By Living Room Realty, June 13, 2022
At the end of 2021 I thought for sure we had plateaued-out on pricing in Portland Real Estate Market. Prices had risen by a double-digit percentage and it didn’t seem feasible to go any higher. Then the Late-Winter/Early-Spring of 2022 happened. Fueled by shrinking inventory and surging demand, prices shot up dramatically across the board at almost every price point; the million dollar plus category didn’t used to be competitive like this in Portland. Personally, I wrote a few offers that were $150k over asking that landed my clients squarely in 4th place. My refrain through it all has been: patience. There are only so may buyers out there willing to go all-in like that and at some point, something has got to give.
In spite of over arching market forces, there is always a seasonal rhythm to our market (if you want the long winded-version, please give me call; it is too much to type out. Ha!). Generally speaking, it is tough to be an Early-Spring buyer and that should be avoided if humanly possible. I knew that if buyers were patient, the correct timing would come along eventually.
Now at the beginning of Summer, the shift is on, but unfortunately it is accompanied by mortgage rates that have risen sharply. It will take 6 to 12 months for this dynamic to change listing prices of new homes on the market, but it effects competition immediately. Properties that were once getting 8 to 12 offers are now getting just a few. And for the first time for a long as I can remember, we are starting to see some price reductions.
The bottom line for buyers: as long as you plan on staying in your home for 4+ years, it is a much better time to be a buyer now than it was in January. The rate rise will be partially offset by lower sale prices and you’ve got a lot more negotiating power for repairs, credits, etc. At the end of the transaction, regardless of what you pay, you are stuck with your monthly payment. If you are happy with that number, then we’ve got a good outcome.
The bottom line for sellers: you won’t get as much today as you would have a few months ago, but as compared to any year going back a decade…you are still going to do really well on your home sale. Be prepared to be flexible.
Everyone seeks a fair deal and a desire to time the market perfectly. This always reminds me of a few quotes:
The perfect time to plant a tree was 20 years ago. The second best time is now. -Chinese Proverb
Don’t wait to buy Real Estate…buy Real Estate then wait. -Mark Twain (I think)
In the big picture I think the current market changes are positive. Over time my hope is that we will see more balance come to the market to make it fair for everyone. If you want to hear the longer and more nuanced version of this analysis…give me a call!
