Portland Real Estate Market, February 2023
As we head into February 2023, we’re seeing the stabilization of a falling real estate market in Portland, Oregon. Fall 2022 was brutal for home sellers as inventory far exceeded the number of available buyers (due to so many dropping out with the higher rates). As we moved to the end of 2022, there were less sellers than normal listing their home on the market, and while some homes sold others cancelled entirely.
The holidays have a wonderful effect on the Portland real estate market every year. The season wipes out excess inventory and sets up the market for a good spring. The reason why spring is typically always the best time of the year to sell a home is the sudden drop in inventory around the major holiday. Add that to the fact that inventory rises slower in the new year than buyer traffic. (We get daily inventory counts and weekly buyer traffic counts.)
The market here typically peaks for sellers in March and April, followed by May. June is usually more balanced, and typically by July things have tipped in the favor of buyers. When the real estate market is cooler (I’ve been selling here for 20 years now), the spring selling season is shorter. When the market is hotter, the entire summer can favor sellers. 2023 will be a cooler year, likely with a shorter selling spring season. This means inventory could exceed the number of available buyers as early as June, but certainly by July. That means we will start to see price drops by July if not June. Until then, we will see price stabilization, and perhaps even an uptick as we approach better weather.
Home Price Drops Are Starting to Drop After a Continual Increase
This is a recent trend reversal. Numbers from Fidelity National Title up to Jan. 13th 2023.
Home Prices are Leveling Out After a Long Slow Decline
This is a price per sq. ft. chart from Fidelity, up to Jan. 13th 2023.
Portland Real Estate Inventory is Still Nose-diving
It’s almost like the market knows what time of year it is and simply behaves the same, like the instincts of a migrating animal. This continual drop in inventory (as you can see in past years) often bottoms out in Feb. causing March and April to boom with an influx of new home buyers.
What does this mean if you’re a home seller?
If you’ve been waiting to sell due to terrible market conditions, get ready! However, note that the opportune time to sell will be quick and leave early. I do expect home prices to drop in summer, fall, and winter of 2023.
What does this mean if you want to sell and then buy?
Since overall, selling this year is likely to be tougher than buying, it is best to take advantage of the season. While taking advantage of the season, it might also be a good idea to extend the time you can stay in the home as long as possible, so you’re buying in a better time too. For example, you can negotiate up to a 45 day close without messing with the buyer’s loan terms, and you can add to that a 60 day short term rent back (short term lease) where you stay in the home after closing (you get the money at closing) for another 60 days. This short term lease back also does not mess with the buyer’s loan terms. We often negotiate the two together so that when our home seller client accepts an offer (goes pending), they still have another 105 days in that home before they have to move out. That’s more than three months! This gives them an opportunity to sell in the best time of year, and buy three months later when things have likely started to, or already fully turned to favor buyers. It is the smart way to buy and sell.
What does this mean if you’re a home buyer?
While prices have leveled out, many home sellers that have been on the market for a while are still willing to negotiate. Strike now while the market still favors you, or perhaps wait a few months until it does so again. It is likely that by June, and for the rest of the year, the market will favor you. All that being said, if you find the perfect home or deal, that can always be more important to you than the overall market conditions.
Work with a Top Realtor
Surprisingly, many real estate agents don’t follow the market closely and seem boggled by its ups and downs. A top selling or buying Realtor knows what is happening, what is going to happen, and why. We can help you prepare your home for market, or prepare your offer for market. Give our team a call today at 503-714-1111, or chat with the bot on this site. We’d love to connect!January 20, 2023