Portland’s real estate market is slowly seeing some changes. For the first time in years we are seeing price reductions on homes and fewer bidding wars. While the days of homes selling in a day with 10 offers is not completely over, they are fewer and far between. Popular neighborhoods in Portland, and the surrounding cities, are still seeing multiple offers on occasion, but they are less likely to garner the over-the-top offers we were recently seeing.

Where are we headed and what happened?

Portland’s real estate market remains attractive, but we expect to see more moderate price increases (3-5%) that represent a more normal market rather than the double digit price increases we saw over the last several years. The market is shifting to a more level Buyer-Seller market, where recently we have seen the market sit at a hot Seller’s market for years. Homes will take longer to sell as shown in the data below and you might even find that you don’t have to pay full price, or above, to purchase a home.

Portland real estate has been affected by the growing affordability problem, buyer fatigue and the increase in mortgage interest rates. Rates have climbed considerably and now sit in the mid 5% range giving buyers less buying power than they had even 6 months ago. Meanwhile, the affordability of the Portland Metro area has risen to a point that has kept many first time home buyers on the sidelines and some buyers who have been in the trenches trying to buy a home have ended their search due to buyer fatigue.

Inventory continues to remain about the same as it has the last several years, but fewer buyers is helping to cool the hot market. Look for the Portland Real Estate market to normalize into 2019.

Highlights from the latest RMLS market update released in August:

• Through July of 2018 the number of homes sold is down 2.0% vs the same period in 2017
• Through July of 2018 new listings are up 2.8% vs the same period in 2017
• Home prices are up 6.0% versus 2017
• Inventory is at its highest point, in terms of “inventory in months” at 2.4 months, but well below a normal market of 4-6 months
• Average days to sell a home in the Portland metro area has stayed relatively steady at 36 days
• Gresham, Troutdale, Columbia County and Yamhill County are the only areas that are continuing to see double digit price increases versus 2017
• Beaverton / Aloha have the shortest average time to sell a home at 19 days while Mt. Hood has the longer at 74 days

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Urban Pacific Real Estate, LLC or its employees. The information set forth herein has been obtained or derived from sources believed by the author to be reliable. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the opinions serve as the basis of any investment decision and it has been provided to you solely for informational purposes only and does not constitute  advice or recommendation.