Portland Real Estate Market Update 01/27/2025

Will 2025 be the year that things pick up for the Portland Real Estate Market?  For the past 2 or 3 years, I have been hearing comments from real estate brokers and mortgage bankers like "Survive until 25" or "Thrive in 25".  Appreciation for the past 2 or 3 years has been basically flat, but in the past 12 months the average sale price ticked down 1.4% when you compare December of 24 ($578,300) with December of 23. ($586,800).  However, units sold when comparing December of 24 to December of 23 moved up 15.3%.  This is a very interesting move in the market.  There is a lot of pent up supply and demand.  On the supply side, there are a lot of sellers who want to sell, but they just can't afford to.  This is because they can't afford to trade their old house with a 3 or 4% interest rate for a new house with a 7% interest rate.  On the buy side, buyers have not been able to afford the property they want to buy.

Here are some reasons why 2025 may be different.  There has been a lot of inflation over the past few years.  This inflation has carried over into wage growth.  1. If housing prices have been flat and wages are rising, then housing as a percentage of a buyer's budget should go down.  This could be the spark that ignites the housing market in 2025.  2. Lower interest rates could also be a spark to ignite turnover, but interest rates have been sticky around 7%.  3. Lower prices could also lead to higher turnover (average prices were slightly lower over the past 12 months).  4. Are the December 2024 numbers regarding closed sales (up 15.3% from December of 2023) an early indicator that turnover is increasing?

Anecdotally speaking, I have noticed an increase in activity.  The phone is ringing, texts and emails are coming in.  It seems like buyers and sellers are getting tired of waiting, and both are looking for change is 2025. 

 

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