The December 2012 RMLS Market Action gives us the complete picture of the 2012 Portland real estate market. There 17,84 fewer new listings than 2011. Coupled with 3,340 more closings than 2011, inventory was driven to lows we haven’t seen since 2006. The low inventory has created the first seller’s market we’ve seen in years. Multiple offers, which were almost nonexistent for years aren’t that uncommon now. As always, the lower end of the price spectrum is seeing more activity than the upper end where the qualified (willing and able) buyer pool is smaller.
Affordability (not quoted this month) is much higher than it has been due to lower home costs and the lowest interest rates in history. Most of us thought rates couldn’t go any lower than they were in 2012 but we were proved wrong. Most pundits believe they will remain fairly steady in 2013.
Today’s Oregonian says that new listings in the first couple of weeks of the year are way down compared to last year. That’s going to put more pressure on inventory and may fuel the seller’s market. Can we get to 10,000 listings and 4-5 months of inventory? That would be a healthy market.
The increase in average sales price from $260,800 to $290,220 equates to a 4.4% rise which is a strong result. The market can handle numbers like that year in and year out where it couldn’t sustain the rapid growth of the run up.
The crystal ball? It’s a little less murky than its been the last few years. It looks like we will be able to call March 2012 the bottom of the market. I’d like to be in June before making the final call but sans something major we appear to be out of the woods. If there really is a huge shadow inventory it would seem like now is the time for banks to put them on the market. Working through that inventory while it is low seems prudent. That might put some pressure on the average sales price as REO property tends to be less expensive but we need to get people into these homes so they don’t sit vacant.