2018’s Portland housing market was a little different than it has been in recent years. Homes aren’t moving quite as quickly as they have been, inventory is up a bit, and home prices are still rising but not as fast. In short, we’re seeing a shift in the housing market, so let’s dive in!
#1. The Population Boom is Fading
One of the biggest reasons that Portland home prices got so high were incoming out-of-state buyers that could afford more expensive homes. For several years, Portland was one of the quickest growing spots in the country. But that’s changed.
We’re seeing the slowest growth we’ve had since 2013. The Portland area is still growing fast (about 1.1% for 2018), but it’s not growing nearly as fast as it was during 2015 and 2016.
#2. Inventory Will Stay Tight
Portland has had very tight home inventory for the past few years. Unfortunately, there doesn’t seem to be an end in sight for this problem.
Home inventory increased some during 2018, but it’s still well below what we’d see in a normal market. We’ve had around 2 months of inventory for some time, and that’s actually an increase from what we’ve had for the past little while. (Six months of inventory is considered a balanced market).
Home construction has been very low, which hasn’t helped our inventory shortage at all.
#3. It’s Becoming a Little Easier to Buy
The affordable starter home has been especially elusive for buyers over the past few years. The market has been heavily skewed in sellers’ favor due to price increases and the lack of inventory we just mentioned.
Existing homeowners have stayed in starter homes longer because of the worry that they wouldn’t be able to find a home to move into. Plus, low interest rates enticed homeowners to refinance and stay put.
The good news if you’re looking to buy in 2019? The market is beginning to see a balance between buyers and sellers. While home prices continue to steadily rise, there are fewer offers on homes, and it might be a little easier for buyers to find something than it has been. Also, homes aren’t moving quite as quickly as they were, giving you a little more time to make an offer.
#4. Home Values Are Increasing at a Slower Rate
In the past year, home prices in the Portland area increased 0.7%. The current median home value is $426,300.
However, home prices are projected to increase a little more than that in 2019. The 1-year forecast, according to Zillow, is 3.1%.
Both 2018’s increase in home prices and the projected increase in home prices in 2019 are far lower than the steep price increases we’ve seen in the past few years.
#5. Mortgage Rates
Mortgage rates will likely continue to rise in 2019. They’ve climbed steadily for the past two years, and nobody expects that to change anytime soon. Nearly all major housing authorities agree that rates will climb to above 5% in 2019. While rates are still historically low, if you’re thinking of buying, it might be smart to do it before rates go any higher and limit your purchasing power. They’ll be between 5.0% and 5.5% for most of the year, according to experts.
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