Two common real estate terms are ‘seller’s market’ and ‘buyer’s market.’ What exactly do these terms mean and how do they apply to Oregon’s current real estate climate?
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First, let’s define a ‘normal’ real estate market. Terms like equilibrium and stasis describe real estate climates favoring neither buyers or sellers.
For example, let’s imagine a tug o’ war game. If the rope is not being pulled in any clear direction over a sustained period of time, there is balance between the two opposing teams.
In real estate, ways to gauge whether one side (buyers, for example) are more powerful than the other side (sellers, for example) is not watching direction of a rope, but instead things like the supply of homes (also called inventory), how long properties are on the market (market time) and where prices are headed (market direction). These factors reveal ‘demand’ to help determine whether there are more buyers or sellers.
In much of the Willamette Valley, a typical ‘rule of thumb’ figure to determine housing supply in a balanced market is between 3 and 6 months of home inventory. If there is less than this, like the current 1.4 month home supply around greater Portland, then there is a strong seller’s market.
Markets vary within a state, or even between relatively close communities. For example, the greater Salem metro right now has a significantly higher inventory of homes for sale. As a result, there is more balance between buyers and sellers. Consequently, prices are more stable, or growing less drastically than greater Portland.
Under this 3 to 6 month guideline describing a ‘normal’ market, even Salem’s current 2.6 months of home inventory, nearly double that of Portland, is still indicative of a moderate seller’s market. This is because with fewer than usual available homes for sale, buyers compete and therefore bid up the price.
Moving on over to the Oregon Coast presents a completely different market dynamic. Jobs drive income and with the spread out nature of coastal communities, plus limited employment hubs with lower populations and therefore less real estate demand, we could expect the scales to tip more in favor of buyers and currently, that is indeed the case.
As a result of this higher housing inventory, we witness in the above coastal home price chart essentially flat home price growth.
Thinking about selling your Oregon property? It’s tough to beat selling in a seller’s market. Our current real estate climate in much of Oregon is a seller’s dream. For expert assistance and a free consultation, contact Realtor Roy Widing with Certified Realty using the convenient form below.