We are starting to see a real change in the Portland market. Not only are we seeing home prices level out, we are even seeing an increase in value in some areas. Realtor Magazine just released an article about the 7 cities with the greatest median home price growth. Portland is sitting at number 6 on that list; with an average of an 8.8% price increase on properties from the same month last year.
We also see an increase on all of the broken down statistics. The chart on the right shows most of the important areas that we want to see growth. And they are all growing! Some of the statistics that I think are most important are % change in closed sales, and % share of cash buyers. Another important statistic not displayed in the chart is the # of months worth of inventory on the market.
The % change in closed sales is an easy one, we want to see homes selling and people buying, As long as this number continues to be a positive number we have either a steady market (small growth month over month) or a growing market (large growth month to month). The % share of cash buyers is slightly trickier to interpret. Cash buyers are almost always investors who are either flipping properties or renting them out as income properties. We want to see a strong presence of investors when we have a recovering market because they help raise property value. This is done in a couple of ways, they take distressed properties off the market, and they raise the demand for housing. As long as the market is steady, having investors is great for the Portland market.
The last important statistic that is making a huge change in Portland is the amount of inventory on the market. When we have 6 months of inventory it is considered a steady market. We determine this number by taking the average amount of homes sold in a month and divide it by the total number of homes on the market. In Portland we currently have about 3 months worth of inventory which is incredibly low. Because of the low inventory, homes that are cute and priced well are getting multiple offers and selling within a week of going onto the market. These are the things we typically see with “a seller’s market” the only difference is that most of these offers are still just below listing price instead of the inflated prices we were seeing in 2006-7.
Good things are happening in the Portland real estate market and we are all hopeful that these upward trends will continue. What this means for the consumer is if you are thinking of buying, its time to do it! But prepare yourself for some competition; and if you are thinking of selling, market conditions are perfect for getting your home sold quickly!