Clients and Friends,
We trust that this post finds you warm and well today! Oregon always throws us at least one winter curveball…
We know that our last update, entitled “Year-End Market Action Report,” was not actually the Year End report. The numbers in our previous email were November’s numbers, but December’s numbers do not come out until January, effectively creating the opportunity for another, and more true, year-end update.
We are fascinated by these numbers, because they truly do demonstrate the trend we have seen throughout 2023: real estate seemed to grind to a halt, but because both sellers and buyers put plans on hold (for a variety of reasons, interests rates being among the top), the supply and demand problem we have been experiencing at varying degrees for the past 8 years is largely undisturbed. That is evidenced by the fact that though pending and closed sales decreased in December, so did inventory levels.
You can find the Market Action Report attached via a link at the bottom of this post.
Take a look the Inventory in Months chart on page 2 of the attached report, and you get a really great overview of the last 3 years. Any time inventory is below 4-6 months, we are in a seller’s market. You can see the numbers throughout 2021 and the beginning of 2022 indicating a STRONG seller’s market. In November of 2023, inventory hit a 3-year high of 3.5 months and, even in spite of a sharp decrease (-43.9%) in pending sales from November to December, inventory in December still declined, dropping to 2.7 months. This is, of course, partly due to the fact that very few people choose to list their homes in December, but you can see that this decrease in inventory from November to December is greater than either of the 2 preceding years.
Additionally, on this same page in the Residential Trends chart, we want to draw your attention to the comparison between December 2022 and December 2023, specifically the average and median price stats which show an increase. As we mentioned in our last post, these figures are not the same as appreciation, but they are an indicator of where the money is or is not being spent. In the Portland Metro area, the average sale price is currently $598,000 and the median sale price is currently $548,000. If you look at the price range distribution chart on page 3, we have broken down why that might be the case: the vast majority of unit sales lost happened in the “under $600,000” range (correlating to the Median sale price). Sales over $600,000 were only down by 2 units from November to December. We take this as an indicator that high earners and spenders are still active in the market. While the vast majority of unit sales happen under the Median sales price, when the spending of top income-earners isn’t drastically down, that is an indicator of market confidence.
Final year to date numbers are highlighted on page 2 as well as on the chart at the bottom of page 3. Even though those numbers are down, down, down, and we would like to see them balance out more, this is a necessary correction from the high sales (in units) even from 2022. We believe in 2024 these numbers will plateau.
Finally, check out the graphs on pages 4 and 5. If the trends do what they usually do (the curves are largely the same for the past 3 years), then we will see active residential listing climb from March to April, new listings and pending & closed sales begin to climb from February to March, and average time on the market begin to drop around March.
If you are thinking about listing in 2024, now is a great time to reach out so that our team can begin strategically planning with you to accomplish your goals! We look forward to connecting with you again.
All the best,
The McCreith Team | www.themccreithteam.com
To Email: Joni McCreith
To Email: Catherine Summers
To Email: Amy McCormick
To Email: Molly Barajas
For a full, in-depth analysis, download the PDF below.