By Living Room Realty, January 15, 2019
December 2018 is a Seller’s market*
Home For Sale in December 2018: 1889 units.
• Down 20.5% compared to last month
• Up 31.9% compared to last year
Home Closed in December 2018: 648 units.
• Down 17.3% compared to last month
• Down 26.4% compared to last year
Home Placed under Contract in December 2018: 561 units.
• Down 16.3% compared to last month
• Down 5.1% compared to last year
Click here for the full Market Report
Wait… does this report say “seller’s market”? Yes, yes it does. But, is it? NOPE. It is still a neutral balanced market currently in my opinion. So, why does this say “seller’s market”? Because the program I use to generate these reports does an automatic ‘seller’ or ‘buyer’ market summary basing their assessment on what we call ‘months of inventory.’ You ready for a more technical explanation this month?
‘Months of inventory’ is the fifth chart on the full report and is a figure that literally means that, given the current pace of home sales, the number of months it would take for the current inventory of homes for sale to sell. Well, great, but what does this really mean? A quick rule of thumb on how this is used by market watchers is the following (and this is how this program automatically decides what kind of market we are in):
Buyer’s market = more than 6 months of inventory based on closed sales
Seller’s market = less than 3 months of inventory based on closed sales
Neutral market = 3 – 6 months of inventory based on closed sales
So, when you look at the fifth chart, we have just statistically dipped to 2.9 months of inventory which technically = seller’s market.
But, look deeper. Why are we at 2.9 months of inventory? Because a ton of sellers decided to just pull their homes off the market for the holidays. So, inventory dropped. You will also notice that closed and pending sales were down from the previous month. In addition, average price per square ft went down vs November, days on market went up, etc.
Now, this is not a big downturn in Portland from November. It is just the cyclical nature of our market each year, combined with an overall cooler market from the last 5 years. December is SLOW. People are thinking about Santa, not selling. And who wants to move during all of the holiday celebrating? Mostly nobody unless they have to. So, nothing has changed, really, and I don’t want people to think that something HAS changed and gone back to last year and that we are now in a seller’s market.
As the days get lighter and interest rates change approaching the Spring, the market might be moving in either direction. We will have to watch and you know I’ll keep you informed.
Click the link above to see the full report.
