The Numbers: Good-bye to the Buyers’ Market?

(The following information is based on October’s Market Action report, courtesy RMLS)

Check out that inventory!  6.5 months?  You could make an argument that we’ve reached that elusive “balanced market”.  Personally, I would like to see a inventory figure between 4 and 6 or so for a few consecutive months before I deem Portland a balanced market (as opposed to a buyers’ or sellers’), but it certainly looks like we’re well on our way. 

Pending and closed sales are WAY up versus October 2008.  When I say way up, I MEAN way up.  Pending sales were up 64%, which is the largest same month increase since February 1996, also known as Winter Quarter of my senior year at UCSB.  Yeah, it’s been awhile.  Closed sales were up a ridiculous 37% versus October last year.

The month-to-month figures aren’t quite as staggering, but they’re fairly impressive nonetheless.  Closed sales increased 11% compared to September 2009. 

Why all the activity?  I think we can safely assume that the first time buyer tax credit’s, then, expected expiration drove many buyers into making quick decisions.  It’s definitely possible that the tax credit extension will actually slow sales back down, but we won’t really know for another month or two.

In the meantime, remember that it is still an incredible time to be a home buyer.  $8000 tax credit for first time buyers.  $6500 tax credit for many current home owners.  Extremely low mortgage interest rates.  Etc.

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.

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