September Residential Highlights

Sales activity in the Portland Metro area showed improvements in closed and pending sales this September compared with September 2010, and the inventory level remained much lower than the same month in 2010. Closed sales grew 13.4% in September 2011 compared to September 2010. Pending sales were also up 17.5%, and new listings dropped 29.5%. Comparing the previous month of August 2011 with September 2011, closed sales decreased from 1,805 to 1,586 (-12.1%). Pending sales also went down from 2,187 to 1,861 (-14.9%). New listings fell from 2,879 to 2,501 (-13.1%). At the month’s rate of sales, the 10,666 active residential listings would last about 6.7 months.

Sale Prices

Average sale price for September 2011 declined 4.2% compared to September 2010. Median sale price also fell 3.8%. Month to month, comparing August 2011 to September 2011, sale price activity was mixed. Average sale price went down from $271,800 to $268,200 (-1.3%) while median sale price increased from $225,000 to $230,800 (2.6%).

Third Quarter Report

Comparing the third quarter of 2010 with that of 2011, sales activity was up. Closed sales jumped up by 21.5% (4,340 v. 5,275), while pending sales also increased by 21.6% (4,725 v. 5,747). New listings fell 27.6% (11,582 v. 8,380). In the same quarterly comparison, average sale price fell 6.9%, while median sale price dropped 7.5%.

NORTH PORTLAND —-
Previous Month’s Average Sales Price: $222,700.
Year-to-Date Average Sales Price & Appreciation: $221,400, -4.5%.

NORTHEAST PORTLAND —-
Previous Month’s Average Sales Price: $249,200.
Year-to-Date Average Sales Price & Appreciation: $267,800, -5.5%.

SOUTHEAST PORTLAND —-
Previous Month’s Average Sales Price: $216,100.
Year-to-Date Average Sales Price & Appreciation: $214,400, -8.1%.

WEST PORTLAND —-
Previous Month’s Average Sales Price: $399,100.
Year-to-Date Average Sales Price & Appreciation: $392,100, -2.2%.

BEAVERTON —-
Previous Month’s Average Sales Price: $232,100
Year-to-Date Average Sales Price & Appreciation: $212,200, -13.0%.

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People say that “life is full of surprises.” And indeed, last week’s Jobs Report contained several surprises. Read on to find out if they were good or bad…and what they meant for home loan rates.

Overall, the Jobs Report wasn’t great, but it did surprise by being better than anticipated. One thing that wasn’t a surprise was the unemployment rate which held steady at 9.1%. But the headline number came in at 103,000 jobs created, which was better than expectations of 60,000 and even higher than some of the more frothy expectations. In addition, 137,000 jobs were created in the private sector, which offset more government job losses and which was a lot better than the 83,000 private job gains expected.

Another surprise in the report was the significant upward revisions, which added 99,000 jobs to what was previously reported in prior months, and this added to the positive tone of the report. These upward revisions really change a very pessimistic jobs picture to something a bit more optimistic. For instance, last month the Jobs Report showed zero job creations and now that figure has been revised to show 57,000 jobs created. Once again, these aren’t great numbers—but they are better than bad, and they tell us that the economy is not in a recession…at least for now.

So, what did all of this mean for home loan rates? It’s important to remember that when our economy is struggling, our Bond Market usually benefits as investors seek a safe haven for their money. And since home loan rates are tied to Mortgage Bonds, our home loan rates are sometimes at their best when our economy is struggling. In a way it makes sense…in times of economic struggle, good home loan rates can help kick start our economy in other areas.

Yet, when good or better than expected economic news hits the wires, like it did with Friday’s Jobs Report, investors often move their money out of Bonds and into Stocks in an attempt to take advantage of these gains. And that’s a big reason why we saw Bonds and home loan rates worsen a bit this week.

As of today (Thursday, October 13th) rates are still great:

Conforming

30 year fixed: 4.125%

15 year fixed: 3.50%

5/1 ARM: 2.875%

7/1 ARM: 3.375%

Government

30 year fixed: 3.75%

5/1 ARM: 3.50%

Jumbo

30 year fixed: 4.875%

5/1 ARM: 3.25%

The most important thing to remember is that now is still a great time to purchase or refinance a home, as home loan rates remain near historic lows.

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