May Residential Highlights
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
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.
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).
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.