Low inventory squeezes Portland real estate market amid signs of easing
Because the Portland Business Journal restricts the access of some articles for subscription members only, I've provided the text and graphics below. I would encourage you (if you are a paying member) to read this article over on their site where you can access the interactive graphic/charts to get a better sense of the complete story. Otherwise, please keep reading....
Portland’s market of high-end homes and luxury apartments is flush.
What keeps real estate agents, property managers and mortgage brokers working overtime is the low end of the housing spectrum. Their number one beef is under-supply of affordable housing, closely tailed by under-supply of mid-range housing.
The dearth of single-family home building is also a top concern. Aside from these inventory issues, the specter of rising interest rates haunts a now-robust seller’s market.
“Low inventory has made it difficult for agents to find homes for buyers,” wrote Ward Spears, Oregon regional manager at Coldwell Banker Bain. “Often a buyer may be in several multiple-offer situations before they are finally able to secure a house.” Spears said this requires great trust and communication with buyers’ agents who face a much rockier road than sellers’ agents.
The low inventory is “just a function of where we are in the current real estate cycle,” said Sean Becker, owner of Sean Z Becker Real Estate . “As inventory rises and any current hardships ease, there will be other hardships to arise.”
Indeed, according to U.S. Census Bureau data, Oregon’s rental housing vacancy rate and home ownership rate are both easing upward from lows hit over the past few years. The rates exceed those in Seattle and San Francisco. Meaning, the market may be shifting a little friendlier toward buyers.
Meanwhile, the financial health of homeowners seems to be brightening. December figures from CoreLogic show lowering rates of home mortgage delinquency and foreclosure in both Oregon and Washington, which remain well below national averages.
Summary (in my words):
Clearly, the housing market has bounced back. Unemployment is low, job wages are (creeping) up and overall the economy is doing well. PBJ is correct with their statement about inventory being low in the low to moderate price range. Approximately 90% of my first time home buyers compete against multiple offers. This can be tough both emotionally and financially for them but they still stay in the game because they can see the long term payoff. Where I see a change in the market has to do with the increase in interest rates. Some buyers will give up on their home search all together and some will put off their purchase because they no longer have the buying power they once had. This may create a change in the demand for homes and thus sellers less likely to see multiple offers in just 4 days on the market as we have experienced in the past.
If you ever have any questions about the Portland Real Estate market and how it affects buying or selling, feel free to reach out to me. I would love to provide you with an in-depth analysis so that we can come up with a plan to meet your goals.