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Portland Real Estate Update By Rob Levy

Portland Real Estate Update July 2018

The June 2018 numbers are out for housing in the Portland Metro area and as expected they are down a little from May.  Typically our sales drop in the summer a little bit, so its a GREAT time to buy a home as buyers are (a little) more in the drivers seat.  

Closed sales in the meantime were up over May, which is a reflection on our busy April and May with 2,946 closed sales vs. 2,803 in May.  However, this was the slowest June closings month since 2014.  New listings still arent filling the pot enough though, only 4,515 in June which is 3.2% fewer than May.  We need inventory for sellers to sell their homes which many are resistant to do as there isnt much to choose from for them to buy.  For the year so far though new listings are up 2.7% at 22,079 homes listed for sale in 2018 through end of June.

Average and median prices are still rising, ableit not at such a high clip which is healthy.  Comparing the first half of 2018 with the same period in 2017 our average price is up 6.2% to $453,400.  The median is also up 6.7% to $400,000 even.

The time on market as of the end of June is 2.1 months.  That's a bit higher than the 1.6, 1.8 and 1.9 months for the previous few months, but still well into a "sellers" market.  The balance point is always considered to be 5.5 months of inventory.

You can view the entire report (Courtesy RMLS) by clicking here.

December Residential Highlights
The Portland metro area saw mixed numbers this December, but new listings made gains compared to December 2016. At 1,617, new listings showed a 13.8% increase compared to December 2016, despite a 33.1% decrease from last month in November 2017 (2,416). This was the strongest December for new listings in the Portland metro area since 2011, when 1,700 new listings were offered.
Pending sales (1,757) exactly matched the 1,757 offers accepted last year in December 2016 but showed a 25.9% cooling from the 2,371 offers that were accepted last month in November 2017.
Closed sales, at 2,350, ended with a 10.3% decrease from December 2016 (2,621) and fell 1.6% short of the 2,387 closings recorded last month in November 2017 as well.
Total market time in December ended at 55 days, with inventory decreasing slightly to 1.6 months.
Year to Date Summary
Activity in 2017 was a little cool compared to 2016. New listings (40,805) decreased 0.8%, closed sales (31,624) decreased 3.6%, and pending sales (31,330) decreased 5.7%.
Average and Median Sale Prices
Prices continued to rise in the Portland metro area in 2017. Comparing the entirety of 2017 to 2016, the average sale price rose 8.5% from $395,000 to $428,700. In the same comparison, the median sale price rose 9.5% from $347,000 to $379,900.Information courtesy RMLS.

Interest Rates Make a Difference

Recently one of my sons and his girlfreind purchased a home for $400,000 and he asked me "Dad, what happens if my house loses 10% of its value?".  My answer was "Well, you are a math major, so you know you just lost $40,000 but let me ask you this.... If you buy that same house at 10% less for $360,000 BUT the interest rates were at 6% vs. the 4% how much more would you be paying a month?"

Interestingly, a $350,000 loan at 4% is $1,671 a month BUT if that same house dropped 10% and the loan is now $310,000 (same $50k down off a now lower $360k purchase price) that payment is $1,859 or a whopping $188 a month more for a $40,000 cheaper home! So it shows the importance of lower interest rates.   

Yes, I know at 4% they are higher than where we bottomed out in the high 2% range back in the middle of the recession, but they are still historically very low, well lower than the long time average rate of 8.2% (yes I am old enough to remember them peaking at about 19%).  So if you are concerned about our rising prices and still looking to buy a home, clearly now is one of the best times in recent years to do so.  Contact us today and let us know how we can help.

Tesla Model 3 Report / July '18

Now with about 39,000 Tesla Model 3s delivered, Im starting to see more on the road. In fact today I parked next to one identical to mine!

I'm still LOVING this car, its truly like living and driving inside a computer game.  Its got loads of torque, so really gets up and goes.  A recent trip with my wife from our Portland home to Astoria and back was 180 miles, and I still had enough charge left to go another 150 miles without charging!

Many people think this is an expensive car and thats not the case.  The base model is $35,000 and there is a federal tax credit of $7,500 and an Oregon tax credit of $2,500.  Yes, the early ones including mine have a bigger battery an options driving up the price, but its still under $40,000 with credits.  Many of you know I owned a Chevy Volt for years and loved that, but on a good day I would get about 50 miles out of it.  This one with a consistent 330 miles plus really makes it a mainstream car.   

Recent publications say that with the rapidly dropping cost of batteries (they are 75% cheaper now vs my Volt in 2012) that the crossing point of building an electric car vs. a regular car will be in 2022.  So look for a lot more electric cars on the road very soon!