Average Portland home prices soar to $423,700 while mortgage rates dip slightly
Nationwide, housing inventories have reached crisis proportions. There is a severe lack of available homes for sale everywhere. Home values are increasing an average of 5+% throughout the country. But here in the Pacific NW, home prices are surging faster than anywhere else in the country. Average prices in Seattle are up about 12% per year, while Portland in the #2 position is seeing average value increases of 10.7%.
Remember, these are average price and value increases. There are some neighborhoods with lower inflation rates, but there are also many with much higher rates. Currently zip code 97233 (Centennial, Rockwood and Mill Park) is leading the metro area seeing prices and values up 19.7% for 2016 and early 2017! This means that if you are currently a home owner in 97233, you’ve watched your home value increase about $2500 – $5000 every month for the last year and a half – depending on size and condition of your home and immediate neighborhood. Still closer in areas such as Tualatin, Tigard, West Hills, Hawthorne, Rose City, Alberta and more are also seeing inflation between 10-15% annually so you’re not being left behind.
Spring and early summer months are the busiest months of the year for home purchases.
Buyers are out in droves, so homes are selling as quickly as they hit the market; often with multiple offers and often selling for considerably more than list price.
According to RMLS, new listings for May hit their highest level in May 2017 since May 2008 but demand was so strong that inventory levels actually dropped .2 months (down from 1.7 months to 1.5 months once again.)
What does this mean for buyers?
If you are a prospective home buyer, once you make up your mind that you’re ready to get out and start looking at homes, there are a few things that you should get in order before you proceed. First and foremost, whether you’re paying cash or financing the purchase, get your finances in order.
- If you are going to be financing the purchase, get your pre-approval. This means you will need to get your paperwork together for that lender.
- If you’re a cash buyer, be sure your funds are free to use (if you need to sell stocks or move funds from a retirement account, that shouldn’t be left until the last minute.
- If you need to sell a home, get it on the market. I know this could put you in a difficult position of needing to move in with friends or stay in a hotel if your house sells too quickly, but sellers need to know that you’re serious and you will need to present proof of your ability to go through with the purchase if your offer is accepted.
Many sellers won’t even allow you to view a home or consider an offer from you without the above business details being in order.
This doesn’t mean that you shouldn’t go out and take a look at a few homes just to see what’s available in your price range. But, it really doesn’t make a lot of sense to just go out looking at lots of homes until you’re a serious buyer because prices and values are moving so quickly. The home you’re viewing today at $300,000 will cost and be worth considerably more in 6 months. Still some looking around in advance will help you understand better what your dollars will buy in different neighborhoods, and that’s a good thing to know as you begin this process.
Strike while the iron’s hot
Boom markets never last forever. The markets ebb and wane all the time. But the old adage to “strike while the iron’s hot” has never made more sense.
Most buyers are not looking for their forever house. They just want a home of their own and the stability of knowing that their monthly payments are locked in (other than tax and insurance increases). Of course obvious. Your purchase starts making you money in the form of equity often before the transaction even closes, and of course the tax advantages can’t be overlooked either. Mortgage interest, property taxes and even mortgage insurance are all tax deductible, so your monthly income rises once you become a property owner.
You might like to read 15 fastest selling neighborhoods in Portland as of June 13, 2017