I’ve noticed a lot of talk lately among industry professionals and the general public about the real estate market heading into a bit of a slowdown. Looking at trends on the national level this has been more or less true. Granted, what many people would call a slowdown I would much rather refer to a normalizing. The days of homes being snatched up with all cash offers after only a few days on the market seems to be behind us and in many ways, that’s a good thing.
Looking at the Portland housing market, as things stand in November of 2018, things have stayed pretty steady. Appreciation rates are still high, particularly in Portland but also across Beaverton, Hillsboro and Lake Oswego. Prices are what we would expect in the winter market, more days on market and lower prices than in the Spring, Summer or Early Fall. However, the percentage of “List” price to actual “Sales” ratio is still between 95.2% (in the $2m+ market in unincorporated Washington County) to 103.5% in the $200k range (single family homes).
So, what we have right now is a slightly better situation for buyers than we’ve seen in recent years in that there isn’t such a mad rush, as all slows down during the holiday season, when prices are lowest. Time will tell if that situation will continue after the first of the year or if inventory will once again tick back down or hold steady as we approach spring in 2019. With the interest rates increasing, and the supply of homes on the market (i.e. new construction) increasing, buyers won’t have as much competition as they have in the past few years.
The biggest takeaway right now however is that nothing indicates prices going down in the near future. According to Zillow home prices in 2019 are expected to rise 8.1% across the entire nation and 4.3% across the Portland metro area on average. This is significantly lower than the double digit percentage increases we’ve seen in the recent past but I don’t think it will be a surprise to anyone that such massive growth was not destined to hold steady over the long term.
The big x-factor still remains interest rate levels. Right now they are holding steady around 5% which is historically low, though higher than we’ve seen in recent years. It remains to be seen which direction interest rates will go in the coming month or even the coming year which can make a big difference to buyers, particularly first time home buyers or buyers with less than perfect credit.