Tuesday, August 18, 2015

Portland Home Values - A New Housing Bubble? Perhaps Not.

Portland's real estate market has remained very active this summer. Home sales are up 22% from last year including the most productive July in Portland on record. This is real amazing. The average price of a Portland home has risen between 6% to 7% this year, and the supply of houses on the market are at just 1.7 months of unsold inventory. A more balanced buyer/seller market would have between 4 to 5 months. The low supply of homes for sale continues to put an upward pressure on home prices. It really is a good time to sell a house. 

Click here and read below to see how this can benefit you. 

Are we experiencing another housing bubble? Some analysts have suggested that we've entered a new housing market bubble. Lawrence Yun, Chief Economist for the National Association of Realtors has said hard facts suggest otherwise. Mr. Yun says underlying conditions today are fundamentally different from the bubble of a decade ago. Back then, credit was easy to obtain and the volume of home sales were 40 percent higher than now. By comparison, credit is still very tight, which has led to an unusually high level of all-cash sales. Mortgages balances are falling, home owners are paying their mortgages on time and few are seeking cash-out refinances and equity lines of credit.

It's fair to ask, though, whether at some point affordability problems will slow this pace down. Home prices are expected to rise continuously as long as mortgage rates remain under 6%. Rates have been averaging about 4% for some time, though analysts say them may rise to 5.5% by the end of next year. Robust job creation and meaningful increases in income levels will help. Mr Yun says for now, no bubble or impending crash in sight.

The average cost of a home in the Portland Metro Area is currently $351,600.

The graph below displays the average and median sale prices of Portland Metro Area homes between 2006 and today. During this period the average price of a house rose 51% from a market bottom in 2011.

Mortgage interest rates are about 4%! Call Brent Schreiber with Consolidated Community Credit Union at 503-872-9455 if you think it’s time to refinance or buy. You’ll be happy with Brent’s experience and commitment to serving his clients.

Call me when it’s time to buy or sell a home. I’ll work hard for you!

Darin Provost, Broker
Portland Digs Real Estate