What Just Happened to The Portland Housing Market?

More homes for sale, less properties selling. What is happening in Portland? All right. This is Nick Krautter, principle broker with Keller-Williams Real Estate in Oregon, managing broker in Washington. I wanted to give you a quick update on the Market Action report. That's what we're looking at right now. A lot of folks mail this out but they don't really explain it and I want to show you what I look at when I'm looking at this report. They [the market reports] do o a great job of giving you a summary of activity; our active, pending, and sold; up or down, versus last month and up or down versus a year ago; and where pricing is. This box over here is our inventory. You can see the last three years. We're tracking pretty closely with the last couple years. Our inventory is slightly higher. We're still at under two months of housing inventory in our metro area. That means it's a seller's market and when it's a seller's market, it means there's not a lot to choose from and therefore prices go up. A balanced market is six months. As you can see we haven't even gotten close to that. Our highest inventory was 2.2 months or 2.3 months right here, September of last year. Our average sales price is up 7%. Median sales price is up 8%. Here's where it is today. So right now in May, this is the most recent report, it came out last week, average sales price is just under $461,000. Days on market 37. Our median sales price is at $409,000, so this is the first time we've had our median sales price in the 400's other than April. Median days on market in April was 42. If you look here you can see what last year was. 2017 in May average sales price was 440. Basically the average person in Portland made about $21,000 in equity just by owning a home over the last year. The median went from $388,000 to $409,000. So our pricing is up quite a bit. We're still doing well compared to the rest of the country. Seattle is doing a little bit better, much stronger economic base. Now if you are in real estate, you've probably noticed that things are slowing down a little bit, taking a little longer to sell. I want to show you why I think that is. This is a chart of active listings. This is the last two years and they were really, really similar. Last year and the year before were basically the same with slightly higher prices each year. But this year each month we've had more and more on the market. Now that on its own doesn't tell you the whole story, but if you look at pending listings right here you can see that the red line of pending sales is a little bit lower. So as that gap widens, as actives go up and pendings go down, that means it should take a little bit longer to sell a house. We might see appreciation slow down. Now that takes a long time. It doesn't change over night. It can take years for pricing to hit a peak after inventory starts to rise. So keep in mind, just because there's more to choose from and just because things might take a little bit longer to sell, it doesn't necessarily mean prices are going to go down for quite a while. Now we also have all-time high prices. We have rising interest rates. I'm keeping track of this. This is really the numbers that I look at. I think this kind of tells the story of where we're going. We're basically, if you look at this, we're about one month ahead of last year. April had as many listings as May of last year and May has a little bit more than last June. I think this trend's probably going to continue and that's just because as prices go up and interest rates go down, it becomes slightly less affordable and we lose some of our buyers that stay renters. The other thing is despite all of the articles and reports and the city saying about rents getting out of control, there's been so many apartments built [that] rents are actually kind of stabilizing. If you've rented a new apartment recently, you probably got a free month's rent. You might have gotten some other incentives. That's really common right now in the apartment rental market. That effectively brings down your cost to rent. When that happens it also gets some of the folks that were on the fence about buying to stay in a rental if the prices aren't going up or if they're even going down for them. I expect rental prices to stay flat or go down a little bit for folks. It won't drop dramatically but if you're looking at nicer luxury stuff, you're not going to have to pay the same price as you did maybe a couple years ago. It looks like it's fairly flat and maybe coming down a little with so many new choices out there for renters. So again, I'll keep reporting on this. I'm going to be probably doing updates a couple times a month and sharing them with all of you guys. If you have any questions, you can always reach out and give me a call or an email, nick@sellpdx, or my number on the web site, and happy to help out. I'll talk to you later. Bye. ...