Portland new home prices observation in 2016
Gearing up for the hot real estate market in the spring in Portland, OR, which is typically where most home buyers rush in for properties. The weather in the Pacific Northwest is great and flowers are booming so spring makes the perfect season for home buyers who are full of optimism and respond emotionally to what their family’s future will look like in the future. I think we all know that.
I took a snapshot of this Zillow graph for Portland housing market to illustrate home sale prices going up and down throughout each year. Evidently, starting from February, home prices start going up all the way to July, making these six months the hot real estate season. Starting from the end of summer throughout the rainy reason, the median sale price goes down. The typical fluctuation is around $20,000 for the high and low.
But something unusual has been going on in the winter season of Portland in 2015. When the market is supposed to drop during the rainy reason, it took a sharp turn in October and went back up to the year’s high peak. This hasn’t happened in the last three years. Is this an outlier or does this indicate something else?
One thing that can be generalized from this phenomenon is that there were lots of home buyers in the winter season of Portland in 2015. 2015 has been such a hot housing market with a huge amount of home value appreciation that the market probably stayed hot in the rainy reason. Enough people probably saw it as an opportunity to buy homes but found out they weren’t alone putting an offer on a home in the rain.
The upswing in the graph also could reasonably indicate that there were more home sellers. After all, someone needs to be selling for someone else to be buying. With more homes being on the market, you will see the number go up as there will be more higher priced homes selling. High-end homes typically sell more in the perfect spring season to maximize their appeal. In the winter of 2015, however, these homes were still selling.
Does this mean the market is still sizzling hot and even hotter than ever before that all that rain doesn’t cool it down anymore? Or does it mean that now sellers are starting to sell more as they foresee the end of the hot real estate market? I am about 30/70 on these two questions. The national housing market is slowing in 2016 but Portland is still above average hot this year. As the economy is slowing down, more investment companies may be considering releasing some of their rental properties into the market, increasing the supply. But if the latter is true, one remaining question is why not wait until the spring season? This is not something that could be answered with a high degree of accuracy. We will just have to wait and see where the housing market goes this year. Chances are that the Portland market will have more of a modest growth in 2016.