RMLS Market Action for October 2012 was released yesterday and inventory has dropped even further to 3.8 months. 2012 has seen fewer new listing than 2011 but an increase in closed sales has pushed inventory levels even lower. At the end of October there were only 7981 active residential listings! That’s a huge drop from 2010’s 13,805 or even 2011’s 10,012.
Prices continue to climb which makes us wonder if we’ve seen the bottom of the market? Case Shiller puts the bottom of the current market in March 2012 but RMLS reported a lower average price in the spring of 2011 than 2012. To measure the Portland real estate market the two reports use different methodology and geographic areas so you cannot compare one directly to the other.
The stock market is currently in a bit of an upheaval which is good for interest rates which remain at historic lows. Principle and interest on a $100,000 loan in 2007 was $624 per month (6.38%). At today’s rates the monthly cost for the same loan is $443 (Freddie Mac 30yr rate of 3.4%). The bad news for the real estate market is that lower stock markets tend to indicate less confidence in the economy which is not good for home prices.
The question we get asked the most at this time of the years is, “should I wait?” Buyers and sellers are more serious in the winter. Sellers have to put up with showings during the holidays and yards that look stellar in the summer tend to look lousy in the winter months. As a buyer it isn’t exactly fun when it’s near freezing and raining horizontally. Lots of out-of-town buyers use the holidays to start the move process and many companies relocate their employees at the beginning of the year. If you’re ready to sell hanging out on the sidelines doesn’t make a ton of sense but we wouldn’t recommend going on the market on Christmas Eve.