RMLS' July issue of "Market Action" shows the Portland Metro area in a rapid state of flux. The supply of homes for sale jumped from 2.6 months to 3.5 months in the past 30 days. New listings are up over 11%, pending sales are down 21%, and closed sales are off 16.7%. Surprisingly, home prices over the past year jumped 17.4%, from $263,500 to $309,400. How can that be?
Simple. Last year saw record prices with homes "flying off the shelf." That momentum carried over into the first part of 2006. Home prices were up an average 5% in the firt quarter this year, but only 1% in the 2nd. Economists expect that 1% trend to continue into next year.
The Portland Metro supply of homes at 3.5 months is the highest it has been since February 2004 when there was a 4.8 month supply for sale. That figure last year stood at about 2.0 overall.
Sellers are still in that transitional stage when they still believe that even though the market as a whole has shifted more toward a buyer's market, THEIR home is still worth top price. It's sort of like "All members of Congress stink...except for MY Congressman."
Many buyers are now on the sidelines, waiting to see which direction the market goes before buying. Oregon is more fortunate than California, Arizona, or Florida, for example. They really are in a downslide. Our up and down swings have been far less dramatic, however, which economists will help us keep home prices on a gradual upswing in the next year, perhaps 4-5% annually.
