The home market in Oregon may have cooled a little, but it is by no means cold. not yet, at least.
Founder of Portland-based Opt Real Estate and former president of the Oregon Realtors Association Drew Coleman stated, “I like to describe the market as having gone from white hot to red hot, but it’s obviously in the cooling phase.”
Mortgage payments increase as the U.S. Federal Reserve raises its benchmark interest rates; it increased rates by 0.75 percentage points last week. This scares some homebuyers away from offers they may have taken had rates been lower.
The purpose of the rate increases was to bring down prices. And certain markets in Oregon are noticing that: Deschutes County experienced the largest decline in median listing prices, falling from $777,000 in May to $707,000 in August, according to statistics from Realtor.com. Due to Bend’s high housing demand, this location has some of the highest median listing prices in Oregon.
A minor decline was also observed in Multnomah County, from $545,000 in May to $525,000 in August.
However, these drops are insignificant when compared to the prices prior to the epidemic. Deschutes County’s median list price was $523,000 in May 2019, whereas Multnomah County’s was $460,000.
Compared to earlier this year, homes are also staying on the market a little longer. In Deschutes County, the median number of days a home was on the market was 29 in May; by August, it had increased to 50. The average number of days increased from 28 to 38 in Multnomah.
According to Noah Blanton, president of the Oregon branch of WFG National Title Insurance Company, “it’s trying to go back to normal.” It aims to get back to levels of price growth and inventories that are closer to where we were in 2019.
Around the time of the pandemic, the number of active home listings in Oregon began to decline, reaching its nadir in January 2021. According to seasonal tendencies, inventory increased once more that summer, but by January 2022, it had dropped back to its previous level.
However, August delivered some encouraging statistics: there were nearly 12,000 homes for sale in Oregon, up nearly 3,000 from the same month a year earlier. There were 18,300 homes for sale in Oregon in August of this year, but the inventory is still well below that number.
According to Blanton, the housing market behaves like a pendulum: it will swing as far as it can in both directions before settling.
The key question, in my opinion, is how far this pendulum will swing before returning to normal. stated Blanton.
And how much time? Opt Real Estate’s Coleman claims to have some insight. He examines appreciation rates, which quantify the rate of growth in housing value.
The top 100 economists countrywide forecast that 2022 would end with a national appreciation of roughly 9.3% before cooling to a pretty typical historical appreciation of 4.19% in 2023, according to Coleman.
More specific estimates were made by the National Association of Realtors: 3.12% in 2024, 3.46% in 2025, and 4% in 2026.
Coleman stated, “Historically, we want an appreciation rate of 3 to 5%. “It helps homeowners increase the value of their property, but it also makes it easier for people to enter the market than when an appreciation rate of 20 to 25 percent occurs.”
Coleman advises Oregon’s most recent homebuyers not to be concerned about losing equity or having their home’s worth fall below what they paid for it if they made their purchase during the market’s peak when many buyers were making offers that were significantly more than the asking price.
“If they did buy above-and-beyond what the market would bear now,” Coleman said, “those who substantially overpaid for a home obviously could have a modest loss in equity.” “In time, I wouldn’t feel so anxious about that… Over time, it typically works quite well for you, even if it makes a small step backward.
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