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Summary: Are you thinking of buying a home in Oregon in 2020? If so, should you buy now, or wait until later in the year? This article will outline why buying sooner rather than later may help.
Home buyers in Oregon tend to have a lot of questions about the local real estate market and how it relates to the purchase of a home. One of the most common questions is: Does it make sense to buy a house in Oregon now, in later on in the year, or even in 2021?
Related: Oregon first-time buyer guide
There are some things we just can’t predict with certainty, and that includes future housing costs. Not long ago, experts forecasted that home prices in Oregon would increase over the next 12 months. But with the coronavirus pandemic going on right now, it’s difficult to make any such forecasts until the crisis has eased.
That said, the housing market across Oregon and the US continues to forge ahead despite the health crisis, though things may not be as strong as they likely would be in an ideal economic environment.
Houses in Oregon Are More Expensive This Year
It’s a supply and demand story, as always. There is a high level of demand for housing in cities across the state, but there’s not enough inventory to meet that demand. As a result, home buyers in Oregon who postpone their purchases until later in 2020 could encounter higher housing costs.
As of July 2020, the average price for a home in Oregon is $372,800. That’s a 3.5% increase from the same month last year. While it might be difficult for experts to accurately forecast what home prices in Oregon will do in the coming months, it’s likely that prices could rise as the economy strengthens as the pandemic eases.
In Depth: The Supply and Demand Situation
Let’s talk more about the supply and demand imbalance that is occurring across the state. This is one of the primary factors that is influencing home prices. So it’s support for home buyers to understand these market conditions.
Most real estate markets across the state of Oregon are experiencing a supply shortage. Inventory is falling short of demand, and that puts upward pressure on home values. In fact, Oregon has some of the shortest inventory supplies in the entire country.
Let’s look at the inventory situation in Oregon’s three most populous cities. From a housing perspective, Portland, Salem and Eugene all have something in common. These real estate markets all had less than a 2.4-month supply of homes for sale in July 2020.
Portland had around a 2-month supply, and Eugene’s is even lower. That means it would theoretically take 2 months to sell all homes currently listed for sale in Portland, if no new properties came onto the market in the interim.
Economists and housing analysts say that a balanced real estate market has somewhere around 5 to 6 months worth of supply. So these markets are clearly “tighter” than normal, from an inventory standpoint. This is true for other parts of the state as well.
Getting back to the question at hand: Does it make sense to buy a home in Oregon now, or is it better to wait until later in 2020?
Current trends suggest that home buyers who delay their purchases until later this year or next will probably encounter higher housing costs. All of these trends and forecasts make a good case for buying a home sooner rather than later.
Mortgage Rates Extremely Low
According to a recent housing forecast from Freddie Mac, the average rate for a 30-year fixed mortgage loan is expected to remain below the 4% mark for the rest of 2020, with the possibility of even going below 3% at some point before the end of the year. (It was around 3.08% when this article was published, in July 2020.)
With rates as low as they are today, this could offset any potential increases in home prices in Oregon. Even a 1% difference in interest rates can make a big difference in the overall cost of a mortgage to finance a home in Oregon.
Need a Mortgage Loan in Oregon?
If you are looking to buy a home in Oregon in 2020 or beyond, you’ll want to work with a seasoned mortgage specialist to help. Sammamish Mortgage has been helping borrowers across the Pacific Northwest since 1992, including Washington, Oregon, Colorado, and Idaho. We offer competitive rates on a variety of mortgage programs. Please contact us if you have financing-related questions or would like to receive a rate quote.