If you’ve been on the fence about whether or not you should buy a home in Portland sometime soon, there are a few reasons why it might be time to pull the trigger. (If you are ready, of course.) Portland’s housing market has been anything but typical the last few years, so here’s a look at what’s going on and why you might think about buying in the near future.
1. Home Prices Will Continue to Rise
Home prices have risen dramatically in Portland over the last 5 years (see this heat map for a dramatic visual representation of exactly that). Home prices rose around 15% in 2016. The median home price in the city is just over $400,000.
Home prices are expected to continue their rise, though at a slower pace than before. Chief Economist of Windermere Real Estate Matthew Gardner estimates that home prices will rise 8.5% before the end of the year. Veros, a property valuation company, suggests just over 11.1% this year, while Zillow is more conservative at 7.5%.
This means two things. 1) Buying before a home is even more expensive and out of reach is a good idea, and 2) your new home will continue to appreciate at a higher-than-normal pace for at least a little while.
2. Competition is Stiff
Oregon was hit hard during the economic recession in 2008. But the good news is that Portland has recovered well. The local housing market has been great thanks to very steady job growth in the city. Unemployment is at its lowest point in years. But job growth and good pay mean that more people are able to buy homes, increasing competition.
To complicate things even more, Millennials are ready to enter the home-buying market, causing even stiffer competition in an already extremely competitive market. Inventory in Portland is going to continue to shrink.
3. Mortgage Rates Are Headed Up
Everyone knows it. Although mortgage rates are still historically low, they are on their way up and will continue to rise, although no one knows at exactly what pace. Last August, rates hit an average low of 3.59%. They’re currently hovering around 4%, but they could go several percentage points higher over the next few years.
The up side to this, of course, is that higher mortgage rates often mean that there is a little bit less competition in the housing market, making it just a bit easier for you to buy a home in Portland.
Are You Ready to Buy a Home in Portland?
If you’re ready to buy a home in Portland, we hope you’ll give us a call at (503) 283-1900. We’re ready to help you find the house of your dreams.