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Portland Average, Median Sale Prices & Appreciation – March 2007
The conundrum posed by a real estate market that is experiencing fewer sales and longer marketing times juxtaposed against continued above-average appreciation rates for housing in the Portland area is leading to an epidemic of odd, head-scratching behavior.
At least my head, anyway.
March 2007 results published by RMLS show a continued trend of more listings and fewer sales, which equals more inventory and longer ‘days on market’. Yet, the overall metro market is appreciating at over 12%. An interesting puzzle, indeed.
The numbers, year-to-date:
- Average sale price: $327,800 (vs. $292,100 in 2006)
- Average market time: 65 days (vs. 45 days in 2006)
- New listings: 13,697 (vs. 11,383 in 2006)
- Closed sales: 6,359 (vs. 6,781 in 2006)
- Average appreciation: 12.2%
- Inventory: 3.8 months (vs. 2.0 months in 2006)
The market appears to have reached equilibrium with incoming listings and pending/closed sales. Since hitting a peak inventory of 6.2 months in January, a balanced ratio of new listings vs. closed sales has settled out at 3.8 months available inventory.
Suburban communities such as Beaverton, Hillsboro, Gresham, and Yamhill County show the greatest appreciation strength, and inside the city limits, North Portland and Southeast Portland show the best gains.
Below are the 12-month average and median sale prices, plus 12-month average appreciation compared to the same period last year, sorted by market area:
| Area | YTD Avg. Sale Price | YTD Median Sale Price | 12-Mo. Appreciation |
| Lake Oswego / West Linn | $518,900 | $445,000 | 13.1% |
| West Portland | $431,100 | $368,700 | 8.2% |
| Tigard/Tualatin/ Sherwood/Wilsonville | $378,200 | $336,000 | 6.2% |
| NW Washington County | $380,400 | $350,000 | 8.4% |
| Milwaukie / Clackamas | $350,200 | $310,000 | 15.5% |
| Oregon City / Canby | $315,500 | $294,600 | 12.2% |
| Northeast Portland | $304,400 | $266,900 | 11.5% |
| Hillsboro / Forest Grove | $298,600 | $268,000 | 14.5% |
| Beaverton / Aloha | $288,200 | $261,200 | 9.7% |
| Gresham / Troutdale | $279,300 | $253,800 | 14.6% |
| Southeast Portland | $278,000 | $245,000 | 14.7% |
| Yamhill County | $274,200 | $246,400 | 17.7% |
| North Portland | $258,000 | $241,500 | 13.9% |
| Columbia County | $256,700 | $245,000 | 14.7% |
Photo by: frogmuseum. Used under Creative Commons license.
[tags] Portland, Oregon, real estate, average, median, sale, price, inventory, activity[/tags]
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3 Responses to “Portland Average, Median Sale Prices & Appreciation – March 2007”
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The , quoting the NYTimes, sheds some light on your conundrum:
“The truth is that the official numbers on house prices — the last refuge of soothing information about the real estate market on the coasts — are deeply misleading. Depending on which set you look at, you’ll see that prices have either continued to rise, albeit modestly, or have fallen slightly over the last year. But the statistics have a number of flaws, perhaps the biggest being that they are based only on homes that have actually sold. The numbers overlook all those homes that have been languishing on the market for months, getting only offers that their owners have not been willing to accept.”
This is not such a big mystery, but fairly commonplace market behavior …
Inventory is a leading indicator (future sales), while appreciation is a lagging indicator (last month’s sales compared against last year’s sales). When the market accelerates, inventory will drop while appreciation remains constant, seemingly defying the law of supply and demand. Likewise, when the market slows, inventory rises first, and price declines happen much later.
In addition to this technical subtlety, you also have to consider the psychological effect during market inflection points. Even when the general market turns, there will be a few misguided optimists who believe the market will boom forever. So while the general market has stopped buying (rising inventory), the few remaining optimists will continue to buy at inflated prices, believing this to be a great opportunity for increasing their holdings. This also contributes to the seemingly contradictory situation of rising inventory with positive appreciation.
Look at the history of the markets which are now beginning to experience the first price declines (DC, Miami, San Diego, etc.) They all experienced several months of booming inventory with high appreciation, then booming inventory with no appreciation, before beginning the first price declines. There is nothing mysterious happening in the Portland RE market; we’re just one or two years behind some of the other markets.
[...] The conundrum posed by a real estate market that is experiencing fewer sales and longer marketing times juxtaposed against continued above-average appreciation rates for housing in the Portland area is leading to an epidemic of odd, head-scratching behavior. At least my head, anyway. March 2007 results published by RMLS show a continued trend of more listings […] Read more… [...]