Is the Portland housing market showing signs of slowing a bit?
It’s no news to any buyers out there in the Portland housing market that homes on the east side have been selling in a matter of a few days. This includes houses as far south as Milwaukie, and as far east as Oregon City.
Housing inventory in March dropped to 1.9 month’s supply; far below a healthy level of 3+ months. While there are a steady stream of new listings, these are usually selling in just a matter of days. What’s even more disturbing is the number of “as is” listings that we are seeing. Fortunately for buyers looking for homes on the west-side, the market is quite a bit more normal.
Buyers are being driven primarily by low mortgage rates, but in fact, we are also seeing more cash buyers than at any time in prior years. There is no way to track just where the cash is coming from; it could be from parents, relatives, pooling funds from multiple buyers, and/or out of area buyers who are moving to Portland at the rate of approximately 30,000+ people every year. But it’s also springtime; traditionally the busiest home buying season of the year.
Most buyers, even those with cash, are seeing competition so fierce, it’s actually been scary. Some buyers have reported making as many as 20 offers on homes before they got one accepted. In the hottest areas, primarily just east of I-5, many homes have been selling at 10%-20% above list price and more. And this is affecting homes priced as high as $500,000 – $600,000! This is not because houses are deliberately been priced low, thought that does happen; but because we honestly don’t know where to price houses anymore. Comparable pricing of houses that sold 6 months ago are almost meaningless in a market that is moving so fast.
The sad part is that many would be home owners are being priced out of the market.
Suddenly in the last week or two, we have seen the market slow down a bit. Most sellers haven’t been receiving 10-20 offers, but more around 5-6. Unfortunately it’s way too early to say the trend is towards a slow-down. It could just be that a lot of buyers took a break. We did just recently have spring break week, where many would be buyers left town, so that could account for the slow-down. We’ll just have to watch and see.
On the up-side, Labor Day is just around the corner when the housing market almost always slows down from Labor Day through the end of the year. In fact, historically, those are the best months to buy, if only we didn’t have the threat of rising interest rates hanging over us.