PORTLAND REAL ESTATE MARKET - DECEMBER 2023

December is always an interesting month in real estate as the holidays impact new listings coming on the market more in December than other months of the year. New listings showed a 4.4% decrease from December 2022. This dip is part of a larger trend, with a substantial 43.9% decrease from November 2023, signaling a potential rebalancing of supply and demand.

A notable highlight amidst the fluctuations is the surge in pending sales, witnessing an 8.5% increase from December 2022. While a 9.2% decrease from November 2023 indicates a possible decline in those wanting to enter into a real estate transaction so close to the holidays. Closed sales experienced a 9.2% decrease from December 2022. This aligns with a broader trend seen in the year-to-date summary, revealing a 25.2% decrease in closed sales for the entire year of 2023 compared to 2022. This could be attributed to various factors, including economic shifts, higher interest rates, and low inventory. On the inventory front, the supply-demand balance is reflected in a decrease to 2.7 months in December. Looking at the year as a whole, new listings, pending sales, and closed sales have seen respective decreases of 18.0%, 20.4%, and 25.2%.

In terms of prices, the average sale price decreased by 2.1%, moving from $610,900 to $598,000 in the comparison between 2023 and 2022. Similarly, the median sale price exhibited a 3.0% decrease from $548,400 to $532,000. NAR stats for 2023 show 59% of buyers paid asking price or above, indicating a seller-friendly market, however 2023 also had a record number of price decreases indicating that when a house starts out at market value or the price dropped to market value, buyers were will to pay the asking price and waited for those price decreases rather than making lower offers.

The much-anticipated Consumer Price Index (CPI) was released this week with an increase of 0.3% in December. For those seeking evidence that inflation will soon be back at the Fed's target level, it wasn't the triumph it might have been. Even so, rates managed to move lower today to 6.69%. In order for rates to continue to drop, inflation needs to decrease. Interest rates dropping will increase demand of homes to purchase which will also prompt sellers to list more homes.