Another Fed Rate Hike as Mortgage Rates Slide. What's the Effect on the Portland Metro Real Estate Market?!
The real estate market situation in Portland Metro (including Clark County Washington) has fluctuated for the past 5 months. There were observable contradicting trends in several real estate variables. There was an evident increase in the average sale price, demand for new contracts, and Fed Funds Rate. On the other hand, the median sale price, supply of active listings, and the rate for the 30-year fixed mortgage dropped.
- The Average Sale Price rallied Up by 7% vs the same time period Last Year. The Median Sale Price slid Down by -0.7%.
- The Portland Metro Supply of Active Listings Dropped by another 4.5% as demand surged with New Contracts Up by 31% vs the previous week.
- The Fed Board Raised the Fed Funds Rate by another 50 Basis Points at the same time the residential 30-Year Fixed Mortgage dropped Below 6%.
It appears that this week's sold figures have inched up from the numbers of last week. Despite this mild improvement, sold numbers have not rebounded to pre-pandemic levels. According to reports, homes sold this week are nearly half of what was sold during the same period last year. Thus, it appears that the housing market is continuing to remain volatile due to Covid-19 and its accompanying effects on demand.
Looking at active listings for the last 30 days, it seems that sellers may be bracing for the upcoming holidays. Inspecting the numbers more closely reveals an overall 14.3% decrease in active listings from this timeframe, which indicates that sellers are feeling the pressure to take a break from the market and get ready for the holidays. This could mean good news for buyers who are looking to purchase during this time of year as competition should decrease. In any case, we will monitor developments in the real estate market to help provide an accurate understanding of what is happening.
What’s good though, is that the new pending deals have surged 36.4% shooting up from 349 last week to a healthy 476 mark. This could signal more confidence in the market as buyers take advantage of trends that appear to be slowly falling in their favor. It remains hopeful that this sustained level of activity will continue, strengthening the market for future growth and stability.
The median days the property is selling in the market is still on an upward trend. This doesn't come as a surprise; with everyone navigating the slow pace of commerce and seeking ways to spend more time with their loved ones, a slower market makes total sense.
Lastly, although the industry is moving at a slow pace, the average sale price of properties remains strong. This week saw an increase of 4.5%, driving average prices to $605,702, up markedly from the average price of $579,536 just last week, though this is volatile and can be attributed to a much higher than average sale in a particular week. This hints that despite market forces, homeowners and buyers can potentially see equity gains in their investments over a short period of time.
Overall, the effect of the recent Fed rate hike on Portland Metro's real estate market is not likely to be a drastic one. Mortgage rates have remained fairly low compared to history , meaning that buyers will still be able to get financing for their purchases. Additionally, the supply of homes remains low and demand is high, meaning that prices are likely to remain stable despite the rate hike. Ultimately, this is good news for buyers and sellers in the Portland Metro area. While it is important to keep an eye on future economic shifts, at this time there is no reason to expect a sudden or drastic change in the market due to the Fed rate hike.