Industry after industry, life has been returning to normal as the pandemic's pace slowed considerably. Surprisingly, the real estate market was up for an unprecedented rebound despite the heavy global turmoil. It appears the summer of 2022 brought historic heights in property valuation that only recently showed signs of a pullback.
For the first time in over a year, the price of active listings in Portland is coming down. Such an occurrence signals that a buyer's market might be around the corner. But what do experts say about homes in the Portland area and the current state of the market?
The first signs were already there in May
According to local realtor Drew Coleman featured on KOIN 6 News, the number of pending sales showed a notable decrease in May, when the performance went down 17.9%. As many in real estate would know, this development signals that property listings might decrease in value over the coming months.
Nevertheless, Coleman notes, the local market is still red-hot. The slight decrease in sales has led to an insignificant reduction in property valuation. The median sale price is down $4000 over the previous month. Yet, the overall picture is relatively stable.
The market shows considerable resilience
According to Redfin, home prices in Portland were up 7.5% for July, compared to the previous year, with the median price of a property at $570,000.
Analyzing the historical trends, with an emphasis on seasonal price fluctuations, the price is expected to dip between fall and winter. However, the trajectory of the upward trend has been stable despite the negative macroeconomic indicators. In other words, if this trend is about to keep pace, we should expect even higher prices next spring.
According to Redfin, average homes sell for about 3% above their listing price, whereas hot properties can go as high as 7%. Compared to nearby cities, the market in Portland is very close to that of Tigard and Milwaukie, which is great news for realtors who must consider the overall economic climate of the industry. Interest rates on mortgages, for example, are around 6% which is a multi-year high. However, despite these developments, the market shows considerable resilience.
How do different locations compare to one another?
According to Portland Monthly, several areas sell lower than the metropolitan average. Namely, Washington state, downtown Vancouver, Orchards, and Hazel Dell have an average sale price below $500,000.
For those looking for the lowest numbers, the average sale price in Columbia County is $479,000. By contrast, Lake Oswego and the West Linn market keep an average price above one million dollars, which despite overall economic indicators, doesn't seem to affect demand.
The area is quite attractive.
With 89 neighborhoods and great diversity in real estate, Portland is an excellent market for buyers and sellers alike. The city is rich with vibrant communities, attractive architecture, solid infrastructure, and a lucrative job market. The area is excellent for livability, culture, education, and entertainment. It is home to a thriving business scene that attracts plenty of talent.
Regarding safety, violent crimes in Portland are down and slightly below the national average. Surprisingly, property crimes are relatively high, almost double the norm in the US.
Trends in property crime indicate a fundamental necessity for property insurance, especially in neighborhoods like Northwest, Downtown, and Pearl, where burglaries are much higher than the city average.
Despite the economic turmoil, living costs are currently more than bearable. Despite these statistics, Portland is a thriving area with a vibrant cultural scene, a thriving retail sector, and thousands of venues for world-class entertainment, hospitality, and all the requirements for modern living. It compares somewhat favorably to cities like Seattle.
Portland has a robust job market.
Currently, the hospitality sector is struggling to replace workers laid off during the early months of the pandemic. As venues were closed to stop the spread of infections, thousands of employees were forced to re-skill, adapt, and abandon their usual line of work.
Following up, the health care sector in Portland is also understaffed, with more than 20,000 vacancies, albeit due to different reasons.
In an unprecedented turn of events, the number of job vacancies in the area surpasses the total pool of unemployed talent. Still, employers were offering $21.36 per hour in 2021, a slight increase even after adjusting for inflation. Such developments, at least for the time being, are a strong indicator that the city enjoys a robust job market.
As we observe the local economic climate and the real estate market in general, there is no need to expect a significant reversal in current trends. As fall approaches, we should prepare for a similar, albeit slightly lower, performance. If they are aware enough, buyers should see this window as an excellent opportunity to jump in on the market.