June 2007 Real Estate Market Update — The New Normal
Buyers sifting inventory. Sellers tapping their nails impatiently. Buyers scanning internet listing sites. Sellers nervously eying their neighbor’s listing.
For homeowners in the Portland area with short memories, we have entered a ‘normal’ market–one with a healthy amount of housing inventory, still-appreciating prices (albeit slower), and historically low mortgage interest rates. Between hearing the national news and sharing local anectodal experience over the fence, are Portland-area home sellers displaying unnecessary anxiety over the housing market?
June 2007 market activity results are out and the trends are a little revealing. First, in typically one of the busiest months of the year, housing inventory has increased to 5 months, meaning at the current pace of sales with no new listings added, the current inventory would liquidate in 5 months. Most analysts call that a balanced market, and many areas of the country would kill to have just 5 months on hand.
Two, the twelve-month average compared to the previous 12-month average is showing a drag on house price appreciation, down now to 8.9%. The 12-month average sale price in the Portland area is now $333,200 and the median price is $280,000. Year to date, homes are taking 59 days to sell on average.
So, what are we to make of the current market?
Hopefully, buyers on the sidelines will enter the fray, take advantage of a slightly softer market and absorb some inventory. Sellers need to watch out for overpricing, and may have to concede more than they anticipated or be patient enough to wait for that perfect buyer. I believe price appreciation will continue to erode, but the market fundamentals (interest rates, inbound migration, West Coast affordability) will keep prices from going into negative territory.
Tomorrow, average sale prices and appreciation by market area.
Technorati Tags: Portland, Oregon, houses, homes, prices, appreciation, real estate, market, update
Photo by ClintJCL, used under Creative Commons license.
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