How supply, inflation, interest rates, and more affect our market.
It’s time for another real estate market update, and there is a lot to discuss. We’re nearing the end of the first quarter, and we have to cover how the war in Ukraine, inflation, supply and demand issues, interest rates, and more affect our market. We’re going to unpack all of those so you can understand where the market is right now.
We’ll start with the numbers for February. For Clark County, active listings were down 2%. There were 5.8% fewer pendings and 7.4% fewer solds. For Marion and Polk counties, everything is up, and I’ll talk about why later. In the Portland Metro, active listings are down 3.6%, pendings are up about 1%, and solds are down 1%.
Our March numbers aren’t complete yet, but here’s where we stand so far. Active listings are down 14%, pendings are down about 1%, and solds are down 15%. In Clark County, actives are down 1.9%, pendings are up 14.11%, and solds are up 24.9%.
Why is there such a discrepancy between active listings and pendings or solds? Clark County has a bunch of new construction because it’s easier to build up there. The land is cheaper, and the local government makes it easy. A lot of those properties never go to the market; they’re already sold. Marion County is also improving because it’s easier to build there than in Multnomah County. If you want affordable homes, you have to relax the zoning a little bit.
What will the war in Ukraine do to the real estate market? It will keep gas prices high, fuel inflation, and disrupt our supply chains. That’ll raise both material and construction costs.
Some people out there think we’re going to see a housing crash, but it’s not going to happen. Interest rates have risen almost 2% in the last few months because the Federal Reserve is trying to slow inflation, but that will not crash our market. Why? Supply and demand. Nationwide, we are five million homes short of what we need.
Instead of a crash, affordability will become an issue. The interest rates went up almost 2%, which decreases your purchasing power by about 20%. If you could afford a $400,000 home, now you can only afford a $320,000 property. That’s why you’re seeing more sales in Marion and Polk counties. Their median sales price is only $418,000 compared to $519,000 in the Portland Metro and $506,000 in Clark County.
If you’re a seller, the market is still crazy, and you can expect multiple offers. If you’re a buyer, it’s a tough game, but you want to get in soon. Interest rates will continue to climb unless something major happens with the war in Ukraine.
Overall, the market is going to stay hot. If you have any questions about buying, selling, or real estate in general, feel free to call or email us. We’d love to hear from you.