Portland Metro Real Estate Market Update

Market Recap

This first quarter of 2022 has been a very wild ride for our local real estate industry! The year began as it had ended in 2021 with historically low inventory of homes on the market. However, the pressure on pricing escalated monthly, and often weekly, from January through March as sellers waited for the spring market to list their homes, resulting in fewer listings and therefore, more pressure on pricing. It was not uncommon for buyers having to offer $100,000-$150,000 over the list price in an effort to be chosen in a bidding war. In addition, we saw more buyers making “as-is” offers (agreeing up front to not ask for any repairs), and some even waiving their inspection contingency. Easily, one of the most competitive market we have seen in the two decades we have been practicing in real estate.

How is the Market Changing?

Now that we are deep into the spring market, the Fed has raised the interest rates half of one point earlier this month and industry experts are counting on the Fed doing it once more in June. What will that mean for our local real estate market? Our team is already witnessing a lessening of buyer demand as some buyers, especially first time home buyers, are taking themselves out of the market due to affordability. We have already seen fewer offers in multiple offer situations; where we once saw 15-20 offers on a new listing, we now are seeing 4-5 offers. Buyers are also expressing more hesitancy changing their minds on making a bid after viewing a home.

What Can We Expect Moving Forward?

Has this changed our local market into a buyer’s market? No. Do we expect it will become a buyer’s market overnight? No. The reason for this is that there is still so much more demand than there are homes available to satisfy that demand. Also, there are still buyers who can afford a higher interest rate as 5-6% (remember, that used to be considered a good rate). In addition, Oregonians are still at a very low rate of delinquency on mortgage payments and most homeowners have a lot of home equity based on strong appreciation in recent years. Overall, employment is positive and the economy is still doing well, albeit the recent high inflation. 

The Good News?

These signs of a shift in our real estate market are very positive as we have needed a correction, and in our opinion, this will be good for our overall real estate market. Prices and demand have gotten too far out of hand, making home ownership out of reach for many. Existing homeowners who have needed (or wanted) to make a change in their housing, have also been prevented by this overheated market. A correction, even a slight correction, are a welcome dynamic that should help all Portlanders!