Let’s check out who’s buying real estate.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
René Nelson: Hey Marcia, let’s talk about who the buyer clientele is. So first, tell the audience what the average market price is of single family houses.
Marcia Edwards: Well sold prices year to date is at $379,000 median sales price. The $379,000 is a sold market pricing. That’s fantastic. I mean not necessarily in a good way for your buyer but it’s phenomenal what it’s done over the last year. Over 14 percent appreciation.
René Nelson: Wow. I think I’m old. When I was a lender 30 years ago I think the average median price was $185,000, $200,000. Man I feel old.
Marcia Edwards: Do you remember when, I believe it was Ken Rotten, did that series that started with a $60,000 house and what it’s done to appreciate over the past year? Well a $60,000 house, where is that house?
René Nelson: I think that’s a garden shed, right? Isn’t that Sheryl’s She Shed.
Marcia Edwards: That’s right, Sheryl’s She Shed. Now the median list price, I’m sorry the average list price is $579,000 so our inventory is up there at 500 and our buyers are down here at 379.
René Nelson: Okay, my mind is just exploding right now. I’m going 9000 different directions. I have a 25 year old child, student, or kid lives here in Eugene, graduated from the U of O, gainfully employed, there’s no way he can afford a $379,000 house.
Marcia Edwards: And we haven’t even talked about debt ratio and the possibility of student loans behind that situation like that or those similar so you’re right. There is an affordability gap. Now the interest rates have been phenomenal as well so that has offset this, at least in the last year or so, let’s say a 10 percent increase in buying ability based on lower interest rates versus last years 14 percent higher prices, so that’s offset some of that gain.
René Nelson: Yeah, okay. Okay, that’s true and just ballpark, I know we’re not lenders but if my son went into Ladelle White at Guild and he was going to buy a house, owner occupied, what would he see? Like three and a half percent at an interest rate, ballpark? Four?
Marcia Edwards: Less than four percent has been the recent history.
René Nelson: Okay.
Marcia Edwards: So that’s definitely the case. What you’re seeing in that circumstance of first time buyers is you’re seeing a lot of parents participating early on, you’re seeing gift money, you’re seeing- actually I’ve seen purchases in cash by the parents, once it’s closed they sell it to the buyer that’s actually going to get the mortgage. So they compete by going cash in while the competition has to finance it, scoop it away from those other first time buyers and then when they’re alone with the house they can sell it to their daughter or son.
René Nelson: That’s brilliant.
Marcia Edwards: Fancy magic.
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 5:30pm on KPNW for the “Real Estate Today” radio show.