2015 is off to a bang. It seems that in almost all sectors, values are growing, there are more buyers than sellers, it really just doesn’t matter how you look at it, ownership has it’s advantages right now in big way.
In particular, I am talking about the market for what I call plexes, which is really the entry level of investment for most buyers…..that is 2 to 4 family (plex) properties.
So back to the bang part of 2015, real soon, the market is going to grind to a halt in total sale volume because the market is so tight for investment properties……how tight……real tight…….ridiculously tight…….how tight you say, I say tightest inventory I’ve ever seen.
So normally, and this is similar to residential markets, in 2 to 4 family properties, a 6 month supply of inventory means a balanced market. That means in plex inventory, historically speaking, it would be about 350 properties for sale, metro wide, at any given time. Right now, 56 properties are for sale. Yes, 56…..not even 1/6th of “normal”.
Digging into it a little further, there are 96 pending plex properties….which means that if buyers swallow up 96 properties one more month, there will be nothing for sale………which would be quite interesting in and of itself, to see what that would really do to the value of the next active listing put onto the market……..hardly what would happen, but it is interesting to just theoretically noodle this a little in one’s mind.
In short though, it’s too little of a supply, and I’ve already seen stupidly strange things like sellers taking the first deal day one of a new listing ………. I can’t help but think they left money on the table if they would have just sat on the market for even a week…….. there was a triplex in NoPo put on the market, tons of offers, my client offers way over list price all cash…….and we don’t even get a thank you email for the offer…..and it sold way way over our number…..then there was the SE triplexes listed, again a client of mine offers well over list price……all we get is a rejected offer via email………and the deal ends up selling in record time like the other, for all cash…..but interestingly, same offer price as the deal I wrote…..which I know for sure the seller left money on the table, had they countered “our” deal, I’m sure my client would have upped the anty…….
If you buy right now, you are potentially over paying in the moment just given the basic theory of supply and demand. A bad thing, not necessarily so……..that will more depend on your vision of the future for Portland and your own investment horizon. As a seller, enjoy the moment, if your property is in the investor bullseye of “close in”, it’s pretty hard not to feel real good about all the flattery!