With fewer homes for sale than buyers who want to purchase them, Portland, Oregon has been a real estate sellers’ market for some time now. And while recent reports suggest the market might cool a bit, Portland will likely remain a sellers’ market in 2018.
Portland, Oregon a “Hot-ish” Sellers’ Market in 2018
In November, a group of economists gave a presentation about the local housing market for the Home Builders Association of Metro Portland. Among other things, they pointed out that the local real estate market is beginning to cool off a bit.
Of course, all things are relative when it comes to real estate. This doesn’t mean the Portland housing market will be “cold” in 2018. It just means that it’s cooling down, compared to the last couple of years.
According to Timothy Duy, an economist with the University of Oregon:
“It’s probably a little bit less of a seller’s market than we were experiencing a year or two ago. You’re making that transition from a super-heated market to just a sort of hot-ish market.”
As usual, supply and demand have a lot to do with current conditions in the Portland housing market, and they are driving factors in the real estate forecasts for 2018 as well.
“That’s the Reason Home Prices Are Growing”
The local supply-and-demand situation in Portland can be summed up with a single word: shortage. There just aren’t enough homes for sale in the local real estate market to satisfy the level of demand from buyers. This is putting upward pressure on home prices and making things very competitive for buyers seeking a house to purchase.
Robert Dietz, the chief economist for the National Association of Home Builders said the industry has been under-building for years. “That’s the reason that inventories are tight. That’s the reason that home prices are growing faster than incomes.”
According to housing analysts and economists, a balance real estate market has a 5 to 6-month supply of homes for sale at any given time. Portland falls well below this level, with less than a 2-month supply reported in October 2017. More than any other single factor, this is what’s making Portland, Oregon a sellers’ real estate market.
Meanwhile, the city and the broader metro area continue to attract new residents from elsewhere in the state, and from across the country. A strong local economy, natural beauty, and other factors are boosting the city’s population and bringing more home buyers into the local real estate market. And all of this at a time when inventory is constrained.
Homebuilders are attempting to ramp up in order to meet the growing demand for homes in the Portland real estate market, and elsewhere across the state. But it will take some time for new construction to achieve a better balance between supply and demand.
What Will Mortgage Rates Do in 2018?
On a positive note, mortgage rates for Portland home buyers remain attractive, as we move further into the fall of 2017.
According to the weekly mortgage industry survey conducted by Freddie Mac, the average rate for a 30-year fixed home loan has been hovering below 4% since mid July of this year. This is good news for Portland home buyers, especially when you consider that home prices in the area have been rising steadily and continue to do so.
Disclaimer: This article includes data and commentary provided by third parties not associated with our company. We have compiled them here as an educational service to our readers.
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