Has the Portland, Oregon Real Estate Market Stabilized?
Being a Realtor in Portland, Oregon sure feels like the real estate market is stabilizing. Every month there are more and more areas and suburbs of Portland that are appreciating in value when compared to a year ago and more and more areas the Average Sales Price Percent Change are also moving into positive territory at a rapid pace. The inventory in Portland has dropped from January to July every single month and the time on market has decreased significantly as well. All indication is yes the market is stabilized and poised for some long term steadiness rather than the sharp falls and rises that we have been accustomed to since 2008.
There is one variable that plays a significant role in this recovery that is a bit unknown, and that is the interest rates. The 30 year fixed interest rate our preferred lender sent over today was at 3.375% which is basically near or at it's all time low ever. The million dollar question is, what would happen if interest rates increased to 6-7%? Would the real estate market collapse again? Would our economy, jobs, and cost of living support this type of increase? Are many people buying a home today because the cost of money is so low that it doesn't make sense for them not too purchase? Did enough people refinance their current home to a low 30 year fixed rate?
With a systematic approach all indication is that the market recovered enough that it should continue. Most of the problem homes have been snatched up, many of the problem mortgages have been refinanced, the new borrowers are better borrowers who've had to prove their income, assets and be scrutinized more by the banks loaning or selling their loans. Interest rates will be eased up eventually not drastically. Even though jobs are really bad currently and they could get worse which would make a big impact, but on the other hand what if they get better it's only going to help further build on a new real estate foundation. With disciplined economic policies and good local leadership the Portland real estate market should continue to gain strength.
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