Market Update: Will Portland Climb Out of the Inventory Slump?
According to the latest RMLS data, Portland may be hitting another record low for housing inventory. The 90 day average sits at 550 active listings, down from 891 last year. Portland’s inventory crisis consistently topped the list of biggest Portland real estate news stories over the past year, with the pandemic making a clear impact. We’ve theorized that fewer folks were willing to sell during the pandemic, but that Covid-19 doesn’t appear to have deterred buyers. With demand consistently outstripping supply, inventory suffers.
But what happens now that we’re entering the busy season for Portland real estate? The weather is getting nicer, and more folks are getting those vaccines. So will Portland see more homes go on the market?
April into May: Traditionally a Time for Increased Market Activity
Every time that inventory number drops again, it’s easy to feel a little disconcerted. But let’s not forget that March is typically a time of low inventory, coming out of the winter slow season. And by May, usually inventory goes on the rise again. Let’s look at the past few years to see the trend.
The pandemic’s mark is obvious, certainly. But also take note of where we were in April of 2019 and 2020. For both years, this week nearly to the day saw the bottom of the inventory curve (for a 90 day average). Now, inventory this year is still much lower than usual – the 7 day average this week is 585, nearly cutting in half 2020’s 7 day average of 1,061.
But we believe the curve may trend upwards again in the coming weeks and months. History shows that better weather (and fewer holidays) see more people putting their house on the market. And with the vaccine reaching more and more Oregonians every day, more folks will likely start feeling comfortable with the idea of a move. It may take a while for inventory to catch up to pre-pandemic levels (we might not even see that this year). However, it’s highly unlikely that inventory will stay as low as it is once we reach the summer months.
How Fast Are Homes Selling in Portland?
The short answer: fast. The 7 day average for median days on the market for Portland homes went up slightly in the past couple of weeks – 14 days to 21 days. But three weeks is still a pretty incredible turnover time! Our 90 day average sits at 31 days. For context, this time last year, the 90 day average was over double that.
So safe to say that demand has not been slacking. This tracks with lockbox activity as well, which is up 10.7% this week.
Nearly 24,000 homes were shown last week. This week in 2020, that number was at 10,500. Granted we were going into lock down, but it’s still safe to say that demand remains high, and that’s selling houses faster. Taking into account our data on showings and listings gone pending, we recently determined that homes in 2021 see an average of 25 visits to sell.
So as we head into what’s typically the busy season for Portland real estate, will homes continue to sell this quickly? That depends on two big factors. First, will supply shoot up, or climb slowly? If we see a flood of new homes come on the market, buyers will see less competition and more wiggle room. Second, will demand increase proportionally alongside supply, or will it remain around its current level? For now at least, it’s more likely that inventory will climb slowly since demand doesn’t seem to be taking a break any time soon. You can expect homes for at least the next month to continue selling quickly.
Portland Condo Market Still Slowing Warming
The huge drop we saw last month in median days on the market for condos continued over the past couple weeks. The 7 day average is down to 56. Compare this February, when it was common for condos to take 100 days to sell. And in, fact, condos’ median days on the market sits exactly where it did this week last year. And price per square foot made another jump up the past two weeks as well, to $423.50. This time last year the average price per square foot was $354.
So it appears that condos are making a comeback, but the market for houses still outstrips it. Buyers’ desire for more space may linger well after we conquer this pandemic. The summer months will truly show if buyers are ready to jump back into the condo life.
Portland Suburbs Are Booming
Homes in Portland proper are in high demand, don’t get us wrong. The theory that Covid-19 would see all the city slickers flee to the suburbs has not panned out in Portland. But don’t count out the Portland suburbs either. For example, some of the biggest bidding wars we’ve seen played out in Beaverton, where the Silicon Forest brings job security and innovation. So let’s take a look at how a few major suburbs are fairing in terms of days on the market and list price.
|Portland Suburb||Median List Price||Median DOM|
|Portland (for comparison)||$670k||31|
As you can see, there’s a ton of competition in the more affordable suburbs of Beaverton, Hillsboro, and Gresham. Houses there are selling fast. But places like West Linn and Lake Oswego are selling houses at high prices. And don’t forget, the list price doesn’t reflect what the homes actually sold for. In this seller’s market, it’s uncommon for a house to sell for under the list price – quite the opposite.
Portland Real Estate Market: Look Out for Increased Activity
As we move into busy season, we’ll be keeping a close eye on the biggest question for the Portland real estate market right now: inventory. Keep checking back for updates on Portland’s hot seller’s market, we well as how and when it’s shifting.
Looking to buy or sell? The best way to navigate these uncertain waters is with an experienced agent at your side. Check out our top 1% buyers agents or top 1% sellers agents, who are ready back you up with their extensive knowledge of the Portland real estate market!April 13, 2021