My fascination with numbers and localized inventories began last January when the metro area started off 2008 with 12.8 months of inventory. It was a huge headline, it was the most inventory recorded in almost the last 20 years. Then February and March brought that number down and it averaged 10 months until October when it started climbing again. What happened in October? The stock market crashed and took many investors out of the mix. The winter is when a lot of investors are making moves and that just didn’t happen in 2008.
November and December shot up to 15 and 14 months respectively and the number of transactions slowed considerably. Two more things worth noting are the fact that loans all of a sudden needed 45 days to close and Portland shut down for two weeks with ice and snow.
One new factor I am following and will be sharing every month is the transaction volume. Most simply put how many homes are actually selling. Transaction volume is important because price follows volume. In January of 2009 303 properties sold in Multnomah County – that’s down from 480 in January of 2008. Today the inventory for the metro area was released and it’s at 19.2 months. Here’s the scary part – last year February and March saw big increases in sales volume – This year February is on track to be the slowest month EVER with a pace that would put the total sales at 200 properties. That will drive prices down and inventory will shoot up even more with many people waiting until spring to list their homes.
The flip side is we are moving more and more to a true affordability and that will bring more buyers to the table.