Realtors and homebuyers spent the holidays wishing for more inventory. They didn’t get it. The just released RMLS Market Action reports just 1.2 months of inventory for Portland Metro, the lowest level since 1999! Metro is a five country area, if we look closer we find that North Portland’s inventory is .82 months, .92 months in NE, .94 in SE and 1.6 month on the west side.
December’s Market Action report also allows us to look at 2015. The average sales price rose 6.5% to $354,500 and the median price climbed 7.9% to $285,500. Activity was up to: closed sales up 20%, pending sales 22.5% and new listings 8.4%. We have low historically low inventory because the number of closed sales went up much more than the rate of new listings.
The Feds raised interest rates for the first time since 2006 in December. Will this cool the 2016 market? Will they raise rates again? It’s an election year. How will the market respond? The Dow is off 2000 points from its high. These are factors that could cool the market.
That said, we’ve already discussed super-low inventory. The rental market is crazy. It is often less expensive to own a home rather than to rent the same home. We understand that there are costs associated with it (down payment) but there are also tax advantages to go along with it. The average first time home buyer is putting down 4.5% on their home purchase. With any rate increase, a buyer’s buying power drops.
Portland has been in the news recently as a top migration destination and that adds to the already steep competition for a small selection of houses.
Will the questions drag the real estate market down or will the drivers continue to push it up? Baring any major shift in the questions, the market will continue its march.
As always, if you have questions as a buyer or seller, let us know and we’re happy to chat. Advice is always free.