HAPPY MOTHER'S DAY & A MARKET UPDATE!
Updated: Jun 21, 2022
Low Inventory and Rising Rates Hit the Portland Market
The real estate market this spring has been more competitive than ever before. For example, we had an all-cash buyer interested in a Beaverton home this past weekend. This home received 11 offers, some 20%+ above asking price - WOW!
So, why is the competition so heavy? A few reasons: First, there’s a lack of inventory across the Portland metro area. Second, rising interest rates are creating even more buyer urgency. And finally, the demand for homes hugely outweighs our current supply.
According to our market research and knowledge of the housing industry, we predict there will be a housing shortage here in Oregon for many years to come. Partly because there hasn’t been enough new construction coming on the market to meet demand for the past 40 years.
From 2008-2012 (during the “great housing depression”, as I like to call it), we saw housing development nearly come to a complete halt due to tanking values, and many builders owed more on the land than it was worth. With new construction so far behind, we believe it will take years for the supply to catch up to current and predicted ongoing demand.
As interest rates rise, homes available on the market may see fewer multiple offer situations, but with rising home prices right alongside them, affordability will continue to be an issue.
If you’re thinking about buying, we would recommend starting your search now as the Fed raised interest rates this week and are planning multiple additional rate hikes moving forward. If you’re thinking about selling, now is an ideal time to list before rising rates start to price out potential buyers. We are here to be a valuable resource for you and to strategize your best options.
Portland Metropolitan Association of Realtors data for March 2022:
Inventory is at 0.7 months (a balanced market is 4-6 months of inventory). The median sales price was $550,000 (up year-over-year from $477,000). The average sales price was $610,000. The average number of days on the market came in at 25 days, but most properly priced homes in decent shape are under contract within the first few days of being listed on the market.
I was blown away to see this number from Zillow: Decade-over-decade (April 2012 – April 2022), Portland metro home values have increased by nearly 145.2% - despite the market cooling off from 2017 to 2019.
A Possible Increase in Inventory on the Horizon
Home appreciation continues to rise and most offers we’re writing are a minimum of 10% over list price. If you’re a current homeowner, your equity gain has been significant over the past 24 months and hopefully you also took advantage of a refinance to lock in a rate below 3%.
As spring unfolds and summer approaches, we’re starting to see more homes come on the market and believe we’ll see an increase in inventory over these upcoming months - not enough to create a balanced market, but still great news for buyers that want more options to choose from.
Appreciating the Mothers Who Make Us Who We Are
Austin & I are very blessed to have amazing mothers. A mother plays such a huge role in our lives, from bringing us into this world to shaping who we become. As adults now reflecting back, we have the highest level of respect and appreciation for our mothers and the roles they played in our childhood and continued support into adulthood.
The love and care a mom gives her children makes such a lasting positive impact and this month, we want to acknowledge just how tough a job motherhood can truly be and how much we appreciate everything moms do for us. We see our wives everyday doing an incredible job to help raise our kids and it’s no easy task.
To all the moms and moms-to-be out there, we want to wish you a very Happy Mother’s Day and to all the kids, dads, families, and friends, we hope you find some time this weekend to show love to all the amazing mothers who’ve impacted you along the way.