Summer Lull in the Housing Market – July 2018 Portland Real Estate Market Report
Real estate sales report came out from RMLS for the month of July. The numbers show a decrease in the median value for all home types with a slight increase in the average and median days on the market. This slow down is not uncommon at all. Us realtors call it the summer lull. Typically the market is hot during the selling season in the spring from March to June and things slow down in July and August. The real estate market in Portland slows down even further in the months of fall and winter with rain. Inventories will drop significantly in October. Anyways, in July 2018, Portland sold median housing price is $429,500, down from $450,000 from last month. Here is the summary of numbers.
Median sold price: $429,500
Median days on the market: 12
Average days on the market: 29
Units Listed: 1468
Pending Units: 1004
Sold Units: 914
Here is the recap of July 2017 Portland market report
Median sold price: $415,000
Median days on the market: 9
Average days on the market: 24
Units Listed: 1528
Pending Units: 1017
Sold Units: 978
If you are comparing from the last year’s July alone, the housing market value has not increased much. If you are comparing June 2018 numbers to June 2017 numbers, there is a huge increase. So why the fluctuation?
We are entering into a new phase where the interest rates are high. The typical 30 year mortgage rates range from 4.75% to 5% these days. This increase is adding to the unaffordablity of Portland housing. On the other hand, there is still a big demand for housing with less inventories. This creates a volatility in the market where less people can afford homes nowadays and the market itself is confused as to keep going higher or not. While the demand for housing in general is strong, the demand of qualified buyers in today’s market condition is less than last year.
Homes stay on the market longer than last year. It makes absolute sense. Prices went up and interest rates went up. People are no longer in a big rush with what was conceived by many as a relative bargain in the past.
Where is the Portland real estate market headed? Things will continue to slow down this fall and winter. In fact it will be very slow like usual. The spring of 2019 will kick back up again but it’s unknown how much that will be with mortgage rates higher than 5%. By 2020, I am predicting that the Portland housing market will turn into a buyer’s market unless prices actually come down. I do not think the home prices will continue to grow fast beyond 2020 at least for some time but I also don’t think the prices will drop much either. My best guess is that we may be entering a period of flat growth for a few years after that.
This market slow down creates an opportunity for cash buyers. With people finding it difficult to afford financing costs, cash buyers will enjoy more leverage in the market.
So in a slow market, how do you sell your home when homes stay on the market for longer? Price it competitively and have your real estate agent generate lots of interest in the first two weeks.