I think one of the most under reported stories about the real estate market today is just how close to normal our markets are. What we keep hearing is how far off we are “from the peak”. Well, “the peak” was unsustainable in any market so, why are we comparing our current market’s health with such unrealistic statistics. For our market here in Portland Oregon, inventory levels are currently at 6.5 months (inventory levels are calculated by taking the current number of active listings divided by the number of pending sales in any given month). In fact, Happy Valley was one of the first and hardest hit markets in the Portland metro and it has reduced it’s inventory in line with the metro average as well. The Portland metro started out in January of this year at 19.2 months of inventory! Not a bad adjustment. In comparison, the time period between 1998 and 2002 experienced monthly inventory levels ranging from 4.1 to 10.1. Averaging mostly between 5 & 6 months of inventory until the spring of 2003. We are currently carrying about 3000 more listings than we averaged during that time period however, we had approximately 350,000 fewer people then as well.
In wrapping up this year, it is exciting to hear such statistics as “"The affordability equation is now at its most favorable point for buyers since 1970.", “The 64% jump in pending sales is the largest same-month increase since February 1996.”, “New home inventory, on a non-seasonally adjusted basis, is at its lowest levels in over 14 years.” and “The 30-year (mortgage rate) has never been this low since Freddie Mac began its weekly survey in 1971.” All of which came out this past week.
After the correction we just went through, normal is ok. In fact, welcome. So, it’s time that we started acknowledging, better yet, appreciating what we have instead of dwelling on such unrealistic comparisons. It is time to enjoy the sun rise on a new day, no matter how “normal” it might feel and let yesterday, be just that.