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.
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