While the housing inventory is still at historic lows in the Portland market, one thing that has finally changed this spring is rising interest rates. This is double trouble for buyers as homes are becoming increasingly more expensive at an alarming rate, with seemingly no end in sight.
We are coming into what will likely be another competitive spring, as multiple offers are the common place and each home sale is setting a new valuation record. Actual appreciation has slowed year-over-year from 10% down to 7% in the past 12 months. With that said, if inventory remains low, prices are still likely to rise as buyers compete for housing. Ultimately, it is the buyers who are willing to “give,” or in most cases, paying more to end up with the winning bid.
Due to increasing interest rates, purchasing power is shrinking for buyers. There are likely many sellers who will sense the leveling of prices as we may be near the end of another fabulous real estate cycle. When this happens, owners who are ready to downsize are looking to cash out during what may be the ideal time to sell.
Homeowners who are looking to make that change in the next year or two should be dipping their toes into the market now to keep a good eye on the activity. While it appears to be an excellent time to sell, finding a replacement home has never been more difficult. This puts a homeowner in a position of finding their next home prior to selling, or preparing to sit on the sidelines and rent until the right property comes along.
Ultimately, it is “crystal ball time” again and formulating the right strategy requires both luck and foresight. Whether you find the perfect home, or you feel your best move is to sell and then sit on the sidelines, there is one thing we can all be assured of – when the market bears both rising interest rates and prices, something has to change.
