We’ve passed the midpoint of the year, which means a lot of home buyers in the Portland, Oregon metro area are already looking ahead to 2018. And many of them have the same question:
Does it make sense to buy a house in Portland right now, or would I be better off waiting until 2018?
Answering this kind of question requires equal parts soul-searching and market research. To help you with the market aspects, we’ve compiled some recent stats and trends. The following information will help you weigh the pros and cons of buying a home in Portland now, versus waiting until 2018.
Buying a Home in Portland Now, Versus 2018
The first thing you should know is that home values across the Portland, Oregon metro area have risen significantly over the last couple of years. In fact, the city has far outpaced the nation as a whole, in terms of home value appreciation.
For example, the latest Case-Shiller Home Price Index showed that home prices in Portland rose by 9.2% from March 2016 to March 2017. That was the second highest annual gain of any city tracked by this particular index.
To quote the May 2017 report:
“Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In March, Seattle led the way with a 12.3% year-over-year price increase, followed by Portland with 9.2%, and Dallas with an 8.6% increase.”
This means that home buyers who decided in 2016 to postpone their purchases until 2017 ended up paying a lot more for their properties.
Will this be the case for 2018 as well? Unfortunately, no one can predict future home-price trends with complete accuracy. So it’s difficult to say. But with the current supply and demand situation in the Portland real estate market, it seems likely that house values will continue to rise in the 2018.
A Cooling Trend Ahead?
Housing analysts and economists are predicting smaller gains for the Portland real estate market over the next year or so. The general consensus is that home values in the area are beginning to slow down.
This is not the result of weakening demand. On the contrary, there is still a high level of demand and competition within the Portland real estate market. Rather, the cooling trend is a function of housing affordability.
Home prices in the area have risen much faster than wages and incomes, and this kind of trend is generally unsustainable over the long term. So it appears that the real estate market is “self correcting” in the form of slower price growth.
Housing Inventory Remains Tight
There is still something of an inventory and shortage in the area, and this will affect those buying a home in Portland now and in 2018.
A “balanced” real estate market is considered to be one with around six months worth of supply. When supply falls well below that level, you have a sellers’ market situation. This is what we are seeing in the Portland area at present. In June 2017, when this article was published, the city had less than two months worth of supply.
Home buyers who purchase a house in Portland now or in 2018 will encounter stiff competition from other buyers.
The city is attracting new residents from all over the country, particularly those who are fleeing the exorbitant home prices in California. The resulting population growth has boosted demand for housing, putting upward pressure on house values.
Will Mortgage Rates Rise Later in 2017?
Mortgage rates are another big consideration for those who are considering buying a home in Portland in 2018. The question on everyone’s mind is, will mortgage rates rise between now and 2018?
Interest rates are even harder to predict than home prices. But that doesn’t stop people from trying.
Each month, the Mortgage Bankers Association (MBA) publishes a finance forecast that includes a variety of economic indicators. According to their latest forecast, the industry group expects the average rate for a 30-year mortgage loan to inch upward over the coming months.
They predicted that rates will average around 4.4% by the fourth quarter of 2007. When this article was published, in late June 2017, 30-year mortgage rates were hovering around 3.90%.
If interest rates do rise gradually over the coming months, people buying a home in Portland in 2018 could encounter higher borrowing costs. And this might coincide with higher home prices as well.
Here’s the bottom line to all of this: Nobody can predict future mortgage rates or home prices with total accuracy. But current market conditions suggest that housing costs in Portland, Oregon will likely rise over the coming months. So a case could be made for buying a home now versus 2018 — at least where costs are concerned.
Disclaimer: This article includes various forecasts and projections relating to the Portland housing market in 2017 in 2018. These reports were produced by third parties not associated with our company. We have compiled and presented them here as an educational service to our readers.