RMLS Market Action for July 2014 was released on Friday and our custom info graphic distilling the information from the report is hot off the presses today. Available listings in the Portland Metro area remains under three months for the 4th month in a row. Inventory, the ratio of active listings to closed sales shows how long it would take for the existing inventory to sell if no new listings were added. Six months was the typical length of time assigned to indicate the equilibrium between a buyer and seller market but I think in our post-bubble era, that number is closer to 4.5 – 5 months. Buyers are more likely to walk away from a transaction if they feel something is “off.”
Low inventory and a seller’s market continues to drive prices up. The average sales price is $344,700. That’s only about $10,000 less than the August 2007 peak! That’s a 7.9% increase over this time last year. We probably don’t want to continue at that pace but it’s a lot healthier than the 12% increase we saw in 2013. 5% is probably healthy and sustainable and historically the national housing market has seen a long-term return of about 4%.