Portland, Oregon is one of the most competitive real estate markets in the country, as of summer 2017. And these conditions could persist into 2018 as well. So local home buyers need all the advice they can get. Here are five tips for buying a home in Portland, fully updated to reflect 2017 real estate conditions.
1. Realize that the Portland real estate market has changed – a lot.
Portland, Oregon home buyers need to realize that the local real estate market has changed significantly over the last couple of years. House values have risen while inventory has shrunk. And both of these trends will affect you as a home buyer.
According to the real estate information website Zillow, the median home price in the city rose to around $419,000 in July 2017. That was an increase of nearly 7% from a year before. And while home values appear to be slowing down a bit, they are still trending north.
So the first step to buying a home in Portland is to understand the current nature of the real estate market, including recent changes in house prices. The local housing market has gotten more expensive over the last couple of years, so you need to enter it with a realistic sense of what you can afford.
2. Inventory is tight, so be prepared to move quickly.
In a slow real estate market, home buyers have plenty of time to look at houses, consider pros and cons, and put an offer together. But Portland is not a slow real estate market.
On the contrary, homes across the metro area have been selling at a rapid pace due to limited inventory. So when buying a home in Portland, Oregon, buyers should be prepared to move quickly when the right property comes along.
Real estate experts consider a “balanced” real estate market to have around six months worth of supply. Recent reports showed that the Portland housing market was well below that, with less than a two-month supply of homes.
In July 2017, properties listed for sale spent a median number of seven days on the market, before getting offers. That’s well below the national average. These statistics indicate a fast-moving real estate market where homes tend to sell quickly.
3. Make a smart offer based on recent sales data.
In a highly competitive housing market like Portland, home buyers should probably avoid “low-balling” sellers with below-value offers. That strategy might work in a slower market that tends to favor buyers over sellers. But Portland currently leans the other way.
The key to success is to make a strong first offer that is based on comparable sales data. In other words, you want to offer an amount that is realistic based on what people have paid for similar homes within the past few months. An experienced real estate agent can help you with this.
4. Expand your horizons beyond buying a home in Portland.
You might have to be flexible with regard to where you’re buying a home. Portland might be your first choice, but you shouldn’t discount surrounding cities that offer lower home prices.
Low inventory and rising house values are pushing some buyers into surrounding areas beyond the city of Portland. Some are looking across the river at Vancouver, Washington, to take advantage of lower home prices.
Buyers can benefit from being open-minded and flexible in a hot real estate market. You might not find the kind of home you need within your budget within the city of Portland. But such houses could be more plentiful across the broader metro area.
5. Get pre-approved for a home loan before shopping for a house.
Most people who buy a home in Portland, Oregon use mortgage loans to help finance their purchases. If you fall into this category, you should consider getting pre-approved for a mortgage loan before entering the housing market.
Sellers will expect you to have your financing arranged before you even make an offer to buy a house. So a pre-approval letter from a mortgage company can go a long way toward increasing your chance of success.
Pre-approval is a kind of pre-screening process, where a mortgage lender reviews your financial situation to determine how much you are able to borrow. This helps you in several ways. Sellers will be more inclined to accept your offer if it comes with a pre-approval letter. Additionally, you will be able to expedite your house-hunting process by narrowing the field to a specific price range.