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).
The funny (not funny haha) thing about all this talk of the severe turn that the real estate market has taken in the past several months is that prices are basically what they were in late February. A mere eight months ago. It’s what has happened between February and now that makes it a story, since it has been quite a ride:
The median sale price is now down 8.6% from its peak in May, and dropped 2.5% from September to October. The median sale price is ALSO up 5.4% when comparing October 2022 to October 2021, and roughly flat with some point in February. So are you a glass-half-empty or glass-half-full type? Yes, it’s trending downward, and the market is absolutely favoring buyers at the moment. But it’s also up over 5% in a year (and considerably more when the calendar goes back a couple more years), and that’s not so bad for sellers. Personally, I think the glass is equally portioned between full and empty.
One other note about the above graph, as an astute observer will see that the blue line fell under the red line for the first time in well over a year. The median sale price is now lower than the median list price, by about 1%. In fact, over half of all sales now occur under the list price:
It’s worth pointing out that seller concessions won’t show up in these numbers, meaning that if the seller gave $10,000 in credits to the buyer the sale price will remain the same, but the net cost of the house was lower. That would push those gray and yellow lines up some more. This is notable since right now we’re seeing a big push for seller buydowns, which is a way that sellers can incentivize buyers. Basically, the seller takes a portion of their proceeds (figure 1-2% of the buyer’s loan amount) and puts it in escrow, from which it is pulled to temporarily buy down the interest rate for the buyer. The first year of the loan might be two points lower of an interest rate, the second year one point, and then the third year is the full rate. The buyer gets some relief in the first couple of years, and if (IF!) interest rates come back down they can refinance. It’s becoming a popular tool, but it won’t show up in the sales prices.
Onto the ever-important inventory side of things:
New listings in October were at about 70% the level they were in September, and there’s no way to address that without saying “ouch.” Listings typically drop from September to October, but not by 30%. 2021 had a 14% drop. If you’re a buyer and you’re wondering where are all the new listings, you’re not alone. It’s tough to get sellers to list their houses and move when they’d be walking away from a 2.5% interest rate.
The amount of active listings is still strong through, since they’re staying on market longer:
Average market time is now at 36.7 days, up about four days over September. The median is 20 days. Sellers: for what it’s worth, there’s nothing wrong with these numbers and they’re still lower than what you would normally see. The market of the past couple of years has been the anomaly. So, have patience. Buyers aren’t frantic, and that’s just fine.
Nobody likes 7% interest rates, except perhaps Jerome Powell. However, 7% is pretty average historically. The seismic shock has been over how quickly that number got to where it is today, as a more gradual increase would allow the market to adjust along with it and for people to get used to it along the way. No such luck this time around. Those of us who are still participating in the market must adapt anyway, which is why we’re seeing things like seller buydowns and having discussions about which loans are assumable (FHA, VA, and USDA. It’s a short discussion). Markets may change, but opportunity is always hidden between the cracks somewhere.
I am a licensed real estate broker in the state of Oregon with ELEETE Real Estate. Data is sourced from RMLS, and all analysis is mine and mine alone. If I can be of assistance in your home search or sale, please contact me at eli.cotham@eleetere.com or via the contact page.
