Hope may be on the horizon for home shoppers: More residential properties are expected to be put up for sale in the coming months and spiking prices may level off slightly as some owners on the sidelines jump into a still-competitive Portland market, experts say.
But other factors like record-low home inventory and a wave of motivated first-time buyers will keep sellers in the power seat.
John L. Scott Real Estate agents were informed by company CEO J. Lennox Scott that the “frenzy-level” demand to buy a home remains in the Portland area.
Adding to the tension: The number of existing homes listed on the market in May dropped by 2.3% compared to April, according to the latest Regional Multiple Listing Service (RMLS) report.
The total number of new listings — 3,971 — in May was less than expected in a month starting on a Saturday and ending with a holiday weekend, Scott said.
But the listings signaled a 16.1% jump over May 2020, when owners were reluctant to hold open houses or move during the early months of the COVID-19 pandemic.
Sellers were active last month, accepting 9.3% more offers than in April. More deeds also changed hands in May: 8% more than in April and a ballistic 62.1% more than in May 2020, according to the RMLS.
The median sale price in the Portland metro area jumped $15,000, or 3%, from $500,000 in April to $515,000 in May, according to the RMLS.
Home shoppers’ preference for expanded living spaces, indoors and out, continues to cause well-priced homes in desirable areas to receive multiple offers.
For example: A midcentury modern house designed by architect Saul Zaik in the Southwest Hills sold for $164,000 over its $1.1 million asking price on May 14.
Trisha Highland, a broker with John L. Scott Woodstock, said economists aren’t predicting an end to escalating offers in the greater Portland area anytime soon.
“Bidding wars are fueled by good old-fashioned supply and demand,” she said.
News that the Federal Reserve may raise it benchmark short-term rate twice by late 2023 keeps buyers motivated to lock into rock-bottom mortgage interest rates.
A 30-year, fixed-rate mortgage has been at 2.93% since June 17, granting buyers more purchasing power. An additional $10,000 sale price adds $35 — about the cost of a dinner out — to a monthly mortgage payment.
Compounding an anemic amount of homes for sale is the state’s growing population, September 2020 wildfires that destroyed more than 4,000 Oregon dwellings and a lack of new construction. Oregon has long had the largest housing shortage in the nation, according to the Federal Home Loan Corp or Freddie Mac.
“There are so many factors that brought us to this point that the inevitable correction of the market is going to look more like a large ship slowly turning, not the speedboat making an abrupt 180 that we saw in 2008,” Highland said.
The inventory of homes for sale dropped again in May, this time to 0.7 months, the lowest level reported in the 30-year history of the RMLS. A market is considered balanced between buyers and sellers when there is four to six months of inventory.
If sales continue at the same pace, 0.7 months of inventory means it would take less than three weeks to zero out all the available homes on the market.
Since June 2020, the supply of homes to sell has idled around one month, according to the RMLS.
Inventory is calculated by dividing the active residential listings at the end of the month by the number of closed sales for that month. The active residential listings figure include homes that are proposed and under construction.
New listings: The 3,971 Portland metro area homes introduced to the market in May marked a 2.3% decrease from the 4,065 new listings in April, according to the latest RMLS report. Last month’s new listings marked a 16.1% increase from the 3,419 new listings in May 2020.
Pending sales: In the Portland metro area, the 3,717 homes that received an accepted offer in May signaled a 9.3% increase compared to April and a 19.4% spike from May 2020, according to the report.
Closed sales: In May, 3,183 residential properties in the Portland metro area were sold — an increase of 8% from the 2,946 that closed in April, and a 62.1% jump from the 1,963 closings in May 2020, the report shows.
Time on the market: The average time Portland metro residential properties were for sale last month before receiving an acceptable offer dropped to 22 days.
— Janet Eastman | 503-294-4072
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