• 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]

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.

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.

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.

The rolling 12 month average sales price is down 5.9% to $266,900 from $283,600.  Interestingly 5.9% is the same amount reported last week as predicted appreciation for Portland between the first quarter of 2012 and the first quarter of 2013 by Case Shiller/Firserv.

RMLS Market Action reports “Portland Metro” as a five county area.  Case Shiller reports “Portland Metro” as the seven county MSA.  Tomorrow I will post the more localized City of Portland inventory numbers.

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.

I’ll update the local inventory by RMLS area and post that soon.  We typically see the local inventory track about a month less than the Metro inventory.

RMLS Market Action August 2011 | Presented by the Turner Realtors Team

Market Action reports an average sales price of $267,000.  That’s up from last month but down from $289,800 a year ago (down 7.8%).  Last year at this time listing inventory was 1.3 months higher (7.3 months) than it is today.

What this means for the Portland housing market is hard to say.  Interest rates remain low, lending rules are largely static and home prices are down around 2005 levels, if not 2004 levels.  Home prices increased last summer but then declined through most of the fall, winter and spring.  We have personally seen signs of market strength but our clients represent just a small portion of the overall market.  The national budget (or lack of) and job strength (or lack of) in Portland remain concerning.

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.

Looking at history doesn’t help crystal ball predictions of where the market is heading.  While interest rates remain amazingly low other economic information prognosticates continued tough times.  An accurately priced house will sell in any market.  We just got an accepted offer on a property where four offers were presented to the seller three days after it was listed.  We’ve seen other properties sit on the market for months, if not years.  I just showed a house with an RMLS number starting with 9 (RMLS numbers of properties listed in 2011 start with 11).

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).

Days on market for the metro area is 153 days.  In April of 2007 it was 58 days and inventory was at 4.4 months.  Amazingly 4.4 months was the 5th highest level in the 28 months proceeding that report.  In the last 28 months inventory the lowest inventory was 6.5 months in October ’09 which was down from the recent record of 19.2 months in January of the same year.  Inventory has not been below 7 months since.

I’ll update the local City of Portland inventory that we have been tracking since last year as soon as possible.  Market Action’s Portland Metro report is made up of a five county area.  We’ve seen that the close in Portland areas have tracked consistently below the Metro inventory.

The average sales price also climbed from $244,500 to $261,100 which is the first increase we have seen in a number of months.  One month’s gain doesn’t counter the previous losses and there is no way to way to tell if this is the start of a strong spring selling season or whether the market will continue to decline overall.  The number of closed sales, pending sales and new listings all declined  in March 2011 compared to March 2010 but we all up when compared to last month.

Click on the image above to view the full size version.  Here is the complete March 2011 Portland Metro RMLS Action report.