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The new year brought more of the same in the real estate market, with the slim supply of homes for sale driving prices higher.
Nearly 1,400 Portland-area homes sold in January, according to numbers from theRegional Multiple Listing Service, an increase of 3.9 percent from a year earlier.
Sales were down 21.7 percent from December, reflecting a typical winter slowdown. But accepted offers — deals that will close in coming months — were up 36.6 percent from December, and 6.3 percent from a year earlier.
The brisk sales left an unusually thin supply of homes on the market, setting the stage for another competitive spring for homebuyers.
At January’s sales rate, it would take 4.1 months to sell all the homes that were on the market at the end up the month. (Six months of supply is considered a balanced market, while anything lower indicates a seller’s market — where demand outpaces supply.)
“Gone are the days when you’d schedule an appointment a week away to go look at eight properties,” said Leslie Jones, a principal broker with Re/Max Equity Group in Portland. “Today, anything that’s on the market now isn’t going to be on the market then.”
That’s pushed prices higher. The median sale price in January was $265,000, a decline of 0.9 percent from December — sale prices tend to fall seasonally — but up 6.9 percent from a year ago.
Home prices rose dramatically through 2013, ending the year up 12.8 percent by RMLS’ calculation, but those gains are expected to slow in 2014.
The higher prices also reflect changes in the mix of homes for sale. Fewer foreclosures are left on the market to bring average prices down, and more homeowners are selling to move into a more expensive home.
“The thing that kept everybody out was that prices have never recovered to what they paid,” said Peter G. Clark, a principal broker with Keller Williams in Portland. “My feeling is that now a lot of people are clear we’re not going to recover in the near term to the 2007 price point,” especially in the suburbs.
Despite improvements, some headwinds remain. In particular, the effect of an expected rise in mortgage rates remains to be seen.
Rates spiked in November and December, but despite the Federal Reserve’s decision to ease back on its stimulus program that was helping keep rates low, the average U.S. rate actually fell during the first five weeks of 2013.
“Every … increase in interest rates reduces the buyer’s buying power,” Clark said. “For a seller, every time interest rates go up, their buyer pool gets reduced.”
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