People hoping to buy a home in the Portland area continue to face strong competition for a low level of residential properties for sale, but the sense of urgency to make an offer quickly and over the asking price is diminishing.
Nationally, the high number of COVID-19 cases has weakened employment, spending and consumer confidence, according to the Federal Home Loan Mortgage Corporation, known as Freddie Mac.
Local real estate experts like broker Dustin Miller of Windermere Realty Trust in Lake Oswego say the sticking point is also overzealous sellers demanding too high an asking price.
“When a home doesn’t sell over the weekend, ankle-deep fear starts to rise and the seller lowers his price,” says Miller.
Correctly priced properties that are appealing to buyers, however, are still targets for bidding wars, says Lynda O’Neill, a broker with Exceptional Homes by John L. Scott Lake Oswego.
Bringing buying power to those whose incomes have not faltered during the pandemic is an average 30-year, fixed-rate mortgage interest rate at 2.86%, according to Freddie Mac.
Still, a longstanding housing shortage and the low level of unsold homes in the Portland area resoundingly favor owners.
Although still close to rock bottom, the level of houses and condos for sale ticked up slightly, measured as one month of inventory in August, from July’s 0.9 months and June’s 0.8 months, according to the latest Regional Multiple Listing Service (RMLS) report.
May’s 0.7 months of inventory was the lowest level recorded in the 30-year history of the RMLS.
If sales continue at the same pace, one month of inventory of homes for sale as reported in August means it would take about four weeks to sell all the available houses and condos on the market.
The residential real estate market is considered balanced between buyers and sellers when there are enough houses and condos for sale that it would take four to six months to sell them.
Low inventory and high demand fuel escalating home prices.
The median sale price for houses and condos in the Portland area was $525,000 in August, or $3,000 more than in July, according to the latest RMLS report.
That’s a 16.9% spike — or $76,000 more — from August 2020, when the median sale price was $449,000, the report shows.
The median sale price is the point in the middle at which half of the properties sell at a higher price and the other half at a lower price.
Rising home prices put more pressure on most buyers to have a larger down payment.
First-time buyers needing 20% of the sale price to qualify for a loan are taking funds from savings or retirement accounts, requesting an early end-of-the year work bonus, or are receiving an advance on an inheritance or funds from relatives, says O’Neill of John L. Scott.
“More inheritances are being gifted early for families to buy a bigger home,” says O’Neill. “Parents are helping their grown children get a larger home or one with a bedroom suite and living area, an ADU, to accommodate multi-generations living together.”
August 2021 housing stats
New listings: The 3,698 Portland metro area homes introduced to the market in August marked a deep 13.3% decrease from the 4,267 new listings in July, according to the latest RMLS report.
Redfin, the online real estate marketplace, attributes the low number of homes being listed in August to a typical seasonal decline.
“More homes were listed this summer, but they were quickly snatched up by homebuyers even as bidding wars have become more rare,” said Redfin lead economist Taylor Marr. “The market hasn’t cooled off any further than it usually does this time of year, and we expect home buying demand to remain strong through the fall.”
Last month’s new listings in the Portland area were 4.8% less than homes listed for sale in August 2020, when homeowners who had not lost their incomes were motivated to move to larger houses to work and study during the coronavirus pandemic.
Pending sales: In the Portland area, the 3,535 homes that received accepted offers in August represented a 5.4% increase compared to July but a 4.4% drop from August 2020, according to the report.
Closed sales: In August, 3,219 residential properties in the metro area were sold — a decrease of 6.4% from the 3,439 that closed in July but a 2.2% jump from the 3,149 closings in August 2020, the report shows.
Closed sales for 2021 have been as high or higher each month than in the last four years, according to the RMLS.
Days on the market: The average time a Portland-area residential property was on the market before receiving an acceptable offer in August was 23 days. In August 2020, the average time on the market was 41 days.
— Janet Eastman | 503-294-4072
jeastman@oregonian.com | @janeteastman
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