Portland Metro Housing inventory

RMLS recently reported sales results for October 2008 (RMLS Market Action Report for October 2008).  As you can see in the chart above, housing inventory continues to build and we continue to slide further into a “buyers’ market.”

At month’s end there were approximately 20,000 homes for sale.  It would take 13.5 months at the October sales rate to sell through all of this inventory. When compared with the October 2007 absorption rate of  8.9 month, it appears that supply has grown by 50% since last October.

A closer look reveals that there are ACTUALLY 5% LESS homes for sale this year, NOT 50% MORE.  The “problem” is that the sales rate is about a third lower than it was last October.  Prices have held up better.  The median October home price in Portland is $279,900 with is only 2.6% below the median price from last October.

The Cafe’s October 2008 Real Estate Charts for Portland Metro show the following trends for the two year period ended this Halloween: median pricing, closed and pending sales, new listings, inventory expressed in units and months of supply, and time-on-market for sold and unsold properties.

It would be hard to make the argument that prices are poised for a rebound. We would expect any rebound in pricing would follow an inflection and decrease in supply.   I’ve heard more than a few complaints from buyers that sellers have been slow to adjust to the current market pricing.  Perhaps.  Homes that are well-priced continue to sell, typically within 2-3 months.  One area where many sellers have adjusted their thinking is with their decisions to not sell.  Despite the abnormally high activity of forced sales (foreclosures and short sales), overall new lsitings are a quarter lower than last year.  This helps explain the other common buyer complaint that the inventory seems stale, and they cannot find the house they want.

We all know that all neighborhoods are not created equal.  Yep, it’s location, location, location.  Buyers continue to prefer less expensive single family homes in “close-in” neighborhoods, preferably on the transportation grid.  The market inside the city is out-performing more suburban locations.   The west side median price is about $135,000 above the east side’s which helps to explain the relative strength of the east side.  Single family homes are holding up better than condos and other attached housing.

Best to be detached, close-in, and less expensive

If you’re a buyer looking for a compelling value do you focus on the weakest parts of the market, where sellers are more likely to be in financial duress? Or, is it better to focus on the strongest regions in the city that seem poised to hold up better in a down market, and more likely to be the first to rebound as market conditions improve?

Both strategies have merit; we’d love to work with you to identify and execute the strategy that makes the most sense for you.

Interested in trend-line charts for a particular region of our market?  Check out the following Cafe Reports:
Portland City Limits October 2008 Market Report
East Side October 2008 Market Report East Side Condos E Side Single Family
West Side October 2008 Market Report West Side Condos W. Side Single Family
Lake Oswego & West Linn October 2008 Market Report
Tigard-Tualatin-Wilsonville-Sherwood October 2008 Market Report
Beaverton-Aloha-Hillsboro-Gorest Grove October 2008 Market Report
East Side Suburbs October 2008 Market Report
Portland Jumbos Lake Oswego-West Linn Jumbos

Related posts:

1. November 2008 Portland Real Estate Market Update
2. Southwest Portland Real Estate Market Update November 2008
3. Southeast Portland Real Estate Market Update Report November 2008
4. Northeast Portland Real Estate Market Update November 2008
5. Portland City Limits Real Estate Market Report May 2008

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