Portland Housing Market Slowdown Starting in 2016
It’s almost the end of the spring-summer home buying season. 2016 has been another hot market for Portland. However, some signs indicate that the Portland housing market may be slowing down. Some parts of statistics show the market has not been as crazy hot as 2015. There was about the same number of homes listed this year but the number of homes actually sold were 15% less than 2015 according to RMLS for the Portland metro area. The twist is, however, homes stay on the market for less days in 2016 than they did in 2015.
Home prices are still increasing. Compared to 2015, the median home value has increased about 20% over the past year according to Zillow. It forecasts the price will increase by 7.4% within the next year. For your information, the actual increase in Portland market well surpassed its one year forecast in 2015.
Nationally, some interesting things are happening in real estate markets. While traditionally unpopular metros areas are gaining traction with a real estate boom, already established markets are showing a slow down. Case-Schiller indices for May 2016 show that adjusted home prices are falling for two month in a row on the 10- and 20-city indices.
The biggest gain in the housing market has been in the West, particularly in Portland and Seattle followed by Denver. Portland’s S&P Case-Schiller index monthly change is still increasing at about 1.5% while the 12-month change has been around 13% increase.
Working as a real estate agent, I have not seen as aggressive bidding wars in 2016 compared to 2015 unless a property is way under priced. For reasonably priced homes, we don’t see plus 10 bidders anymore. Most homes I sold this year had about 2-3 bidders per home. It surely makes it easier to win the bid as a buyer when you don’t have deal with 10 or more other bidders on the same house anymore. But buyers that are ready to buy are quick to act when properties pop up on the market. There just aren’t as many buyers this year compared to last year.
Now that we are almost approaching September and the rainy reason. 2015 market was so hot that the rain did not cool down the market. This year, the rain might cool things down like any other years. I will be observing the market closely to see what happens.
What is Portland housing market forecast for 2017? I believe the prices will have gone up still about 10% from 2016. It will be less of a seller’s market than what we have been experiencing. There will probably be a smaller pool of buyers because more of them are priced out and there will be less real estate investors. Supply will continue to be low. Many condos and town homes are currently being built in the suburbs but it still will not be enough to bridge the gap. More millennial buyers will be buying town homes in the suburbs close to MAX stations with urban amenities such as Beaverton Central and Orenco Station in Hillsboro. For buyers that are ready to buy, it will be much easier to buy a home in 2017 and more buyer-sided negotiations will happen. After 2017, the real estate market will continue to grow at a modest pace. Interest rates will also rise in 2017 as the US economy continues to soar in various sectors with a healthy job market. Many economists predict that the growth in real estate will continue to happen throughout 2020 at a slower pace.