It may seem late to say “Happy New Year”, but it’s timely in reference to Portland’s Real Estate Market. It is generally the month of March when the weather begins to clear that starts-off a new real estate year. Homes often sell nicely this time of year with less competition and an active group of determined buyers who've waited through the holidays for something they want.
Click Here and read below for an update on Portland home values.
Portland Home Values
The new year appears to be kicking-off where 2013 ended. There was a slight rise in pending home sales through January and the inventory of homes for sale remains low at just 4.1 months. This demand combined with very few homes for sale should maintain an upward pressure on home prices. Market reports that I follow seem to agree that a rise in home prices will continue in 2014 between 3% to 5%, with five important things to watch:
- The Inventory of homes for sale – Prices have risen largely because of the shortage of homes for sale. Economists are suggesting that inventories hit bottom last year and some markets are returning back to normal levels.
- When will home builder’s start building again? New construction isn't expected to be at normal levels for many years as the cost to build is still higher than relative home values and credit is still tight for smaller contractors.
- Home Mortgages – Getting a home loan has eased up, but is by no means a given. The housing recovery is hinged on threats of rising interest rates even though they are still well below historic levels.
- What will property investors do next? A handful of institutional investors have purchased tens of thousands of homes that are being rented out. These investors played a key role in stabilizing prices. What will happen after the initial rush to invest subsides, and what will they do with all of that inventory?
- Will the rise in home prices tip the scales on home affordability? Rising home prices are a double-edged sword. On the one hand, rising prices are giving many homeowners equity in their homes again. This increase also makes housing less affordable. This will be a problem when home prices are no longer attractive to property investors and/or if interest rate rise in a meaningful way.
The average price of a Portland home is currently $317,000 – up almost 13% in the past twelve months.
Mortgage interest rates are about 4.25% - 4.5% and projected to be closer to 5% by the year end.
Hope your winter is going well. Stay warm!
Please call me when it’s time to buy or sell a home. I’ll work hard for you.
Darin Provost, Broker
Vintage Real Estate