Home sales in the Portland area jumped by $1.9 billion in 2013 as prices rose and willing buyers flooded the market.
Nearly 27,000 homes traded hands in the year, according to Regional Multiple Listing Service sales numbers released Wednesday, up 14.3 percent from a year earlier. They sold for a combined $8.32 billion, a 29 percent increase from 2012.
The year’s median sale price was $265,000, an uptick of 12.8 percent.
It was the second calendar year of recovery in prices and sales after the housing crash. Rising prices in particular characterized 2013, far exceeding industry watchers’ expectations.
“We had a terrific rebound year for housing,” said Jeff Wiren, a principal broker with Re/Max Equity Group in Beaverton. “It was year where we saw some very good appreciation, and low interest rates certainly helped with an increase in buyer demand.”
But rising prices, especially for low-end homes, have started to affect affordability. That, combined with mortgage rates that are expected to continue to rise into 2013, will curb buying power.
It’s already started to slow home-price gains. Most economists and real estate professionals expect that prices will continue to rise in 2014, but at a slower rate.
For all the activity, homeowners remained relatively unenthusiastic about selling. Throughout 2013, the inventory of homes on the market stayed below five month’s worth at the year’s sales rate. An inventory of less than six months suggests a seller’s market, where demand outpaces supply.
In December, the supply was at 3.2 months — not the low-water mark for the year, which was was 2.5 months reported in May, but lower than reported in December 2012. That sets the stage for another year similar to 2013, characterized by intense competition between buyers.
That may be amplified early in the year as buyers try to jump ahead of the expected hikes in mortgage rates.
“If prices are going up and interest rates are going up, the people who really want to buy may want to speed up their process,” said Dustin Miller, a broker with Realty Trust Group in Lake Oswego.
Sellers, meanwhile, remain relatively reluctant. A significant (though difficult to measure) portion of homeowners have too much mortgage debt and too little equity to sell. Others may have built up enough equity to escape an “underwater” mortgage but simply haven’t realized it.
December’s sales numbers, also released Wednesday and reflecting a typically slow month for home sales, showed 1,782 homes were sold. That’s down slightly from November, but up 1.3 percent from December 2012. The median sale price for the month was $267,300.
Another 1,484 sales were pending and are generally expected to close in coming months.
— Elliot Njus