There aren’t enough flame emojis on the internet to describe the Portland housing market. In November 2022, the median home sale price in Multnomah County was $575,000, a 10.6% jump year-over-year. Yowza. 🔥
But thanks to soaring mortgage rates, list and sale prices have dropped. For those hoping to dip their toes in the home buying waters soon, it helps to know if this will continue and what other trends to expect. Put on your floaties, let’s hear what the local experts predict.
Look out for the ‘burbs
Todd Prendergast, president of Windermere Realty Trust, says popular areas in 2022 will likely carry that momentum into the next year. “One of the strongest neighborhoods for sales activity for 2022 was the greater Lake Oswego area. We see that trend continuing into 2023. Additionally, we see Raleigh Hills and Multnomah Village having strong activity.”
While median home prices for single-family homes in Portland are pushing toward $600,000, places like nearby Beaverton ($535,750) and Milwaukie ($483,750) are lower, but still offer easy access to the city’s amenities.
Don’t give up on Portland
Buyers hoping to find areas with less competition may want to think about getting a sweet pad west of the Willamette River. “The best value proposition for buyers next year will be the urban condominium market, specifically the Pearl District and South Waterfront, where buyers will be in the driver’s seat,” said Prendergast.
Buyers with cash (or those who have the capacity to borrow) will have more opportunities to purchase in a less competitive environment and be in a better position to negotiate, versus the hyper-competitive market of the last several years — especially at the entry-level and high end of the market.
Worth it to wait?
As with many aspects of house hunting, this question comes down to personal preference. Matthew Gardner, Windermere’s chief economist, offered his perspective. “I will always say, if you find the house of your dreams in your price range then you should buy it. As the adage goes, ‘you marry the house, but you only hold hands with the mortgage.’ If I were a buyer, I would not wait for mortgage rates to drop if it means losing the right house. You can always refinance down the road.”
It’s evident the market is cooling, with the greatest drop expected in the first half of 2023. Gardner foresees average home sale prices will be down about 2% compared to this year. While it’s too early to be certain, he is still optimistic that mortgage rates will pull back in the latter half of the year, supporting the market and buoying prices.
What about renting?
A recent study by RentHop listed Portland as the 17th-most affordable metro market for single renters in the US, and the median gross rent (2017-2021) was $1,406 according to the US Census. Rent in the city is still rising, but not nearly as much as in the suburbs.
Checking the boxes
Gardner is confident working from home is not going to go away, which means demand for homes with dedicated work spaces will stay high. He added, “We are also seeing more interest in more highly amenitized outdoor spaces.” Who says no to a covered barbecue/patio area?
The supply + demand problem
Are you more or less likely to venture outside when the rain is really coming down? Current homeowners feel the same way as those mortgage rates are really going up — simply put, they’re likely to stay put, meaning there will be less inventory available in 2023.
“I expect there will be fewer home sales next year in the greater Portland area,” Gardner said. “Many homeowners have historically low mortgage rates that they are simply not willing to give up by selling. This will keep the market relatively tight for at least the next few years.”