This winter has been an important moment for many home sellers, as several trends are coming together to affect Portland home prices:
1. Housing inventory remains extremely tight.
The total number of homes on the market fell 10% in the last quarter – the biggest drop since 2013. It’s part of a consistent pattern of very limited and decreasing housing supply. Of course, the fewer homes there are on the market, the easier it is to sell, and the higher the price you can expect to get. This is borne out by numbers: home prices have increased almost 6.5% since last year.
2. Buyers are increasingly optimistic.
Despite the tight inventory, homebuyers are increasingly optimistic and continue to look for homes. This is partly due to the recent growth in income and job stability, and loosening lending standards. Homebuyers are eager to take advantage of current mortgage rates, which have recently slipped near all-time historic lows of under 4%.
3. The new tax reform bill will impact the market.
The federal government recently passed The Tax Cuts and Jobs Act, majorly overhauling the tax code. While it’s unclear how this will affect the real estate market as a whole, there are several changes that do not favor home sellers. The National Association of Realtors now projects slower growth in home prices in 2018, with an appreciation rate of 1% to 3%. By doubling the standard deduction, Congress has significantly reduced the value of mortgage interest and property deductions as tax incentives for homeownership. However, no changes were made in the rules surrounding capital gains for home sales, which is a major victory for home sellers.
When considering the effect of these three trends together, two conclusions emerge:
1. Now is a highly favorable moment for home sellers thanks to the shortage in the market, a surge of eager buyers, and the high and rising prices.
2. On the other hand, higher-cost, higher-tax areas will likely see prices decline as the result of new restrictions on mortgage interest and state and local taxes.
If you are looking to take advantage of the present moment to sell your home, you can get started by finding out what it might be worth in the current market. Please contact us – we are happy to help by assessing your home’s current value.
Contact us for a free, no-obligation market analysis. We are constantly talking to home buyers in the Portland area, and we can give you a precise idea of how a sale of your home would unfold in the current market.
P.S. Good news! Brooke and Joey are now licensed in Washington.
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