Damand outstrips home supply


With the housing market stabilizing after years of decline, buyers who had been waiting for a bottom are now showing up in force.

But home-sales numbers released Thursday by the Regional Multiple Listing Service show sellers remain on the sidelines. In June, demand outpaced supply to a degree not seen in more than five years.

The 8,799 homes on the market would sell in 3.9 months at June’s sales rate. Six months is considered a balanced market, and anything less shows more demand than supply. The last time the measure was lower was March 2007.

“It’s not like we have a shortage of buyers,” said Brian Houston, the principal managing broker at Coldwell Banker Seal in Portland. “There are buyers ready and able, ready to go. We just have a shortage of homes.”

Would-be homebuyers have been lured back to the market by the gathering consensus that housing has started to recover. Homes are more affordable but are no longer losing value.

Meanwhile, mortgage rates continue to hit record low after record low, amplifying that affordability. On Thursday, the average rate for a 30-year fixed mortgage fell to 3.56 percent, according to Freddie Mac. That’s the lowest since long-term mortgages began in the 1950s.

Deals closed on 2,244 homes during the month. That’s fewer than half the number of transactions recorded that month at the market’s peak, but it’s a 14 percent increase compared with a year ago. Buyers and sellers agreed on a price on another 2,435 homes, most of which will be finalized in coming months.

The limited home supply and competing buyers have pushed prices higher. The median sale price in June was $242,000, an 8.6 percent increase compared with a year earlier.

But that hasn’t yet galvanized homeowners to sell. June brought 3,208 new listings, 2.1 percent more than a year earlier. Still, new listings for the year to date lag 2011 by 6.8 percent.

Many homeowners who might otherwise sell are hoping prices will continue to rise, said Nick Krautter, of Keller Williams Realty in Portland.

“I just don’t have as many sellers coming to the table as I would hope,” he said. “The crystal ball question now isn’t, will prices go up? The crystal ball question now is, how much do you think it will it will go up over what period of time?”

To that end, some move-up buyers are choosing to rent out their old house instead of selling it, Krautter said. Slow production of new apartments during the recession means fewer are vacant, creating more competition among renters and allowing landlords to charge higher rents.

And other would-be sellers have asked real estate brokers to evaluate their home, but aren’t happy with what they learn, said Mickey Lindsay, vice president of Beaverton-based Oregon First Realtors.

“It’s nice to see prices are going up a little bit, but most sellers putting their homes on the market are still surprised how much their value has fallen,” she said.

Elliot Njus
July 13, 2012

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