The Portland, Oregon real estate market has generated a steady stream of headlines over the last couple of years, mainly due to rapidly rising home prices in the area.
But what might we expect from the Portland housing market in 2018? Here are some current trends that could shape the real estate scene next year, affecting both buyers and sellers.
Outlook for the Portland Real Estate Market in 2018
Let’s start with an update on home prices. According to recent real estate reports, the median sales price for Portland, Oregon was $415,000 in October 2017. That was the most recent data available at the time of publication.
That’s actually down a bit from the previous month. In fact, the median sales price in Portland dropped for several consecutive months during late summer and fall of 2017 (though the year-over-year figures rose).
These trends foreshadow what the Portland real estate market might be like in 2018. After a couple of years of overheated price growth, it seems that home values in the area are slowing down a bit. Year-over-year home price gains have shrunk. During the first half of 2017, Portland was experiencing double-digit price gains, year over year. But the latest data show smaller annual gains.
Despite a possible cooling trend, Portland is still outperforming the nation in terms of price growth. In a November 2017 market report, Zillow’s chief economist Svenja Gudell said the following:
“The Seattle metro right now we are seeing it’s the second fastest moving market among the large markets in the U.S. with almost 12 percent annual home value appreciation, and Portland is seeing roughly half the appreciation at 6 percent annually right now. But still we have seen a lot of home value appreciation in Portland and it has become a much more expensive market.”
So while the Portland real estate market continues to post bigger gains than the national average, home price growth appears to be tapering off a bit. This is good news from a socioeconomic standpoint, because housing affordability has become an issue in Portland.
Tight Inventory Still a Factor
Inventory is another important factor that’s driving the current housing market. A shortage of housing supply has affected the area over the last couple of years, and it will likely be an issue for the Portland real estate market in 2018 as well. So it’s still a sellers’ market.
Recent reports show that Portland had roughly a two-month supply of homes for sale in November 2017. While that’s up a bit from the low of 1.3 months in spring of 2017, it is still below the national average.
A balanced real estate market has around five to six months worth of supply, according to economists. So by that definition, the housing situation in Portland is still very constrained. This will be another influencing factor for the Portland housing market in 2018.
The bottom line is that we are starting to see some changes, with regard to home prices and available supply. Still, the Portland real estate market will remain highly competitive in 2018, as it has been over the last couple of years. Strong demand and short supply will continue to put upward pressure on home prices, though they appear to be slowing down a bit.