All real estate is local, and this monthly report is a resource for those buying or selling on the Portland metro’s west side. The data below is for the areas including but not limited to NW Portland, SW Portland, Beaverton, Bethany, Hillsboro, Tigard, and Lake Oswego, and includes all residential resale transactions (new construction not included).
A funny thing happened with the idea that mortgage interest rates would keep rising through the rest of the year: it hasn’t been happening. They took their big spike up into the 5% range- then a secondary spike up to around 6% in late June- but since then have been trending downward, with no further indication that any Fed actions will change that.
Last week, the Fed raised their federal funds rate .75%. Why then have mortgage rates been more or less stable since that announcement? There’s a good primer here but the short answer is that the federal funds rate doesn’t correlate directly to mortgage rates, and that the bond market had already priced in that .75% rate increase prior to it becoming real. What the Fed signals that they’ll do in the future has more impact on mortgage rates, so as long as they continue to do what the market expects there shouldn’t be any wild swings in rates, at least in the short term. In a nutshell, inflation is bad for rates while recession is good, so if the bond market thinks the Fed is getting inflation under control- even if it pushes the economy into a recession- that will keep some downward pressure on mortgage rates.
It’s certainly my opinion that it was the fear of rising rates that primarily caused this past spring’s insanity in the housing market- the cherry on top of what had already been two years of a hot market. We’re living a different reality now.
On to July’s numbers.
I did not expect to see a slight increase in median sales price for July, but here we are. It isn’t odd historically to see rising prices through the summer, but it has certainly felt like we’ve been on a downward price trend. Anyway, this half-a-point increase from June could just be noise, and is still down from May’s peak. Meanwhile the median list price increased more sharply, but is much closer to the sales price than it has been for a while. That lines up with this graph:
In which our little fishy above shows that half of all sales are now done at or below list price. That changed quickly.
Meanwhile, new listings and sales are trending down, and are off significantly from last year’s numbers:
Listings and sales down, prices up. In other words, less houses are selling but they’re going at higher prices. In fact, the share of sales occupied by the condo and townhouse market- which runs at a lower price point than single-family homes- has dropped in recent months. It’s about 26% of the market right now, compared to 32% back in February. Also, the condo/townhouse median sales price was down 3% in July, while single-family was up 1%.
Pulling at that string a bit more (stay with me)- the average (we’re talking averages now, not medians) sale price of all homes in July was about $713,000. This number was up .67% from June, which tracks fairly closely with the rise in median price. The average price of those homes that sold above the average- so let’s call those the higher tier homes- rose 1.8% from June to July. So, higher tier home prices are rising more than the rest, and are largely responsible for the modest increase in the whole market.
Whew, that was a lot of numbers and text without any pictures. Enjoy this stock photo of a very good dog:
As noted in a recent post, there are more immediate ways to determine which way the wind is blowing than looking at backwards-facing data. Looking to the number of pending transactions is one way. These are the homes with contracted buyers, now waiting for escrow to close and the sale to complete. The number of homes going pending (as they say) has dropped well below last year’s levels, but did tick up a bit over June:
They’re also taking longer to find buyers.
For those that sold in July, the average days on market was a sharp rise up to 19.5. In addition to monthly I track this metric weekly, and it’s still going up.
The best way to describe the housing market right now is that it is cooling, but nowhere near crashing. While houses are taking longer to find buyers and less of them are selling, the prices of those that do sell haven’t been particularly impacted. There is more room in the market for buyers to find houses without having to compete, and there’s more time for buyers to shop and consider. Those are good things.
I am a licensed real estate broker in the state of Oregon. Data is sourced from RMLS, and all analysis is mine and mine alone. Other opinions may vary. If you would like a free analysis of your specific area, please contact me at eli.cotham@eleetere.com or via the contact page.