Twenty Year Trend: Portland vis-a-vis the US

The NY Times has an interactive graph displaying a twenty year growth trend – both actual and inflation adjusted – in housing prices for nineteen US markets. See here. [Thanks to Dave Koch of RE/MAX for the link.]

For the moaners among us – and I catch myself in that category occasionally – it’s eye opening, and comforting. With the exception of Atlanta, which is missing five years of initial data, Portland is the only market that hasn’t experienced a quarterly downturn in actual growth. We haven’t experienced the wild peaks and valleys of, say, a Phoenix or Las Vegas, and Portland and Seattle remain among the most healthy real estate markets in the United States.

That’s not to say it can’t happen; in August inventories continue to climb and sales slide. But even with that both the average and median prices are up considerably across the broad metro area.

The fundamentals remain strong.

How to Write Imperfect Copy

One of the most difficult tasks in writing is that of writing copy for catalogues, newspaper ads or, well, MLS listings. It’s important to capture attention and tell a story, but character limitations make that difficult, which is why you often run across sentences like “Stng 4br clonl, chrm thruout w/trfc vu of Hd.” As much as I love to write, I admit to being not very good at the task; there are only so many ways to say “Pottery Barn cute!”, and there are only so many synonyms for “coveted”.

But there is – or should be – an inviolable rule: proofread. I came across this this morning:

"Brick front introduced gracious Georgian. Designer Upgrades! Wainscotion, bay windows, island kit, brfst nook, 2 wood burning fireplaces, picket fence backs to manicured greenway. Coverted Oak Creek School. A sence f style embraced by a Spirit of Tradition! No Sign on Proptety."

To me – and I’m priggish when it comes to spelling and grammar, but so are many others – that’s like fingernails on a blackboard. What’s being said disappears into how badly it’s being said. It reflects not only on the writer – who is either magnificently dull or, as I suspect here, careless and inattentive – but on the listing, a $760k home. The listing is five days old, which means the agent hasn’t checked it once posted, and the seller either hasn’t been given a copy – sellers, always get a copy of your listing and check it for errors – or hasn’t bothered to read it.

This is a market where in selling a home – especially in that price range – everything matters, little and big.

Nf sd.

Realtors' Dilemma

I’ve written a couple times on BloodhoundBlog about the need for the real estate industry to divorce the buyer agent commission from the listing agent commission. With the seller still in control of what both agents earn, but the buyer bringing the money to the table, we’re living under the vestige of sub-agency, where everyone in effect is working for the seller. It’s otherwise codified in both Oregon Statute and the Code of Ethics – we owe fiduciary duty to whomever we represent, buyer or seller – but I learned long ago that, with market forces in play, saying isn’t always doing.

Case in point: We had an office discussion yesterday that began with how best to market listings when inventories are fifty percent higher than a year ago. Even with all the right ingredients – right price, top condition, good staging, easy access – given all the choices buyers have it’s sometimes difficult to get showings. What to do?

One suggestion: Raise the Buyer Agent commission. From, say, the average 2.7% to 4%. Considerably cheaper for the seller than lowering the price another $20k.

But, wait. That runs counter to statute and code. As a buyer’s agent I’m bound in all cases to consider my buyer’s interests ahead of my own. A home that’s not right at 2.5% doesn’t suddenly become more attractive at 4%. Could anything like that actually work?

Yes. Sadly. It works. And we’re seeing it used as a tactic more and more often.

It’s comforting to know that everyone in the room was as passionate as I: Not only has the buyer commission never entered into a decision on what to show or not show a buyer, but the suggestion that we’d be thus encouraged is a rank insult. Most felt that any buyer agent bonus needs to be disclosed to the buyer, and if possible manipulated so that it becomes in his or her interest.

Then the conversation turned to the dilemma: As a listing agent my fiduciary duty is to the seller. If more traffic can be generated by bribing my fellow agents, is suggesting that to the seller the right thing to do? Does the duty to my seller trump the cynical feeding of the venal realtor stereotype?

I honestly don’t have an answer. I have a fabulous listing in Lake Oswego - where there’s about an eleven month inventory of homes in the $500k and up range - that would be a perfect candidate for a trial … but neither I nor the sellers are quite ready for that. Much better, I think, to hold the commission where it is and try to find incentives to put in the buyer’s pocket.

In the meantime, I’ll continue to write about divorcing commissions.