Why Our Housing Market is Changing and What It Means for You
What exactly is happening in our real estate market? I help people buy and sell homes every day, so I have a pretty good idea of where our market is heading. Today I’ll discuss what’s happening in the Portland metro area and what it means for you.
Demand has decreased lately due to higher interest rates, increased prices, inflation, and recession risks. This may sound bad, but remember that just because we have less demand doesn’t mean our market is crashing. Plenty of people still want to purchase a home, and housing prices won’t fall as long as inventory remains as low as it is now.
“It has been a strong year for real estate.”
So how do mortgage interest rates affect our market? Around the beginning of the year, they were just around 3%. Now, they’re closer to 6%. Higher rates impact buyers’ purchasing power, and demand has decreased as a result.
Homes are staying on the market longer since there’s less demand. For example, our area only had one month’s supply of inventory in May. In June, that number increased to 1.4 months. Don’t panic just yet; a balanced market should have six months’ supply, so inventory remains historically low. We’re still in a seller’s market, but buyers may have more opportunities now than they’ve had in years.
The last thing I want to discuss is the median home sales price, which decreased from $575,000 in May to $570,000 in June. As you can see, our market is balancing out, but don’t worry — homes have still appreciated 10% this year in the Portland area. It has been a strong year for real estate, even if the market normalizes.
If you have questions about today’s topic or anything else related to real estate, please call or email me. I am always willing to help!