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Portland Real Estate Trends

By Patrick Large

| December 15th 2011 | Views:

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Portland Real Estate Trends

The Portland real estate market is currently in a state of change. The market had a large peak in 2007 with the median value for homes in Portland at $301,000. The market has been in a general state of decline since then with an exception with a brief upturn in 2009. This has created a market with cheaper prices for potential home buyers, but with the outcome of the home losing value after purchasing. This has created a sellers market with a deficit in the amount of people willing to buy property expected to decrease in value.

There is good news however. That news is that the market is about to shift and rise. It is true that the median value for homes in Portland has dropped 6.5 percent from the value 1 year ago. The good aspect of this is that the market has the ability to rise in a situation like this. This is due to the fact that if people take advantage of the low housing prices and buy the homes then the values of homes will rise. The current lower value of homes in Portland also has the effect of limiting production of new housing developments. This causes there to be a limited number of homes to be sold. The limited number of homes, coupled with the low prices of current homes, means that as the currently available houses are sold the values of homes will increase due to demand for homes of a diminishing supply. This creates a market, perfect for potential home buyers, that guarantees that people who take advantage of the current state of the market early will have made an investment that will increase in value.

Current data seems to show that people are taking advantage of the current state of the Portland real estate market. The number of new listings in the Portland area has dropped 22 percent since October 2010, but the number of pending sales has risen 15.1 percent and the number of closed sales rose 14.1 percent. The 22 percent drop in new listings shows that the number of new homes put up for sale is dropping. Normally this would be followed by a decreased number of pending sales and closed sales on homes. However, the number of closed sales and pending sales has not only not dropped, but has significantly risen. This has caused the median value of homes to stop its downward trend of the median value of Portland area homes dropping approximately $2085.37 per month (from July 2007 to January 2011) and take on an upward trend with the median value of Portland area homes rising $1250 per month (from January 2011 to September 2011).

This data indicates that the value of Portland area homes is at a low but is in the process of increasing due to a diminishing supply of new homes for sale coupled with with an increasing demand for homes. This has created a buyers market. Buyers are cautioned because once the initial buyers phase is over and the homes are at a high value and short supply then there may be the onset of new housing developments being produced. These developments, comprised of cheaply produced and generically modeled homes, have the ability to lower the value of homes, especially homes in the area surrounding the new Portland housing developments. If this happens you can expect the market to take another downturn very similar to this one. The good news is that the same situation will most likely arise. The production of housing developments will stop due to the decreased value of homes. This will create another situation where there is a larger demand for homes than there is a supply. This will in turn drive the price of your home up again and cause your home to once again have a higher value than the amount you paid for it.

Patrick Large - About Author:
Patrick Large is a freelance writer for Exclusive Portland Real Estate representing the best purchases and sales in the Portland real estate market and surrounding areas.