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Like most U.S. cities, the Portland, Oregon real estate market experienced a significant increase in inventory during 2022. Rising supply levels made life a bit easier for home buyers in the area, giving them more properties to choose from and additional bargaining power.
But now, as we approach the summer months of 2023, it seems that housing market inventory in the Portland area might be dropping again.
A couple of recent reports have shown a downward trend in terms of supply levels. This trend has affected the entire Portland, Oregon metro area, and it could make the market more competitive into the second half of 2023.
During the second half of 2020 and all throughout 2021, the Portland-area real estate market experienced a sharp decline in the number of homes for sale. This was largely driven by a pandemic-fueled migratory shift and resulting surge in home-buying activity.
As a result of this trend, home buyers in the area found themselves competing fiercely for limited supply. This in turn boosted prices at an unprecedented pace.
In 2022, supply levels in Portland (and elsewhere across the U.S.) began to climb again. Demand declined due to rapidly rising home prices, and this led to a general cooling trend within the real estate market.
Housing market inventory in the Portland metro area began to increase during early summer of 2022 – a trend that would continue through the end of that year.
But during the first five months of 2023, the number of homes for sale began to drop again. It’s too early to say if this is the start of a sustained trend, or a short-term market correction. Either way, it could make the Portland real estate market more competitive over the coming months.
Real estate market inventory is often measured by the number of “months’ supply.” This metric indicates how long it would take to sell off the current inventory of homes on the market, given the current sales pace in the area.
When measured in this way, housing market supply levels within the Portland, Oregon metro area have declined over the past few months. The short version is that there are fewer homes listed for sale today than at the beginning of 2023.
A recent report from Realtor.com also revealed a slowdown in the number of homes coming onto the market. According to their May 2023 report, the number of “new listings” within the Portland-Vancouver-Hillsboro metro area declined by nearly 29% over the past year.
That same report also showed a 51% increase in the total number of active real estate listings within the Portland-area housing market. And this underscores the point made earlier. While supply levels have increased year-over-year, the monthly figures show a different story.
Home buyers in the Portland area might read this report and think: “Oh no, there goes the real estate market again.”
After all, we all remember the hyper-competitive real estate market conditions that developed in the early stages of the pandemic. Back then, a severe inventory shortage led to bidding wars, rapid price growth, and a lot of headaches for home buyers.
But things will likely be different this time around. Even if inventory levels continue to decline into the second half of 2023, we probably won’t see the kind of fierce competition that occurred over the past few years.
For one thing, there are fewer buyers now when compared to 2020 and 2021. Higher home prices and mortgage rates, along with general inflation, have reduced the pool of qualified home buyers. So there’s less demand these days.
Even with a reduction in supply, the Portland real estate market probably won’t experience such frenzied conditions anytime soon. It’s a cooler market in 2023, regardless of what supply levels are doing.
As a home buyer in the Portland area, you might have an easier time finding a suitable property within your budget. The reason for this is something we’ve already stated. The Portland metro area experienced the second-biggest increase in active real estate listings over the past year.
Still, the local market could become more competitive for buyers later in 2023 – especially if the recent inventory declines continue going forward.
You can increase your chance for success by making a strong offer the first time around. To do this, spend some time reviewing recent home sales in the area where you plan to buy a home. This will help you determine the best offer amount, based on what similar homes have sold for in the same area.
You can also benefit from expanding your search area as much as possible. Inventory levels, home prices, and competition can vary from one city or community to the next. So you might be able to get more house for the money, and with less hassle, just by shifting to a different ZIP Code.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.