Real Estate Headlines Rarely Peg Your Micro-Market
The nation’s home prices rose 3.2% in July; equivalent to the gain we saw in June, according to the latest Case-Shiller Index Report. Portland home prices rose 2.5%, a slight increase from 2.4% in June. However, home sales are down 3.3% in Portland and time on market is up 22% year to date (August over August) according to RMLS data. Interest rates are dropping and talks of a recession are slowing real estate sales. It can sound gloomy, and may seem like the market is shifting out there, but what is your reality? Where do you live? And, what can you buy?
While the national and local media vie for our attention with ear grabbing sensational headlines about the shift, what matters most is the micro-market that you live in – your neighborhood.
To fully understand the market you live in, or wish to purchase in, it is important to research the sales trends in the immediate, surrounding communities, specifically noting the number of properties currently on the market, as well as how many properties should sell in a month based on the trends of the past 6 months of sales. These numbers will tell you if you are still in a seller’s market, or if the tides have turned in your micro-market. At a quick glance, it may seem that close-in Washington County continues to be a seller’s market, but we are beginning to see pockets where the inventory is growing. As for the Northwest Hills and Multnomah County, these areas are seeing signs of a shift to a buyer’s market. However, modern homes and clearly motivated sellers are finding success here, and sales are still occurring at a decent pace.
It is important to remember that while sales may be slowing, and you may end up selling for less than your anticipated price, if you remain in the same market you should benefit on the purchase of your new home. However, if you sell in a community that has high inventory and many competing homes and then purchase in one of Portland’s hot neighborhoods with low inventory, you may face selling low and buying high. Conversely, if you move from a hot market to a slowing market, you could hit it out of the park.
Ultimately, a true real estate practitioner can put together the analysis necessary for buyers and sellers to evaluate their own community and any community that catches their attention. At ELEETE, we use our market absorption analysis to guide our sellers in predicting how long it may take to sell their home and to evaluate how their home competes in the current market. If the market absorption rate indicates that only two homes are selling each month, we will work with our sellers to position their home to be one of the top four available properties in their market. This strategy will ensure success in the sale of their home in the first couple of months.
If you are looking to put together a strategic plan in the next year or coming years, contact your ELEETE agent today, and we will keep you informed with monthly competition alerts and send you individual customized absorption rates for both the home you plan to sell and the community you aspire to live in.