The June 2015 RMLS Market Action came out this evening, and we think it foretells a continuing hot real estate market in the Portland metropolitan area.
First, the pretty pictures: the first graph compares active listings at the end of each month (gray bars) to total closed sales for that month (black bars). Dividing active listings by closed sales gives you months inventory (red line), a measure that has proven to be a very good indicator of short-term price trends. When months inventory is low, prices go up; when high, prices go down, or at least stagnate. The conventional wisdom is that six months inventory represents a balanced market.
For the record, we think the conventional wisdom is wrong. A slightly lower level is balanced. Regardless, June’s inventory level of 1.6 months is the lowest since June 2005 and taken alone is inflationary. This time it’s more about increased sales than about low supply, as was the case a few months ago, though supply continues to be a major factor.
Total closed sales were up 12.2% over May 2015 and up 26.2% over June 2014.
The median home sale price in Portland was up 2.2% over May 2015 and up 10.3% over June 2014. Who was it that predicted single digit appreciation this year? Not us. We predicted low double digit appreciation in 2015 with most of it occurring in the first half of the year.
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