Portland home sales for December 2015 blast through all prior records in pricing and number of sales
The Portland Oregon real estate market closed out December 2015 on fire. While home buyers typically take a break during the holidays, there was literally NO slowdown in the Portland housing market. Sold and Sale pending signs dominated the landscape throughout the metro area.
December 2015 sales were 21% higher than those for December 2014, and were the most sales ever recorded for December in the Portland metro area in the 24 years these records have been maintained.
Average home prices also rose in December to $367,000, up $36,000 from last year during the same month, and up $20,000 from just one month earlier in November 2015.
Portland home inventory drops to lows not seen since 1999
Due to the surge in buyers, real estate inventory dropped to 1.2 months (the number of months it would take to sell all houses on the market if there were no new listings). This is the lowest housing inventory Portland has seen since 1999.
According to RMLS statistics, 2015 beat out 2014 on all averages including number of pending sales, closed sales, new listings, sales and median prices.
Many realtors and lenders credit this surge of home buying activity to the anticipated rise in mortgage rates, which fortunately has not yet occurred. But we can’t lose sight of the fact that rents in this area are rising so fast, that for many, home ownership is actually cheaper than renting, and offer the advantage that monthly payments are locked in for the life of the loan (principal and interest).
Analysts predict drop in number of home buyers in 2016
For 2016, some analysts are predicting a slight drop in the number of home buyers as rising prices could price them out of the real estate market. But with rents rising as fast, if not faster than home prices; some of those renters could get more motivated to buy a house as quickly as possible; if for no other reason than to lock in their monthly housing payments.
In fact we are already seeing price increases on existing listings; and new construction is already pricing higher for homes under construction than buyers paid for identical homes during 2015.
Buying versus renting – tough call for many Portland area residents
Research and sales show that a large percentage of renters would like to be home owners. But with rents rising as fast, if not faster than home prices, it’s becoming increasingly difficult to save for a down payment. Many long time renters could get more motivated to buy a house as quickly as possible if for no other reason than to lock in their monthly housing cost.
For more information about what is driving the Portland metro real estate market, you might want to read:
Portland rents among fastest rising in the country