Current Market Overview

According to the most recent RMLS data available, in May 2024, the Portland metropolitan real estate market showed signs of vibrancy and growth. Home prices continued their upward trend with the average sale price reaching $629,000, marking a 1.6% increase from the previous month and a 2.2% increase from the same period last year. Similarly, the median sale price also saw a rise, moving up by 1.5% from May 2023 to $558,500. These price increases are indicative of a strong demand in the housing market.

Market Activity and Inventory

The residential housing market saw an increase in activity with 3,508 new listings, up by 12.4% from April 2024 and 8.3% from May 2023. This influx of new homes entering the market suggests that sellers are responding to the robust buyer demand. Pending sales, however, experienced a slight dip, decreasing by 0.7% compared to May 2023, though they were up by 2.2% from the previous month. Closed sales were strong, with 2,140 transactions completed, a 13.6% increase from April 2024 and a 6.6% rise from May 2023.

Affordability and Inventory Levels

Affordability remains a critical factor in the region. According to the National Association of Realtors’ formula, a family earning the median income of $116,900 can afford 88% of a monthly mortgage payment on a median-priced home. This calculation assumes a 20% down payment and a 30-year fixed mortgage rate of 6.7%. The market’s total inventory stands at 2.3 months, a slight decrease from April 2024, suggesting that the supply of homes is tightening as demand remains high. The total market time increased to 86 days, reflecting the competitive nature of the market as buyers quickly snap up available properties.

Regional Highlights

Different areas within the Portland Metro region showed varied trends. For instance, Lake Oswego and West Linn continue to be among the pricier neighborhoods with an average sale price exceeding $965,600, reflecting a 16.3% increase in closed sales from May 2023. In contrast, more affordable areas like Gresham/Troutdale experienced moderate price adjustments and consistent activity, making them attractive for buyers looking for lower-priced options.

Takeaways

Overall, the local real estate market remains dynamic, characterized by rising prices, robust new listings, and steady sales, set against a backdrop of tightening inventory and competitive buyer interest.

For a practical perspective, Seth Prickett of Mahonia Realty shares the following:

There is significant speculation that interest rates will drop later this year or early next year and, as a result, many potential buyers are waiting on the sidelines and hoping for a lower payment. At the same time, potential sellers are hesitant to trade up or down because they do not want a new loan with a higher interest rate. I suggest that potential buyers act now if they can afford the monthly payments. It is better to purchase a home while the marketplace is calm and refinance down the line in a lower interest rate environment. Once rates decrease, the market may once again go wild and purchasing a home for the asking price and negotiating repairs will be a thing of the past.