Portland’s median home price jumps $8,900 in a month as rock-bottom inventory remains
Beleaguered home buyers saw one factor in their favor in March as the number of Portland metro residential properties introduced to the market were 40.1% higher than the month before, according to the latest Regional Multiple Listing Service (RMLS) report.
But an increase in homes under contract and closed sales actually decreased the supply of homes for sale. For the second time in four months, inventory was the lowest ever reported in the 30-year history of the RMLS.
Prices also increased 1.9% from February to March, with the median sale price ending at $488,000, a $8,900 bump in a month. In March, the average sale price was $554,300.
The median sale price is the point in the middle in which half of the properties sell at a higher price and the other half at a lower price.
Mortgage interest rates ticked up but remain low: A 30-year, fixed interest rate is in the 3.04% range as of April 15, according to the Federal Home Loan Mortgage Corporation, known as Freddie Mac. The same rate hit historic rock-bottom at 2.65% the week of Jan. 7.
March, which typically launches eight months of prime-time real estate transactions, saw a 51.5% spike in homes that received an accepted offer compared to February. The number of pending sales – 3,346 – was also a 42.6% jump from the year before, according to the report.
Desire for more space, especially in suburban areas, during the coronavirus pandemic and the region’s longtime inability to motivate owners to part with their residential property have created a backlog of buyers, pent-up demand and escalating prices, say experts.
If sales continue at the same pace, 0.8 months of inventory as reported in March means it would take about three weeks to zero out all the available homes on the market.
A market is considered balanced between buyers and sellers when there is four to six months of inventory.
Inventory is calculated by dividing the active residential listings, which includes proposed and under construction homes, at the end of the month by the number of closed sales for that month.
Since June 2020, the supply of homes to sell has lingered around one month, according to the RMLS.
Matthew Gardner, chief economist for Windermere Real Estate, forecasts existing home sales to rise up to 11.6% in 2021, a jump “we haven’t seen since 2006.”
He predicts home shoppers, especially first-time buyers, will continue to want to relocate from expensive urban areas and apartments, not conducive to a home office and entertaining indoors and out, to suburbs for larger and more reasonably priced housing.
“I do not anticipate everyone moving way out to the countryside, as most will still be going into an office – just not full-time, and many will put up with longer commutes if they can find more affordable homes to buy,” he says. “I also expect to see some move, not necessarily because of value, but rather because their current homes just aren’t set up for remote working.”
With mortgage rates rising, Gardner believes many will decide to “pull the trigger” on buying their first homes earlier than they may originally have planned.
Mortgage rates dropped to all-time lows 16 times in 2020, fueling price growth at above-average rates. Now that 10-year treasury yields are rising again, Gardner expects rates will average at a competitive 3.1% by the end of the year.
New listings: The 3,465 Portland metro homes introduced to the market in March were a 40.1% jump from the 2,474 new listings in February, according to the latest RMLS report. Last month’s new listings were on par with the 3,468 new listings in March 2020.
Prices: Buyers in March 2020 paid an average of $88,800 or a median of $63,000 less than buyers in March 2021, where the average sale price increased 19.1% from $465,500 to $554,300. In the same comparison, the median sale price has increased 14.8% from $425,000 to $488,000, the RMLS report shows.
Pending sales: In Portland metro, the 3,346 homes that received an accepted offer in March was a 51.5% spike compared to February, and a 42.6% increase from March 2020, according to the report.
Closed sales: In March, 2,556 residential properties in Portland metro changed hands, an increase of 29.2% from the 1,978 that closed in February, and an increase of 8.5% from the 2,356 closings in March 2020, the report shows.
Time on the market: The average time Portland metro residential properties were for sale last month before receiving an acceptable offer was 37 days.
— Janet Eastman | 503-294-4072
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