Cash Home Buyers Still over 40% in Portland Metro
After the super hot real estate market in 2015, I was expecting 2016 will slow down quite a bit. So far, it hasn’t slowed yet. The stock market is doing well again and the general optimism in the economy is back. Federal reserve’s interest hike announcement which is going to be low and steady also helped ease the nerves in the general market. In anyways, me and my team at the office see a lot of cash home buyers still. The statistics is that they are still 42% of all home buyers for homes under $450K in the Portland metro area. There aren’t as many foreign investors with cash this year but most of the cash buyers are from out of state including people who are retiring in the Portland area. The area that they are purchasing vary a lot but the ones used as primary residence by cash buyers are usually on the west side of the river and as far as McMinnville, which is actually one of the favorite areas to buy among California retirees. It is very pretty out there with a nice downtown area filled with restaurants and shops.
So the Portland real estate market is still going up and is still very hot. Will it ever end? Who knows but buyers are still getting on the bandwagon. Average homes now cost 50K more than about this time of 2015. Many first time home buyers are either buying condos and townhouses instead if they want to live in a better part of Portland. There are also detached single houses under 300K if you look in Beaverton, Tigard, Milwaukie, and Oregon City. I have also seen some in SW Portland on SW Barbur Blvd. Most of them are 2 bed 1 bath and but if you extend your search to Aloha, Hillsboro, Gresham, and East Portland east of 82nd, you will find single detached houses with 3 bed 2 baths. For NW Portland, most of SW Portland, and inner SE and NE Portland, 300K will only get you a condo, which is just not an option for some people.
A lot people are waiting for home prices to drop in a year or two. It may happen but likely at the expense of increased mortgage rates and what that happens, your monthly mortgage payment may still be the same. So the decision for a lot of buyers is to get something less than what they imagined or in a less desirable area and start building equity while fixing the mortgage rates for 30 years. I think that’s the smart decision too. The only problem is still the number of cash buyers outbidding traditional home buyers who need to get a mortgage. You need love letters and really personalize your offer to the seller. They seem to work in some cases because home sellers want to take chances in helping out families with children.