Gabrielle Enfield in The Portland Business Journal!

Market madness

The numbers tell the story of Portland’s hyper-competitive real estate market.

Most notable is the inventory of available homes. A 3-month inventory is considered healthy, and that’s close to where the market was in January 2015, when the inventory of homes for sale was 3.4 months, according to the Regional Multiple Listing Service. By January of this year, the number had dropped to 1.8 months.

“When inventory’s tight, it makes for a challenging market to buy in, and it can leave people bewildered unless they have good support going through the process,” said Danielle Hale, chief economist for REALTOR®.com.

If you break Portland’s inventory down by the number of houses for sale, there were 5,671 active listings in January 2014. That number was 3,518 this past January, according to RMLS.

No one is forecasting a meaningful increase in inventory anytime soon, in part because homeowners who don’t have to sell see little upside to doing so now.

“If you are selling and moving out of state, it’s pretty straightforward. If you are trying to sell and stay here, it’s a sticky wicket,” said Lance Marrs, a principal broker with Living Room Realty. “There continues to be a traffic jam.”

At the same time, the number of REALTORS® fighting for listings is growing. The number of licensed agents in the Portland area jumped from 6,400 in 2014 to more than 8,800 last year, according to the Portland Metropolitan Association of REALTORS® and the East Metro Association of REALTORS®.

That’s about 2.5 REALTORS® for every listing. Of course, REALTORS® are also representing buyers — and some may not be all that active — but that clientele presents its own challenges, especially as home prices continue to march north.

In 2013, the average sales price for a Portland home was $333,600. Today, according to RMLS, it’s about $430,100. Newcomers to Portland are a major contributor to rising prices. Many of them are arriving from higher-priced locations in California, Washington, even New York. They’re making cash offers, or at least hefty down payments. While bidding wars have backed off a bit, they are still common in desirable neighborhoods.

“It’s become fairly regular,” said Jules Fedota, a broker with Hasson Company REALTORS®. In 2017, Fedota and her business partner, Myles Faulkner, did 41 deals; more than 80 percent of them were multiple-offer situations.

It can be a long, painful experience for cash-strapped buyers and their REALTORS®, who are writing more offers than they used to and are, in many cases, going for long stretches without closing deals — or getting paid.

“I wouldn’t want to start out in this market,” said Marrs, who has been a REALTOR® here since 1995. “But on the flip side, you could make the strong argument that those who started out more recently don’t know any different in terms of market conditions or inventory levels. An agent could benefit from that, because they don’t know what they don’t know.”