I attended a property appraisal for one of my listings in SE Portland…..right on the edge of East Moreland. I met the appraiser there. He and his sidekick looked like hipsters with long scraggy hair and gel spikes. The rolled up in an old beater, and climbed out of the car looking like they needed a morning cup of strong roast. I realize this description ages me, but really…in a real estate market that is relying more and more on professionalism these guys did not give me a strong sense of security about their ability to accurately appraise this property.

That said, the main appraiser told me he has been doing appraisals for 9 years. We compared outlooks on the long look of the market in Portland. He sees the older, more established neighborhoods as stabilizing now. He sees prices lowered but accepted offers as being close to the listing price in well established neighborhoods in close in Portland. That would include neighborhoods like Irvington, Moreland, Sellwood … pretty much anything west of 82nd. I think this is very optimistic news.  He also observed that new construction prices are not finished dropping. He predicts they will continue to decrease through the end of 2010 and in to 2011. That would be in areas West of downtown Portland….more in the Beaverton area.

My own perspective is a bit different. I am not seeing much market improvement in Portland Oregon real estate for the next 18 months. Why? Unemployment is one reason. I am noticing that Portlanders are really creative about surviving; they will take their skills to the market and do what it takes to stay afloat. People are freelancing and working virtual as tech support, marketing and graphic arts specialists, writing, trying to sell their art or working part time at small jobs to make ends meet. So they don’t show up in the employment statistics but the big effect is that as far as getting a mortgage, they are still unemployed. They won’t have a solid enough work calendar to be considered for a good mortgage.

Based on the National Association of Realtor’s statistics and also on blog articles about mortgage rates, I continue to suggest that we won’t be stabilized for at least 18 months.  We will see a gradual increase in mortgage rates over that time period, ending in 24 months at over 6%….close to 7%. Those increases will directly impact buyer’s ability to purchase, especially if listing prices do not adjust. In Portland Oregon we are not seeing listing prices decrease in relation to unemployment or market inventory. Savvy buyers will buy now, or in the next 6 months. If buyers continue to wait for the ‘best price’ they will miss the market opportunity of both low prices and low interest rates.