Portland Real Estate Market: April 2021 Report
Back in January, we predicted that March of 2021 would be possibly the best month during which to sell a home. And certainly, if nothing else, we hit a new peak seller’s market. This peak will likely last through April and run into May (though it may start slowing down in May as inventory typically rises every year each May). For the month of April we can expect the Portland real estate market to continue to be a lopsided seller’s market for houses (less so for condos, but that could be changing). Buyer traffic has been up, days on the real estate market continue to go down as demand outstrips supply, and home values continue to increase.
Overall, then, March has been a great month for sellers. But let’s get into some of the nitty gritty of what has changed over the past couple weeks, since the last time we checked in. What has shifted, and who benefits, and what comes next? Keep reading to find out.
Buyer Traffic Has Plateaued, but Remains High
We saw a huge uptick in buyer traffic throughout February, with the exception of the week of Valentine’s Day. This trend continued through the beginning of March, but has leveled off in the past couple of weeks.
You can see the plateau happening here, but it’s nothing like a huge dip. And as we mentioned above, major holidays can affect buyer traffic, since people are busy celebrating and have less free time to go look at homes. Now, whether St. Patrick’s Day qualifies as a major holiday is up for debate, but we know one thing. The bars in Portland are opening back up as the vaccine rolls out, and people were here for it after over a year of staying home. Not a lot of folks want to go look at a prospective home after having a few drinks. We’re getting a little speculative here, but unusual weather and holidays always have some impact on weekly buyer traffic.
Demand for homes in Portland is high. Despite the recent plateau, buyer traffic is still up from this time last year by nearly 40%. That’s nothing to sneer at.
Demand Still Outstrips Supply
Portland’s supply problem hasn’t seen much change in March. We’re still seeing hovering around the lowest inventory the city has seen in years. It’s normal for inventory to have ups and downs. But the graph below clearly illustrates how our pandemic year has thrown off the normal ebb and flow of Portland housing inventory.
When we talk about inventory, we’re typically talking simply about how many houses are on the market. That doesn’t necessarily tell the whole story, though, as we’ve noted before. If houses are flying off the shelves quickly, low inventory doesn’t mean that fewer homes are on the market so much as that people are buying them faster, feeling the competitive pressure of the seller’s market. Therefore, it’s useful to also consider factors such as the average or median number of days on the market, which will give you an idea of how quickly homes are moving.
It’s typical for homes to sell faster at this time of year. Again, March is one of the best times to sell a home, after all! But comparing this month to March in previous years provides some perspective.
Whether you’re looking at the 7 day average or the 90 day average, this year the median days on the market is half of what it was at this time last year. This week’s average is only 14 days! That’s great news for sellers who are looking to streamline their process. For buyers, it means you’ve likely got competition.
Median List Price Is Down
Before we get started here, let’s take a moment to acknowledge that median list price isn’t always indicative of how the Portland real estate market is currently operating. The median list price can be a deceptive filter through which to analyze the market, since it doesn’t reflect what homes are actually selling for. So, given the lack of inventory right now, you’ll want to take median list price data with a grain of salt.
That being said, when we see an interesting shift, it’s worth mentioning. This month has seen a fairly steep drop in median list price – when taking the weekly average, a decrease of $64,000. This might not seem groundbreaking, but it is the steepest monthly drop in several years.
Perhaps sellers are simply expecting the see bids over the list price. But we think this trend is something to keep an eye on as we move into a new (hopefully post-Covid) season in the Portland real estate market.
Also this number can dramatically rise and fall simply depending on what type of homes are entering the market at any given time, more luxury homes entering the market will push this number up, and more median to starter level homes entering the Portland real estate market will push this number down.
Price Per Square Foot Continues to Rise
The question of Portland’s affordability is murky (other than it is not headed in the right direction). Some statistics show that given the median income of Portland residents, increases in housing prices still make it a fairly affordable city (at least compared to other major city centers). But we also think it’s important to look at price per square foot. And despite the drop in median list price, the price per square foot for both condos and houses has continued to rise. So, for example, while the weekly median list price for houses dropped by 10%, the price per square foot only dropped by 1.7%. Likewise, while the condo market has been notoriously cool, the price per square foot continues to go up.
The Portland Condo Market Is Still Warming Up
What about the Portland condo market, then? Not a ton has changed since we last updated you, when we noted that the condo market seemed to be slowly ramping back up. But since we’ve been talking about days on the market, let’s check in with how condos are holding up.
Starting on March 5th, condos in Portland saw a precipitous decline in median days on the market when taking a 7 day average. Whether or not this holds up remains to be seen. But this could be the start of a condo market revival here in Portland, as city life slowly returns.
What’s Next for the Portland Real Estate Market?
We’re heading into one of the busiest seasons for the Portland real estate market, as the weather gets nicer and – hopefully – more homes come on the market. With more folks getting comfortable listing their homes and taking tours, we expect the market to take off in the near future. As we head into April, expect to see the strong seller’s market continue.
If you’re ready to take the leap and buy or sell a home, contact one of our top 1% buyers agents or top 1% sellers agents. We are ready to assist you today, and have the local experience, knowledge, and savvy to get you the most out of your real estate transaction.March 26, 2021