Portland Real Estate Market, March 2023 Report
As we enter March 2023, the real estate market in Portland, Oregon is continuing to stabilize after a difficult fall season for sellers, when inventory far exceeded the number of available buyers – who were dropping out due to the pressure of high mortgage rates. Inventory is on the decline and home sales are starting to outpace supply, setting us up for a strong (but temporary) seller’s market. The market remains cooler than at this time last year, with new listings and both pending and closed sales at considerably lower numbers than in 2022.
The effect of the holidays on the Portland real estate market every year is that it eliminates excess inventory, preparing the market for a productive spring. At the end of 2022, there were fewer sellers listing their homes on the market, and while some sold, others were eventually taken off the market. Spring is typically always the best time of the year to sell a home because of the sudden drop in inventory around the holiday season combined with a slower rise of inventory in the new year than buyer traffic. (We receive daily inventory counts and weekly buyer traffic counts to inform these trends.)
Here in Portland, the market typically peaks for sellers in March and April, usually followed by May. June tends to be more balanced, and typically by July the market has tipped in favor of buyers. I’ve been selling in Portland for 20 years now, and when the real estate market is cooler as it is now, it shortens the spring selling season. In a hotter market, the entire summer can favor sellers. The housing market of 2023 will be cooler, likely with a shorter selling season in the spring. This means inventory could exceed the number of available buyers as early as June, but certainly by July. If that happens we will start to see price drops by July, if not in June. Until then, we will see price stabilization, and perhaps even an increase in prices as we approach warmer weather.
Home Prices Drops are Becoming Less Common
Last month we reported that after a long period of increasing home prices they were beginning to drop, and they are continuing their downward trend.
Home Prices have Stabilized after Declining for 6 Months
Price per sq. ft. pricing is just starting to tick up after a long season of price drops.
Portland Real Estate Inventory is Still Plummeting
The market follows a predictable seasonal pattern much like the instincts of a migrating animal. As you can see in the annual cycle of the past three years in the graph above, the drop in inventory we’re seeing now often bottoms out at the end of February, or early March, which is followed by an influx of new home buyers entering the housing market. So as February comes to a close, we can expect the market to become reinvigorated with a surge of buyers in the coming weeks.
The Best Time to Sell Your Home
If you’re a seller and have been waiting for market conditions to improve, now is the time to make your move. But keep in mind that the opportune time to sell will be early in the season, so it would be wise to act quickly and withdraw sooner (before the market shifts in favor of buyers) to preserve your ability to get the best offer on your home. Market patterns strongly suggest that home prices will begin to drop in the summer of 2023 and will continue to lower throughout the fall and winter seasons.
The Best Strategy For Selling Now and Buying Later
Our prediction is that overall, selling this year is likely to be tougher than buying (for most of the year), so it is best to take advantage of the selling season now. While going through the process of selling your house, it might also be a good idea to extend the time you can stay in the home as long as possible to set yourself up to buy at the most opportune time as well. For example, you can negotiate up to a 45 day close with no impact on the buyer’s loan terms, and you can add to that a 60 day short-term “rent back”, which is a short-term lease that allows you to stay in the home for another 60 days after closing (when you receive the seller’s payment). Once again, it is helpful to note that this short-term lease back does not interfere with the buyer’s loan terms. When we assist home sellers, we often negotiate the two together so that when our client accepts an offer (goes pending), they are allowed to remain in the home for 105 days – or over three months – before they need to move out. This gives our clients the opportunity to both sell at the best time of the year and also buy three months later when when the market has either begun to, or has already turned to favor buyers. If you are able to take advantage of it, this is the most savvy and financially rewarding approach to selling before buying.
What Does This Mean For Home Buyers?
While prices have been leveling out, many home sellers that have been on the market for a while may still be willing to negotiate. It would be best to act quickly before the current seller’s market gains strength, otherwise you may choose to wait a few months until market conditions are more favorable. It is likely that by June, and for the rest of the year, the market will favor buyers. And as always, you may come upon the perfect home or deal at any time, and that can always be more important in your buying decision than overall market conditions.
Work with a Top Realtor
It may come as a surprise that many real estate agents don’t follow the market closely and are forced to react to – rather than anticipating – its constant fluctuations. A top selling or buying Realtor understands the housing market cycle and the variables that affect it and can both “read” the current market and predict what is going to happen and why. We are armed with the knowledge and experience to help you prepare your home for market, prepare your offer for a new home, or both! Give our team a call today at 503-714-1111, or chat with the bot on this site. We’d love to be a part of your success story.February 24, 2023