By Living Room Realty, October 19, 2023
It’s officially Q4, 2023. If you’re in the Portland Metro real estate market right now, or considering taking the leap, here’s what’s really going on.
Sticker Price vs. Market Price
The sticker price of a home is the bare-bones listing price — the starting point of the short and long term costs of purchasing a home. Beyond that, buyers are looking at closing costs, PITI (principle, interest, taxes, and insurance), utilities, HOA, and various tacked on costs like the transportation costs of a homeowner’s work commute. The most significant cost beyond sticker price right now? Interest.
Interest rates
Interest rates are at a relative high… a 23-year high with 30 year fixed rates in the high 7% to low 8% range, without paying points (as of publish date). Our trusted mortgage lender Michael Leland of Mortgage Trust shared in his newsletter (which you should absolutely subscribe to… it’s an incredible resource):
The investing term “don’t catch a falling knife” is applicable with mortgage rates. There is momentum with rates trending higher, and that doesn’t appear to be changing in the coming days/weeks. We’re hoping for a “whipsaw,” which would indicate that rates are rebounding quickly.
There’s a sense of acceptance in the air right now… can you feel it? Buyers have adjusted their expectations; sellers and agents are beginning to price their homes according to current interest rates. As we know, interest rates and home prices have an inverse relationship. When rates first shot up this time last year, it took the market this long to adjust to the new reality. These rates are here to stay, at least for now, and we have to soldier on!
Good news? There are some really good values from a price perspective on the market right now! The sticker price of properties (flashback to 3 paragraphs ago) is not all that bad. Interest rates and home pricing have an inverse relationship: as interest rates go up, prices go down, and we are seeing the effect of this now.
Long story short… We don’t see any favorable change to interest rates happening this year. That’s where parsing the nuance of your particular home, neighborhood, the time of year, recent activity etc. are important to consider with your trusted advisors: us!
Reach out and let’s chat about your buying, selling, and investing goals in the next year. Put your trust in the Houselab Team. We’ve got you.
Jake Goodson — jake@houselabteam.com
Tony Le — tony@houselabteam.com
Michael Leland — michael@mortgage-trust.com
