Portland Home Sales Lose Their Sizzle

At a time of the year when both the heat and home sales tend to heat up, the Portland real estate market has lost its’ sizzle.

Housing inventory has now reached 5.0 months, which according to the National Association of Realtors, is the perfect balance between buyers and sellers. This means that if no other properties were listed for sale, the supply of homes in Portland metro would dry up in 5.0 months.

The trend, however, favors homebuyers. The current inventory rate is an increase from the previous month’s supply of 4.5 months. Furthermore, the increase is taking place during the Portland’s summertime when inventory is historically at its’ lowest point of the year.

For comparison purposes, inventory at this time in 2006 was only 2.6 months. And in 2005, during Portland’s record breaking year, inventory was at an all time low of 1.5 months. In other words, the number of homes for sale in Portland and the suburbs has doubled and tripled in the last couple of years.

Home sales are down and new listings are up regardless of month-to-month or year-to-year comparisons.

Comparing June 2007 to June 2006, home sales have dropped 18.5%. Year-to-year, homes sales have fallen 8%.

What about prices? Everyone’s favorite question. Prices have gone up.

Year-to-date in 2007, the average sales price of a Portland area home is now $340,400. At this time in 2006, the average sales price was $318,000.

Year-to-date in 2007, the median sales price of a Portland area home is now $288,900. At this time in 2006, the median sales price was $267,900.

The average market time for a home to sell today in 2007 is now 59 days on the market compared to 42 days in 2006.

Keep in mind everything mentioned above is an average. There are many home that still sell as soon as they hit the market, while others languish in a sea of for sale signs.

Bottom line: Buyers have more selection and leverage. Sellers need to be realistic.