This article is a follow-up to the Portland real estate predictions we published last month. Today, we’ll look at three important trends to keep an eye on, if you plan to buy a home in Portland in 2017 or 2018.
1. Home prices will likely continue rising through 2018.
If you live in the Portland area, you’ve probably already seen the headlines relating to home prices. According to the real estate brokerage Redfin, the median sales price in the area rose to $425,000 in July 2017. In August, Zillow put the median home value at around $419,000, which marked an increase of 7% from the same month a year earlier.
Looking forward, the general consensus seems to be that house values will continue to rise over the coming months.
So that’s the first prediction for Portland’s housing market. While home prices might slow down a bit over the months ahead, they will most likely continue north through the end of 2017 and into 2018. And this is not surprising, when you look at the current supply and demand situation (see item #2 below).
2. Portland will remain one of the most competitive housing markets.
During 2017, the Portland, Oregon real estate market was cited as being one of the most competitive markets in the country. And this could carry over into 2018 as well. When you look at the current inventory situation in Portland, you’ll quickly understand why things are so competitive.
According to economists, a “balanced” real estate market has around five to six months worth of supply. But in August 2017, housing reports showed that Portland had about a two-month supply of homes for sale. It’s a tight market, where buyers have to compete for limited inventory.
Demand can also be measured by the number of days the average home stays on the market, before accepting an offer. This is referred to as the median days on market. In July 2017, homes for sale in Portland, Oregon had a median number of seven days on market. That is well below the national average, and it’s just one more indicator of how competitive things are.
Home buyers can still succeed in this kind of market. They just need to be prepared. Among other things, this means having your financing pre-arranged before you start shopping for homes. If you’re going to use a mortgage loan to finance your purchase, you can benefit from getting pre-approved before entering the real estate market.
3. Mortgage rates could rise gradually over the next 12 months.
Rising home values are a primary concern for home buyers in the area. That’s why we gave it prominent placement as the number-one housing market prediction for Portland. But rising mortgage rates are also a possibility – at least, according to a recent industry forecast.
The Mortgage Bankers Association (MBA) routinely issues forecasts for a variety of economic indicators. Their “finance forecast” also includes an outlook for 30-year mortgage rates. In their latest report, the industry group predicted that the average rate for a 30-year fixed home loan would rise to 4.5% by the end of this year, and would cross the 5% threshold by the end of 2018.
(For reference: When this article was published, in August 2017, the average rate for a 30-year mortgage loan in the U.S. was around 3.90%).
Disclaimer: This article includes housing market predictions for Portland, Oregon that were curated from various third-party sources not associated with our company. We have presented them here as an educational service to help home buyers be better prepared.