Homebuyers may have an edge as sales flatten
It appears a relatively good time to be a homebuyer in the Portland area. Mortgage rates have fallen to near-record lows, and more houses are listed for sale. Bidding wars are mostly a thing of the past.
But buyers nonetheless are sitting on the sidelines, brokers say. Sales are in a slight slump as a result, and homes are spending more time on the market.
“Sellers are putting their homes on the market and feeling it should be like it was just a few months ago, where they get immediate interest…People will come in and look, but no one is pulling the rip cord and buying.”– Micky Lindsay, the president of Oregon First Realtors
New numbers from the listing service RMLS show a Portland real estate market that’s turned decidedly flat.
The 3,757 homes sold in August represent a 2.2% decline from the same month a year ago, and sales this year through August have fallen 3.3% compared with the same period last year.
The median sale price still rose by 2.5% over the last year to $417,500 — but that’s half the rate prices were climbing last August and a quarter that of August 2017.
Homes sold in August spent an average of 48 days on the market, from the listing day to the offer day. That’s about a week longer than homes sold last year.
People looking to buy in Portland have noticed the slowdown. Jonathan Khoo, a programmer who’s moving to Portland from the Bay Area, was looking to buy his first home for less than $350,000.
Despite what he thought were restrictive criteria, he found a few options and made an offer on one this week. That house in St. Johns had had its price lowered twice since it was listed in July.
“I was actually very surprised at how long some of these homes were on the market, ” he said. “Some had been on the market for several months, which for me seems like a long time.”
Buyers are also showing more willingness to walk away from a deal, said Brian Houston, the principal managing broker for Coldwell Banker Bain on Portland’s west side. His company is seeing more sales called off because the buyer and seller couldn’t agree on who would pay for repairs.
“Buyers are taking more time to shop around, and they’re also being more picky about sellers’ repairs and the conditions of the homes,” Houston said. “It’s been a seller-ruled market since 2012, and sellers have been calling all the shots. Now buyers just are being more demanding.”
Among the reasons buyers aren’t facing the same pressure: the slower rise in prices as well as slower rent growth that has left some renters more content to stay put until the right home comes along at the right price.
Yet despite all that, sales aren’t that much slower than a year ago, and measures of supply and demand in the housing market suggest a seller’s market remains.
That might be in part thanks to low mortgage rates. Last week, the average fixed rate for a 30-year loan sat at 3.56%, a full percentage point lower than a year ago and close to its lowest level since 2016.
But “even with interest rates being so darn good,” Houston said, “it’s not like homes are flying off the shelves.”
Buyers might also be unsettled by uncertain economic news, including volatility in the stock market, a looming trade war and predictions of a recession in the offing.
“Buying a home is a bet on the future, and right now, buyers seem to be feeling uncertainty about the future,” Lindsay said. “They’re wondering what’s going to happen, and they’re just kind of waiting.”
— Elliot Njus