Archive for the ‘RMLS Market Action’ Category:

The supply of homes for sale in the Portland market continues to drop according to the RMLS Market Action report released today.  The general convention is that six months of inventory indicates a neutral market but that number should probably be revised downwards as I think buyers are more willing to walk away than they were in the past.    It was 153 days in April of 2011. Inventory in the close-in areas of Portland is lower in three instances than the five country Portland Metro reporting area.

• N Portland: 4.3 months
• NE Portland: 3.5 months
• SE Portland 3.2 months
• W Portland 4.8 months

Average ($262,500) and median ($225,000) prices are almost the same as this time last year.   The report shows Days on Market is down to 123 days.  It was 153 this time last year.   On the other hand the graphic to the right shows that the rolling average and median prices are down.  That compares the last 12 months with the 12 months prior to that.

[Both graphics are from the Market Action report]

I’m still trying to compose myself after heading over to the Portland Business Journal to grab the link to the story discussing Portland unemployment at the bottom of this post.  I was shocked to see this headline: “Portland homes prices up 4.3 percent”.  What’s truly amazing about it is headlining a positive about the Portland real estate market and not the normal pick-the-worst-part-of-the-report title (“Median Prices Down 1.3%” was what I was expecting to read).  Everything must be peachy now… now back to our regularly scheduled RMLS Market Action report.

Most of the monthly metrics for the Portland real estate market were up in February according to the February 2012 RMLS Market Action released today.  Inventory dropped from 7.0 months in January t0 6.5 months.  In February 2011 there were 10.9 months of listing inventory.   The drop comes from a higher rate of sales (up 17.5%) and a decrease in new listings coming to market (-13.6% from February 2011).  The jump in pending listings, up 32.5% since this time last year, is encouraging too.  The average sales price is up 2.4% to $255,100 compared to January but the median price lost 1.3% to $211,000.

From the “real estate is local” theme inventory levels are considerably lower on the east side of the Willamette River within the city than shown from the five county “Metro Portland” data shown in Market Action:

• North Portland: 4.6 months
• NE Portland: 3.7 months
• SE Portland: 4.8 months
• West Portland: 6.6 months
• NW Washington County: 7.4 months

The average sales price of $255,100 is down from a peak of $355,000 in 2007.  That’s pushed affordability rates higher than we’ve seen in nearly a decade.

AFFORDABILITY – According to a formula from the National Association of REALTORS®, buying a house in the Portland metro area is affordable for a family earning the median income. A family earning the median income ($72,000 in 2011, per HUD) can afford 182% of a monthly mortgage payment on a median priced home ($216,600 in December). The formula assumes that the buyer has a 20% down payment and a 30 year fixed rate of 3.96% (per Freddie Mac). [Reporting December 2011, the most current month available]

With low inventory levels, interest rates and other positive signs (Portland unemployment down to (a still high) 8.2%) we still need to be cautiously optimistic about where our market is heading.  Last year it looked like the market was on an upswing throughout the first half of the year.  That fizzled out and left us mostly flat for the year.  Even with less than five months of inventory in certain areas around Portland I don’t think that we’re going to be comfortable with the phrase “seller’s market” for some time.  We’re seeing the return of the investor to the market which is increasing the competition for what is already a reduced number of active listings.  We’re seeing multiple offer situations more often and other houses going sale pending with just a handful of days on market.  That’s due to increased competition but also because sellers are more willing to embrace the importance of accurate pricing and reacting to market feedback quickly.  Buyers are going to continue to be afraid of overpaying for property until we have a long run of stability or market increases.  Their fear, real or perceived, is going to keep sellers twitchy about getting escrow closed versus losing the buyer and going back on the market.  There may have been multiple offers to start but many buyers won’t come back after being rejected once.

Writing for me is like going to the gym.  Love doing it but get out of the habit and it’s hard to get back to.  Today’s release of RMLS Market Action should get me back in the groove.  Inventory is four months lower than it was this time last year.  That partially because there are currently only 9,451 active residential listings and partially because closed sales are up 18.9% from November of 2010.

Average price is down 4.6% from this time last year but edged up .3% from October.  Can we be cautiously optimistic about the Portland housing market going into 2012?  I previously wrote about the Case Shiller article predicting gains.  Yahoo/CNBC wrote “Residential Housing Ready to Waken?” on Friday of last week.  We should note that Portland has typically been about a year late to the party.

“It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place,” declared Barclays Capital analyst Stephen Kim in a recent note to investors.

Affordability and interest rates are as good as they have ever been in recent years.  There’s plenty of reason to be a pessimist too: jobs, politics, Europe being just a few of them.

RMLS Market Action for October 2011 was released yesterday.  The average price of residential property in Portland is $258,700.  The median price is $221,000.  So what does the NBA lockout have to do with that?  CNBC reports that the average NBA player has lost $220,000 in wages thus far due to the lockout (Kobe has lost over a million dollars).  That means the NBA’s 450 players could have purchased 5% of Portland’s housing inventory and reduced the current 6.8 months of inventory to 6.5 months just by playing some basket ball.

In reality most of that salary income would not have been spent in Portland and it is not the players losing out.  The economic impact to Portland is of far greater concern than the impact to millionaires fighting with billionaires.   The NY Times which has a documented love affair with Portland reported on how cities that are a one-team-town suffer the most (they failed to acknowledge the Timbers).  Joe Freeman at the Oregonian also wrote of the impact to the local economy which was repudiated by economist Patrick Emerson.  The Rose Garden employs 900 people a night and the City gets $77,000 for its coffers on games days.  Six games of revenue would have paid for the police overtime last weekend at Occupy Portland protests.  All the money referenced above will be spent one way or another but a large portion probably won’t be spent in Portland.

Moving off the soapbox, let’s go back to RMLS Market Action.  The average and median prices referenced above are both declines on both an annual and monthly basis.  Inventory has pretty much remained static, up just one tenth of a month.  6.8 months of inventory is lower that it was at any point in 2010.  A positive note is both pending and closed sales are up compared to October 2010 and year-to-date compared to 2010.  More houses are selling but for less money.

RMLS Market Action for September 2011 was released on Friday afternoon.  I’d consider the report mostly neutral.  Inventory, median price, pending and closed sales were up but average price and the number of new listings decreased compared to August.  Note that an increase in inventory is not considered a positive though at 6.7 months it is lower than it was at any point in 2010 and all but one month in 2009. (more…)

RMLS Market Action for August 2011 was released yesterday.  Inventory is up to 7.0 months.  Six months has been considered the equilibrium in the past but with the market changing so much in the last few years one has to wonder if there will be a new normal?  There are just under 12,000 home for sale.

Pending sales and closed sales were both down compared to June 2011 but up considerably this time last year.  The average sales price was up 3% from June 2011 but of course is still below July 2010. (more…)

RMLS Market Action for June 2011 was released just before happy hour on Friday afternoon.  I’ve updated our graph of housing inventory levels in the Portland and local market areas and the trend continues that City inventory averages about a month less than Portland Metro as reported in Market Action.  North Portland has just 4.2 months of inventory whereas West Portland is at 7.1 months.  Metro reports in at 6.0, the lowest level since July 2007.  Southeast Portland, which I wrote about last week, has 4.7 months of inventory.  The average sales price in Southeast Portland is $218,600 compared to West Portland’s $408,500.

(more…)

RMLS Market Action for May 2011 is out with mixed news.  The average sales price in Portland is down from April 1.8% to $262,400.  During the same period the median price increased .1% to $220,000.  The average sales price has dropped 7.3% over the last year.

Inventory levels continue to decline.  New listings have dropped and pending transactions are up.  RMLS reports Portland Metro as a five county area.  We’ve updated our inventory graph for the more localized markets.  The trend continues that the City of Portland has about one month less inventory than Portland Metro. (more…)

RMLS Market Action for April 2011 was released yesterday with mostly positive month-over-month news.  I consider a .1 month drop in inventory a positive even though mathematically a loss.  The average sales price went up from $261,000 to $267,300 and the median price also increased.  The average sales price over the last year has declined 5.2%.

April, May and June were the strongest months of 2010 Portland  real estate with a sharp drop off in July.  In previous years May, June and July saw the highest number of closings in a given year.  The difference for 2010 can most likely be attributed to the expiration of the First Time Buyer Credit on April 30th and the need to close those transactions (note the spike in inventory from 7.3 to 10.8 between June and July last year). (more…)

RMLS Market Action for March 2011 in the Portland Metro area shows  some strong gains from February.  Inventory dropped 35% from February to 7.1 months.  I’ve updated the tracking of the local Portland RMLS areas and what is most striking is that North, Northeast and Northwest (Washington County) Portland have inventory levels below six months (see graph below) and the RMLS Area Map (RMLS reports a five county zone).  The average inventory for the five City of Portland areas is 6.0. That’s the traditional line of demarcation between a buyer’s and seller’s market.  Portland’s local inventory has been at least one month lower than Metro’s since I started tracking it. (more…)