The latest home price forecasts and projections for Portland, Oregon suggest that house values will rise more slowly through the end of 2017, and into the first half of 2018. But don’t let that fool you. The Portland real estate market is still very competitive due to limited inventory. Here are the latest numbers and trends.
Portland Home Price Trends and Projections
According to a real estate market report published in August 2017, 94% of homes located in Portland, Oregon had risen above their pre-recession price peaks. This means that house values in and around the city have never been higher than they are now. And they are expected to continue rising over the coming months, though possibly at a slower pace.
As of August 2017, the median home selling price in Portland was around $420,000. This represents an all-time high and a significant increase over the same month last year.
As far as home price forecasts and projections, house values in Portland are expected to climb by another 3% to 5% over the next year or so (through September 2018). But these are the equivalent of an educated guess, so they shouldn’t be taken as “gospel.”
According to David Blitzer, Chairman of the index committee at S&P Dow Jones Indices, house values across the country are expected to continue rising.
“Given current economic conditions and the tight housing market, an immediate reversal in home price trends appears unlikely,” Blitzer said.
According to OregonLive.com, the Powellhurst-Gilbert neighborhood located in the southeast part of Portland experienced the largest home-price increase, when measured earlier this year. They reported a 21.5% increase in prices during the second quarter of 2017, when compared to the same period last year.
Housing Inventory Is the Big Story
Housing inventory has a lot to do with the home price projections for Portland, Oregon. Limited supply and strong demand are expected to keep house values rising for the foreseeable future.
Just how tight is the inventory situation? Consider this. A “balanced” real estate market has around five to six months worth of supply, according to economists. In July, Portland had roughly a two-month supply of homes for sale. That’s basically a textbook definition for a sellers’ market.
Properties are selling quickly too. Over the summer, homes listed for sale spent a median of just seven days on the market before going under contract. That is well below the national average, and it’s indicative of a fast-moving housing market with strong demand from buyers.
The bottom line is that the local real estate market is still very active at competitive.
The Prospect of Rising Mortgage Rates
As if home prices weren’t enough of a concern for potential buyers, recent reports suggest that mortgage rates could rise as well.
At the time this article was published, we were seeing some of the lowest rates of the year. The latest survey results from Freddie Mac (published on September 7) revealed an average 30-year mortgage rate of 3.78%. That was the lowest average of the year, at the time those results were published.
But we don’t know how long rates will stay at this low level. According to the August 2017 finance forecast from the Mortgage Bankers Association, the industry group expects the average rate for a 30-year loan to rise to around 4.3% by the end of 2017.
Based on all of these trends and price projections, Portland home buyers probably shouldn’t expect housing costs to go down anytime soon. Chances are, they will continue to trend upward over the coming months. So a strong case could be made for buying a home sooner rather than later, at least from a cost perspective.