RMLS’ April 2013 and 2013 year to date statistics are in and the Portland RE market continues to be red hot. Every market conditions indicator is showing increasing values when comparing this year’s statistics to last year’s. Supply levels are still low (around 3 months), distressed activity is low and no longer a prevalent factor (hasn’t been for 12+ months actually) and almost every market area is showing increasing average sales prices. Inner Portland continues to lead the way with the lowest of supply levels and what I consider to be the “craziest” market at this time. Escalation clauses, multiple offer scenarios and sales prices above and beyond asking prices are common occurrences for the hottest markets in the area.
Supply levels are so low and financing is so cheap that buyers are fighting over the little supply that is out there right now. New listings priced above recent sales and being bid over asking price is a common occurrence right now.
This leads me to the question…..will it slow down? Not this selling season. The short term outlook on this market is hot hot hot. The fact is that demand is strong, effective purchasing power is high, and that won’t change over the next 4-6 months. That may change in the next 6-12 months, but as of now, supply won’t catch up to the demand during this selling season. In fact, an increase in listings in April only stabilized supply levels. Demand is strong enough to take on more listings. The Fed is continuing their quantitative easing program (QE) and interest rates remain low. The Oregon jobs market is improving. The latest job #’s are showing unemployment at 8%. This is much better than the 11.6% peak in 2008, but still has room to grow when compared to the lows of the mid 2000’s.
The Oregon Economy still has a ways to go in it’s recovery, but for now, the real estate market is red hot and glowing. That could change over time, with the Fed tapering off of it’s current policy and judicial foreclosures starting to take place at the court house steps. But for now, it’s going to take more than that to cool off the hottest market we’ve seen in 5 years.