A shift in the wind of the market has happened and today I am going to explain what it means for you.
It’s time once again for The Shiver’s Report, where I talk about the real estate market in the Portland Metro and Southwest Washington.
So, what is going on? I believe that there truly has been a shift in the wind. In fact, we are going on four and a half months with fewer sales and more inventory. The reality, though, is that this is probably a good thing. This is because, as buyers already know, it has been a tough market.
When we talk about inventory, days on market, slowdown, and appreciation, the shift isn’t happening—it’s already here.
For the Portland Metro’s first two weeks of August, sales are down 8.7%. This has been the norm for the last three to three and a half months.
Meanwhile, for the first time in Southwest Washington, we saw fewer sales than the year before, even though we had seen a massive pickup. This happened because of affordability—we saw rates drop and then pick up again.
Now people think that there will be a big downturn like in 2009 and 2010. However, the difference between now and then is our current interest rates are between 4.5% and 4.7%, whereas before the crash hit, they were at 6.5%. That’s a 2% difference.
A 2% difference on a $400,000 property is a 20% difference in purchasing power. Even though affordability is starting to go up, home values in our area are higher than ever before and have hit their peak level. This is true as well in over 60% of all markets in the United States. All of this is good for sellers.
Buyers, meanwhile, are starting to get more opportunities and more homes to choose from. You don’t necessarily have to make multiple offers. If you’re looking below the $400,000 range, though, it’s still a super tight market. If you start stepping above that, especially in the luxury level, we have seen days on market and inventory levels go up significantly.
If you have any questions about our market or are interested in buying or selling, please feel free to reach out to me. I would love to speak with you.