Portland, Oregon, home buyers could enjoy a slower real estate market in 2024, with lower home prices and mortgage rates. For these and other reasons, the Portland housing market in 2024 could be more buyer-friendly than in the past few years.
Here’s an updated look at current real estate trends across the Portland-Vancouver metro area, emphasizing the above buyer-friendly conditions.
Portland Housing Market Gentler on Buyers in 2024
Over the past two or three years, home buyers in the Portland metro area have had to contend with strong competition and fast-rising home prices. As if that wasn’t enough, many institutional investors began purchasing homes in the area, depleting already-low inventory levels.
But now, as we head into 2024, the Portland real estate market has shifted in a more buyer-friendly direction for a change.
Three noteworthy trends and developments show that the Portland housing market will be buyer-friendly in 2024.
1. A slower real estate market pace in 2024
The first thing Portland-area home buyers should know is that the real estate market is moving much slower than it did during the past couple of years. We can see this by looking at the latest real estate data for the metro area.
Earlier this month, researchers from Realtor.com published an updated housing market report with data for the nation’s 50 largest metro areas. According to that report, Portland-area homes listed for sale spent a median of 66 days on the market before going under contract.
The median “days on market” metric has increased steadily over the past couple of years. This shows that the real estate market has slowed down partly due to higher housing costs.
Two years ago, for example, the median days on the market within the Portland real estate market was around 30 days. So, it’s taking over twice as long to sell a home today compared to when the market was much more active.
This is a positive development for Portland home buyers in 2024 because it offers them more negotiating leverage. When homes stay on the market longer, sellers tend to be more amenable to buyer requests and conditions. They are often more willing to accept contract contingencies and to negotiate the final sale price.
A slower pace to the real estate market in the Portland area also gives buyers more time to perform due diligence, such as home inspections and price research. Generally speaking, buyers have more of an opportunity to “sleep on it” before making a final decision.
2. Lower home prices and slower price growth
Another positive development for home buyers in Portland has to do with price growth.
Last summer, the median home price for the Portland-Vancouver-Hillsboro metropolitan area peaked at an all-time high of around $553,000. That’s based on data provided by Zillow. After hitting that high point, Portland home prices declined slightly during 2023.
As of January 2024, house values within the Portland-area real estate market are beginning to creep upward again. But they are doing so at a much slower pace than what we’ve seen in recent years.
This is another buyer-friendly real estate market trend for 2024. Portland home buyers who enter the market over the coming months probably won’t have to worry about surging prices. The more likely scenario is that home values will undergo a slow but steady climb for the foreseeable future, more in keeping with historical norms.
The chart below, provided by Zillow, shows the median home value for the Portland area going all the way back to 2015. You can see how price growth accelerated through 2020 and 2021 before hitting the record high mentioned above. You can also see the price correction that occurred during 2023 and the slower growth rate we are currently seeing.
Lower prices and slower appreciation could improve the housing market affordability situation across the Portland metro area, especially considering that mortgage rates have dropped significantly over the past couple of months.
And that brings us to buyer-friendly market change #3…
3. Lower mortgage rates than last year
Mortgage rates shot up to a 20-year high of nearly 8% toward the end of last year. This chilled the real estate market in Portland and elsewhere across the country, increasing housing costs across the board.
Thankfully, Portland mortgage rates have declined steadily since peaking back in the fall of 2023. As of mid-January, the average rate for a 30-year fixed mortgage loan had dropped back down to 6.6%. That’s based on the weekly nationwide survey conducted by Freddie Mac.
According to Freddie Mac’s January 18 report:
“Mortgage rates decreased this week, reaching their lowest level since May 2023. This is an encouraging development for the housing market and, in particular, first-time homebuyers who are sensitive to changes in housing affordability.”
And now that the Federal Reserve is done raising rates—and considering some cuts for later in 2024—there’s a possibility that mortgage rates could drop even further. This would bring another buyer-friendly real estate market shift for Portland house hunters.
An indirect effect of lower mortgage rates could also open up more inventory for buyers to choose from. Until now, many homeowners who have been contemplating selling their homes have hesitated to do so out of fear of giving up their current low rates and getting stuck with a much higher one with a new home purchase. But as rates continue to dip, this could encourage more homeowners to list their homes for sale, which would inadvertently add to the supply of available homes for buyers to choose from.
No one can predict future Portland housing market trends with complete accuracy. But these and other real estate-related trends bode well for those entering the market in 2024. Anyone considering buying a home in Portland in 2024 should consider these trends before entering this year’s market.
Lower prices, lower mortgage rates, and a more relaxed pace to the real estate scene show that the Portland housing market will be buyer-friendly in 2024. Buyers are also encouraged to get pre-approved for a mortgage in Portland to boost further their odds of securing an affordable mortgage.
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