When RMLS released the May 2012 Market Action report last month it was hard to ignore 4.2 months of inventory as being the lowest it has been post-bubble. That 4.2 months represents the Portland Metro area, which for RMLS, is made up of a five country area. Turning to the second page of the report, RMLS breaks down the number for the individual RMLS areas and the inventory numbers, when calculated, are much lower than the broader based metro numbers. Inventory is the ratio of homes for sale divided by the number of homes sold:
- N Portland: 2.8 months
- NE Portland: 2.8 months
- SE Portland: 3.2 months
- W Portland: 4.1 months
Lake Oswego/West Linn has 5.5 months of inventory. Columbia County has 10.2 months of inventory. All of the areas mentioned above, along with about a dozen others, figure into the Metro figure. There were 8,742 homes for sale in Metro Portland when the report was released.
Location doesn’t tell the whole story though. Last week, we looked at sales by price range in Portland. Homes under $300,00 are selling much more rapidly than higher priced homes. The average sales price in West Portland is $434,000 compared to $231,900 in North Portland. Higher priced would be expected to have higher inventory rates.
Six months of inventory was largely considered the neutral point between a seller’s and buyer’s market. I’ve hypothesized that in this post-bubble market that it may be four to five months as I feel buyers are more apt to walk away from a transaction than they had been previously. Even with revision of the neutral point, these are clearly seller favored statistics.