How’s the market? A look at the Warrenton real estate market July-October

It’s the question a real estate professional gets asked daily, or often multiple times per day: So… How’s the market?

The answer we’re trained to immediately blurt out at Evil Real Estate School (kinda like Evil Medical School) is an enthusiastic ‘Great! Couldn’t be better, I’m sooooo busy. In fact I have to run off to pickup yet another commission check! Gee, I hope I’m not out of deposit slips again‘.

Unless you’ve been living under a rock the past few years you likely already know the answer. The market has slowed a lot in the past 36 months, both in terms of units sold and sold prices. Short sales, REO’s and a glut of new construction is added to the mix of a slowing economy and tighten lending standards has resulted in decreased values and increased market time. And that’s only for the sold properties. Many properties sit on the market for many months without an offer or even a look before a frustrated Seller takes the sign down. It’s not pretty folks, but you already knew that.

In the small community of Warrenton things are looking much better than most places around the northwest, including many parts of Clatsop County. From personal experience the Community of Warrenton has been the hub of all real estate activity on the north Oregon coast for the entire county. This is due to a few things, but mostly because economic conditions have reduced the buying power for many buyers and Warrenton just happens to have some of the most affordable homes in the county. Heck, new construction starts at about $200,000 which is less than the list price for many lots in Gearhart and Cannon Beach.  Warrenton also is the retail center for the county, has easy highway access and relatively low taxes making it a common choice for many first time buyers and those relocating to the area. External forces have pushed values down in Warrenton just like every place else, but haven’t completely flattened sales and erased equity.

I took a quick look at the Clatsop MLS for sales reported in Warrenton during the past (full) four months- July through October 2009. Keep in mind Warrenton is a small community, so when looking at total units sold keep in mind the entire community is just over 1,000 residents.

Due to the relatively small number of sold properties the chart is all over the place for each month, but the 4 month rolling average is about 6 sales per month. This doesn’t seem like much, when you put it in context of the number of active listings for sale it looks much better. During the past 4 months Warrenton has averaged  a 12 month supply of inventory (6 months is considered a balanced market, less is a sellers market and more is a buyers market). Months of supply represents the amount of time to sell all existing inventory if no new properties came on the market, ie. absorption rate.

Prices for reported sales are all over the board, ranging from a low of $85,000 (Warrenton foreclosure property) to  a high of $575,000 (in Surf Pines). During the same period the average sold price for Warrenton homes was about $251,000, but looking at the numbers the most active segment is the $200- $250,000 range by a large margin. There’s currently 62 active single family residential listings in Warrenton, ranging from ocean front estates in Surf Pines to a $75,000 tear down home.

With the amount of growth and development currently in the works I believe Warrenton will be growing for many years to come. The development near Home Depot and Costco will increase demand for housing in the future and nearby neighborhoods Forest Rim, Juniper Ridge and Pacific Ridge Estates will fill the gap with affordable new homes.