Thursday, January 22, 2009

Why is the Florence Oregon Market overpriced?

Commonly I am asked, "why do so many Florence Oregon properties appear to be over priced?" I offer the following reasons.

In addition to sellers expecting the market would always go up, many local real estate practitioners became lazy during the boom that came with low interest rates, high demand, and low supply. Brokers became accustomed to simply asking the seller what he or she wanted, then add a little more, and pray the market would go up. Some practitioners either could not, or would not put forth the effort to perform a CMA (competitive market analysis) to inform their client (seller or buyer) of a realistic price.

Unfortunately, some in the Florence Oregon real estate industry still have the "list at any price" mentality, that causes great harm to sellers and buyers in today's market. While this scheme may have temporarily worked in a market upturn, it has ultimately doomed many sellers in a down turning market. Overpriced listings, will actually cost the seller, thousands of dollars for every month they cling to an unrealistic price. Additionally, many buyers overpaid for properties because their broker did not properly inform them about current market conditions or perform a CMA for the Buyer, prior to writing the offer.

The supply/demand factor also aggravated the situation. Low supply was fueled by huge regulatory burdens created by Oregon's Land use system and local planning that is not clear and objective. The above two factors make it impossible for the market to respond to temporary housing shortages adding to artificial scarcity and artificially high pricing.

So why does Florence Oregon's pricing differ from other locales in the State? In most of Oregon, the market has forced a new real estate office model that requires individual brokers working for an office, to to be accountable for their own costs, by paying for their own hard expenses such as advertising. When an individual broker has to pay for ads each month, their senses become much keener when taking a listing. If the broker doesn't do a CMA and doesn't get a listing priced right, the broker is penalized with ad costs in addition to not being paid.

In Florence, the old real estate model of "list at any price" still exists in some offices. The office owner pays for all advertising in exchange for lower fee splits. The owner then buys large blocks of local newspaper and radio advertising to claim a larger market share..... of overpriced listings! Guess who is really paying for those large ads and bravado. Efficient, diligent work will run circles around those big ads if you look at the tips I offer below.

When selecting a real estate broker, do not look at the size of the ad or staff. Ask around town for references. A good reputation will precede professionalism/ work ethic and is better than manipulated statistics. Look at the quality of photos, ask for samples of marketing presentations and Internet ads. Do they keep color brochures on the sign stocked? Ask the broker how much volume he or she has sold in the last 5 years and many listing they are currently carrying. The larger the number of listings, the less time the broker can devote to your property. Call the broker several times at different hours to see how reachable they are. How long does it take before you get a call back? How knowledgeable and diligent is your broker? Is your broker worthy of your trust to deal with one of your largest assets?

The good news is that there are some great agents in Florence who have done a good job in pricing, which reflects the current market and has created excellent buying opportunities. If you find a knowledgeable broker, he or she can quickly determine which properties are overpriced and which ones are an excellent value. A knowledgeable broker can save you money whether buying or selling!

Thursday, January 15, 2009

Florence Market History

According to a USA Today article in Sept of 2004, Florence, Oregon was the #1 place to retire in the US. A typlical 3 bedroom home was selling for around $139,000. By January 1st 2005, there were only 8 residential homes for sale in Florence and surrounding areas for around 100 Realtors. By fall of 2006, the same home was selling for around $270,000. Today, that same home is selling for under $200,000. As of the date of this enrty we have 444 residential properties for sale. The current market has incredible buying opportunities with the lowest interest rates being offered in decades. It may well be in your best interst to consider buying now, especially if you plan on living in or using the property for several years.

Florence OR Overview

Florence is dead center on the Oregon Coast and is 60 minutes due west of the 2nd largest metro area in Oregon. In 2004, Florence was named the #1 retirement spot in the United States according to a September article in USA Today. Florence is located minutes to Honeyman State Park, Ocean beaches, and year around entertainment and shopping in Florence. Florence is in the heart of the Oregon Dunes National Recreation Area and enjoys year around moderate temperatures plus approx 27 lakes and streams nearbye. Florence has a new hospital, library, performing arts center, casino, Historic Old Town, plenty of shopping and world class golfing at Sandpines and Ocean Dunes Golf Courses.