How low will it go? RMLS Market Action for Portland real estate was released yesterday. Metro inventory dropped to 3.2 months which is the lowest it’s been since June 2006. “Metro” is a five county area so when you look at the closer-in areas the picture changes:
- North Portland: 2.6 months
- Northeast Portland: 2.2 months
- Southeast Portland: 2.3 months
- West Portland: 3.2 months
- Northwest Portland (area beyond Skyline): 2.0 months
Average prices are up 15.3% from the first quarter of last year but I advise a little caution when looking at this figure. The number of REO properties has dropped significantly in the market place. These properties are typically lower priced than the market average. The switch from non-judicial foreclosures has not stopped the foreclosure process. The appearance is that REO has gone away when in reality the pipe that they have to flow through has simply gotten much longer and they will eventually reach the end of the pipe and come to market. We should expect that to apply downward pressure on average prices.
Other indicators are strong: Accepted offers and closed sales are the highest since 2007. The 12 month rolling average price is up 7.5% to $282,000. The median price is up 9.1% to $240,000. Again, we’ve got the highest number since mid-bubble years so a little caution may be in order. Alternatively, I could be a little pessimistic and we’ll power right through all of this. The stock market certainly seems immune recently.
Traditional buyers (non-investors) need to make sure they are in the strongest position possible when it comes down to writing an offer. That means being educated on the market and the process and having a trusted Realtor adviser. Tools on the Internet, like this blog, Zillow etc, can provide lots of information but neither can replace one-on-one interaction.