A house for sale in Northeast Portland.
The final numbers for 2012 are in, and the Portland-area housing market showed improvement — about $1.3 billion worth.
The home-sales numbers for the year, released Friday by the Regional Multiple Listing Service, show transactions jumped 19 percent in 2012 compared with 2011. At the same time, prices halted and started to reverse their spectacular decline.
But all that activity and not many new homes on the market have left a depleted supply, which could weigh on the sales over the next few months.
All told, $6.45 billion worth of homes sold during the year, compared with $5.2 billion in 2012 and $5.3 billion in 2010. The median sale price for the year rose to $235,000, an increase of 6.3 percent compared with 2011.
The year was clearly a seller’s market, defined by a small inventory of homes for sale.
There were 32,300 new sale listings in 2012, a 5.2 percent decline from 2011. Despite pricing gains — in some cases perhaps because of them, as sellers wait for a better price later — would-be sellers stayed off the market. Foreclosure sales also declined.
The low inventory was a boon for the market for much of 2012, allowing prices to climb. The average time on market for homes sold was 112 days, down from 143 a year earlier.
“Homes that are priced right to the market are selling in record time,” said Todd Prendergast, a founding partner at Realty Trust Group in Portland. “That’s motivation that, coupled with continued price appreciation, is a good reason for people to consider putting their home on the market.”
But in the first months of 2013, real estate brokers say the small supply may weigh on sales.
December closed with fewer than 6,400 homes listed for sale. At that month’s sales rate — even considering seasonal slowness — it would only take 3.6 months to work through that supply.
Six months of supply is considered a balanced market, with anything less indicating more demand than supply — and 3.6 months of inventory is lower than anything seen since the bubble years.
“Since the inventory has dropped so low, home sellers wouldn’t have anywhere to move to,” said Brian Houston, the principal managing broker at Coldwell Banker Seal in Portland. “That was a mild concern a year ago. Now it’s a great big concern.”
Changes in the state’s foreclosure system has also stemmed the supply of foreclosures brokers had been selling — usually at the low price points most in demand — through the depths of the crash.
The slim inventory led to widespread bidding wars in December, Houston said, not just in central Portland neighborhoods but across the metro area.
Earlier in the year, heavy competition and multiple offers had complicated closing deals, as appraisals didn’t support the higher prices buyers were offering.
Appraisals started to catch up with offers as prices gained ground. But in December, the median sale price for a home was $247,900, 14.5 percent higher than year earlier.
“Now we’re going to go back into appraisal problems,” Houston said. “We kind of had a stabilization there, but now we’re going to roll back into it.”
January has brought some new listings, but the inventory is likely to stay low well into 2013.
“Come March we’ll probably see a bit of an uptick, but I think we’re still going to be lopsided for a while to come,” said Joe Reitzug, vice president for Oregon and Washington at John L. Scott Real Estate.
“We’re not panicking,” Reitzug added. “In fact, we’re all very cautiously optimistic about where we go. Even with the current situation with the inventory … it’s still a very healthy market that’s getting better every month.”
–Elliot Njus
Follow @ORFrontPorch
Open all references in tabs: [1 – 5]