You’ll have to look pretty hard for good news in the October 2010 RMLS Market Action. One bright spot is that there is an increase in the number of closed transaction through October 2010 compared to 2009. This is coupled with a decrease in the number of pending transactions. It means that fewer transactions are failing in escrow which is important and may show a measure of increased confidence in the housing market. It could also be a sign that buyers were so afraid of losing the home buyer tax credit that they settled on something they would have passed on otherwise.
The other reason to perk up is if you are a buyer. Prices are down 2.4% from this time last year. This has pushed the Affordability Index to the highest it has been since 2004. We discussed Portland housing affordability a little last week. As a buyer you have to decide whether you think the market is bottoming out, going to slide more or increase and then do the same for interest rates. As a seller who is selling and then buying you might consider the purchase and sale as one transaction. You’ll sell at a lower price, and quite possible forego a higher interest rate, for a purchase at a lower price and most likely a lower rate. It’s best for upsizers.
The rest of the news isn’t so good. Closed sales are down 35.7% when compared to October of 2009 and the average sales price dropped 1.1%. Inventory bumped up a little but has been pretty flat over the last few months. There were 13,101 active listings at then of the October 2009 comapred to 13,805 homes for sale today.
We’ll take a closer look at the City of Portland inventory later in the week.
Interesting info. Makes me wonder where the Portland’s rental market is going since there seems to be a weird connection to rental demand and housing affordability. That is, when affordability goes down, landlords can’t afford to buy rentals, thus the supply and demand curve becomes tigher and rents go up…At least in Calgary Canada they do…