Let’s talk a little bit about affordability.
Marcia Edwards: One lens you can put on that conversation is what is for sale as inventory versus what buyers are looking for price point as buyers in this market today? The average list price on a property today is 452, $452000-
Bob Nelson: Now these are single family residential properties?
Marcia Edwards: Single… Yeah.
Bob Nelson: Okay.
Marcia Edwards: Only get one house for that price.
Bob Nelson: Well that’s okay.
Marcia Edwards: $452000.
Bob Nelson: You get four of those you get a red hotel if I remember right.
Marcia Edwards: Classic.
Bob Nelson: Yeah.
Marcia Edwards: That’s where we all started in real estate.
Bob Nelson: Whatever.
Marcia Edwards: The median sold price… I’m sorry. The average sell price is $311000. So $452000 is where our inventory sits. $311000 is where the buyers are looking for homes.
Bob Nelson: Oops. That is a detachment at that particular point. Now, when you say these are buyers, this is where the buying market… the price point of the typical sale is occurring?
Marcia Edwards: Correct. Yes.
Bob Nelson: So if I’m bringing it on at $450000 and people are buying at $350000, guess what? There’s a handful of them that might be able to swing the ax at that particular piece of wood, but you got a problem.
Marcia Edwards: Well, the situation here is that oftentimes you listen to the real estate trends and think that’s the entire marketplace.
Bob Nelson: Right.
Marcia Edwards: $311000 is a very different market than $600000 right now.
Bob Nelson: Oh my gosh, yes.
Marcia Edwards: As you can see, we’ve got more homes and less buyers at the higher price points. So make sure you do your homework in regards to that. But this affordability situation is an interesting climate shift in the Eugene marketplace. It’s rolled into landlord tenant relationships as well I think.
Bob Nelson: Would that then impact places that are being offered for rent? If I can’t sell it at the price that I would like, would I potentially hang onto it as a rental, thus starting to impact the rental pool of properties that are available?
Marcia Edwards: It’s interesting there’s other influences. Because of a recent legislation, I have heard of a lot of single family landlords saying, “I’m out of the landlord business.”
Bob Nelson: Right.
Marcia Edwards: So there is… There’s an interesting flex in both directions I think.
Bob Nelson: Right. But again, if I have owned this thing for 20 years, occupied it myself, and I bring it on as a rental, there is no rent control. My first rent point would though establish a control factor for the next tenant who happens to come in. If the first tenant vacates because I’ve raised the rent, the second tenant is going to be limited as to how much I can charged.
Marcia Edwards: It’s been interesting watching our consumers acclimatize to the circumstance.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30 on KPNW for the “Real Estate Today” radio show.