Portland, Oregon Real Estate Market, October 2023 Report
The market has turned to favor buyers as housing inventory increases while the number of pending sales continues to decrease. The corresponding decrease in prices resulting from high supply and a lack of demand are creating ideal buying conditions that will benefit buyers until inventory begins to drop again (likely) in October. Let’s take a look at the numbers that are shaping our current real estate market conditions.
Portland Home Buyer Traffic Remains Lukewarm
As you can see illustrated on the RMLS buyer traffic report, buyer traffic has picked up slightly in September after a period of decline through the month of August. Levels of traffic continue to remain in the lukewarm range as they have since March with little fluctuation. Despite the small increase, we expect to see a decrease in buyer traffic throughout the rest of the year according to the predictable seasonal pattern of the Portland real estate market.
By entering current buyer traffic numbers into the chart below (based on our extensive knowledge of the Portland market), we can see that a traffic range from 15,000 to 20,000 translates to a lukewarm housing market.
|Oregon weekly home buyer traffic||Hot or Cold Market?|
|0 – 5,000||Frozen|
|5,000 – 10,000||Cold|
|10,000 – 15,000||Cool|
|15,000 – 20,000||Lukewarm|
|20,000 – 25,000||Warm|
Portland Real Estate Inventory is Rising Slowly
While real estate inventory has been on the rise since May, it is currently showing signs of slowing. With consistent buyer traffic and the tendency for fewer new listings as we head into the fall season, we expect inventory will begin dropping again in October. Entering the high number of available homes on the chart below tells us that we are currently in a lukewarm market that is saturated with inventory.
|Portland inventory ranking||Hot or Cold Market?|
|0 – 500||On Fire (notice April of last year)|
|500 – 750||Hot|
|750 – 1,000||Warm|
|1,000 – 1,250||Lukewarm (Currently)|
|1,250 – 1,500||Cool|
|1,500 – 1,750||Cold|
|1,750 – 2,000 +||Frozen (last Oct. – Dec.)|
Though the housing market has been less productive in 2023 compared to recent years, we are headed toward a favorable season for home buyers. Lower numbers of buyers combined with a larger pool of available homes on the market is a recipe for greater choice and competitive pricing that both work to the advantage of prospective buyers.
The Number of Homes with Price Drops Continues to Increase
Since June the number of homes on the market with price drops has steadily risen, and currently about 45% of detached homes have experienced a drop in their original listing price. With the decrease in buyer activity we expect to see in the Fall, there will be further price drops as sellers compete to appeal to a smaller pool of buyers.
Average Prices are Slowly Decreasing
Though prices have remained fairly consistent for several months, last month we saw a slight decline in average home prices (calculated by price per square foot). Increasing inventory and the lower buyer traffic we anticipate in the Fall will contribute to continued lower prices throughout the season, to the benefit of home buyers.
New Listings Remain Steady, Pending Sales are Down
As you can see on the top chart, the trajectory for new listings in August defied the pattern of the last two years, increasing slightly instead of dropping significantly as they did in both 2021 and 2022. At the same time, this small increase brought the number of new listings much closer to 2022 levels than they have been throughout 2023.
The number of pending sales also deviated from recent years by continuing to decrease (as we predicted last month) instead of increasing as they did in August of 2021 and 2022. Based on our experience and knowledge of the Portland real estate market, we can confidently predict that sales will continue to dwindle throughout the fall and winter months.
The two charts above clearly demonstrate how the housing market in 2023 has dramatically underperformed in comparison to the last two years– at some points coming up short by a third fewer transactions. We can attribute the sluggishness of this year’s housing market to two main factors: the current higher interest rates that deter both prospective buyers and sellers, and ongoing inflation. Sellers have been reluctant to list their home in the current market with fewer interested buyers (and to potentially let go of a lower interest mortgage), and buyers may choose to wait until mortgage rates are more favorable.
When to Sell Your Home
Despite the slight recent increase in buyer activity, the low number of buyers shopping for homes compared to the increasing number of available homes on the market means buyers will have to compete and likely lower their prices to secure a sale. We would advise waiting until Spring to list your home to benefit from the seasonal shift towards increased buyer activity that works to the advantage of sellers.
Conditions are Right for Home Buyers
Market conditions are currently working in favor of buyers and these conditions will likely continue to improve as we head further into Fall. With an increasing number of homes to choose from and decreasing prices, this is an ideal time for buyers to find a new home or investment property in their desired neighborhood at a competitive price. We would encourage you to check out our fantastic home search portal that has some unique filters that could improve your search in a down market, for example, biggest price drop in the last 7 days filter.
Work with Experienced Realtors
Because we have over twenty years of experience supporting buyers and sellers in the Portland area and have in-depth knowledge of our local real estate market, we will provide you with top-notch customer service whether you are ready to buy or sell. Call 503-714-1111 to reach our top 1% home buyer’s and seller’s teams or chat with the bot on our site to get started today!September 22, 2023