Portland Days on Market V. Price Range
By Charles TurnerRMLS reports days on market for each RMLS area monthly. Time on market in March, the latest data available from RMLS places DOM at 51 days for SE Portland (area 143). Average overall time on market was 65 days for that period. Average selling price in SE Portland was $293,500.
How does price range effect days on market? For April, I ran my own reports (using our company’s proprietary software). Total days on market was 43 days (a large drop from March’s 65). I ran additional searches and discovered the following:
Seventy seven properties sold under $200,000. They averaged 44 days on market
There were 192 sold properties priced between $200,000 – $400,000. Average time on market: 40 days.
Thirty five properties sold between $400,000 – $600,000. Average time on market: 48 days.
$600k – $800k: seven properties sold averaged 72 days on market (see a trend forming?).
Over $800k; three properties for 130, 137 and 157 or an average of 140 days!
There is most likely some difference between how RMLS gathers data and I searched for it. When their April report comes out (usually about the third week after the period is over), we will compare my overall results to theirs.
So what? It shows us that there is a much larger buyer pool at the “lower” end of the market and properties move faster. It says that sellers at the higher end of the spectrum need to have different expectations about selling their properties.
A few days back you blogged about falling inventories in Portland. DOM, or the time it takes to sell a home is undoubtedly influenced by supply conditions, or, the level of competition. It would be interesting to take a look at inventory levels at various price points alongside DOM as well. For example, much of what has driven the downtown condo market (i.e. South Waterfront) has arguably been affluent empty nesters from areas like the West Hills. Given limited market demand at these price points, inventories at high price points in the West Hills can be measured in years, not months.
Also, what was your rational for choosing SE portland as your evaluation area?
Rational on SE is that there are listings across all price ranges. If I used West Portland, I think we would have seen the lower priced listings selling faster but the bulk of the listings would be over $400,000. I could have picked any area but SE made sense.
Logicly, as inventory drops, DOM drops too. I’m sure the actual data would that. I’d welcome someone to disprove the theory but don’t think culling through old RMLS Market Actions would productive.
Housingtracker.net shows inventory up 1.4% last week and median price down 0.3% :
http://www.housingtracker.net/
0.3% down isn’t a huge amount, but it does continue the slight downward trend that’s developed over the last few weeks… And this at the height of selling season. It seems pretty clear that prices have at least stagnated.
Again, was this 43 days on the market from the original time of entry? Or, was this 43 days with the newest refreshed RMLS number?
SE is a good place to use, though; have to agree with you there. It has some of the most diverse pricing throughout Portland; Brooklyn to Laurelhurst.
It would be interesting to see how the figures compare in the NW and SW. Bethany area went from 60+ listings in February to 80+. Forest Heights is up to a steady 60+.
Perhaps the prices will stabilize in the lower-priced markets and stagnate further in the higher-priced market. Should be interesting to see.
This just in:
Millennium Funding Group, a major regional subprime lender in Vancouver, Wash., has halted its lending and is cutting all its jobs amid nationwide mortgage turmoil. The company had laid off 76 in March. After 71 layoffs late last week, only 10 workers remain. Their jobs will end after Millennium’s remaining loans are closed. The Oregonian, 5-1-07
This also just in…Portland feeling less of the shock of subprime loans. Apparently the proportion of subprime loans in PDX in the total mix of loans originated is shrinking rather than growing as I had postulated…dropping from 20% in 2005 to 17% in 2006.
http://www.newsreview.info/article/20070329/BUSINESS/70329007
PDX Renter: 17% of loans subprime in 2006 still seems sizable ( 20% of loans were subprime, according to that article, in 2004, 2005).
…and then there’s Alt-A which isn’t even included in that 17%. And those option ARMs (an Alt-A loan type, not subprime) don’t start resetting in significant numbers till mid-2008 and continuing well into 2010. Saw a statistic somewhere today that said 80% of option ARM holders only pay the minimum payment meaning they’re going into negative amortization. A lot of people are in for a rude awakening when their mortgage company (or whoever it is that owns that debt now) asks them to cough up a lot more money each month when those toxic loans reset.
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OK, so how does this work:
Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.
With income from tenants, which didn’t come right away, Beatty’s daughter thought she could afford monthly payments of nearly $5,000.
…but of course she never was able to make any payments… (big surprise)
TIP, the situation described says “You cannot afford to buy” and/or “it’s better for you to rent right now”. What were these people thinking????
Sell people on the idea that they need to have a big house, and they’ll go for it. A sucker is born every minute.