The market is definitely slowing. The Portland market often slows in the summer. Its a beautiful time in the Pacific Northwest, and folks are out playing. We've also become a vacation destination, so we see lots of out of town folks falling in love with our city. Do they all want to buy houses right now? I don't think so. We'll see them back on subsequent long weekends.
We are seeing LOTS of price reductions, and some rather steep and rather quick. If it doesn't sell now, it may not sell until the September/October market flurry we usually see in advance of the holidays. For builders, flippers and move-up sellers, that fall flurry may be too far away, hence, the price reductions.
So what do I mean by slowing? May 2018 saw 6.3% more new listings hit the market, than May 2017. Closed sales fell 3.2% from May 2017, pending sales decreased 6.8% from May 2017, and the median price through May 2018 has risen 8.0% as compared to 10.7% through May of 2017.
But, that puts our year to date, median sale price at $399,500 in 2018, as compared to $370,000 in 2017. So, still going up, but at a slower rate. And those price reductions? Some of them aren't due to "dropping values", so much as aspirational pricing by sellers.
I think Realtors are reluctant to talk about a slowing market (as with many financial markets, does talking about it change it?). Sellers are often basing their pricing expectations on what they've heard about the market from friends and neighbors. This anecdotal evidence can be a few months behind reality. The expectations of every house generating multiple offers, bidding wars and sales prices well above the list price are unrealistic. Are we still seeing some multiple offers? Yes. Are some houses still selling well over list price? yes.
Here are the frustrating parts:
1) We, the professionals, are having a hard time predicting what houses will sell quickly and which won't.
2) With such a varied market, buyers might be able to look at houses priced above their top price range, as some sellers are accepting offers below their list price.
3) Some houses are still going well over list price, so buyers should be shopping below their top price.
4) Though the stats look like a slowing market, May 2018 market time was 37 days, compared to 39 in 2017.
Here are a few things we do know:
1) Interest rates are increasing, and will continue to do so.
2) Portland is still seeing significant in migration from other states.
3) With a slowing market, it can be possible to get an offer accepted, subject to the buyer selling their current home. These "contingent" offers have long been a favorite approach for move up buyers.
4) In a slower market, buyers can make better buying decisions. Now, buyers might be able to think about making an offer on a house for as long as they can think about that new pair of shoes, or where to eat dinner this weekend.
5) Houses that are priced too high, and stay on the market, will eventually sell for less than than had they been priced properly at the beginning. Sellers who say they'll "wait to get the price they want" are misinformed. Who ever paid more for a house because its been on the market so long?
There you have it. To buyers, you may have a bit more buying power than you did previously. This means, you might be the only offer on a house, and might have the luxury of negotiating with the seller, or not. Sellers, be careful about over pricing. We have seen very good appreciation in Portland in recent years. Don't get greedy.
If you have questions about your particular property or situation, get in touch. I'll be glad to help. and as always, let me know if there are questions I might answer. Here's the link to the most recent RMLS stats.
leslievjones@gmail.com 503-312-8038
