Inventory is one of the market indicators we look at. Conventional wisdom used to say that market equilibrium is six months. Anything below that is a seller’s market and above, the market favors the buyer. We’re at .8 and have been at a month or lower since November of last year. Even if we move the six month line to four, or even three months, I can’t see that happening anytime soon. More on that later.
The average sale price of a home in Metro Portland in June 2020 was $479,700. Fast forward to June 2021 and it’s just under $600,000 at $597,100- a whopping 24.4% increase. The year-to-date appreciation is 20.1%.
Compared to May, new listings were up 8.2%, pending sales down 4.9% and closed sales up 9.2%. Pending sales are the best indicator of the following month’s closed sales so we might see a small uptick in inventory? It depends how many new listings we get.
When does it stop? Right now, we’re looking at a supply and demand issue. In June of 2019 there were 6,735 listings. Now there are 2,722. Factor in even lower interest rates, a rebounding economy, a shortage of new construction and a change in attitude about living space during Covid, I don’t see a market drop on the horizon. A slow-down? Yes. A reversal? No. The current situation is not sustainable.
Sellers are in great shape. It’s hard for buyers. 3,477 got new homes in June but many qualified buyers did not get what they wanted. Some are starting to suffer from buyer fatigue, there is a roller coaster of hoping you are going to get a home and being beat out. There are things we can do to increase the odds of getting an offer accepted but sometimes there is simply someone better positioned to buy that home. We have 26 buyers pending right now so it’s challenging, not hopeless.