trends

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