In a few days, the RMLS Market Action Report will tell us about Portland's real estate market in September. We predict that the report will be seen as negative, and in that is opportunity.
Here is what has happened: In August the number of Portland properties that went under contract was 7.6% lower than August 2016, and also 7.6% lower year-to-date in 2017 compared with a similar period in 2016. These numbers will result in fewer reported closings last month compared to September 2016, August 2017, and year-to-date 2016 vs 2017 through September.
Those that closed in September will probably also be at lower price points. OregonLive and a few talking heads will claim that tight supply and affordability issues mean the market may have peaked, that the recovery may be over, and that the Portland market will, at best, level off. Some buyers will hesitate, bidding wars will diminish, and a lot of people will comment on how much the market has slowed.
So is the boom over?
No, it's not. Here is why:
Fundamentals: Portland is still affordable by national standards, employment and new household formation is strong, and supply is limited. More on this in another post.
Market Cycles: The number of closed sales, and the average and median sale prices, drop every year in late summer and fall, and rise in the spring. This year will be no different. That does not mean that home values have fallen. For instance, both the average and median sale prices of Portland homes fell 2.5% from July to August. Some have called it a price correction in an over-heated market. We think it was more about smaller, less expensive home selling later in the year, just as they do most years. Looked at another way, do you really think home values in your neighborhood fell 2.5% last month? Neither do we.
Okay then, what should be done?
If you want to buy a home or investment property, and you don't like bidding wars, get serious now. The market will slow for a while, and you'll be able to make a smart investment if you act now. Competition to buy next spring will be tough, and we'll see bidding wars much like we have seen the past few springs. Home prices will rise sharply. If you buy this fall, you'll be glad you did. If you wait, you'll wish you had bought earlier.
Call us at 503-222-4300 or email MyAgent@PortlandHomeTeam.com. We're here to help.