Portland Real Estate Up Close

Overview/Fluctuations ~ Market Data:  

As we move from summer to fall, we see a continuing trend of market stabilization. Inventory is still holding its own compared to last year but down slightly from the prior month. Prices are pulling back as far as the steep upward trend that we’ve been seeing, and activity remains strong with accepted Offers and Closings increasing in volume over July, and average time on market at 28 days. Even so, we’re slower this year than August 2021.

Rates: “Rates have pushed up based on inflation and are now around 6% for a 30-year fixed rate mortgage.” Gary Boyer, Regional VP, Directors Mortgage                                                                                                                                                                                                

According to the RMLS Market Action Report  for the Portland Metro Area-Aug 2022:

• There were 3,209 New Listings in August 2022– down 13.2% from 3,698 in August 2021 and down 14.7% from the previous month/July’s 3,763.
• At 2,581 August 2022’s Closed Sales (Solds) are down 19.8% from August 2021’s 3,219, and up 8.9% from the previous month/July 2022’s total of 2,369.
• At 2,530 August 2022’s Pending Sales (accepted Offers) are down 28.4% from August 2021’s 3,535, and also down 3.5% from the previous month/July’s total of 2,445.
• The Average Sale Price in August 2022 of, $607,700 is up $24,100 from last year/August 2021’s $583,600, and took a quick dive of $28,000 from the previous month/July’s $635,700.  
• The “Median” Sale Price (the price smack dab in the middle of all sales) in August 2022 of $548,400 rose from last year/August 2021’s $525,000 by $23,000, and is down $17,600 from the previous month’s $566,000.

Overview/Fluctuations ~   Happy August!  We’re seeing the market slow a bit, which is often a seasonal characteristic of the hot vacation weather and travel schedules, BUT, this year we’re also seeing things really pull back as a direct result of the overall economy in a good way…in a way that is creating more of a “normal” market where Buyers and Sellers each have their own leverage, and where negotiating on reasonable repair items and price is again “the norm”. Right on cue, more houses are going on the market (see Inventory). Anecdotal buzz goes right along with the data- Realtors seeing Buyers actually getting Offers accepted where they’ve been struggling till recently. The pace of upward push on pricing is easing, and all of this in time for inflation concerns to be lessening per recent headlines.  Overall, the word on the street is and the stats show that Portland housing market is evening out some.                                                     Rates: “Rates have moderated along with inflation and are coming down to the lower 5’s at this time.” Gary Boyer, Regional VP, Directors Mortgage                                                                                                                                                                                                 

According to the RMLS Market Action Report  for the Portland Metro Area-July 2022:

• There were 3,763 New Listings in July 2022– down 11.8% from 4,267 in July 2021 and down 12.4% from the previous month/June’s 4,295.
• At 2,369 July 2022’s Closed Sales (Solds) are down 31.1% from July 2021’s 3,439, and down 18.1% from the previous month/June 2022’s total of 2,893.
• At 2,445 July 2022’s Pending Sales (accepted Offers) are down 27.1% from July 2021’s 3,354, and also down 4.6% from the previous month/June’s total of 2,563.
• The Average Sale Price in July 2022 of, $635,700 is up $42,600 from last year/July 2021’s $593,100, and up $2,400 from the previous month/June’s $633,300.  
• The “Median” Sale Price (the price smack dab in the middle of all sales) in July 2022 of $566,000 rose from last year/July 2021’s $522,000 by $44,000, and is down $4,000 from the previous month’s $570,000.

Overview/Fluctuations ~ Market Data:
We are seeing the effects of interest rate increases in the Portland market. Gresham, Milwaukie, Oregon City and Tigard are holding their own as competitive for Buyers. The rest of the areas of Portland saw Buyers putting their collective foot down as evidenced by the Average Sale Prices compared with the previous month. We call this stabilization, so it’s actually a good thing. Inventory is rising to almost 2020 levels at 1.4 months, but 2018 was 2.1 months inventory and 2019 was 2.4 months, so you can see we’ve got a way to go before we’re back to those levels. Rates: Right now I’m told rates for primary/owner-occupied are at around 6.1% with great credit, utilizing a discount point and putting 20% down.

According to the RMLS Market Action Report  for the Portland Metro Area- June2022:

• There were 4,295 New Listings in June 2022, which was down only slightly from June 2021’s 4,298, and up 11.5% from the previous month/May’s 3,853.
• At 2,893 June 2022’s Closed Sales (Solds) are down 16.8% from June 2021’s 3,477, and down 0.8% from the previous month/May 2022’s total of 2,916
• At 2,563 June 2022’s Pending Sales (accepted Offers) are down 27.5% from June 2021’s 3,534, and also down 17.9% from the previous month/May 2022’s total of 3,122.
• The Average Sale Price in June 2022 of, $633,300 is up $36,200 from last year/June 2021’s $597,100, and down $16,300 from the previous month/May’s $649,600.  
• The “Median” Sale Price (the price smack dab in the middle of all sales) in June 2022 of $570,000 rose from last year/June 2021’s $521,000 by $49,000, and is down $5,000 from the previous month’s $575,000.

Overview/Fluctuations ~ Market Data:
Listings, Accepted Offers and Sales are up overall from the prior month and a bit down from last May. Most neighborhoods in the Portland area saw their Average Price rising over the previous month, and Inventory is finally back up to where it was last August, which is still historically low. Of course the big story at this moment is rates:
Rates: “The market has experienced a dramatic move higher as the Federal Reserve fights inflation. Currently 30-year fixed rates are right at 6.0%” Gary Boyer, Regional VP, Directors Mortgage

According to the RMLS Market Action Report  for the Portland Metro Area-May 2022:

• There were 3,853 New Listings in May 2022 decreased 3.0% from May of 2021’s 3,971, and increased 4.6% from the previous month/April’s 3,684.
• At 2,916  May 2022’s Closed Sales are down 8.4% from May 2021’s 3,183, and up 4.8% from the previous month/April’s 2022’s total of 2,782
• At 3,122 May 2022’s Pending Sales are down 16.0% from May 2021’s 3,717, and increased 3.9% over the previous month/April 2022’s total of 3,005.
• The Average Sale Price in May 2022 of $649,600 is up $67,400 from last year/May 2021’s $582,200, and up $16,700 from the previous month/April’s $632,900.  
• The “Median” Sale Price (the price smack dab in the middle of all sales) in May2022 of $575,000 rose from last year/May 2021’s $515,000 by $60,000, and $15,000 from the previous month/April’s $560,000.

I thought I’d take the easy way out and cut & paste a section out of my own Homebuyer’s Class for my post this week as I’m kind of busy with…real estate. When I looked at the section on Tips for Offering, I realized I think my own class document needs an update given the current state of the market! Here are a few things I realized I might like to address:

Love Letters- I’ve been writing these on behalf of my clients for many, many years, and have indeed won homes for my clients (been told) on the strength of the letters I wrote. I have never encouraged my clients to write their own letters as I believe it is a stronger position for me to advocate on their behalf. That said, my focus is always their strength as Buyers and whatever they bring to the table in terms of job stability, their actual love of the particular home/property (read: commitment), and other such things. I definitely do not use photos of the Buyers. There is a big debate going on around the issue of these letters (mainly the ones Buyers write about themselves), and it revolves around Fair Housing concerns. This has gotten to the point where they were outlawed for a time, and now that has been overturned and they are again allowed (as of this writing). NOTE: It is never OK to try to appeal to a perception of a Seller’s preference for race, gender, familial status or other protected class positions. Never. So, if you’re ever in the position of deciding whether to deliver such a letter, please keep this in mind, and consult with me! Or your Realtor ; )

Lower Offers (and how best to make them)- Well… this one is just nearly N/A in the current market. I say “nearly” as it does happen, but usually not at the outset unless a property has been sitting on the market for what is considered a longer period of time or if it was priced too high to begin with (which is usually why a property is still on the market). It *can* happen that the price goes down after certain things are revealed in the inspection process to compensate, but most properties are selling above their asking price, & often well above.

How to Win- It has been the case for awhile that multiple offers have driven prices up significantly over asking, and/but we think we are seeing a teensy bit of pullback in at least the amount of overage. This is more due to Buyers backing off than to more properties entering the market as we still see record-low Inventory. The way this has been playing out in a “multiple” bidding situation to date, is that the Offers guaranteeing they’ll bring a certain amount of cash to the Closing table in the event of a lower Appraisal are the Offers that get chosen as it’s less risk/more reliable for a Seller. (*Little understood fact, fyi: The “Closed” sale price effectively sets a new value standard in the neighborhood regardless of what it appraised at during the transaction. ; ) This tactic is obviously limited to those who *have * the cash to do that, and the whole scenario is part of what’s driving the angst /frustration around this supply and demand phenomenon and how it affects, say, first-time home-buyers. Considering the fierce competition driving prices higher, Appraisers and Realtors alike have been wishing for a calmer, more “readable/predictable” market, and several factors *may* be causing this to be the case very soon. In the meantime, there are ways to win even if you don’t have the cash…or don’t think you do. One is to look in a lower price range than you want to buy in. This way you are able/have the means to at least push your Offer price over the heads of much of the competition. There are a few other things you can do to get an edge, but we can talk about those one-on -one ; )

Overview/Fluctuations ~ Market Data:

Inventory inched up just a bit in April, and the comparisons to last year and the previous month’s data remain similar to the month before…down over last year, slightly up generally from the prior month, except for Pending Sales which are down a slight 1.3%. See below for more details on that. Total market time is down to 21 days, so activity is up as you’d expect in springtime & plenty of people are out looking for a limited number of homes. Rates continue to rise, so some of the less-than-typical/less-than-robust activity is traceable to that and to the low inventory that persists. It’ll be interesting to see May numbers as, anecdotally, Agents are noticing slowing and a bit of a pause in that usual Buyer-excitement cycle that distinguishes this time of year.
Rates: “We have seen continued pressure on rates as the Federal Reserve fights inflation. A 30-year fixed is at roughly 5.375%” Gary Boyer, Regional VP, Directors Mortgage

According to the RMLS Market Action Report  for the Portland Metro Area-April 2022:

• There were 3,684 New Listings in April 2022 decreased 9.4% from April of 2021’s 4,065, and increased 4.6% from the previous month/March’s 3,521.
• At 2,782  April 2022’s Closed Sales are down 5.6% from April 2021’s 2,946, and up 3.7% from the previous month/March’s 2022’s total of 2,683
• At 3,005 April 2022’s Pending Sales are down 11.6% from April  2021’s 3,400, and down slightly at 1.3% below the previous month/March2022’s total of 3,045.
• The Average Sale Price in April 2022 of $632,900 is up $75,000 from last year/April 2021’s $557,900, and up $22,000 from the previous month/March’s $610,900.  
• The “Median” Sale Price (the price smack dab in the middle of all sales) in April 2022 of $560,000 rose from last year/April 2021’s $500,000 by $60,000, and $10,000 from the previous month/March’s $550,000.

Overview/Fluctuations ~  Market Data:            

In the In the first three months of 2022 as compared with the same period in 2021, New Listings have decreased 1.3%, Pending Sales have decreased 3.7% and Closed Sales increased 1.2%.  So, basically Inventory is insanely low, & that fact is keeping the sales data (Pendings & Solds) low as well  for the quarter. BUT, as you’ll see below, though Inventory is still ridiculous, activity is picking up this month as it usually does and competition is still stiff, which means Appreciation is continuing to climb (see March 2022 & Neighborhood Report below).

Rates: “The Fed is trying to slow things down, and consequently right now rates sit at about 5.125%.”     Gary Boyer, Regional VP, Directors Mortgage                                                                                                                                                                                                                                          

According to the RMLS Market Action Report  for the Portland Metro Area-Mar 2022:

• There were 3,521 New Listings in March 2022 increased 1.6% from March of 2021’s 3,465, and increased a whopping 37.0% from the previous month/Feb’s 2,571.
• At 2,683  March 2022’s Closed Sales are up 5.0% from March 2021’s 2,556, and up another whopping 38.4% from the previous month/Feb 2022’s total of 1,939
• At 3,045 March 2022’s Pending Sales are down 9.0% from March 2021’s 3,346, and up 24.2% from the previous month/Feb 2022’s total of 2,452.
• The Average Sale Price in March 2022 of $610,900 is up $56,600 from last year/March 2021’s $554,300, and up $28,700 from the previous month/Feb’s $582,200.  
• The “Median” Sale Price (the price smack dab in the middle of all sales) in March 2022 of $550,000 rose from last year/March 2021’s $488,000 by $62,000, and $25,000 from the previous month/Feb’s $525,000. ***I’m not a statistician, but it seems to me that the above similarities in Average –vs- Median increases indicate that homes are selling across all pricing spectrums in somewhat even distribution. Prove me wrong! ; ) If true, this surprises me as the current rate hikes tend to make it harder for first time home-buyers who historically tend to buy in lower price ranges.