May 2007 Portland Oregon Market Action

Market Activity in the Portland Metro Area appears to have cooled when comparing May 2007 to May 2006. While new listings continue to grow, the market experienced a decline in both closed and pending sales transactions. The number of new listings in the market continued its growth trend, increasing 4.8% over last May's total.  On the other hand, the total amount of closed sales dropped 8.3% (2,802 v. 3,054), while pending sales dropped 16.4% (3,054 v. 3,651).

The average sale price reached a record high of $348,800. This is likely the result of increased high end home sales, which included five homes that sold for $2 million or more. The 12,486 active residential listings at the end of May would last approximately 4.5 months at the month's rate of sales  

Year-To-Date Trends 

New l i s t ings have grown considerably when comparing market activity for January-May 2007 to the same period of time in 2006. In that time, new listings ha v e inc r e a s ed 1 5 . 8%. On the other hand, pending sales and closed sales have declined 8% and 5% respectively.

Appreciation

Using the average and median sale prices for the twelve months tha t ended wi th May 2007 compared to the twelve months ending in May 2006, the average sale price appreciated 10.1% ($331,600 v. $301,300). Using the same formula, the median sale price appreciated 10.6% ($279,900 v. $253,000).

Observations

Since both average and median price data is based on 12 month moving averages, I believe we can expect to see a continuing decline in the rate of appreciation.  Interest rates are anybody's call at this point - but if they trend up, we will probably see further inventory build and a continued move towards a more balanced market at 5 to 6 months of inventory.

This is not a doom and gloom forecast, but an opportunity for investors and buyers to work with agressive Buyer Agents to acquire property.