Fall is here - summer vacations are now memories, children are back in school, and the pumpkins are ripening for us to enjoy this upcoming holiday season!  In the Real Estate market, the Fall selling season is typically the second busiest season for housing sales over the course of the year.  This Fall, we're seeing a bit of a shift in the Portland Metro area housing market.  Inventory is hovering around 2 - 2.5 months inventory which is still very low (in a normal market we'd see around 6 months inventory.)  This means prices should continue to appreciate at above normal levels, which many experts believe will continue into 2019.

However, two things are occurring that indicate a movement toward a more normal market.

1. Listing supply is increasing - marginally so far, but we have moved from less than one month of inventory in some communities to over 2 months as more existing homes and new construction hoems are becoming available.  Plus, building permits are also increasing, as we're experiencing in the South Hillsboro, Cooper Mountain, Cornelius and Forest Grove areas.
2. Buyer Demand is Softening - a recent Real Estate Broker Survey, and anecdotal input from local Realtors, suggests that buyers have grown more discerning and a level of 'pause' has taken hold in many of our surrounding cities.

What this means is that prices won't appreciate at the levels we've seen recently, nor will they depreciate.  Buyers will have more time to consider homes and possibly have the opportunity to view homes of interest a second tiem before making any decision.  More contingent offers will be accepted.  Seller will more easily be abel to move-up or move-down to a home that better suits their current lifestyles.

Returning to a normal market is a good thing.  Even thought it may feel strange after the whirlwind activity we've been experiencing since about 2013.  The housing market is not falling apart - we are just returning to a market that will be much healthier in the long run.

Where Are Interest Rates Headed in 2019?

The interest rate you pay on your home mortgage has a direct impact on your monthly payment; the higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily over the course of the next year.

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.2% from this time last year and are predicted to be 5.1% higher next year.

If both the predictions of home price and interest rate increases become a reality, families would wind up paying considerably more for their next homes.

Bottom Line
Even a small increase in interest rate can impact your family’s wealth, so don’t wait until next year! Let’s get together to evaluate your ability to purchase your dream home now.

Home Prices: The Difference 5 Years Makes

CoreLogic recently released their Home Price Index Report. One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from July 2013 to July 2018 to show how prices over the last five years have fared.
The graph below was created to show the 5-year change in price from July 2013 to July 2018 by price range.

As you can see in the graph, the highest price appreciation occurred in the lowest price range with 48% growth, while the highest priced homes appreciated by 25%. This has been greatly fueled by the lack of inventory of homes available at the lower price ranges and high demand from first-time buyers looking to enter the market.

Where were prices expected to go?

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).
According to the Q3 2014 survey results, national homes prices were projected to increase cumulatively by 19.5% by December 2018. The bulls of the group predicted home prices to rise by 27.8%, while the more cautious bears predicted an appreciation of 11.2%.

Where are prices headed in the next 5 years?

Data from the most recent HPES shows that home prices are expected to increase by 20.0% over the next 5 years. The bulls of the group predict home prices to rise by 31.2%, while the more cautious bears predict an appreciation of 9.3%.

Bottom Line

Every day, thousands of homeowners regain positive equity in their homes. Some homeowners are now experiencing values even greater than those before the Great Recession. If you’re wondering if you have enough equity to sell your house and move on to your dream home, let’s get together to discuss conditions in our neighborhood!

August 2018 Real Estate Market Statistics

The following is the latest Real Estate Market Statistics for August 2018.
Click here for the full report

• Sales:   2,967 in August 2018 vs 2,736 last August  8.4 %

• Pending Sales:   2,760 in August 2018 vs 3,072 last August:  -10.21%

• New Listings:   4,214 in August 2018 vs 4,048 last August:  4.1%

• Average Sales Price:   $454,500 in August 2018 vs $429,000 last August:  5.9%

• Total Market Time: 40 days in August 2018 vs 34 days last August:  18.3%

• Inventory in Months: 2.3 months in August 2018 vs 2.0 months last August

Inventory by Area:

• NW Washington County   2.40 months
• Beaverton/Aloha               1.39months
• Hillsboro/Forest Grove     2.02 months