Portland home prices skyrocket with record-low real estate inventory
PORTLAND, Ore. — Portland’s home real estate market appears to be getting hotter: in December, the area’s real estate inventory dropped to a record low – and experts don’t expect it to improve much when January’s numbers are released.
“I think we were all a bit surprised about this happening because a lot of us, you know, we’re nervous about how COVID is going to affect real estate,” said Alexsis Woolsey, a sales executive with Ticor Title.
According to the Regional Multiple Listing Service, the real estate inventory in the Portland metro area dropped to 0.8 in December. This means if no other houses were listed for sale, the number of available houses would sell within 0.8 months, or about 24 days.
Portland’s real estate inventory has been steadily decreasing since April, when it was 2.4.
Woolsey said the combination of fewer homes on the market and more people buying as they try to take advantage of low mortgage interest rates are what’s causing homes to sell so quickly.
To give some perspective, in January 2020, there were 2,884 listings put on the market and 1,738 sold. In January 2021, 2,600 listings were put on the market and 1,810 sold, according to RMLS.
Woolsey said sales will be pending within hours of homes going on the market. That’s how competitive things are right now.
“I would say it’s a fantastic time to be alive if you’re a seller because you have your pick and it’s unbelievable. Because of the lack of options that buyers have, they are willing to pay more than premium for that house,” said Andrew Finkle, owner of Finkle Real Estate. He has seen this competition play out with his clients.
In a recent situation, he had a client who paid $920,000 to purchase a home that was listed for $850,000.
He’s also represented the seller in a transaction that earned more than $100,000 of what its listed price was.
“I was selling a place for $699,000 and we had 12 offers and the highest offer was financed and they had escalation up to $857,000. We were listed at $699,000 and we ended up taking actually a cash offer at $800,000 for finance purposes,” Finkle said.
Woolsey explains it as basic supply and demand.
“When there are a lot of buyers in the market looking for a home that’s going to increase prices because there’s a lot of people who want to buy, so, you know, a lot of homes are receiving multiple officers and going for well over asking, which indicates a strong seller’s market,” she said.
In January 2020, homes were selling for an average of 98.82% of the listing price. In January 2021, that number jumped to 103.9%, according to RMLS.
The situation isn’t unique to Portland. According to Realtor.com, national real estate inventory in the U.S. declined by 39.6% over 2020. Their records show that the average home in the U.S. spent 66 days on the market in December 2020, which is 13 days less than the previous year. In the 50 largest U.S. metropolitan areas, homes spent an average of 56 days on the market in December 2020, 12 days less than in December 2019.
The finalized Portland January report from RMLS hasn’t been released yet, but preliminary numbers show the average number of days homes were on the market in January 2021 was 39 compared to 63 in January 2020.
Woolsey said the median number of days on market usually serves as a better indicator of how quickly things are selling, since there are always specialty properties that can take longer to find a buyer. In January 2021 the median days on market for homes in Portland was 11 days. In January 2020, the median days on market was more than triple that – 38 days.
By looking at the preliminary January numbers, Woolsey said real estate experts expect the inventory rate to remain about the same or think it could drop even lower.
Finkle says more houses tend to go on the market starting in April and he’s hoping that’s the case this year. For now, he said it’s a crazy market out there and for people looking to purchase a home, it’s going to take a lot of patience, a lot of persistence, and oftentimes, multiple offers.