Portland-area home prices at a new high
Average dwelling now costs $412,000 as the housing shortage continues region-wide
The average sales price of a home in the Portland region hit a new record high of $412,000 in June, up 2.4 percent from the previous month and 11.5 percent from a year ago.
The jump happened despite an increase in homes for sale in June. The 4,501 new listings were an increase of 8.6 percent over May and the strongest June for new listings since 2008, according to the monthly Market Action report by the Regional Multiple Listing Service released last week.
The price increase reflects the fact that, although more homes came on the market in June, there is still a shortage of homes for sale in the Portland region, compared to historic inventories.
Lennox Scott, chairman and CEO of John L. Scott Real Estate, says the housing market is the same along the entire West Coast and he expects the situation to continue into next summer.
This is a historic market. The economy is recovering and interest rates are at historic lows, fueling demand, he said. The prime selling season still has three more months to go, then new listings traditionally drop by half from November to February.
Although new home construction has increased after coming to a virtual halt during the recession, Scott says not enough new homes are being built to meet the demand.
According to Scott, 80 percent of low- and mid-priced homes are selling within the first 30 days, compared to the historic average of around 25 percent.
Theres a backlog of sellers who want to put their homes on the market, but theyre afraid if they do, theyll sell so fast they wont have time to find another one, Scott said.
Average sales prices varied throughout the region, the report said. The highest price was $650,200 in the Lake Oswego/West Linn area, followed by $592,500 in the West Portland area and $496,900 in the northwest Washington County area. The lowest average price was $196,300 in the Mount Hood area, followed by $257,000 in Columbia County and $286,000 in Yamhill County.
Michelle Maida, managing broker of John L. Scott Portland Woodstock, offered several reasons for the inventory increase in June.
Interest rates are so low that we are seeing more homes coming on the market contingent on the seller finding suitable replacement housing. Also as we head into the last three really great selling months in 2016 (market tends to lose half its inventory Nov. 1), sellers are getting their houses on the market now rather than risk a leveling off or even downturn after the presidential election (but she doesnt think that will happen), Maida said in an email. However, close in Portland metro in the affordable price range still suffers an extraordinary inventory shortage.
Brigitte Pascutoi, managing broker of John L. Scott Portland Sunset Corridor, added two more reasons for the phenomenon.
Definitely more new construction and also seller confidence in listing because of equity growth and desire to buy now. Slight increase in condo construction/conversions as well, she said in an email.