This month, I had the opportunity to meet with a lender, an appraiser, and attend a home builder's meeting where I heard two economists speak about the trajectory of the housing industry. In light of this recent insight, I wanted to share my thoughts on what the next year in real estate will look like in the greater Portland metro area. Let’s begin with some numbers from 2019:
According to recent data, the average home price increased by 1.4% over the last 12 months, with median home price up 2.5% year-over-year. This means a home that sold for $400K in 2018 would now be worth $410K. With an overall home inventory below 3 months, the Portland metro market is still favoring a seller's market.
As we move into 2020, the real estate market will depend heavily on what happens with interest rates. This week, I sat down with clients who have a 30-year conventional loan at a 3.5% interest rate, a full 1% lower than the year before at this same time. Low interest rates help to create a strong market where buyers feel confident about home affordability over the long haul. I believe inventory will stay below 4.5 months in 2020, which will keep us in a steady seller's market, with 6 months marking the shift to a buyer's market. Trajectories show home values will likely increase by 2 to 2.5%. These numbers indicate we’ll continue to move toward a healthy, balanced market in the coming year.
Competitive pricing will continue to be important to ensure properties sell in 90 days or less, with well-priced homes predicted to go relatively quickly. While buyer demand is still strong in the Portland area, as we move closer to a balanced market, buyers shouldn’t have to offer substantially more than the list price or compete with many multiple offer situations to secure great properties. While some homes will still see bidding wars, the intensity of competition for buyers is predicted to level out a bit.
If you’re looking to sell in 2020, inventory levels are still on your side - with less homes available for buyers to see than the historical average, this is a great time to enjoy some extra leverage in the marketplace. If you’re looking to buy in 2020, you have an important factor on your side as well: phenomenal interest rates that keep your mortgage payment affordable. It's an excellent time to refinance your home and lock in at a lower rate if you didn't have a chance to handle that in 2019.
As always, there’s no crystal ball when it comes to real estate but over the last 60 days, the information I've gathered from experts and my own on-the-ground experience have showed me Portland will be a great place to live in 2020. If you have ANY questions about what these projections might mean for you in the coming year, please don’t hesitate to hit ‘reply’ or reach out via phone. I’d love to treat you to a coffee, beer, or beverage of your choice to talk about your best real estate strategy in 2020.
Lastly, I wish you and your family a Merry Christmas & Happy New Year! I hope the next year brings you lots of joy, laughter, amazing new memories, good health, and many blessings!!! Thank you again for a wonderful year and for being a part of my community of family, friends, and amazing clients. Enjoy this special time of year and do your best to take a break from work and relax with your loved ones! :)
P.S. Make sure you don’t miss next month’s newsletter! I have some BIG & EXCITING NEWS TO ANNOUNCE in January!!!
