The good news is that the housing market in Portland, Oregon remains strong. This is despite the surge of the Delta variant, which has understandably put many people on edge. Fortunately, the housing market in Portland, OR is still healthy heading into the last quarter of the year. That said, there are signs of a potential slow down as we’ll discuss later.
On the bright side, low interest rates continue to make home-buying an attractive option for people in the Portland area. It’s the main driver of the continued health we’re seeing in the market and it’s why 2021 has met or exceeded the sales numbers of the past four years. It’s likely that people will continue to take advantage of those rates into the new year as the Fed may consider an increase at some point late next year. Fears of another housing market bubble bursting could slow things down as well, but for right now, there’s no reason to panic and it’s still a seller’s market.
Read on for some key numbers in the current Portland real estate market. The main takeaway is that if you’re a first-time homebuyer, or need more space in a bigger home, it’s still a great time to buy. Likewise, if you’re considering downsizing into a smaller home, then these numbers will interest you as well.
Note: The statistics are for the Portland Metro area including counties in Washington, Multnomah, and Clackamas.
Median Sold Price
Looking at the numbers for the Portland Housing Market for the third quarter shows strong sales, but perhaps the beginning of some downward trends. The median sold price for the third quarter is $515,000. It’s important to note that the median price is not the same as the average price. The median price marks the halfway point in pricing with higher prices above and lower prices below. The average cost, on the other hand, is the total of all sales prices divided by the number of areas in a specific market such as Portland, Oregon. It’s more helpful to look at the median price because it’s closer to the real average.
Comparing the 2021 third-quarter median price of $515,000 to the second quarter median price of $510,000 we see prices have remained relatively flat. Compare the third-quarter median price of 2020, which was $449,500, and it’s an increase of close to 15 percent. This shows the market still has solid growth year over year.
Number of Homes Sold
If we take a look at the number of homes sold in the third quarter, we also get an indication of a slight slowdown. In the third quarter of 2021, a total of 10,173 units were sold in Portland. Compare that number to the previous quarter of this year and it’s an increase of 64 units. Any increase is good, however, compared to the third quarter of 2020, it’s a decrease of 113 units.
This could be a result of the stiff competition created by a hot market. High demand results in a short supply in many cases and would-be buyers are getting squeezed out due to the economic instability caused by the ongoing pandemic and other factors.
Median Days on Market
High demand means high competition, as we noted, but it also means that homes are selling much quicker. Let’s look at the Days on Market numbers for the third quarter, which is the total number of days the house is on the market from the day it is listed to the day it goes under contract.
In the third quarter of 2021, that median number was five — just one day longer than the previous quarter but still down three days from nine days in the third quarter of the previous year. So, while homes are on the market for only slightly longer, it is far from a reversal of the trend. As we noted in our last market update, these numbers are still very impressive when compared to the number from the first quarter of 2020 when the median days on market was 22.
Upside and Downsides to an Up Market
So everything is peachy in the Portland housing market, right? Not exactly. It’s definitely better for sellers at this point. Buyers, on the other hand, are at a disadvantage. They are making higher offers on a smaller number of homes that aren’t on the market for long. Not everyone who wants to buy a home in the current market can do so and this also favors those with more money to spend.
On the flip side, as the number of available homes in the market decreases, the opportunity for real estate investors increases. The current Weeks of Supply in the Portland Metro area is 4.1, which is a 6.0 decrease over last year. The Weeks of Supply looks at the number of months it would take for all the homes currently on the market to sell. Four to five months is the average so that is encouraging news but it does show that supply is shrinking. This is caused in part by an increase in out-of-state buyers relocating to Portland even as overall population growth has decreased. Net migration to the area contributes to the majority of that growth. That’s the number of people moving to the city minus the number of those moving out.
One positive thing to result from the pandemic is a low interest rate on mortgages. As of this writing, the average mortgage rate on a 30-year fixed-rate mortgage sits at 3.048 percent. A 20-year fixed-rate mortgage is 2.633 percent, with 15-year and 10-year fixed rates at 2.115 percent and 2.052 percent respectively. With many Americans, including Portlanders, rethinking their live/work situations during the pandemic, they are likewise anxious to take advantage of these low rates.
Looking toward the future, it’s difficult to predict with any certainty what coming changes will affect the housing market in Portland. After all, we’re still waiting for the post-pandemic reality to hit. There may be challenges to meet demand and certainly, interest rates may rise. Buyers need to show patience during this time. As for sellers, it’s still their market and it’s a good time to take advantage.
The data cited in this market update was sourced from multiple places. It’s subject to change over time and is only intended as a snapshot of the Portland real estate market in September 2021.