Portland Real Estate Blog

We’re getting a better look at how 2009 wrapped up with yesterday’s release of RMLS Market Action. For the year, there were fewer closings than in 2008 but not by much (18,955 down from 19,132). The rolling 12 month average sales price was down 12.1% to $289,000 (median down 10.8% to $247,000).

Compared to 2008, December 2009 was a great way to finish the year. Closed sales were up 52.6% from the previous snow battered month a year ago. 2008 ended with a record high 14.1 months of inventory that has now dropped nearly in half to 7.7 months. Sales were slower than November but that would be expected.

RMLS Market Action is one of the three sources I usually write about that cover Portland real estate. Market Action is released mid-month of the following month reported. The Case Shiller Index has a three month lag so we won’t see December ‘09 until the last Tuesday of March. Prudential Northwest Properties Market Tracker reports are released the first week of the following month and are emailed to subscribers. You can also look at the graphs from the reports on our PDXBuyers.com website.

RMLS Market Action was released yesterday. The last page of the Portland Metro report focuses on condos. The median sales price is down considerably but has seen an uptick the last couple of months.  Closed sales appear to be fairly consistent but the number of listed condos has declined more than 20% since November of 2008. [both graphs from RMLS]

If you want to take a closer look at the reports for other regions, follow these links:

• - All Areas (52 pages)
• - Baker County
• - Columbia Basin
• - Coos County
• - Curry County
• - Douglas County
• - Lane County
• - Mid-Columbia
• - Portland Metro
• - SW Washington
• - Union County
• - Wallowa County

I had an appointment this morning at a listing just after Market Action was published so only covered inventory in this morning’s post.  Pending sales are up over 2008 but closed sales are down.  That says that more transactions are failing in escrow.  A reminder that an accepted offer does not equal a “SOLD” sticker.  Factors that might be included:

• Appraisals not coming in at the agreed upon sales price.
• Buyer being disqualified due to changes in lending rules during escrow.
• Buyer backing out due to economic concerns.
• Increased sale fails during the inspection period (sellers are accepting offers closer to their “drop dead” price and therefore less willing to negotiate during escrow).
• Short sales (by the time a short sale is approved and changed to “pending” in RMLS, buyers are less emotionally attached to the purchase and therefore less likely to make it through escrow.

On one of the most positive notes reported this year in Portland real estate:

Closed sales were up 72.4% compared to November 2008 and pending sales rose 19.9%.  New listings dropped 7%.  The 72.4% same-month increase in closed sales is the largest percentage increase on record for the area.  The previous high was56.9% in December 1996.

Year to date listings are down by 19.2%.  This is keeping inventory levels low as inventory is a ratio of “active listings at the end of the month in question by the number of closed sales for that month.”

The average sales price is down 11.4% for the year and 3.6% for the month.  The average sales price of home is now $273,300.

RMLS of Portland just released their Portland real estate market data for November 2009.  Inventory ticked up a little from October’s 6.5 months.  The 9% increase is less than the month on month increase in 2008 but in 2007 the inventory level remained almost static for the same period.

Must run.  More later.

The Case Shiller Index is released on the last Tuesday of each month (tomorrow).  The Index has a three month lag; tomorrow’s report will tell us about September.  RMLS Market Action comes out midway through the following month; we already have data through October.  Without a massive amount of statistics, does RMLS Market Data predict what the Case Shiller Index for the Portland real estate market look like?  I don’t think so.

The graph ab0ve with inventory levels makes the average sales price and Case Shiller Index (for Portland) hard to discern so the graph below removes inventory but is the same otherwise.

October 2009 RMLS Market Action for Portland was released yesterday.  The complete RMLS report for all areas is here.  The 6.5 months of inventory is the lowest it has been since August of 2007 and is down 67% since January’s all time high.  Inventory is a ratio of the number of months it would take to sell all the active listings at the current rate of sales.

Pending sales are up 64% compared to October of last year but those properties are selling at a discount: the average sale price is down 12.6% and median price down 10.9%.  The average sales price of a residential property in October was down compared to September and the whole year.

RMLS Market Action September 2009 was released today (Portland Metro or whole report).  Inventory dropped slightly from August which contrasts with rises month-over-month in 2007 and 2007 between August and September.

Cumulative days on market is 144 days but a quick search in RMLS shows that 243 properties sold in the last two months with days-on-market of seven or less in Portland. Area-wise: North Portland averages 89 days, NE Portland 84 days, West Portland 152 days, and SE Portland 228 days.  A unit in the South Waterfront’s John Ross recently closed that was 1382 days on market.

RMLS Market Action for August 2009 was just released.  Inventory rose for the first time this year but is 21% lower than it was this time last year.  At the current rate of sales, it would take 7.8 months to sell all the existing properties on the market.  Prior to July, the last time inventory levels were this low was in August of 2007.

Sales are up from this time last year but down from July.  New listings are down.

The average sales price of Portland area property is down 10.6% from this time last year (median down 10.8%).

The average sales price was up 2.7% to $296,300 but the median price was down .04% to $249,900.

There is still plenty of room for concern with the overall economic news, especially Oregon’s unemployment rates.  We’ve seen car manufactures offer job loss protection and now Prudential Northwest Properties has introduced it to the Portland real estate market (as has Directors Mortgage).  It isn’t a fix all but may help some.

I expect that we will see an increase in the number of pending sales through October as we don’t know if the government will expand, extend or let the First Time Buyer Credit expire.

The chart above is from the June RMLS Market Action.  It shows the historical affordability of the Portland housing market.  The National Association of Home Builders publishes the NAHB/Wells Fargo Housing Opportunity Index (HOI).

CNNMoney reported yesterday on the HOI index and the most and least affordable cities but Portland doesn’t get mention.  Going into the data on from NAHB website we find Portland ranked 198th out of 226. Note that RMLS data cites the National Association of Realtors (NAR) and CNN cites NAHB.  Portland is more affordable vis-a-vis itself historically but still remains one of the less affordable markets nationally.

The typical American family, making the nation’s median income of $64,000 a year, could afford to buy 72.3% of all homes sold in the United States during the second quarter, according a quarterly report from the National Association of Home Builders (NAHB) and Wells Fargo (WFC, Fortune 500).

That’s off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.

The Federal Reserve meeting ended its two day meeting today without changing interest rates.  CNN reports, “Central bank says the long decline for U.S. economy appears to have ended, although it’s likely to remain week for awhile.”

RMLS just released its latest Market Action report with some strong numbers for July:

Closed sales in the Portland metro area for July 2009 eclipsed last July’s total by 8.6%, marking the first time same month closed sales have increased since April 2007. Pending sales also grew 8.3%. New listings dropped 25.4%.

That said, the July 2009’s average sales price is down 15.2% from July 2008.

Inventory continues to decline due more to an increase in activity than a change in the number of listings.