Portland Real Estate Market Forecast 2022
We looked for anyone forecasting a decline in home prices in 2022 nationally or locally and couldn’t find a single reputable source. The lowest forecast for the nations real estate market in 2022, is Realtor.com’s 2.9% increase prediction.
Summer 2022 Market Forecast Update. Since writing this forecast at the beginning of the year, the aggressive increase of interest rates (by more than double previous rates) has caused an unexpected slowdown (at least more of a slowdown than was previously projected). All major industry news portals have revised and reduced their real estate market outlooks. Looking back at Q1 we say skyrocketing home prices in the greater Portland metro area and will still likely see some increase in Q2. However, it is likely Q3 and Q4 will see price decreases in most, if not all, areas. There will be a spring bump in prices in 2023 (there historically is always a bump in spring), but it is yet to be determined if prices will be lower across the board in 2023. Now, the below forecast may still not be far enough, simply because prices jumped so high in Q1, double digits plus, but they will most likely be coming down in the second half of this year, a more volatile year than previously expected.
When looking ahead to 2022, you may be interested in knowing the best month to buy or sell a home (we rank each one). Seasonal norms came back in 2021, with spring (March – May) performing the best for home sellers and fall (August – October) performing the best for home owners. We predict the 2022 real estate market will follow similar seasonal norms. Buying or selling at seasonal peaks give you a 10% boost in your sales price or in your purchasing power.
Looking ahead to 2022, you may also be interested in knowing if the Portland real estate market is at risk for a crash or bubble burst. We analyzed 10 foundational, local Portland real estate statistics to help us determine the crash risk factor.
Finally, if you own a luxury home, condo, starter home, live in the suburbs or in the city proper, our forecast for your specific home in the Portland metro in 2022 will be different. Read on for our segmented forecast.
National Real Estate Market Forecasts 2022
|NAR (National Associations of Realtors)||+ 5.7%|
|Freddie Mac||+ 7%|
Portland Real Estate Market Forecasts 2022
|My Forecast||+ 8%|
Notice that for the few reporting sources that break their real estate forecasts down into the city level, each one has Portland performing slightly better than their overall national housing market forecast.
Reasons Why Portland Home Prices Will Continue to Rise in 2022
- Portland unemployment is low, currently just above 3% – already a full recovery from 2020.
- Portland wage growth is higher than it was in 2019, hovering just above 4%.
- The Portland rental market was getting cheaper in 2019-20, but rents are increasing again due to plummeting vacancy rates, lack of new rental housing options in the city. This means the rent vs. buy equation for Portland will skew buy. Those that can buy will be more likely to do so.
- Interest rates are likely to rise, but at a glacier pace, and unlikely to top out past 4%.
- Inventory problems, the number one reason for the sellers market in Portland since 2014 or so, will continue into 2022. New construction rates in Portland are at near zero, hitting all time lows despite increased zoning laws, and population growth (though much, much slower) continued in 2021 in Portland.
- Home selling costs are down. Average national real estate commissions dropped to just under 5% in 2021. Closing costs haven’t moved much in our area and are minimal (for the seller).
- Portland will not see a significant number of foreclosures in 2022. Simply will not happen due to forbearance rates dropping to under 2%.
For a more detailed explanation of each of the above points with reference links, check out our article here.
Portland Condo Market Forecast 2022
The Portland condo market has been in a slump since 2017 and probably bottomed out in 2020 before finally seeing some new life in 2021. Prices increased across the board for the first time in 2021 after largely dropping across all segments in the years prior. This does not mean that the condo market was hot in Portland in 2021 or will be in 2022. In fact, for first time homebuyers, a condo in Portland might be their most affordable choice in 2022. The average condo sales price coming into 2022 is only just above 300,000.
The top 25% of Condos in Portland are listed for $995,000, have 1,881 sq. ft., two bedrooms and two and a half baths. They currently take 129 days on average to sell (increased time on market is normal for luxury properties). I expect this segment, luxury condos, to outperform the rest of the condo segments and increase 8% in price in 2022. Luxury condos outperformed the rest in 2020 as the demand for size and amenities increased post the start of COVID and that continued into 2021.
The bottom 75% of Condos in Portland take about 55 days to sell. I’m lumping in all three remaining condo segments here because their performance is so similar. I expect them to increase in price 4% in 2022. In 2021 all three segments had mild appreciation. These segments represent higher density living situations, which are still less desirable overall post the start of COVID.
Portland Price Segmented Real Estate Forecast 2022
The top 25% of detached homes in Portland are priced at 1,200,000 and have 3,575 sq. ft., a lot size over .25 acre, four bedrooms and three and a half bathrooms. The average time to sell one of these homes right now is 105 days. This segment increased the second most in 2021. I predict a 10% increase in luxury home prices in Portland in 2022.
The top 50-75% of detached homes in Portland are priced at $639,900 and have 2,216 sq. ft., a lot size of .1 acre or over, and have three bedrooms and two and a half baths. The average time to sell one of these homes right now is 42 days. This segment saw the slowest price growth in 2021, not having either the appeal of affordability nor of high-end luxury. I predict a 5% increase in home prices for this segment in 2022.
The bottom 50-25% of detached homes in Portland are priced at $499,000 and have 1,660 sq. ft., a lot size of .1 acre or over, and have three bedrooms and two baths. The average time to sell these homes right now is 35 days. These smaller, more affordable (but probably not fixer) homes outperformed all other segments in 2021 in Portland. I expect another banner year for this segment with home prices increasing 12% in 2022.
The bottom 25% of detached homes in Portland are priced at $389,750 and have 1,137 sq. ft., and a lot size over .15 with an average of three bedrooms and one bathroom. The average time to sell a home in this segment is 42 days (fixers in the mix slow it down). I predict this home segment to increase 8% in price in 2022.
Talk with Portland Real Estate Experts
Our small team has over 2,000 successful home sales in the Portland metro area. We’d love to talk with you! Whether you’re looking to buy or sell, we have top 1% sellers and top 1% buyers agents standing by. Give our main line a call today at 503-714-1111 or chat with our bot on this site.December 31, 2021