Portland Metro Average Sales Price Up?

23 09 2010

“If so many houses are taking a hit on closing price, how come the Average Sales Price for Portland Homes is going up?”

 

Well, for starters, it is a big number thing.  Secondly, it is only very small increments of percentages we are talking about.

 In January we went down 3.7%, February down 3.3%, March we went up 2.6%, April up .06%, May down 2.3%, June up 5.2%, July 2.5% and August .08%.  That is a total of 1.14% year-to-date.  How it happens is simple numbers, if you take 30 sold $100,000 homes, the average price is $100,000 to start.  If 8 of them sold for a total of $18,000 more than $100,000 (one is up $1000, another $4000, etc.)—the average price increase is .6%.  Not even a full percentage.  If you take 10 gallons of milk priced at $3.00 each in your average grocery store, the average price is $3.00.  If, instead, two of those gallons were purchased at 7-11 for $3.25 a gallon, then the average sales price goes up 1.64%. 

Our market sold 156 homes above $1M last year and this year we are at 100 already with 28 pending.  This could be one big reason why the price is slightly higher.  Since $1M spread out over 13,185 closed sales is only $75.00 more for each house.  Add to it– 11 of those were over $2M and those numbers help make up for the deficiencies of the others.

THE GOOD NEWS is not that everyone’s house went up 1.14% so far this year (which is far from the truth); THE GOOD NEWS is that, as a whole– spread out over Portland’s 61,476 active, pending or sold homes to-date– the Portland Metro Area has not gone down in price for 2010 to date.  Well, at least, so far…. 

Onward!

Dustin Miller 

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August 2010 Portland Metro Market Action

17 09 2010

 So, last year was better than this year in August by 25%!  Yikes!  Where is the discrepancy?  One thing… it’s emotional.  Last year, we were tired of the recession talk and willing to step out and move forward.  Folks who hadn’t lost their jobs figured they weren’t going to lose them in the future.  This year, the glass is 1/3 full.  Closed sales down 25% and pending sales down 21.7%, plus new listings being up 1.3% adds for a little more bootstrap pulling into the Fall. As they say in the world of surfing wth boots on, you don’t have to out-surf the next shark…just the next surfer.

 The month-to-month report is more optimistic as the closed sales were down from July to August by 2.2% but pending sales were up 3.6%.  And, the prices are up a click to near 1% over last year and the month of July.  (I am still working on the best metaphor for an explanation of the prices up vs. sky is falling piece). 

 To wrap this up, in my estimation, the market is going to continue emotionally through the Spring of 2011 unless we see an improvement in the jobs sector.  We have stepped back to Fall 2008 when we were concerned with what was going to happen next as country—skip the election piece.  Oddly enough, our inventory numbers are currently mirroring the market of 2008 for the Portland Metro Area.

 The State of Oregon Economists have a blog which I keep up on to get new info with their spin which is always fun.  I frequently serve balls into their court to challenge their reports.  However, it does give decent update on what is going on from their perspective. 

http://oregoneconomicanalysis.wordpress.com/.

More soon,

Dustin Miller