PORTLAND HOUSING 1Q18: A Normalizing Market Looks for a Strong 2018
- Sales of detached single family homes in the region fell 4% from 4Q17 levels, but all of the decline came from Washington County as Clark, Clackamas and Multnomah counties were all up for the quarter.
- Median prices in the region were level in Clark County but up in the rest of the region – ranging from up 7% in Clackamas to up 15% in Multnomah.
- Despite the huge demand for attached housing in the region, sales are down 24% QoQ – a decline the Metrostudy team attributes to poor marketing by developers.
Metrostudy’s 1Q18 survey of the Portland housing market shows that detached single family sales fell 4% quarter over quarter but all of that came from Washington County. Clark County was up 6%, Clackamas was up 9% and Multnomah was up 10%. The decline in Washington is not due to lack of inventory as we currently have 38 completed unsold homes and 117 unsold homes under construction.
The median list price stayed level in Clark County while the other three counties have seen anywhere from a 7% price increase in Clackamas to a 15% price increase in Multnomah. This is the 5th consecutive quarter of conservative pricing in Clark County with prices staying in the mid $400’s. It is important for Clark County to remain affordable in order to stay competitive.
“The attached market continues its struggles with sales down 24% quarter over quarter, but as I have stated many times it is a marketing issue,” said Todd Britsch, Regional Director of Metrostudy’s Portland office. “There is a huge demand for attached housing in the region but 80% or more of the projects have no website or no staff on site. A buyer is challenged to find any digital information regarding the projects or product. Most developers are not doing presales and in an environment of declining sales, presales are critical.”
Months of supply seem to be staying in that “Normalized” months of supply. Eighteen to twenty four months total supply of vacant lots and homes creates an environment that should stop price acceleration.
The market today however is a little different from the norm with a labor shortage creating higher labor costs along with the rise in materials. That said appreciation in land values should be slowing dramatically especially in Clark County with a high number lots coming to market later this year in Battle Ground and Ridgefield. The months of supply for unsold lots and homes rose slightly from 14 months to 18 months but please don’t be alarmed. Look at the comparison to 2008 when we had a 63 month supply of lots.
“I can’t seem to stress this enough that the market is normalizing,” said Britsch. “In-migration, Job growth and inventory levels have been on the path to normalization for the past year and a half. Yet when I speak to industry professionals that are outside of my reach on a daily basis the perception is the market is hotter than ever. The market is good, job growth is good. Inventory levels are at a point that should stabilize pricing. The resale inventory is climbing back to normal months of supply which is allowing for the resale sales numbers to climb by 15%. All fundamentals point towards a good year in the market.”
For information contact
Todd Britsch – firstname.lastname@example.org
About Metrostudy: Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com
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