The Market’s Looking Up!

RMLS just released the November Market Action report showing an extraordinary leap in sales activity. 

When comparing this November to November 2008, closed sales increased a monstrous 72%.  You read that right, 72%!  That is the largest same-month increase on record.  Pending sales also showed a significant 20% gain.

November’s activity, though, was lower than October’s (closed sales down 11%, pendings down 36%), but much of that can be attributed to the season and the weather.  In my experience, there is always a significant activity drop off between October and November as Portland enters the cold, rainy season.  The holidays certainly contribute to lower sales activity, as well.

In my opinion, the market has found its equilibrium.  Inventory has remained relatively stable since July and now measures 7.1 months.  The only negative piece of information, and it’s really no surprise, is the continued decrease in sales price.  Average sales price was down 11% versus November 2008 and the rolling twelve-month average shows a 13% decrease.  However, the month-to-month decreases are happening at a much slower rate (2.5% median sales price decrease versus October).  Again, the market seems to have found its center.

As any home seller will tell you, showing activity is still slow.  The average total market time for a property to sell is now 131 days.  I would expect that number to inch upwards in December, but then start coming down the first quarter of 2010.  My advice to home sellers, hang in there!  It’s just a matter of finding that one buyer.  If your home is priced well and is getting enough exposure, it’s just a waiting game.  An admittedly frustrating waiting game, but a waiting game nonetheless.

Stable But Not (Yet) Recovering

RMLS released April’s Market Action report and the numbers are consistent with the recent trends.

If you’re a potential home buyer, you’ll be ecstatic to hear that Portland housing is at its most affordable point since December 2004. Have I mentioned that now is an incredible time to buy, especially if you’re a first time buyer? Affordability takes into account housing prices as compared to average income. While this economy has been no fun for most of us, there is a silver lining if you have stable employment and want to buy a home.

Put simply, the market is slowly improving. We’re seeing incremental increases in sales activity (as measured by closed sales) and slow decrease in housing inventory. As I’ve been saying for quite some time, it is my contention that the housing market will not fully stabilize and begin its recovery cycle until inventory comes back down to a reasonable level. April’s inventory was at eleven months, meaning at the current rate of sale there are enough houses on the market to last eleven months. I’d like to see inventory absorbed and a monthly figure of seven or eight. That would bring us closer to balance. Still, the decrease from twelve months to eleven is a positive sign.

In a sign that prices are beginning to find their equilibrium, housing prices stayed just about the same in April, as compared to March.

When we compare April 2008 versus April 2009, we see a similar trend of stability. Prices are down roughly 10% compared to April of last year. Sales volume is down about 18% and new listings are down 28%. Those figures are very similar to what we’ve been seeing since February or so. Again, the signs point towards a stability, though not yet recovery.

OK, here’s what you’ve all been waiting for, how much have prices dropped? The twelve-month average shows a 7.4% drop in prices. All things considered, that’s pretty good. Portland has been lucky to avoid the true crash that markets hit places like Detroit, Phoenix and Las Vegas.

For a closer look at your part of town click here. h

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March Market Report – Some Good News

RMLS just released the March Market Action report and there are some positive signs.  March definitely was an improvement over a very slow February.  Sales grew nearly 40% as compared to February.  Probably more important, honestly, is that inventory dropped to the lowest level since October 2008.  In my opinion, the market will begin to stabilize and then improve as inventory reaches more “normal” levels.  Inventory for March 2009 was at 12 months.  I’d like to see that down to about 8 or 9 months, but it feels like we’re on our way to a stabilized market.

The average sales price is still down versus last year, but not nearly as much as many would expect.  The 12-month sales price is down 5.7%.  When many parts of the country are seeing 25% and great depreciation, Portland’s relatively tiny 5.7% has to be seen as good news.

Market Action – February 2009

RMLS just released their February Market Action report and it is definitely a good news, bad news scenario. 

The good news is that the Portland Metro market is much improved over the all-time slow January 2009.  However, the market is still significantly down compared to February of last year.  All the major categories of listings dropped from Feb 2008 to 2008.  Closed sales were down almost 40%, pending sales were down 30%, and new listings were down 20%.  Having new listings down is actually a very good thing, though.  In my opinion, the market won’t really start recovering until some of the inventory gets absorbed.   Our inventory is currently rated at 16.6 months, which is down significantly from last month’s 19.2 figure, but way higher than the 6 month figure I believe signals a balanced market.  What this boils down to, of course, is that Portland is still experiencing an incredibly strong buyers’ market.  That’s great news for most of my clients, but it is obviously of great concern to many potential home sellers.

The good news is that a well-priced home in a good location will still sell.  More than ever, though, now is the time to put your best foot forward.  It is not the time to overprice your property with the hopes of negotiating down to what you consider a fair price.  My advice for potential sellers, get your home in the best possible condition and make sure it is ready to show and show well.  That first impression is everything.  Make sure the pictures are perfect and show off your property’s best qualities.  Most importantly, price your home right! 

For the entire Portland Metro market, home prices were down 13% compared to February 2008.  However, with such a small sample size, that number is probably a bit inflated.  As I’ve mentioned continuously, though, real estate is inherently local.  The national numbers, while interesting, do not directly affect Portland.  The same can be said of Portland Metro itself, though.  What’s happening in Beaverton or Happy Valley is not necessarily what’s happening in SE Portland.  Not to put too fine a point on it, but SE Portland can even be broken down to Hawthorne, Sellwood, Ladd’s Addition, Lents, etc.  The local trends are what really matter.  With that said, here are the appreciation figures:

·         N Portland          -1.2%

·         NE Portland          -1.2%

·         SE Portland          -5.9%

·         W Portland          -1.9%

The market graph is pictured below, but I’d be happy to email you a complete Market Action report if you’d like.  Just email and let me know.

As always, I continue to hold my biweekly Home Buying 101 workshop for first time home buyers.  It’s laid back, but extremely informative.  If you or anyone you know would like to attend, contact me for scheduling.  My business is built on referrals, so if anyone you know is thinking about buying or selling, I would very much appreciate the referral.