Portland, Oregon Real Estate Market, January 2024 Report

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Our local housing market is in a cold state with a high inventory of detached homes, slow but continuing price drops and the number of active buyers at its lowest point for the year. Pending sales have continued to decrease and inventory is beginning to drop, but at a slower pace than in recent winter seasons. These current factors create the ideal (and typical seasonal) conditions for those wishing to buy a home before the market heats up in the spring. In this article we’ll examine the statistics that are influencing the current status of the Portland housing market and shaping it in the month ahead.

Portland Home Buyer Traffic is Slowing Down

We expect to see buyer traffic taper off during the Fall season each year due to the predictable yearly cycles of the Portland real estate market. Since our last report, traffic has dropped by over 3,000 home viewings. As shown on the graph from RMLS below, this drop has moved our cool real estate market even closer to our cold status rating, and with the holidays right around the corner we should see an even more significant drop in active buyers in the near future (note the dip in buyers around the Thanksgiving holiday).

By entering the current number of active buyers on the market into our chart below, we can visually see that the market is currently in a cool state (relative to more active periods of the year). We developed this chart based on our decades of experience working in and analyzing the Portland real estate market. If buyers continue to drop out at a similar rate, the market could become frozen over the next several months.

Oregon weekly home buyer trafficHot or Cold Market?
0 – 5,000Frozen
5,000 – 10,000Cold
10,000 – 15,000Cool
15,000 – 20,000Lukewarm
20,000 – 25,000Warm
25,000 +Hot

Portland Real Estate Inventory is Slowly Decreasing

Portland home inventory reached its peak for the year in November and is now starting to decline, which we can see illustrated on the chart from Fidelity below. Inventory levels are following a similar pattern as in recent years, with numbers steadily decreasing after November in both 2022 and 2021. We should see inventory follow this trend over the months ahead by continuing to drop until the Spring of next year. The current lower inventory has shifted the market to lukewarm status, and further decreases in the number of available homes will continue to warm up the market, as demonstrated by our chart below.

Inventory as of December 18, 2023. Above chart courtesy of Fidelity National Title.
Portland inventory rankingHot or Cold Market?
0 – 500On Fire (notice April of 2022)
500 – 750Hot
750 – 1,000Warm
1,000 – 1,250Lukewarm (Currently)
1,250 – 1,500Cool
1,500 – 1,750Cold
1,750 – 2,000 +Frozen (last Oct. – Dec.)

Our current real estate conditions continue to be beneficial for buyers while the number of active homebuyers continues to drop, yet inventory is still high. Interested buyers may be able to take advantage of price drops by sellers who are motivated to sell before the end of the year.

The Number of Homes with Price Drops Remains Steady

Percentage of Listings with a Price Decrease as of December 18, 2023. Chart courtesy of Fidelity National Title.

After steadily rising since June, about 52% of listed homes have now had to undergo price drops, compared to 53% in November. As you can see on the chart above, this percentage began to decrease after reaching its highest point during December in both 2022 and 2021. We can expect a similar trajectory in the coming weeks and months as we move closer to the revival of the housing market that always comes with Spring, bringing with it a new wave of homebuyers and fresh listings.

Average Prices are Slowly Dropping

Price per sq. ft. as of December 18, 2023. Chart courtesy of Fidelity National Title.

Average prices are decreasing at a steady rate similar to our report last month. The current low number of active buyers and still-high home inventory will contribute to an overall decline in prices (calculated by price per square foot) for the foreseeable future. These are the conditions that benefit homebuyers, who can take advantage of both lower prices and a greater variety of homes to choose from.

New Listings and Pending Sales are Decreasing

As shown on the top graph, new home listings continued to decline in the month of November at a slightly slower pace, bringing listings closer to the numbers we saw in 2021 and 2022. The graph clearly illustrates how new listings in 2023 have behaved in a similar manner to the last two years by consistently decreasing from the summer months through the end of the year. With the holidays now upon us, we should expect this trend to continue through the start of the new year.

After closely mirroring the sales performance of 2022 since September, pending sales in November nearly matched numbers at the same time last year. Sales typically drop during the holiday season each year when both buyers and sellers are less active, and we anticipate that sales will continue to decline through the first half of January.

After lagging far behind the performance of the 2021 and 2022 housing markets for the first half of the year, the market began to more closely parallel last year’s numbers until finally matching them in the month of November. Factors like high interest rates and ongoing inflation have worked to suppress the housing market of 2023. To learn more about how these will influence market performance in the new year, read our 2024 real estate forecast.

When to Sell Your Home

The holiday season is typically slow for sellers in the Portland area, with a peak in available home inventory as many would-be buyers put home shopping on hold. At this time of year many sellers choose to withdraw or wait for a more opportune time, which is what we would advise. Our local housing market follows a predictable seasonal pattern, and the Spring of 2024 will bring a new wave of motivated buyers to energize the housing market, increasing competition and creating more favorable conditions for sellers. If possible, the ideal time to list your home is in the Spring (in particular March – May).

A Great Opportunity for Home Buyers

If you are on the lookout for a new home, current market conditions will work in your favor, with both the large pool of available homes and the lack of competition from potential homebuyers. This annual holiday lull in the real estate market pushes sellers to compete for buyers by dropping their prices and increases the likelihood of finding a great deal on a new home. The intuitive home search platform at PortlandHomesForSale.com is a great place to start, giving you the ability to search by individual neighborhoods or by custom filters, for example “biggest price drop in the last 7 days” to pinpoint the unique characteristics you are looking for in a new home.

Work with the Top Portland Real Estate Team

Whether you are interested in buying or selling, our top 1% buyer’s and seller’s agents are prepared to help you every step of the way. We have 20+ years of experience in expert negotiations and optimized online marketing to provide the best exposure for your home. We love to provide our clients with superior service, yet we charge a lower-than-average commission rate. Get started today by chatting with the bot on this site or calling 503-714-1111. We would love to put our experience to work for you!

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