Housing Inventories Decreasing Again – Portland Real Estate Market Report November 2018
November 2018 Portland housing market report is out. As expected, the November market was a slow market. Although Novembers typically present a very slow real estate market since home buying and selling activities are cyclical and seasonal, the long term slowdown effect is starting to take tolls in the Portland market. The average price of sold homes is only at $400,000 this November, which is exactly the same as the average sold price of November 2017. If you are looking at detached single family homes only, the average price actually decreased from 12 months ago from $417K to $414K.
So has the home value gone down in 2018 compared to 2017? No. Overall, there was about a 5%-6% gain in the market value in 2018. So then why are we seeing decreases in the market value? That’s because the slowdown in the winter market in 2018 is greater than the slowdown in the winter market in 2017. What’s causing the slowdown? Higher interest rates combined with higher home prices. As a result, homes are sitting on the market for 47 days in average now in Portland.
One interesting thing to notice is that the inventory has gotten tighter this winter. The number of inventories was increasing and was greater than last year all throughout the spring and summer of 2018 but this winter, the inventory just got tighter. In October, 1184 new listings hit the market compared to 1190 in October 2017. In November, only 840 new listings hit the market compared to 904 in November 2017. We all thought the inventory was getting better in 2018 compared to 2017 and it was good news for buyers in this short supplied Portland market. What’s happening? I will need to observe more but it’s possible that home sellers who are upsizing or downsizing are not taking the plunge because of higher interest rates. Many sellers are buyers after they sell. For those who refinanced the mortgage at around 3.5% few years ago, there is now less reason to sell and buy something with 5% mortgage rate at this point. If the mortgage rate continues to increase, the upsizing and downsizing sell/buy activities will slow down substantially and possibly further decrease the home supply shortage in Portland.
If your home is not selling as quickly this winter, just hang tight and make sure you are not selling it over-priced like it is April 2016. We are in a different market now. If you are a buyer, you will face less competition than ever before in the last few years.