- It's Official: Portland Has Turned into Buyer's Market
- Portland Real Estate - First Half of 2007
- Portland Real Estate Outlook for 2007
- Portland Market Condition 2006
It's Official: Portland Has Turned into Buyer's Market
After months of sustaining a higher growth rate than any other city in the country, the Portland real estate market has finally cooled down substantially. It's official: the Portland market is a buyer's market in full effect.
When inventory hit 6 months at the end of summer 2007, most experienced real estate professionals knew that things will get worse during the slower winter months. The unusually heavy rain that we've been getting in September and almost all of October this year didn't help the market one bit. Buyers are getting cautious and taking a sit and wait attitude. During the first half of 2007, sellers were unwilling to budge on price, insisting on the higher amount. This forced the appreciation rate to be somewhat higher than the real growth. We witnessed a rapid change in the marketplace in August when a good number of buyers simply gave up on buying altogether. This forced the sellers to take lower prices. Hence, the growth rate slowed down from double digit to just shy of 8% in September 2007.
The next few months will be interesting. Our current inventory piled up to be over 8 months worth; more buyers are reluctant to move during the winter months (with the exception of corporate transfers). If the number of listings start to slow down correspondingly, then situation will be manageable. Otherwise, we'll see a market that turn into a situation worse than 2000 where we had 10 months of inventory.
I personally welcome this cool down. It's not a crash, just a correction that put buyers and sellers back on an even keel.
Portland Real Estate - First Half of 2007
The first 7 months of 2007 have gone by quickly. Interest rates are on the rise. You'll hear from all the sellers today that it's getting harder to sell at the price they want. Two years ago, a 3200 SF home in Beaverton with an unobstructed mountain view, priced just under $600K, would have been sold within a day or two. Today, there're over 60 homes in Beaverton in that price range - all sitting and waiting. Looks like real estate has gone back to "normal".
The Portland market has in no way 'crashed', dare I even use that word. It is adjusting itself for a soft landing. Sellers can no longer priced homes based on the appreciation rate that we saw in the last couple of years. We've reached somewhat of a threshold. What was a 17% last year should be adjusted to 10% for this year. Our outlook is still relatively strong. There're buyers out there. It's just that they now have more options and more in a power position to bargain. Gone are the days when there's a large number of speculators and "flippers". Since they can no longer make a decent profit out of buying and selling homes within a short period of time, some of them have retreated and some have accepted a lower margin.
Though we're no longer seeing double digit growth across the Metro area, high rate growth is still there buried in the neighborhoods ready for gentrification. Due to the urban growth boundary, inner city real estate prices will almost always stay relatively stable. It's kind of like living on an island. When there's no other way to expand, prices soar.
The outlook for 2007, in my opinion, is still strong relative to the rest of the nation. There will still be decent growth between 8% and 12% depending on the area within Portland.
Portland Real Estate Outlook for 2007
Well, the verdict is out. Though 2006 is not as spectacular as the previous few years, the Portland real estate market still finished with a 14% overall appreciation. In some areas like Milwaukie and parts of SE Portland, the growth rate is as high as 20%.
The last quarter of 2006 was indeed somewhat slower than the other 3 quarters. The market was bogged down by the news of Intel layoff and the softening of the Californian market. As a result, a lot of buyers were holding back their purchases and listings were sitting on the market longer than expected. When listings sit, sellers panicked and started to unload at lower prices. This then caused prices to drop. Unlike the Californian market, our market price in Portland dropped only slightly creating a soft landing.
In December 2006, our inventory is becoming tighter again. There were fewer listings available and buyers aplenty. As we enter 2007, we'll likely see a market somewhat the same as 2006 - strong and stable. The market appreciation projection is likely to hover around 10%.
Portland Market Condition 2006
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