In Portland Oregon we are almost two years into the recovery. With inventory of available homes so low it is counted in weeks the memories of the overheated market of 2004-2007 are coming back to many in the industry. I have been shocked at the bidding wars on more than one occasion. So that begs the question; Are buyers paying too much in Portland Oregon?
Agents and buyers are acutely aware that it is hard to find a home and even harder to get your offer accepted right now. It feels crazy out there! But what do the numbers really say right now.
First let’s look at where we were in May-June 2010 in the Close-in East side of Portland. [Area codes 97202, 97214, 97232, 97212]
Median Days on Market: 25
Median Price: $390,000
Average Price Per Sq Ft: $173
Then let’s look at last year 
Median Days on Market: 12 = 1/2 the days
Median Price: $410,000 = +$20,000
Average Price Per Sq Ft: $176
Now today’s market 
Median Days on Market: 6 = 1/2 the days [over 2012]
Median Price: $446,500 = +$36,500
Average Price Per Sq Ft: $190
*Effective cost due to interest rates going up 1% = an additional +$45,000
When you look at the numbers two things stand out:
1. Days on market are way down – most homes sell in a week. That means for buyers it feels like everything is moving VERY fast and in truth it really is moving fast.
2. Prices are up but the change in interest rates is costing buyers more than the rising prices, at least up to this point.
A friend of mine in Portland who has been a Realtor for twice as long as me mentioned that prices in Portland are still much lower than other west coast cities. At the end of the day as long as people can afford their mortgages and rents aren’t dramatically lower than the cost of owning then prices aren’t too high too sustain the market. The big difference isn’t so much in prices going up [they are up and still climbing] but in how fast things are selling. As prices continue their climb more sellers will be motivated to sell and inventory will go up bring more balance to the market.
For all the details and my notes download this PDF: Stats for Are Buyers Paying Too Much in Portland Oregon