Portland Oregon Real Estate Market Update - December 2021

Okay, we have a lot to discuss today but I want to start off with a side but related topic to the real estate market.

If you follow the real estate market closely you may be seeing articles talking about a real estate market bubble and a wave of foreclosures.

So let's start by discussing... will the ending of the mortgage moratorium at the end of this month lead to a massive wave in foreclosures?

First, it's hard not to discuss 2008 when this topic comes up...

In 2008 the housing industry, particularly the mortgage industry was at the heart of the financial crisis due to predatory loan practices. In our current financial crisis, the effects on the housing market were a symptom of the financial crisis, not a cause.

For this crisis, the government also put a lot of protections in place to try and keep people in their homes, the major ones being an eviction moratorium and a mortgage forbearance program. Allowing homeowners to pause their mortgage payments.

And while some people chose forbearance due to financial hardship this time around, others chose it just in order to take advantage of forbearance, and instead invest their money elsewhere.

We do not know exactly the percentage of people who chose it due to being unable to make mortgage payments or chose to do it in order to use the program to their advantage.

Plus many people have already been able to get back to mortgage payments, or due to the hot real estate market (another huge difference from 2008), many homeowners were able to sell their homes prior to ever going into foreclosure.

While we could see a bump in foreclosures, it shouldn't have a large effect on market prices as a whole this time around.

So if you are a home buyer, you might see a few more forclosure homes, aka more options, but it should not have a large effect on home prices.

If you are a homeowner thinking of selling, I would not predict this greatly affect your sale by adding a ton of new competition in your neighborhood. We should therefore continue to see home prices steadily rise.

Okay now on to the numbers.

The number of homes on the market took another hit. Inventory of homes is at 0.8 months. If you are a home buyer this may be a concerning thing to hear. BUT if you pay attention to these updates you will know that the inventory of homes often falls during the holiday season... AND that low inventory of homes does not mean that few homes have sold. In actuality, the number of homes sold has risen significantly in the last year. So while it means the market is still tough for buyers, there are still a lot more opportunities now than there were in the heat of the pandemic.

New listings did decrease slightly last month to 2,229 new homes to the market. This goes in line with the normal holiday slow down.

But pending sales and sold homes both saw an increase with 2,660 homes going under contract and 2,832 homes getting new owners. This really shows that even with the distraction of the holiday's buyers are still greatly motivated to get into homes.

Something you should pay attention to if you are thinking of selling.

If you are a potential home seller you may also be interested in knowing that home prices saw a major increase of 16% when looking year to year with home prices averaging at $492,000 in November 2020 and home prices last month averaging $571,100.

If you are a home buyer I will note (well this info pertains to home sellers as well), many are predicting that we should see some stability in home prices in 2022. They will still rise, so time is of the essence to some degree, especially with interest rates also potentially rising BUT we most likely will not see the massive jump in pricing that we observed over the last two years.

We should see some stability return to the market in general in 2022 which would be great for everyone. It may even be welcome to some home sellers, as they will need to find a new place to live as well, right?

If you are planning to make a move in 2022 either buying or selling a home (or both!) I would be happy to talk with you and help you strategize and make the process easy, simple, and maybe even fun!

Contact us HERE