The anemic number of residential properties for sale continues to plague Portland metro home shoppers and favor sellers.
Brokers with John L. Scott Real Estate were told by Chairman and CEO J. Lennox Scott that Portland is “virtually sold out,” prompting intense interest in well-priced listings, especially homes under $500,000.
The 3,264 Portland metro homes put on the market in September was a 16% drop from the 3,885 listed in August, according to the local listing service RMLS.
Inventory of homes on the market in September was a historical low of a 1.1-month supply, which was a decrease from August’s 1.3 months and July’s 1.2 months, according to RMLS.
Inventory is calculated by dividing the active residential listings at the end of the month by the number of closed sales and homes proposed and under construction.
In January 2019, there was a 3.3-month supply and even that was considered a seller’s market. Basement-level inventory in a state with the largest housing shortage in the nation is offering buyers the fewest choices in years.
Compounding shortages in homes for sale is a growing population, owners unwilling to sell during the coronavirus pandemic and September wildfires that destroyed more than 4,000 Oregon dwellings.
The biggest factor of not selling, according to national real estate database analysis, is concern of not finding another home.
A 1969 split-level house at 1555 S.W. Cardinal Terrace in Beaverton with four bedrooms, 2.5 bathrooms and 2,074 square feet of living space is being sold “contingent on seller finding suitable housing,” says listing agent Sherry Hawkins of Knipe Realty ERA Powered.
Real estate experts say some homeowners who were considering downsizing to condo living, especially those in the COVID-19-vulnerable age group, over 65, don’t want to give up a home with a yard where they can still entertain friends outdoors and be socially distant.
Previously vacant homes, such as second homes and rentals, are being occupied by owners or family members — from seniors to young adults who lost jobs or returned from a college campus during the pandemic — effectively taking these homes off the market, say experts.
“At the end of the day, Oregon can’t build homes fast enough to accommodate our growing population,” says Whitney Minnich of John L. Scott in Oregon City. “Before the pandemic, one permit to build a new home was issued for every three new jobs in our area, and the historical average is one for every two jobs.”
Buyers who have their offer accepted and haven’t lost their source of income can benefit from mortgage rates in the historically low 2.8% range, according to the Federal Home Loan Mortgage Corporation, known as Freddie Mac.
“When new housing inventory does hit the market, as long as it’s priced well and in a desirable location, it’s snapped up quickly,” says Minnich.
She received six offers on a recent listing. Some buyers waived inspections and appraisals.
In September, 3,251 residential properties in Portland metro changed hands, a bump of 3.2% from the 3,149 closings in August 2020 and a 36.8% jump from the 2,377 closings in September 2019, according to RMLS.
The low number of homes for sale and other factors moved up the sale price. The median cost to buy a Portland metro home jumped 5.7%, to $433,500, when comparing the first nine months in 2020 to 2019, according to RMLS.
“The low-end properties are surely a tough go for first-time home buyers who are struggling to afford their perfect home,” says Dustin Miller of Windermere Realty Trust in Lake Oswego. “The inventory has hit 1.2 months a few times in the past 20 years but never 1.1 months. The low inventory has buyers making quick decisions on homes and perhaps a little hasty. Many have over-promised and backed out of the deals or tried to gain back some promises they disclosed upfront as far as financial commitments.”
Miller, who relies on a different calculation, found the average sale price in the Portland area dropped $1,000 in September from August’s $511,000, which is close to an all-time high.
In Portland metro, the 3,152 homes with an accepted offer, called pending sales, in September decreased 14.7% compared to offers accepted in August 2020 but were a 17.3% jump from offers accepted in September 2019, according to RMLS.
The average time Portland metro residential properties were for sale last month before receiving an acceptable was 38 days.
— Janet Eastman | 503-294-4072
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