There is much good news in the Market Action Report for the Portland metropolitan area for January 2012:
1. Inventory is low and has been declining for most of last year. There are mixed reasons for this (not out of the woods yet) but one substantial reason is that sales volume is up and that trajectory has been solid for 6 months now. We are seeing the effects of this in the market place where buyers are much more restrained in their demands because they are not inundated with so many intoxicating choices. Now, if they want a property they often have to be reasonable to get it.
2. The Affordability Index is at an all-time high (see the last page). The combination of low prices, exceptional interest rates, etc is sky high. While the National Association of Realtors® tracking on this is only a decade, I recently read a news report that this is true for the past 4 decades. I suspect that this might be true even longer than that. Our housing depression of the past 4.5 years is the worst since the great depression of the 30s.
3. Closed sales for this time of year are the highest since pre-crash 2007.
4. Pending sales for January are up 22.4% over a year ago and 26% higher than in December proving that the reduction in closed sales since December is explained by the normal push for year-end closings (tax purposes, etc).
5. Time on the market is also dropping; it has been going up since August of 2007.
6. Regarding price, the news is also mixed but this is an improvement over the normal bad news:
- Average sale price is flat compared with last January. This reflects the reality that the whole market, not just the lower end distressed housing or the first time owner houses, are selling. This is great news for many people who have been waiting to sell for years.
- Both the average and median sale prices are down between 6-7% for the past year. This represents the fact that values are still dropping but slower and less than over the past 3 years.
We are optimistic for this year.
- To date our office has sold an $850k filbert farm, two luxury homes over $500k, a duplex, 2 buildable lots, a home we had listed for almost 3 years, a short sale, and a several normal neighborhood homes of various prices.
- We have pending sales on 14 properties from $90k to $1,500,000. This includes rural properties over $500k, lots and land, a luxury home, a rental property, a golf course neighborhood property, and numerous homes spread out over the county.
- Our new listings are a nice wide spectrum including a $2 million Bed and Breakfast with unique entitlements making its value much greater still.
We are not back to normal but if we continue in this fashion we expect a good year and one we can finally prove is a turn in the housing market. It was the housing market that took our economy down, most recessions end with the housing market pulling the economy up; let’s hope the time has finally come.
As always, glad to have your thoughts and comments.