2020 saw a record low in the number of homes on the market and since then, there has been little change. At the beginning of the 2020 pandemic, we all expected “2008-déjà-vu” with a wave of foreclosures and an increase in houses on the market. Two years later, when this never happened, the major real estate data providers (Zillow, Freddie Mac, Corelogic) forecasted the market to remain HOT for the foreseeable future!
While this is great news for sellers – quick transactions and negotiable prices – it’s a stressful market for Portland buyers. Whether you are looking to buy or sell a home, I’m here to help you navigate the market and make the best financial decisions. Let’s get rolling!
Why Is There A Housing Shortage?
Portland’s population has been steadily growing for decades, even during the height of the 2020-2021 pandemic and series of lockdowns. People are migrating from all over the country for Portland’s charm, access to nature, and net-zero emission efforts (check out Suzette Smith’s Willamette Weekly article!). Not to mention, Portland is still one of the more affordable large West Coast cities. Unfortunately, the population is increasing faster than new housing is being built.
The pandemic has impacted residential construction, putting supply at a disadvantage. The Home Builders Association of Metropolitan Portland has reported the lull in construction is due to:
- Ongoing labor shortages for construction workers
- Rising cost of materials, especially lumber, due to “supply chain disruptions”
- Shipping delays for materials
- and permit approvals
What Does This Mean For Sellers?
For sellers, the market is scorching hot! If you are looking to sell your home, now is the time while inventory is at an all-time low and demand is high. Let’s take a look at the market trends from 2020-2022:
As mentioned in the previous section, Portland is in a “Seller’s Market”, meaning there is a limited supply of homes, and buyers are rushing to swoop in on listed homes. Between December 2021 and December 2022, the value of Portland-Vancouver-Hillsboro Metro homes has increased by a whopping 19.2% and are forecasted to rise another 13.3% over the next 12 months. Scaling down to Multnomah County, we saw an increase of 14.7% and expect a similar growth rate for the following 12 months.
Based on these trends, when you list your home, expect a rush of offers to sift through. Make sure you connect with an experienced agent (hey there!) who will help you negotiate and close with the best offer.
What Does This Mean For Buyers?
Now, hold on! It’s not all gloom and doom for buyers. A seasoned agent will help you navigate the low inventory of homes, make competitive offers, and secure your next home. You may expect to spend a little more time in the search, however, and when it comes to looking at homes and putting your offer in, you should be prepared to move quickly.
Here are my top tips for navigating a seller’s market as a buyer!
- Don’t shy away from compromises – Entering the market with a flexible attitude and expectations will make the process smoother for all parties. Consider what features are most important to you right now.
- Have your finances on lock – Remember that sellers are on hyperdrive. They want to wrap up their home sale in a snap! Everything you can prepare in advance, including preapproval for a home loan, will give you the upper hand.
- Don’t stress the little stuff – Another way to speed up the process is through a “limited” inspection process. Inspections are a must, but when the market is hot, I suggest only asking for post-inspection repairs if the repair exceeds $500, so sellers won’t feel “nickel and dimed.”
- Trust in a seasoned agent!
Extra Pro tip: If you have been saving for a new home and have the available funds, make a cash offer. Cash offers forgo interest, mortgage loans, and waive certain contingencies (appraisal, inspections, and sales contingencies) speeding up the process for all parties. If this is an option for you, it’s a great way to get a leg up on the competition!
Forecast For 2022 and Beyond?
Here’s a slice of hometown pride for you! Did you know Oregon was the first state to introduce “Missing Middle” multi-family construction (aka, duplexes, triplexes, quadplexes, cottage clusters, and townhouses)? Missing Middle housing was Portland’s first major modern solution to the growing population and the rising cost of housing, signed in 2001 by Governor Kate Brown.
We may be experiencing a lull in new housing construction, there are still many construction projects underway, bringing affordable housing to the Portland Metro. Six affordable housing buildings were completed this past year, including the Nick Fish Apartments off NE 106th and Halsey. Another 24 housing projects are currently in the works, expected (fingers crossed) to open in 2022!
Additionally, the Residential Infill Project proposed in 2020, will allow four-unit houses to be built on almost any lot, creating an influx of affordable housing! Former Commissioner Edlay reflected that the Resident Infill Project will, “open the door for the missing middle housing to exist across our city.”
What does this mean for Portland buyers and sellers going forward? Although the market is not predicted to cool off anytime soon, we should see the effects of these construction projects through an increased number of available listings and (hopefully) a decrease in Portland home prices. For regular updates, subscribe to my newsletter – your #1 resource for Portland real estate news.
Are you interested in buying, selling, or investing in a home this year? Well, grab your sunglasses and SPF, because this market is HOT!
Allow me to guide you through the process – contact me here!