In today’s video, I’m going to share the market update in the Portland metro area. I just had to get out of the office, so I’m out here in the tennis club outdoor court bench.
So, one big change that is coming, the first one is that basically RMLS, which is the regional multi-listing services that they agreed to follow the NAR settlement. So what it means is that they’re not supposed to put agent’s fees anywhere on RMLS. “The offers of compensation can still be made off MLS but will not involve our MLS in any way.”
So nobody will know whether a listing is sharing or paying the buyer’s agent’s commission or not. We call it the BAC, buyer agent’s commission. And the other change that they have to do, “there will be a requirement for a written agreement to be in place for MLS participants working with the buyers before any home touring is conducted.” This has pros and cons too, but basically, those are the two big changes.
These changes will be implemented by August 17th, 2024 which is about a month delayed because I believe the settlement due date was mid-July. So they’re giving a little bit of maybe extra one month to get used to the changes. And they’re working on the policies, the systems, the data field and everything. So we’ll see what kind of things are gonna come up.
So a few thoughts, I made a video about this before, but a quick few thoughts are that in my opinion, if a seller is not offering the buyer’s agent’s commission, there’s a good chance that some of the buyers may not be able to afford to buy that house that doesn’t offer the BAC, because what it means is that the buyer has to pay the buyer’s agent’s commission.
But in order to see a house, Typically, there are couple of ways to do it. You can call the listing agent or you can hire a buyer’s agent. When the changes come, you have to sign an agreement with the buyer’s agent that they’re going to work with this buyer’s agent for the day, for the week or for the whole time.
That means if a listing doesn’t pay the buyer’s agent’s commission, the buyer has to pay that buyer’s agent’s commission. And that can be pretty expensive. Typically buyers don’t have enough cash because of the down payment, closing costs, they’re cash poor. And with this rule, it really hurts the buyers in my opinion because the affordability even goes lower than what’s provided by the high interest rate environment. So it’s tougher for the consumer. That’s for sure. We’ll see how it will play out.
Enough of that, the law change. So looking at the Portland metro market, May 2024 inventory is just about the same. And then the average sale price went up compared to April, even 3.1% went up. Compared to May of 2023, 4.5% went up. Pending sales are up compared to last year of May, about 8.9%. And then the total market time has increased a little bit. But that doesn’t say much. Median sale price compared to May of 2023, 6.3% went up. The home price is still going up. Some say that rates gonna really hurt the home prices. I know there’s some people on Twitter world that the market, the home price will be slashed by 50%. I say dream on, just looking at the inflation, it may actually go to the opposite. It may double in the next 10, 15 years. Well, this isn’t guaranteed, but when milk goes to $10 a gallon, you can’t expect the house price to go down in 50%. It will go up almost like double. That’s what inflation does. The money doesn’t have as much value.
Here’s one interesting. I’m Gen X, by the way, and this home buyer, the home ownership by the generation group. So all buyers percentage, Gen X is like 4%, which kind of made me think, Gen X is just trying to make money. They’re happy with the home that they have. That’s fine. Gen Z is 3%, the silent generation 4%. So they’re like a lowest group. The biggest groups are the millennials. There’s two different, the younger one and older millennials. It’s kind of confusing, isn’t it? And then there’s the baby boomers, the younger ones and older ones. So they are pretty much like 90% combined. 38%, the biggest group is the younger millennials, 25 to 33 years old. They’re about every, you know, two to three homes are bought by them. So this is kind of interesting data in my opinion. And obviously the baby boomers are downsizing.
That’s what it means. So that’s pretty much it. I mean, everything else is pretty much the same. I like to see the lockbox in the Portland, like a weekly 20,000 lockbox access is healthy, but it’s slightly below. I hope that makes sense.
Oh, I actually have one more quick, the New Home Builders Association released this data on June 6th, 2024. Here’s a house price appreciation for US. It’s quite good data, in my opinion, 2013 Q1, 2.2% appreciated. Now, 2022 Q1, during the pandemic, before the interest rate went up, we had 19.5% home appreciation. This is countrywide and very abnormal. So when the home price goes up that much in one year, you can expect some downturn, right? But no. The next year, 2023 Q1, 8.1%, even at 7 or 8% interest rate. And 2024 Q1, just now, people are saying the market is crashing, but the reality is it’s going up 6.3%. So as I mentioned before, when you listen to the news media. They need to make a living by dissecting data and then blowing up to make it into news. It doesn’t have much value. You know, listening to those like micro-dissected and number driven news. Just look at the annual appreciation 6.3 percent. That’s how much it went up since 2023 Q1. So I hope that makes sense.
So here’s, I mean, pretty much the blue means that it’s been appreciating, 67%. Where the hell is that? I’m guessing somewhere in the dark blue, maybe Florida, Arizona, Montana, Idaho, East Coast. Yeah, I mean, everything’s blue. Again, this is the inflation, the home prices, even at high interest rate. This basically tells me there’s enough money out there.
And the other thing is a troublesome thing is that institutional home buyers are still competing against the regular home buyers. What I mean by that is with the capital funds, owning thousands of homes, which in my opinion is not the best for the common good. It works in a capitalistic society, a company can buy as many homes that they can. But when you do that, regular folks become renters. And forever renters term came out about a decade ago. And now forever stuck as a renter. That could be the next 20 years if they (institution buyers) own more single-family homes or starter homes. So that’s why I advocate for homeownerships, guys, because it’s a battle. It’s a battle between have and not have. I’m not trying to become like a communist here, but individually you need to start owning assets, whether it’s a a laundromat, whether it’s like a multiplex or a single-family home.
Primary home is going to become an asset. When you’re paying and living in your house, people say it’s not an investment, it is. Trust me, primary homes are investments because it will give you leverage in the future to do something when the equity is built and the loan principle balance is reduced. Anyways, I’m kind of losing my train of thoughts here. Thanks for watching this. If you like this video, please hit that like button and subscribe. And if you have any questions about Portland Metro Market, about selling or buying real estate, I’m here in 2024, I’m still in business, so I thank you for your support and have a great day. Bye now.
Shawn Realty 