And Happy Winter.
The new year for selling homes has started off a little mixed from where 2016 ended. The number of homes placed up for sale rose in January by almost 56% from December, but the number of homes sold fell short by almost 30%. This gave us a slight rise in inventory of homes for sale to 1.7 months. The holidays and winter weather made for an interesting two months. (Heck, I was out of town for most of it including the snow!)
The average price of a Portland home is currently $409,900 - an increase of 12% over the past 12 months. Market reports suggest a rise in prices of about 3% to 5% for 2017 - See Predictions for 2017 below.
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Predictions for 2017
We have a new Administration that'll have an impact on the housing market. It's too early to predict what the impacts will be for 2017, but reasonable to feel alert to how new policy changes will affect the market for years to come. Stay tuned!
Here are a few indicators we can rely on for now -
An Ongoing Housing Shortage
Lawrence Yun, Chief Economist of the National Association of Realtors says there's nothing on the horizon in the coming year that will likely bring any relief or improvements to the housing shortage. Sigh... A low inventory of homes for sale should maintain an upward pressure on home prices through 2017. Market report suggest a rise in the Portland Metro Area of 3% to 5% this next year.
New Housing Construction
Nationally, single family new construction increased 9% in 2016. This is low considering the lack of new construction over the past 10 years. One big reason housing construction hasn't returned to normal levels, despite increased demand, is lack of labor. A lot of workers left the industry when construction jobs dried up in 2007. Interesting statistic, about one in four construction workers are foreign born. New immigration policies might make this problem worse.
Mortgage Rates May Increase, But Not by Much
Experts predict 30-year fixed mortgage interest rates to be about 4.5% in 2017.
Slower Market Growth Due to Affordability Pressures
Availability of affordable homes for sale has declined over the past 4 years and won't likely be much different for 2017. Redfin is predicting median home sale prices to increase nationally 5.3% year over year and the volume of homes sold up just 2.8% in 2017.
More People Will Have Access to Home Loans
It seems mortgage lending has relaxed some from the height of the housing crisis. For those with particularly good credit, some lenders are introducing mortgages that require down payments as low as 3%.
2017 Will Be A Very Fast Moving Market
We've had a persistent inventory shortage for 4 years in Portland, especially in lessor expensive starter homes. These homes are selling very quickly. The development of new technologies via the internet and smartphone applications is also contributing to homes disappearing quickly. It's been commonplace to arrive at a new listing with someone already inside viewing it, and 1 to 2 parties arriving behind my clients and I. Another Sigh... Oh, and you should see how FAST a millennial buyer can find a home for sale!
Hope this helps.
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