Interest Rates Inch UP

Interest rates are definitely starting to creep up the last few days. A 30 year fixed with 1 point is almost 5.9% today. Most people might think that this would cool down the real estate market. But from our experience, this might just spark another growth cycle. You see, it's all about buyer's psychology. People will start to believe that if they don't get into the market "now", they'll have to pay more. If all goes right, we shouldn't see a dramatic change in real estate in Portland though the winter months are just around the corner. Typically, November and December are the low seasons for the home buying market. With this interest rate increase, we shall see the true effect.

Portland broke the BIG $300,000 mark

Yep, hot off the press: the Portland average real estate prices just broke the $300,000 mark in August 2005. We made history.

While we're seeing a lot of reports all over the country that real estate prices are slowing down or tappering off a bit, the Portland market is still as hot as ever. We're particularly seeing a surge in Californian migrants and investors. Many real estate owners and investors alike are cashing out and reinvesting their real estate dollars in Portland.

A word of caution to investors, however. Don't just go around and buy another condo or townhome. You'll find it difficult to get tenants. As such, you'll likely to run into negative cashflow. With interest rates still low, many people who used to rent have gone to buy a home instead, paying just about the same amount as rentals. So there are just fewer renter around. An over supply of condos and townhomes available is prevalent in our market already, particularly in the popular Beaverton and Hillsboro markets. Many property managers are not even taking on any more condo clients. So investors, beware!

If you're thinking of buying income properties, consider investing in a single family home instead. You'll find that those people who used to rent condos shifting over to single family homes for more space and backyard.