Kelly's Portland Metro Market Review

October's Months of Inventory for the Portland Metro Markets:

November's Months of Inventory for the Portland Metro Markets:

The months of inventory (MOI) for the Portland Metro markets, including Washington, Multnomah and Yamhill County, has continued to decline through October and November. The further decrease in MOI occurred for all price categories from $200,000 to $1,999,999. Though, similarly to October, the decrease in MOI is not due to increased home sales. Instead, decreased MOI reflected the reduce number of active listings in all categories. Listings priced between $200,000 to $399,999 saw the greatest decrease of inventory while retaining the largest buyer pool.

As the percentage of pending sales per total listings has remained steady throughout October and November, it shows that buyers are still actively in the market despite decreased inventory. As a result, sellers will continue to net more now than in the coming real estate cycle as competition increases between home sellers when active inventory rises.

While the Fed raised the interest rates, we will most likely not see an immediate rise in home interest rates, which makes it still a great time to buy. Traditionally, as the housing market picks up during the spring and summer with increased inventory, the real estate markets shifts to favor buyers for listings in price categories that have smaller buyer pools, such as luxury or investment properties.

With properties that remain in high demand, such as the $399,999 and lower residential properties, home prices are likely to increase through the shifting market, in part to reflect the increased interest rates. At this time, it is difficult to predict exactly how much home prices may increase, but with fewer housing options available for low income families, new home owners and millennials, increased home prices may continue to keep many out of homeownership in favor of renting in the coming years.

Although there is reduced inventory during the winter months, buyers may find better deals for properties priced at or below $399,999 before home prices shift from the increased interest rates and the seasonal increase in demand as more buyers come into the market during the spring and summer.

Analysts forecast that the new year will also bring a moderate increase in housing demand as homeowners who have seen increased equity will be transitioning into larger homes. Therefore, 2016 is expected to bring a larger buyer pool for properties listed over $399,999, which is great news for sellers whose properties may have been skipped over in previous years. Also, given increased home equity and the anticipated increase in home prices, the 2016 market will likely benefit seasoned homebuyers over first-time buyers that may continue to get priced out of the market.

With many first-time buyers still sidelined from homeownership, the rental market is expected to continue strong through 2016. For property owners, rental income provides a steady means of building wealth while property equity climbs.

For property owners looking for more information on their home’s rental potential, please contact Access Property Management LLC at 503-310-7949.