June Home Sales in Portland Real Estate Market Beat Out Past 10 Years
If you’ve read this blog at all this year, you know that one of the biggest stories we’ve been following is Portland’s low inventory. Yet if you read the title of this post, you know that home sales are still going through the roof. So how do these two truths not contradict?
First, let’s talk about what inventory means. When we quote an inventory number, that number comes from our monthly RMLS reports. It’s calculated by dividing the number of active residential listings at the end of the month by the number of closed sales for that month. So you’re looking at a ratio: when it’s under 1.0, that means more homes sold than came on the market. For June, that ratio sat at 0.8, a slight uptick from May’s record-breaking 0.7. But that slight uptick is a drop in the barrel. At this time in 2019, that number came in at 2.4.
But inventory, when figured as a ratio, doesn’t necessarily represent buyer traffic. It doesn’t tell you how many homes sold or how many have come on the market. It can instead represent the ratio of demand to supply. So let’s investigate. We’ll start by asking how many homes have sold in Portland in June of 2021 versus other years.
Portland Home Sales For June Comfortably Broke 3,000
Let’s get to the data. The number of homes sold in the Portland metro area for June totaled 3,498. It’s the first time we’ve broken 3,000 homes sold in June since 2017. And no year in the past ten years has seen the number of home sales in June as we have this past month. In 2020, that number came in at 2,726. But let’s not forget that 2020 was an extremely strange year for Portland real estate (and for real estate nationwide, for that matter). So what about 2019 data? In June of 2019, 2,772 homes sold – not too far off from the 2020 numbers. Comparing June 2021 to June 2019, that’s an increase of 26.2% – not insignificant.
What these statistics tell us is that despite the low inventory numbers, plenty of sales are going through. The answer doesn’t seem to be that fewer homes are on the market. Rather, perhaps more folks are buying.
Existing Vs. New Homes Sales in Portland
Why talk new versus existing home sales? Existing home sales lagged throughout the pandemic, most likely because owners weren’t ready to put their homes on the market during a pandemic. The everyday hassle of dealing with open houses? Nothing compared with figuring out how to manage making them Covid-19 repellent.
Nationally, existing home sales were down for the past few months, but saw a gain in June. The same seems to be true in Portland. Typically in Portland, for the past decade at least, existing homes make up about 90% of June home sales. The big exception? You guess it – June of 2020, when only 88.9% of sales came from previously occupied homes. That might seem like a small dip. But compare it to June of 2021, when 93.3% of sales were existing homes, the highest number seen in the past decade. What that suggests is that a good number of sellers put off putting their homes on the market during the pandemic. Now that we hopefully see the light at the end of the tunnel, more owners feel comfortable putting that for sale sign up.
For anyone worried about over development in Portland, these numbers should provide some comfort. Overwhelmingly, homes sold in the past decade went from previous owner to current buyer. The percentage of new homes – developer to buyer – has stayed fairly stable at around 10%.
Portland Condos Vs. Single Family Homes
Now for the next big rivalry: condos versus single family homes. It’s no secret that condos have been having a harder time selling in downtown Portland, though the market is warming up in the suburbs especially. Just as new homes make up a smaller part of the market, so do condos. Typically, condos take up about 10% of the sales market in June. This year that number hit just over 11%. So it’s possible that with the screws getting tightened on the single family housing front, more buyers are turning to condos. We’d expect that trend to continue if buyers feels squeezed out of the market by rising home prices, since condos tend to offer more variety when it comes to affordability.
Are Portland Home Buyers Cooling Off?
Speaking of buyers being squeezed out of the market, let’s talk demand. Our numbers show that more homes than ever are being sold, yet inventory sits at an all time low. That suggests that on the demand side, buyers are chomping at the bit.
But there’s such a thing as buyer fatigue, and we may be reaching the breaking point. Fannie Mae’s Home Purchase Sentiment Index for June proved that 64 percent of buyers feel it’s a bad time to buy a home, up from 56 percent in May. That’s a national poll, though, and only represents a limited number of respondents.
Let’s take a look at lockbox numbers in the Portland area for more insight. These numbers don’t necessarily tell us how many buyers are out there, but they give a good look at the traffic that’s coming through Portland’s hot listings. The good news for buyers? Throughout the chaos that was 2020, weekly home showings often averaged at 24,000 or above. This year, that number has hovered at 20,000 to 21,000 in the past few weeks.
The good news for sellers? We may be seeing a bounce back. After a big dip on July 4th weekend, lockbox activity jumped up by 14.8% to 23,382 showings.
We’ll have to keep a close lookout these next few weeks to see how the trend continues. For the health of the Portland real estate market, we hope the stakes even out for buyers and sellers. A healthy real estate market spells good tidings for everyone. But you can’t control the market – so don’t let the market control you.
The best way to accomplish that? Choose a reliable agent. Our top 1% buyers agents or top 1% sellers agents are prepared to steer you through towards your best possible real estate transaction!July 23, 2021