Portland Oregon 2024 End Of The Year Market Update

Summary

In this video, real estate expert Seth Marchant offers an insightful recap of the 2024 housing market in Oregon and predictions for 2025. He discusses steady home price increases, inventory challenges, and the impact of high interest rates. Despite population shifts and predictions of a market crash, Seth maintains that home values are unlikely to decline due to ongoing demand and a shortage of inventory. He also highlights the importance of consulting with a professional in 2025, especially with rising insurance costs and mortgage payments. Seth provides expert guidance for prospective homebuyers and sellers in a tough market.

Takeaways

• 😀 Home prices in Oregon rose by 3% in 2024, with Portland seeing a more modest 1.4% increase.
• 😀 Despite rising home prices, Oregon's market showed no signs of a housing crash, contrary to some predictions.
• 😀 The Oregon housing market remains constrained by limited inventory, making it a seller's market.
• 😀 The lack of homebuilders, a legacy of the 2008 financial crisis, continues to limit new home construction and supply.
• 😀 Interest rates are expected to stay high in 2025, impacting affordability for homebuyers and limiting market activity.
• 😀 Although affordability is a challenge, the market is expected to remain relatively stable with home values continuing to rise slowly.
• 😀 For potential buyers, it’s crucial to budget carefully, especially considering rising insurance rates that affect monthly costs.
• 😀 Homebuyers should start their search early in 2025 to adjust for higher mortgage rates and plan for potential cost increases.
• 😀 The competitive nature of the market means that buyers should be ready to act quickly, especially on well-priced homes.
• 😀 For buyers looking at new construction, builders are offering incentives to close out their year-end books, providing opportunities for deals.
• 😀 Real estate remains a solid long-term investment, even in a market with rising prices, providing a good hedge against inflation.

Q & A

What were the main real estate trends in Oregon in 2024?

In 2024, home prices in Oregon saw moderate increases. According to Cas Schiller, home prices were up 4.57% year-over-year in Oregon, with Portland seeing a smaller increase of 1.4%. Despite a slight population decline in Portland, the market remained relatively strong due to people moving from the city to the suburbs and Central Oregon.

Is a housing market crash expected in 2025?

No, a housing market crash is not expected in 2025. While there have been predictions of a market crash since 2020, Seth Marchant confidently believes that home values will continue to rise. The main reason is that inventory will not outpace demand due to factors like limited home production and the ongoing demand for housing.

What factors make a housing crash unlikely in the near future?

The main factors preventing a crash are limited inventory and high demand. The last housing crisis (2006-2008) was caused by a surplus of inventory and high-risk lending, which are not present in today's market. Additionally, many home builders went bankrupt during that period and have not returned, further limiting housing supply.

How do home prices and home values differ?

Home prices refer to the amount a property is sold for, while home values refer to what a home could potentially sell for based on factors like location and market trends. Home prices and values are correlated, but they are not the same thing, and a decrease in home prices does not necessarily mean a decrease in home values.

How has the inventory situation affected the real estate market?

The real estate market in Oregon is still struggling with limited inventory, which leans the market towards being a seller's market. There is not enough new home production to meet the growing demand, exacerbated by people moving into the area and immigration trends. While some people are leaving Portland, they are mostly moving to the suburbs or other parts of Oregon.

What role do Baby Boomers play in the housing market?

Baby Boomers could impact the housing market in the next 5 to 10 years as many of them are currently living in larger homes and may downsize. This could create opportunities for younger buyers to move into larger homes as Boomers move to smaller units or even live with family members.

How did mortgage rates affect the market in late 2024?

In late 2024, mortgage rates experienced volatility. After the Federal Reserve cut rates, many expected mortgage rates to continue dropping, but instead, rates went up. Despite a Fed rate cut in September, mortgage rates remained largely unchanged, which impacted buyers' affordability and slowed the market down slightly.

What is the outlook for mortgage rates in 2025?

Mortgage rates in 2025 are expected to remain high, possibly not dropping significantly. Due to ongoing inflation concerns, the Federal Reserve might pause rate cuts or even raise rates again. This will continue to make home affordability difficult for buyers and sellers alike.

What are some potential challenges for buyers in 2025?

In 2025, buyers will face high mortgage rates and limited housing inventory. Affordability will be a significant challenge, especially as homeowners insurance costs rise, making monthly mortgage payments more expensive. Buyers will need to be more proactive and strategic to make home purchases work within their budgets.

What should buyers consider regarding homeowners insurance in 2024-2025?

Buyers should pay close attention to homeowners insurance costs early in the home-buying process. In 2024 and 2025, insurance premiums have risen significantly, and this can make a noticeable impact on the affordability of a home. Some deals have fallen through due to high insurance costs, so it’s important to factor this into your budget early on.