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Portland housing market report is out for June 2019. June is an important month because it’s usually the last month of the spring and pre-summer selling season because starting from July, the market slows down. June has shown another hot real estate market with shorter average days on the market compared to 2018. Prices are overall steady. Prices fluctuate from month to month but overall they are same as last year. Portland has been showing a slowdown in the real estate market since 2018 and the drag is still there although it hasn’t seemed to escalate in any meaningful ways. One important thing to notice is the fact that 30 year mortgage rate is really low at this point being around 3.75%, which is about the same rate as in 2017. However, the real estate market has not ignited again. Things are going steady this time with the low rates and I expect the continued steadiness in the next few years unless the mortgage rates shoot up. The job market is doing great and many home buyers are finally able to purchase a home with low rates with steady home prices. The only challenge in the Portland metro market is the lack of inventories.
June 2019 real estate market data is below.
Overall (Detached single family homes & townhomes & condos) Median Sold Price: $432,000 Average Days on the Market: 29 Days Median Days on the Market: 12 Days New Listings: 1462 Pending: 1052 Sold: 927
Detached Single Family Homes Median Sold Price: $450,000 Average Days on the Market: 24 Days Median Days on the Market: 9 Days New Listings: 1164 Pending: 867 Sold: 762
Detached single family home market is still performing very
strong. Compared to the data from June
2018, single family houses are selling faster than last year. The number of new listings have gone down a
little bit from 12 months ago and we are still faced with a low level of
supply. The demand is still stronger
than the supply overall. However, for
homes over $500,000, it’s not so much of the case. Homes over $500K are more on the unaffordable
side by many and the demand is a lot lower than it used to be two years
ago. Buyers are still there for every
price range but they are choosier than ever.
Detached single homes below $450K are more in demand because more people
can afford them. You can get a nice 3
bedroom 2 bath house for $450K or under in a lot of good neighborhoods
including Beaverton and Hillsboro where qualify if life is better for young
families (unless of course you define it by walkability and entertainment
Starting from July to the end of the year, things will
continue to slow down due to real estate being highly seasonable. It will be interesting to see just how slow
it will get compared to 2018 fall and winter market when the 30-year mortgage
rates were around 5% high. I suspect the
rates will continue to stay low towards the end of the year at least. If the US economy gets a second booming, then
the rates will go up but it seems like that’s not the case. Things are very stagnant.
Portland’s real estate market came back with a bang in May after a sluggish start in 2019. The market was so hot in May unlike any other months so far in 2019. For detached single family homes, the market was hotter than May 2018 with shorter days on the market this year. Condo markets are still showing a slower market and it brought down the combined market average a little but not by much. The real estate market report from May definitely makes one wonder where the Portland market is headed and why the market turned out to be so hot when the trend has been showing a slowdown.
Portland Housing Market Comparison
Detached Single Family Homes (May 2019)
Median Sold: $475,000
Average Days on the Market: 26
Median Days on the Market: 8
New Listings: 1400
Family Homes (May 2018)
Median Sold: $445,000
Average Days on the Market: 27
Median Days on the Market: 8
New Listings: 1395
May is typically the hottest selling season of any given
years. I was really looking forward to
see the numbers from May 2019 because if the numbers prove a slow market with
prices dropping or staying put, it would have confirmed the housing market
slowdown and would have contributed to a slow market forecast for the rest of the
year. May median sold home prices hit
the new highest record. $475K for detached single homes and $455K for all home
types including condos and townhouses.
Homes also sold very quickly.
More homes went pending in May 2019 than May 2018. I don’t get it. What’s going on with our housing market? Was all the forecast about the market slowing
It’s the low mortgage rates.
The answer lies in the plummeting mortgage rates. It gives buyers more buying power and a sense
of optimism and urgency to buy while the rates are low. 30 year fixed mortgage rates officially hit
below 4.0% as of now. Most quotes hover
around 4% these days and that’s lower than it was in 2018. That low rate reminds me of 2017 when the
market was so hot in the Portland metro.
Will mortgage rates continue to drop?
It certainly seems to be the trend that the rates keep on dropping so long as the stock market is also dropping. The stock market continuing to drop amid increasing fear of global slowdown from trade wars between the US and China. If the stock market continues to drop into a correction or even a recession, rates will continue to drop. The Portland market is enjoying a very low unemployment rate. It’s unknown whether the overall slowing economy will affect the employment sector and if so how much. For now, it’s a great time to buy if you have a solid job with good credit while the rates are low. I’ve seen 30 year fixed mortgage rates go as low as low 3% in 2016 and it’s safe to assume that is pretty much the very bottom if the rates drop more in the future. It’s also possible that the economy will shake off the current downturn and mortgage rates go up as a result.
Home Bidding War
Unfortunately, when there is a competition to lock in low rates to buy a home, there will be other buyers. Bidding war is still a thing in the Portland market depending on neighborhoods and a home’s price point. Home inventory is still pretty low compared to the demand in the Portland metro area. The amount of inventory even dropped in May from April. Any good home priced competitively will receive multiple offers even now. We’ve seen more multiple offers in May as more home buyers shape up to purchase.
What will the rest of
2019 housing market look like?
My bet is that things will slow down a bit after July but this summer and fall market will be hotter than 2018 because of the current low rates. 2018 fall and winter market experienced a major slowdown and that seems to be because of high mortgage rates at the time when it reached over 5%. So long as the rates stay low around 4% or lower, even our fall housing market will stay hot. This means that homes will continue to appreciate higher than originally expected. 2019 housing market forecast prepared by anyone at the end of 2018 assumed that mortgage rates will continue to climb because it seemed to be the trend at the time. However, because of the unexpected low mortgage rates, the housing market should continue to heat up. The Portland housing market will react very sensitively to rates as time goes on.
Portland east side real estate market has cooled down recently. The price point is very high in inner SE and NE Portland neighborhoods, so naturally there are fewer buyers for homes over $600K when the market median is around $425K for detached single family homes. Houses sit on the market longer nowadays also from the general cooling down of the market unless they are under $400K. In neighborhoods like Alameda, Irvington, Ladd’s Addition, and Laurelhurst, the median sold house value is over $700K. These are some of the most expensive neighborhoods on the east side. Despite the general price point being high, there is still a lot of demand for the right house. Let me emphasize the phrase “right house”. The demand is for a good old house. Houses in these neighborhoods are older homes from 1920’s. Despite the amazing locations, older homes come with more physical issues in general that can be daunting for home buyers. There is a whole array of old home issues including foundation settlement, work done without permits, no garage, radon gas, and general “funkiness” that many buyers don’t quite seem to agree with. Buyers these days spending $700K or more are very careful in what they are buying these days more than ever. If a right house comes up, it’s still a bloodbath.
I have been involved as a buyer’s real estate agent recently for a few deals in these neighborhoods including Alameda, Irvington and Ladd’s Addition. The houses my buyer wanted were nice houses that put a checkmark in all the boxes. I’m talking about houses with a great structure and foundation with updated components and features throughout the house but also feel very inviting and warm. These houses also have a nice bathroom upstairs and a detached garage with a nice and private backyard. Sloping floors are minimal throughout the house and the finish quality is high. The problem is that a house this attractive is very rare in these neighborhoods. Many older houses have been flipped too but even with these flips, you can tell that fundamental problems still exist or the job was done in a hurry. So many flipped houses put in nice new bathrooms without pulling any permits for the work. It’s insane to see the knuckleheaded approach of some home flippers.
When you do find the unicorn, it’s a bloodbath. You are still competing with five other
offers. A few houses that I have been
involved in those neighborhoods literally had 4 to 6 other offers. It’s crazy but old houses that highly
desirable are still somewhat rare. Other
homes in the neighborhoods sit on the market for many months. As a buyer, even though you see an
opportunity to negotiate the purchase price down if a home has been sitting on
the market for a while, many of these homes may be either way over priced and/or
After a hot start in March, the start of the spring real estate season, April is just getting hotter. The good news is that the prices are not appreciating like 2016. It’s staying where it’s at and compared to the sold median price in Portland from April 2018, the price is actually down a little. It may just be due to different data fluctuating but home prices are not on a trend of going down. It’s about the same level as last year, which is good news for home buyers coupled with low mortgage rates. Portland real estate market is still very healthy. Demand for purchasing a home is still very very high. In April 2019, the median days on the market was 12 days whereas the average was 38 days. In March 2019, the median was 21 and the average was 50. In April 2018, the median was 7 days and the average was 28 days. 2018 was definitely hotter than 2019. Last year, the momentum of seller’s market propelled through the market despite higher interest rates. 2019, things are actually better for buyers as the market is slowly shifting away from what it was. There is no more this urgency among buyers to get a piece of the action like before. However, if buyers do come across a really good listing, it’s still a blood bath. For all other listings, it takes a bit longer this year to sell.
Throughout the Portland metro, I’ve been seeing an interesting trend. In the city of Portland, the east side of the river west of 205 is still hot. On the west side, SW Portland neighborhoods priced under $500K are hot. As for the luxury markets, the east side is much hotter than the west side. For example, Alameda, Irvington, and Laurelhurst neighborhood homes are selling quicker than Southwest Hills or Hillside. As for Portland suburbs, the west side wins the hotness hands down. Beaverton and Hillsboro housing market is hotter than Portland east of 205, Gresham, and Happy Valley. Additionally, regardless of the neighborhood, lower end priced homes are HOT. Houses under $400K are seeing a lot of demand and often there are still bidding wars.
It’s important to price your home right in this market. Over-priced homes sit on the market for a lot longer. If your home is priced more in the median range or less in the Portland market and it has sat on the market for more than two months, it might be over-priced. It’s very helpful if sellers prepare their home to sell in this market. Permit those unpermitted improvements in your house; Repair and upgrade undesirable conditions; and price it to sell.
Many Portlanders are dead set on which part of the town they want to live. Portland neighborhoods can be so different when you cross Willamette River it’s a different world almost. I have seen some diehard fans of the east side who swear they will never live on the west side and vice versa. I think most of us know what those appeals are specific to each side of the river. Simply put, the east side offers more entertainment and culture whereas the west side offers more privacy and safety. Many young people prefer the east side but it’s not always the young people. We have a variety of demographics in the Portland area who prefer one or the other. In this article, I’m going to not only talk about the obvious ideas of the east side versus the west side but also cover some considerations particularly for home buyers if you’re deciding to move to one side or the other.
General reasons to move to the east side
If you live in the east side, you are either in the
middle of the action or very close to it. Most of the amazing restaurants,
shops, and trendy streets are on the east side of the river. It’s where everyone meets up on
weekends. There are many benefits to
live on the east side even during weekdays.
You can easily bicycle to work even if you work in downtown and you
won’t be the only one on the road on a bicycle.
Life can still be fun and easy during weekdays after work with a lot of
great amenities from just around the corner of where you live. Living in a
trendy urban area offers great lifestyles and experience. If you’re a social person, it will really add
to the experience.
General reasons to move to the west side
If you live in the west side, you’re likely into nice
things. Aside from the downtown area,
you will enjoy quiet and private neighborhoods.
In neighborhoods like Southwest Hills, Hillside, and Forest Heights, you
will be literally living in a forest. There won’t be drunken yelling and
shouting by somebody outside of your home and you won’t run into homeless tents
on your leisurely morning and evening walks.
If you have children, the west side offers the best school districts in
Portland and it’s a safe place to raise a family. It can be a very short
commute to Downtown Portland and you probably don’t have to battle the freeway
traffic during rush hours. The west side
is either very upscale and/or quiet and peaceful. There are also trendy neighborhoods such as
Multnomah Village. Even if you live close to Multnomah Village, your home will
still be in a quiet and peaceful surrounding.
If your work is stressful and you need to get away in a nice and quiet
place, the west side is your answer.
Buying a house on the east side
If you’re a home buyer and you gravitate towards buying
in a east side neighborhood, you will most likely run into old houses. Many close by east side neighborhoods are
older neighborhoods and most houses have been built in 1920’s. Popular architectural styles there include
craftsman bungalows, cottage houses, tudor, and Dutch colonials. Most houses will come with a basement and
more than half of these basements are unfinished. Due to the structure being so old, you will
definitely run into issues related to the age of the house. To name a few, the issues can include settled
foundation, structural issues, asbestos, lead paint, underground oil tanks, damaged
sewer pipes, rusty water pipes, and radon gas.
It’s a lot of inspection but that’s why you hire a professional
inspector. You will probably have to
live with some asbestos and lead paint somewhere in the house but they won’t
kill you so long as you don’t disturb them.
Radon gas can be mitigated with an installed system. There are also many houses without an off
street parking option on the property. Many still have driveways and detached
one car garages. Your house likely sits
on a 5,000sf lot and you probably have a very small backyard. If you buy an old house in a nice east side
neighborhood, your house may still be in a great demand nevertheless. The east side is densely populated and the
housing demand is from a variety of demographics.
Buying a house on the west side
Other than the immediate downtown neighborhoods where
it’s flat, if you live anywhere in the West Hills or beyond, your house will be
a lot newer than houses in the east side.
If you live anywhere on the West Hills, your house is likely a nice big
house built after 1960’s or 1970’s. If
you are thinking about buying a house in the West Hills because it’s close to
downtown, your house will likely on a steep hill and one side of the house sits
on engineered stilts. You won’t have a
backyard because it’s steep but you probably have a great view of the downtown
or trees. For homes built prior to 1978,
it will likely contain lead paint somewhere.
There is no real consistent architectural style in the West Hills
neighborhoods. Once you move a little
further out to a flatter area, you will see more typical houses. In Forest Heights (Northwest Heights), you
will see even newer and luxurious homes with flatter yards. The area still contains hills but it starts
to flatten out from the West Hills. On
the southwest side, land gets flat once you get out of Southwest Hills. You will see lots of older suburb
neighborhoods with homes built in the 50’s and 60’s including a lot of ranch
houses. You still occasionally run into older 1920’s bungalows and cottages
here and there.
Not to say that homes built in the 50’s and 60’s don’t have issues, but more people find those houses manageable than houses from the 20’s.
Suburbs in the east side vs. west side
The truth is that there are a lot more options as you move away from the city. Homes become more affordable and many people find better lifestyles in the suburbs. If you can’t find what you’re looking for in inner city neighborhoods, chances are you will find something within your price range if you are willing to commute for just a little longer.
On the west side, we have great suburban areas including Beaverton, Hillsboro and Tigard. Close to Beaverton, there are also unincorporated census designated areas like Raleigh Hills and Bethany that are very popular. Beaverton and Hillsboro offer a lot of employment opportunities especially in the tech industry. With MAX trains and an increasing number of restaurants and breweries, Beaverton has been a very popular place to move to. School districts are very decent in Beaverton, Hillsboro and Tigard. You will find a lot of newer homes in a nice and clean community. If you run into older homes, chances are it’s a ranch from the 50’s and those are also highly sought after by first time home owners and retirees.
On the east side, we have both suburban and less urban Portland neighborhoods east of I-205. Many of the neighborhoods here are very affordable and up-and-coming. East of 205, you will see residential neighborhoods that seem both urban and suburban in flat areas with houses like 1920’s bungalows to 1950’s ranch and a mix of mid-century and newer houses on the hills of Mount Scott towards Happy Valley and right around Powell Butte in Pleasant Valley neighborhood. Some commercial streets can be a bit rough still but you can see the transformation that has taken place in the last several years including the Lents Town Center. All the best Asian restaurants in the city are on the 82nd Ave. School districts are a bit challenged still in this part of Portland. There are still lots of homelessness along I-205. Outside of Portland, there is Milwaukie, Happy Valley, Clackamas, Damascus, and Gresham. Milwaukie is an older neighborhood that is affordable and still close to the city. Happy Valley and Clackamas are newer towns with nicer newer houses. They are more expensive and most newer houses are in HOA communities. SE Sunnyside Rd is the main road that splits the two towns. Both of those cities have great schools and offer a very nice and clean environment for families. Damascus has been a hot bed for new housing developments and outside of that area still remains very much rural.
Which neighborhood should you live?
It’s really up to what you like and your life needs. If you’re buying a house in a certain neighborhood whether on
the east or west side, not only consider your lifestyle but also know the type
of houses you will most likely run into.
There are also other housing options including newer condos, townhouses,
and occasional new construction homes in dense and older neighborhood areas. With a bit of due diligence, you can always
find what works for you and your family.
RMLS market data is out and it turned out that the March real estate market in Portland is still HOT. It did slow down a little bit but not much. Prices are staying where they were last year but the demand for housing is still very strong. Our housing market is proving resilience with fundamentals that are favorable to home buyers. How long will it last? It depends on the mortgage rates.
Real Estate Market Data
In March 2019, the Portland median sold price is $419,450
overall. Detached single family homes
had a sold median price of $444,500, up $500 from March 2018. The median for
condos and townhouses is $349,500, down $500 from March 2018. Overall, it takes about a week longer to sell
a home in Portland right now from 12 months ago but as of March, more homes are
selling than 12 months ago.
Supply is still low compared to the high demand for
housing. For detached single family
homes, there was only two months of inventory and 2.5 months of inventory for
all types of housing including condos and townhouses. Six months of inventory
is considered normal.
Market Conditions for Different Areas and Asset Classes
From what I have seen from my activities in March, houses
priced in the $300 to 450K ranch have been selling quickly especially in the
west side of the Portland metro. The
market has been really hot in SW Portland, Beaverton, and Hillsboro for houses
in that price range. In the east side,
houses in that price range tend to be in the east of 205 and they are a bit
slower. Houses over $600K have been sitting
on the market a lot longer. The higher
end market in SW Portland neighborhoods close to downtown such as Southwest
Hills have been somewhat slower compared to the higher end market in the east
side neighborhoods such as Alameda and Irvington. There are still many buyers in the high-end
east side neighborhoods looking to snatch up the right deal.
Mortgage rates are still very low as of now, which gives
home buyers more purchasing power. I
have been reading various economic and financial news lately and it seems that
the rates will probably stay low for a while as the overall economy is
slowing. Job market on the other hand is
still very healthy.
Forecast Factors for Fall and Winter Market
Assuming the mortgage rates stay low throughout the spring,
summer, and fall, it will be interesting to see the housing market after
August. Last year, mortgage rates shot
up after spring and there was a significant housing market slowdown in the
third and fourth quarter of 2018 with rates reaching 5%. Housing market does normally slow down after
July but with this type of rate, the slowdown was more significant with less
buyers willing to buy in that conditions.
If the mortgage rate stays low all year in 2019, the Portland metro real
estate market may be hotter in the 3rd and 4th quarter of
this year. We will just have to see what
If you are looking to buy or sell this year, depending on
the area, price range, and property type, you will have a different level of
leverage in the market. It is important
to talk to a good real estate agent to understand the specific market condition
for the type you will be transacting and come up with the best strategy.
Enjoy the rest of April and I will be back in the beginning
of May with the real estate market report for April 2019.
Portland real estate market data is out for February 2019. After a surprising number of new inventories from January, the new listings dropped again in February. In January, we had 1131 new listings whereas in February, we only had 875 new listings. February normally gets more new listings than January so maybe the January number was an outlier rather than a new trend of more people selling in 2019. Maybe all that snow we received in February had something to do with it. When homes are covered in snow, realtors often recommend waiting until the snow is gone for photography. In 2018, there were 861 new listings in February and 788 in January. The number jumped to 1372 in March. Right now we’re in March and although I don’t get the complete data until the end of the month, I’ve been seeing a lot of new listings popping up in the last few days so it will be interesting to see what the March inventory will look like.
The median sold price is $412,200, which is overall down a
little bit from 12 months ago. Price for detached single family homes has
increased a bit from 12 months ago. The
market is still cool with average days of 54 days on the market. The median is
29 days, which is down from 36 days from January. In February 2018, average
days on the market was 47 with 22 median days on the market. In April 2018,
that was reduced to 25 average days with 6 median days so in about two months,
we will see a hot spring market slightly cooler than 2018 but still a hot
Mortgage rates are still down and they seem to be on a
downhill trend, which is great for home buyers. The rate is currently at 4.35%, which is lower
than this time of year in 2018 when the rate was 4.45% on an upward trend. The economy is slowing and that seems to be
causing the rates to cool down. So long
as the job market stays strong, the housing market will continue to be healthy.
If you’re in the process of purchasing a house, you and your buyer’s agent must look at many houses together before finally deciding on the one. That is an emotion filled process as you have so many things to consider. Hopefully if you see a house that you really like and you have zero construction knowledge, your agent can help you identify some common issues associated with the house so that you are aware of the conditions of the house. If you work with an agent with enough construction knowledge, you won’t have to wait till you put in an offer and pay $400-500 for an inspection to find out the house needs major components replaced.
If during the first showing of the house, you and your agent couldn’t go through everything because you only have 30 minutes before you have to go see another house showing appointment, make sure you go back there for a second showing so you can look through things. Now that our Portland housing market is slowing down, you will have time for a second showing whereas in the spring of 2016, you will be pressured to put an offer in after seeing it for 10 minutes because of buyer competition. This is important especially if the house is older. Many important house components such as roof, furnace, and water heater have limited lifespan. If the house is 40-50 years old at least, there must have been new roofing at some point as most roofing’s lifespan is between 20-40 years. Furnaces can last around 15-20 years but not 40 years. It needs replacing if that’s the case. Don’t buy a house with oil heating. Eventually you will need to replace that but there will be additional DEQ requirements for decommissioning oil tanks. On your second home showing, look beyond the cosmetic issues like kitchen cabinets and paint colors and really look into the age of house components.
Perform a visual inspection from the ground. You should be able to see what the roof looks like in most cases without a ladder. Is it an asphalt tile roof? Concrete tile roof? If the roof is old, you will see the age as the roof will probably show discoloration, lack of granules, thick moss, and/or other physical damages. Most asphalt roofs last between 20-40 years. Concrete tile roofs last about 50 years but they are rarer in the Pacific Northwest. Replacing the roof is a big cost to a home buyer. If you are only replacing the shingles, it can cost about $10K for a 1500-2000 sf house. If you’re replacing sheathing, and underlayment, the cost will be much higher. In many cases, a complete new roof can easily cost you $20K on a 3 bedroom house. If the price point of the house you are looking at is already at the top of your budget and in the top range of its comparable homes in the neighborhood, maybe you don’t even want to put an offer in if you have this knowledge that this house will need a new roof.
First find out whether it’s a gas furnace or electric furnace. The expected lifespan is different. Also maintenance can extend or reduce the lifespan of a furnace. Many homeowners don’t realize they need to replace the filter every year or so or else it will overwork the furnace thereby reducing its lifespan. If you look on the furnace, there is usually some information on when it was built. If not, pull the manual out and see when it’s dated. Chances are the date on the manual is the date of the manufacturing of the furnace. If the furnace is old, it raises a concern. You may need to look into hiring a furnace specialist inspector. General inspectors don’t inspect furnaces in depth. If you have a bad furnace, it needs to be negotiated with the seller.
In the Portland metro, we have a lot of rain. Because of the rain, every house must be equipped with drainage systems that can divert rainwater away from the house. For homes within city limits, houses have downspouts connected to storm sewers. Make sure downspouts don’t pour water onto the ground close to the house. There should also be French drains around the house and in the backyard. Look for unusually muddy spots.
4. Basement Water Damage
Many older homes have basements whether it’s a bungalow or a daylight ranch. All basements are subject to some stress and potential damage from built up hydro pressure in the soil behind the concrete walls. There are many ways of waterproofing basements but you won’t be able to see what’s in the ground. Buying a house with a sump pump in the basement is an excellent idea. If not, make sure you smell the basement and look for any water damages. That includes discoloration of drywalls if finished. If unfinished, you may be able to spot past water damages on the concrete.
Look for any mold growth. Mold usually grow in the basement or in the attic. During a home showing, you probably cannot access the attic. However, in the basement, keep your nose open for moldy smell and also look around the bottom of walls to see if there is any mold growth. Buying a house with mold is a bad idea.
6. Proper Construction Permit
I can’t believe how many houses I
have looked into as a real estate agent have had some building permit
issues. The most common permit issue is
when a house has 2-3 bathrooms, the county/city records only show 1. That means a bathroom has been added at some
point without a applying for a permit and passing for inspection. Should you avoid these deals? Maybe.
Permitting a bathroom can be done retroactively. It’s not that difficult or costly. Last time I had my seller retroactively
permit a bathroom prior to listing his house and it cost him about $500 with
the City of Portland. He had to draw the bathroom plan, show pictures of the
plumbing connected the right way, and also install a bathroom fan to vent to
the outside. If you are a buyer, you
will want the seller to take care of this prior to closing.
After a long and slow real estate market during the holiday season, Portland housing market in January 2019 turned out to be in a very favorable position for home buyers. Real estate agents are starting to get busy as more buyers are entering the market at the moment. We have a lowered mortgage rate at the moment from last year and we have a surge in the home inventory. The rates are expected to stay low for a period of time this year. This is exciting news for many home buyers in the Portland metro area who have been feeling the pressure of the increasing home prices coupled with increasing mortgage rates. The first quarter of 2019 housing market forecast is so far turning out to be very buyer friendly. Homes are staying on the market for a lot longer these days with average days of 58 days on the market. Once the spring comes around and the prices and rates stay reasonable, the buyers’ competition may heat up again as the demand goes up. But as of now, because this is still winter time and there aren’t that many home buyers quite yet, this is a great window of opportunities to get a good deal for home buyers who are ready, willing, and able. In fact, 727 units went under contract in January, which is about the same number of pending units from January 2018 when things were a lot hotter.
Let’s look at the numbers. This is for Portland only. For other areas like Beaverton and Hillsboro, email me and I can send you the data.
All Housing Types: Median Sold Price: $399,450 (Compared to $401,500 in January 2018) Average Days on the Market: 58 (Compared to 45 in January 2018) New Listings in January: 1129 (Compared to 788 in January 2018)
Detached Single Family Homes: Median Sold Price: $405,000 (Compared to $410,500 in January 2018) Average Days on the Market: 57 (Compared to 44 in January 2018) New Listings in January: 796 (Compared to 563 in January 2018)
Condos / Townhouses: Median Sold Price: $337,400 (Compared to $359,950 in January 2018) Average Days on the Market: 64 (Compared to 48 in January 2018) New Listings in January: 333 (Compared to 225 in January 2018)
As you see, the market is slower than it was 12 months ago.
Prices are even coming down slightly or have flattened. Moreover, we have a lot more inventory. These are all great news for buyers, not so
much for sellers. For sellers, it’s important to notice that our housing market
is now different, which is more normal. So long as the conditions stay
favorable to buyers, it’s still good news for sellers because that means things
are still moving.
It will be interesting to continue observing the market as we approach the spring season to see how much things become heated during the prime buying and selling time of the year so that we can have a good grasp of what the market truly looks like in 2019 and sense what kind of forecast and trends our housing market is ahead of us. As I have mentioned in my Portland housing forecast, the market is becoming a lot more buyer friendly as we speak. What I don’t know yet is how much of a buyer’s market it will turn out to be in the future. Portland metro’s job market is very strong. So long as the mortgage rates stay reasonably low, things are looking good for both buyers and sellers in coming years. If the economy continues to expand, the rates will go up. If the economy is bearish, the rates will stay low.
Since sometime in December, mortgage rates have been free falling due to the turmoil in the stock market. The rates used to be in the high 4% and low 5% for a 30 year fixed mortgage in the fourth quarter of 2018. Now I am seeing rates lower than 4.5% for a mixed 30 year mortgage! Not surprisingly, Portland housing market is heating up with this window of opportunities. I have been lots of activities for homes under $425K, unusual for January.
Due to the stock market volatility and the government
shutdown, investors are flocking to bonds, causing the bond prices higher with yields
becoming lower. When bond yields decrease,
so do mortgage rates. The yield on the 10-year Treasury has plummeted from a
high of 3.24% in mid December to about 2.7% currently. Will this continue to fall? It will depend on the economy. After the
Treasury yield hit the bottom at 2.5%, it is on the upward trend again
especially as the US – China trade talks continue. Mortgage rates will continue to face volatility
in my opinion because no one really knows how the economy will play out. If the
stock market continues to heat up, then the mortgage rates will continue to go
up. If we see more slowdowns and recessionary cues, the rates may drop.
As of now, Portland job market is very strong and the metro
region has expanded economically and we are continuing to see an increase in
population as Oregon is still one of the places people are moving to for a
better lifestyle. That means the region
is continuing to see higher demands for housing. The problem is that we don’t have enough
inventories still. Home builders have
lost confidence and we don’t have enough existing homes for sale.
While we do not know exactly what the rest of the 2019 will look like, this lowering mortgage rate has been a spark of optimism in our housing market for both sellers and buyers. If you have been thinking about buying a home in 2019 in the Portland market, you should move rather quickly this year and take advantage of this window of opportunity. The only problem is the low amount of supplies at the moment because we are still in the winter housing market. If you do see some places that you like that are currently for sale, please talk to me. I help a lot of home buyers in the Portland metro region with my top buyer’s agent services.