However, the housing market is starting to cool as the summer heats up.
Homes stay on the market longer, and the supply of available homes is gradually increasing. It’s not all rosy for buyers – home prices and mortgage interest rates are still significantly higher than last year and show no signs of slowing down any time soon.
But real estate agents say they are seeing buyers regaining some power in the market.
Jenny Foy and her husband put in an emergency offer on a condominium in the Pearl District this month, meaning their purchase is contingent on selling their Bay Area home. The seller accepted it.
According to Foy’s agent, such a transaction was unheard of in the past two years. Jennifer Watson.
“I haven’t had a buyer’s emergency offer in years,” Watson said. “You couldn’t write one.”
For the past two years, control rested almost entirely with the seller: houses were off the market. One weekend listing, with asking prices up to $100,000, and sellers were making 20 to 30 offers on a single home.
Just a few months ago, buyers had to either ignore problems with a home or offer thousands over asking prices to have a chance to close on a property.
Now, while the market is still competitive, the increased supply of available housing means buyers can take advantage of it less.
Homes stayed on the market for an average of 20 days in July, up slightly from June’s 18-day average.
Foy said she and her husband just finished paying for their Pearl District condo, which had been sitting on the market for at least 30 days.
“I didn’t want to nickel and dime them on the price because they accepted the offer,” she said.
Watson says instead of 15 competitors, buyers are now likely to compete with two or three others for a home.
That doesn’t mean buyers should rest easy, said Chris Suarez, a broker with PDX Property Group. He said he expects median home prices to fall, but not because homes are becoming more affordable.
Instead, he said, luxury home prices are falling in Portland and across the country because of a slowdown in high-income industries — particularly the technology industry. He said while higher-end homes may drop in value, pulling down the median price, lower-end homes will stay roughly the same.
“I think buyers are losing confidence, where they’re waiting for the average price to come down,” he said. “But inventory is still being consumed. We need five months of inventory, not two.
Still, Suarez said, buyers are also seeing a return to popularity. In the past few years, buyers said they would do anything to get a home, and foreclosing on a home was almost unheard of.
“People welcomed the house with all the warts,” he said. Now, buyers have the option to continue searching.
“Buyers are going to go, and sellers have to be a little more stubborn to be honest,” he said.
With mortgage rates at their highest in decades, some buyers are adjusting their plans.
According to Suarez, high prices primarily affect people at the two opposite ends of the home buying spectrum – first-time home buyers and luxury home buyers.
“Some people are literally driven out of the market by interest rates, not home prices,” he said.
And for those looking for second homes, or properties worth more than $1 million, they could see a significant change in price tag.
“A $1.5 million house cost a year ago a $3 million house, if you’re doing financing,” he said. “So the payments on that home, as a second home, are double what they were. You will see a slowdown in the second home market.
Even for sellers, the market has allowed more flexibility.
“A few sellers have decided to list their home and buy another home. Six months ago they were too scared to do it. If they sold their house, they couldn’t immediately buy another one,” Watson said.
Suarez added that homes priced fairly still sell quickly.
“If it’s waiting, it’s not the market, it’s you,” he said. “The market is still good, and there are clearly enough buyers. But they don’t go overboard.”
But Watson urges sellers not to be too quick to change their price if their home doesn’t sell right away.
“I think the value is still there, but instead of selling out, which is normally happening over the weekend, it might take a few weeks. It’s still a very good market.”
– Jayati Ramakrishnan; 503-221-4320; email@example.com; @JRamakrishnanOR
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