The Oregon housing market may have cooled down a bit, but it’s certainly not so cold. At least not yet.
“I like to describe the market as having gone from hot white to hot red, but it’s definitely in the cooling phase,” said Drew Coleman, founder of Portland-based Opt Real Estate and past president of the Oregon Realtors Association.
As the US Federal Reserve continued to raise benchmark interest rates — it raised rates another 0.75 percentage points last week — mortgage payments rose, scaring some homebuyers of deals they might have accepted had rates been lower.
The idea behind the price increase was to cool down the prices. Some Oregon markets see the following: According to data from Realtor.com, Deschutes County saw the largest drop in average listing prices, from $777,000 in May to $707,000 in August. This area has some of the highest average listing prices in Oregon, thanks to housing orders in Bend.
Multnomah County also saw a slight decrease, from $545,000 in May to $525,000 in August.
But these declines are negligible compared to what they were before the pandemic. In May 2019, the average list price in Deschute County was $523,000, and Multnomah County had an average list price of $461,000.
The homes are also on the market for a bit longer than they were earlier this year. In Deschutes County, the average number of days homes remained on the market in May was 29; Jumped to 50 by August. In Multnomah, the average number of days went from 28 to 38.
It’s trying to get back to normal,” said Noah Blanton, president of WFG National Title Insurance Company’s Oregon office. “It’s trying to get back to levels of price hikes and inventory levels that are closer to where we were in 2019.”
Oregon’s stock of active home listings began declining with the onset of the pandemic, and reached its lowest point in January 2021. The stock rose again that summer, following typical seasonal trends, but declined again by January 2022.
But August brought some promising numbers: There were nearly 12,000 homes on the market in Oregon, an increase of nearly 3,000 from the same month last year. Inventory is still close to what it was in August 2019, when there were 18,300 homes for sale in Oregon.
Blanton says the housing market is like a pendulum: it will swing as far as possible in every direction before settling.
“So I think the big question is, how far will this pendulum swing [get to] Normal?” Blanton said.
And what is the period? Coleman, of Opt Real Estate, says he has an idea. It looks at appreciation rates, which measure how much homes have increased in value.
“Nationally, the 100 largest economists predict that 2022 will end with an estimate of 9.3% nationally, then cool down to a very typical historical rate of 4.19% in 2023,” Coleman said.
These projections go even further: 3.12% in 2024, 3.46% in 2025, and 4% in 2026, according to National Association of Realtors.
“Historically, we like an estimate rate of 3 to 5%,” Coleman said. “It helps homeowners gain equity in their investments, but it also allows people to enter the market much better than when a 20-25% appreciation rate occurs.”
Coleman says newer homebuyers in Oregon shouldn’t have to worry about a loss of equity — that is, their homes dropping below what they bought for — if they buy at the top of the market, when many homebuyers were bidding well above the price. Required.
“People who have overpaid significantly to buy a home can certainly experience a small loss in equity if they overpay what the market can now afford,” Coleman said. “Over time, I wouldn’t be really nervous about it…even if it takes a step back a little bit, usually over time, it works really well for you.”