Author: Christy Walton

July 13th
Portland Metro Area (OR and WA)
Market Activity for the Week of July 5th through July 11th 

Homes Sold: 732 vs previous weeks: 1035; 1035; 917; 802; 737; 685; 896; 792; 807; 749; 848; 684; 733; 687; 687; and 581. During the same week last year, this number was 901.

Active Listings: 3209 vs previous weeks: 3425; 3091; 2967; 2822; 2744; 2568; 2593; 2476; 2289; 2265; 2173; 2275 2252; 2163; 2135; and 1998. 

Total number of Pending Deals: 6250 vs previous weeks: 6186; 6586; 6593; 6664; 6546; 6587; 6640; 6561; 6501; 6388; 6393; 6216; 6049; 5894; 5835 and 5779.

New Pending Deals: 836 vs previous weeks: 934; 1030; 1050; 1068; 904; 1084; 1117; 1079; 998; 1037; 1088; 952; and 894. 

Average Days on Market: 14 (36 last year) – Median Days on Market 5 (11 last year).

Average Sale price – $577,782 vs $507,859 during the same week last year.

Total Sales Volume – $422,936,424 vs $441,055,725 457,580,959 during the same week last year.

Average List Price vs Sale Price
Average Sale Price as a Percentage of the Asking Price  – 104.58%
Median Sale Price as a Percentage of the Asking Price – 105.05%
Average Sale Price as a Percentage of the Original Asking Price – 103.93%

PUBLISHED MON, JUL 12 202110:36 AM EDTUPDATED MON, JUL 12 202110:54 AM EDT
Diana Olick
Homebuyers get a break as new listings rise and mortgage rates drop (cnbc.com)

• New listings of homes jumped 4% in the four-week period ending July 4 from a year earlier, according to Redfin.
• New listings were up 3% from the same time in 2019, the first time they topped pre-pandemic levels.
• Seventy-seven percent of respondents said it’s a good time to sell, up from 67% in May, according to Fannie Mae.

For more than a year now, the housing market has been a perfect storm for sellers, but the winds may finally be shifting.

Strong demand and record-low supply are starting to ease, and mortgage rates are coming down off their recent highs. While home prices are still surging, these new market dynamics will likely take some of the heat out of those gains as well.

New listings of homes jumped 4% in the four week period ending July 4 compared with the same period one year ago, according to Redfin. They were up 3% from the same time in 2019. It was the first time new supply topped pre-pandemic levels.

The number of active listings is still down 32% from a year ago, but that’s actually the smallest annual drop since early February. Active listings are now up 8% from their 2021 low in early March.

“Many buyers have backed away from the housing market and are waiting until more and better homes are listed,” said Daryl Fairweather, Redfin’s chief economist. “Buyers don’t have the same sense of urgency that they did at the beginning of the year. They aren’t racing to buy before prices increase, because asking prices have already increased and stabilized.”

 A monthly housing sentiment survey in June from Fannie Mae found that 64% of respondents said it’s a bad time to buy a home, up from 56% in May. On selling, 77% of respondents said it’s a good time to sell, up from 67% in May.

Potential sellers had been holding properties off the market, not wanting people coming through their homes while the pandemic was raging. They were also concerned they wouldn’t be able to find something else to buy.

Vaccines, as well as rising inventory, are giving them more confidence, not to mention that they can now sell for top dollar. A record 55% of homes sold above listing price in June, up from 27% the year before.

Home prices were up 15.4% in May compared with May 2020, according to CoreLogic. Prices, however, are projected by CoreLogic economists to increase 3.4% by May 2022, as affordability challenges hit some buyers and cause a slowdown in price growth.

“First-time buyers are hitting a wall in many places around the country as the pace of home-price rises outpace the benefits of lower borrowing costs. Younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves,” said Frank Martell, president and CEO of CoreLogic.

Mortgage rates, while historically low, have been on a roller coaster lately, starting the year at a record low but then shooting higher at the end of March. Last week, they fell back again, and while they are expected to rise slowly over the long term, there appears to be no imminent fear of another spike.

“They [buyers] aren’t racing to buy before mortgage rates go up, because rates have dropped back below 3% and are likely to stay low. With more new listings starting to come on the market, buyers who threw in the towel may want to look again because the market is tilting more in their favor,” added Fairweather.

Consumers are also feeling better about the economy and their own personal wealth. That could inspire those buyers who do have the means to afford a new home but have so far chosen to remain renters.

“Despite the pessimism in homebuying conditions, we expect demand for housing to persist at an elevated level through the rest of the year,” said Doug Duncan, Fannie Mae’s chief economist.

“Mortgage rates remain not too far from their historical lows, and consumers are expressing even greater confidence about their household income and job situation compared to this time last year, when the pandemic had shut down wide swaths of the economy,” Duncan said.

Residential Highlights
New listings (4,298) increased 17.5% from the 3,658 listed in June 2020, and increased 8.2% from the 3,971 listed in May 2021.

Pending sales (3,534) decreased 3.3% from the 3,654 offers accepted in June 2020, and decreased 4.9% from the 3,717 offers accepted in May 2021.

Closed sales (3,477) increased 28.3% from the 2,709 closings in June 2020, and increased 9.2% from the 3,183 closings in May 2021.

Inventory and Total Market Time Inventory increased to 0.8 months in June. Total market time decreased to 21 days.

Year-To-Date Summary Comparing the first six months of 2021 to the same period in 2020, new listings (21,226) increased 11.1%, pending sales (18,291) increased 18.8%, and closed sales (16,272) increased 25.6%.

Average and Median Sale Prices Comparing 2021 to 2020 through June, the average sale price has increased 20.1% from $468,500 to $562,700. In the same comparison, the median sale price has increased 18.2% from $423,000 to $500,000.

In real estate, it’s normal to see ebbs and flows in the market. Typically, the summer months are slower-paced than the traditionally busy spring. But this isn’t a typical summer. As the economy rebounds and life is returning to normal, the real estate market is expected to have an unusually strong summer season.

Here’s how this summer is stacking up against the norm and what it means for you.

Inventory is increasing.

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), inventory levels have been rising since February of this year. Looking at the graph below, there’s a clear upward trend, as shown in the green bars. Currently, there’s roughly a 2.5 months’ supply of homes for sale. And while inventory is trending up as more houses are coming to the market, it’s still much lower than several of the previous summers, as the orange bars indicate.If you’re looking to buy, some relief is on the way in the form of more homes coming to the market. Just remember, we still have less inventory than the norm, so be patient in your search.

If you’re thinking of selling, now is the time. Work with your agent to list your house before it has more competition on the market.

Time on the market is still shorter than normal.

Unlike the typical summer trend, time on the market is moving at the fastest speed we’ve seen since NAR started collecting this survey-based information in 2011. The most recent Realtors Confidence Index shows that the average home is on the market for just 17 days, as shown in green in the graph below. This means houses are selling at a much faster pace than a typical summer, which the orange bars represent.If you’re looking to buy, this means you need to be prepared to move fast. Brace for a quick pace and rely on your agent to stay in the know on the available homes in your area.

If you’re thinking of selling, data shows your house will likely sell quickly. If you’re worried about where you’ll go once your house sells, consider a newly built home as a good way to move up.

Price appreciation is still rising.

The last big factor making this an unusually strong market this summer is home price appreciation. According to the State House Price Index from the Federal Housing Finance Agency (FHFA), we’re currently experiencing double-digit house price appreciation and have an average of 12.6% appreciation across the country. The graph below uses data from NAR to show a more granular view of how prices have changed month-to-month over the past few years. The green bars show the current price appreciation we’re experiencing today. Our current levels are well above what we’ve seen in recent summers, shown by the orange bars.If you’re looking to buy, competition and bidding wars are driving prices up. Getting pre-approved can show the seller you’re serious and help you know what you can afford. Once you do, work with your agent to make a strong offer that stands out.

If you’re thinking of selling, seize this opportunity to use your additional equity from this price appreciation to power your next move.

Bottom Line

This isn’t a typical summer. Whether you’re buying or selling, let’s connect to talk about how you can capitalize on today’s market conditions to sell your house or find your dream home.

While the housing market forecast for the second half of the year remains positive, there may not be a better time to sell than right now. Here are four things to consider if you’re trying to decide if now’s the right time to make a move.

1. Your House Will Likely Sell Quickly

According to the most recent Realtors Confidence Index released by the National Association of Realtors (NAR), homes continue to sell quickly. The report notes homes are selling in an average of just 17 days.

Average days on market is a strong indicator of buyer competition, and homes selling quickly is a great sign for sellers. It’s one of several factors that indicate buyers are motivated to do what it takes to purchase the home of their dreams.

2. Buyers Are Willing To Compete for Your House

In addition to selling fast, homes are receiving multiple offers. NAR reports sellers are seeing an average of 5 offers, and these offers are competitive ones. Shawn Telford, Chief Appraiser at CoreLogic, said in a recent interview:

“The frequency of buyers being willing to pay more than the market data supports is increasing.”

This confirms buyers are ready and willing to enter bidding wars for your home. Receiving several offers on your house means you can select the one that makes the most sense for your situation and financial well-being.

3. When Supply Is Low, Your House Is in the Spotlight

One of the most significant challenges for motivated buyers is the current inventory of homes for sale, which while improving, remains at near-record lows. As NAR details:

“Total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.”

There are signs, however, that more homes are coming to market. Odeta Kushi, Deputy Chief Economist at First American, notes:

“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”

If you’re looking to take advantage of buyer demand and get the most attention for your house, selling now before more listings come to the market might be your best option.

4. If You’re Thinking of Moving Up, Now May Be the Time

Over the past 12 months, homeowners have gained a significant amount of wealth through growing equity. In that same period, homeowners have also spent a considerable amount of time in their homes, and many have decided their house doesn’t meet their needs.

If you’re not happy with your current home, you can leverage that equity to power your move now. Your equity, plus current low mortgage rates, can help you maximize your purchasing power.

But these near-historic low rates won’t last forever. Experts forecast interest rates will increase in the coming months. Nadia Evangelou, Senior Economist and Director of Forecasting at NAR, says:

“Nevertheless, as the economic outlook for the United States looks brighter for the rest of the year, mortgage rates are expected to rise in the following months.”

As interest rates rise, even modestly, it could influence buyer demand and your purchasing power. If you’ve been waiting for the best time to sell to fuel your move up, you likely won’t find more favorable conditions than those we’re seeing today.

Bottom Line

With supply challenges, low mortgage rates, and extremely motivated buyers, sellers are well-positioned to take advantage of current market conditions right now. If you’re thinking about selling, let’s connect today to discuss why it makes sense to list your home sooner rather than later.

Some Highlights

• The amount of wealth Americans have stored in their homes has increased astronomically.
• On average, homeowners gained $33,400 in equity over the last 12 months, and the average equity on mortgaged homes is now $216,000.
• When it’s time to sell, your home equity can help accomplish your goals. Let’s connect to discuss how you can take advantage of today’s sellers’ market to get the most out of your home sale.

There’s no denying we’re in a sellers’ market. With low inventory and high buyer demand, homes today are selling above the asking price at a record rate. According to the latest Realtors Confidence Index Survey from the National Association of Realtors (NAR):

• Homes typically sell within 17 days (compared to 26 days one year ago).
• The average home sold has five offers to pick from.
• 54% of offers are over the asking price.

Because so many buyers are competing for so few homes, bidding wars are driving up home prices. According to an average of leading expert projections, existing home prices are expected to increase by 8.9% this year.

Yet even in today’s red-hot sellers’ market, it’s important to price your house right. While it may be tempting to price your house on the high side to capitalize on this trend, doing so could limit your house’s potential.

Why Pricing Your House Right Matters

Here’s the thing – a high price tag doesn’t mean you’re going to cash in big on the sale. While you may be trying to maximize your return, the tradeoff may be steep. A high list price is more likely to deter buyers, sit on the market longer, or require a price drop that can raise questions among prospective buyers.

Instead, focus on setting a price that’s fair. Real estate professionals know the value of your home. By pricing your house based on its current condition and similar homes that have recently sold in your area, your agent can help you set a price that’s realistic and obtainable – and that’s good news for you and for buyers.When you price your house right, you increase your home’s visibility, which drives more buyers to your front door. The more buyers that tour your home, the more likely you’ll have a multi-offer scenario to create a bidding war. When multiple buyers compete for your house, that sets you up for a bigger win.

Bottom Line

When it comes to pricing your house, working with a local real estate professional is essential. Let’s connect so we can optimize your exposure, your timeline, and the return on your investment, too.

If you’re thinking of buying a home, there really is no time like the present. With today’s low mortgage rates, you have a great opportunity to get more home for your money. The challenge is inventory. Like you, many buyers want to capitalize on these market conditions, and it’s leading to more buyer competition and bidding wars.

If you’re having a hard time finding a home to buy, it may be time to talk to your trusted real estate advisor about a newly built home. Early indicators show new-home construction is beginning to ramp up. While new homes alone won’t be able to fix all of the inventory challenges, this does mean you’ll soon have more options as you search for a home. As a buyer, a newly built home may be exactly what you’re looking for – it’s brand new, and with builder customization options, it’s uniquely yours from the ground up.

Here’s what industry experts are saying about new homes coming to market:

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says recent research could indicate upward momentum when it comes to new home construction. Evangelou refers to the volume of new homes where construction began during a set period, known in the industry as housing starts.

According to that research, housing starts reached their highest level since 2006 in March of this year – an encouraging sign for the industry. While they dipped slightly in April, Evangelou reiterates that the level of housing construction is heading in a positive direction compared to recent years:

“…we are currently building 24% more homes than we typically have built in April in the last couple of decades. Thus, housing construction is trending upward with housing starts likely to reach 1.6 million for all of 2021 and rise further to 1.7 million in 2022.”

As new data pours in, it further confirms this trend. According to the latest Monthly New Residential Construction report from the U.S. Census Bureau, housing starts increased even more in May, which continues the ongoing upward trend (see graph below) and indicates that ground is being broken on even more new homes.Robert Dietz, Chief Economist and Senior Vice President of Economics and Housing Policy for the National Association of Home Builders (NAHB), singles out another encouraging sign:

“It is also worth noting that the number of single-family homes permitted but not started construction continued to increase in May, rising to 142,000 units.”

This insight that there’s also an uptick in single-family homes permitted serves as an additional sign that more new homes lie ahead. It’s important to realize that the construction doesn’t have to start on these homes before you may be able to purchase one. According to the Monthly New Residential Sales report from the U.S. Census Bureau, many new homes are selling before construction even begins (see graph below):These signs are all good news for housing inventory. And as the recent challenges of rising lumber prices and dwindling lumber supply begin to improve, builders will be able to increase their production even more in the months ahead.

Bottom Line

While the inventory challenges we’re facing today won’t be solved overnight, the increase in new-home construction means your house may have more competition in the market. Let’s connect to talk about finding your dream home and the newly built homes available in our area.