Portland Real Estate Strategies. Is now the time to buy a home? Love these 3.xx% Mortgage Rates!
Portland’s Hot Real Estate Market
The Portland real estate market is a fast-paced, high priced market. In just the last 5 years the prices of homes have skyrocketed. To give you an example, I purchased a home in 2010 for $430K and sold it in 2013 for $475K. That was a pretty decent return. However, the Portland real estate market was just beginning to heat up. By 2017 that home was priced at $720K.
Is Now The Time To Buy?
The question we often ask ourselves when considering purchasing a home or selling our current home and getting into a new one is ‘when is the right time?’ The Portland real estate market is proving to hold steady with only 1.2 months worth of homes on the market. A healthy market has 6 months of homes to sell.
The answer to this question tends to be a personal, emotional and/or financial question. The reasons we buy a home are often because we are secure in our job and we are tired of renting, we have a baby coming, we want to downsize as empty-nesters, we want to move closer to work or we need a one-level because stairs just don’t agree with us any longer and these are just a few excellent reasons to move. One reason people don’t often consider moving is that it’s a financially intelligent thing to do.
There are two important scenarios I’d like to cover. First is someone, or a family, who is renting and would like to buy and the second is someone, or a family, who owns a home.
Rents are high in the Portland real estate market currently, let’s say you rent an apartment for $2000/month. You have been living there for some time and have been able to put some money away with the idea you’d like to buy at some point but you’re not sure when that time is. You’re a prime candidate to start to look into buying now.
The best time to buy is when you have a 20% down payment (although options are available through the FHA program for a 3% down), interest rates are low and your credit is good – excellent (although you can get loans with less credit but expect a higher interest rate).
If you’re currently in the boat of having a down payment, a solid job history, and good-excellent credit you are ready to buy a home now. The reason is that interest rates are at, as my mortgage officer puts it, a “once in a lifetime” low. Bankrate has the mortgage rates at 3.71% for a 30 year fixed and 3.05 for a 15 year fixed.
If you’re paying $2000/month, a down payment, and have very good credit you could qualify for about a $280K 15 year loan (3.2%) or $420K on a 30 year (3.92%). Both of these are enough to purchase something in the Portland Metro area. Click on the numbers above to see what’s available in that price range.
Portland Real Estate Activity
Below is a chart pulled from the RMLS (Regional Multiple Listing Service) website, a Portland real estate listing service. An interesting thing to look at is the “Change % current month compared to the prior month.” The wealthiest people with homes from 900K to 2M have a huge increase in real estate sales and purchase activity. The low-interest rates are convincing this group of individuals to reevaluate their position and either put their homes on the market or purchase a new home. What does that mean for those, not in that price range?
Even if you are not in that price range you too can take advantage of this low rate opportunity.
|Data pulled on 2/3/2020 for January|
|PRICE RANGE||ACTIVES CURRENT||PRIOR Month||CURRENT Month||CHANGE % current month compared to the prior month||PRIOR Month||CURRENT Month||CHANGE % current month compared to the prior month||PRIOR Month||CURRENT Month||CHANGE % current month compared to prior month||INVENTORY IN MONTHS|
For those with a home in the Portland metro area, you have probably seen your property values rise. You might have some decent or very decent equity in your home and are thinking about moving. If you locked in an interest rate in the last 6-10 years you may have locked in a high 3 or even a low 4%. Some of you may have locked in a low 5%, perhaps your credit score wasn’t what it is today.
Lower Your Payment or Get More House
If you’re at a place where you’d like to either lower your payments or get more house for the same monthly payment, now is a good time to make that purchase. The difference between a 4% and 5% interest rate (paying $2000/month) means you could have a home worth $50k more than your current home for the same monthly payment. $50K is about the cost of an additional bedroom and possibly a bathroom. That number only goes up if your monthly mortgage is higher. At $3000/month that’s a $70K difference.
If you’d like help in looking for a new home by either getting out of your apartment or upgrading by selling your current home and buying a new one, I can help you with those big life transactions.
Contact me at 971-645-6463 or email firstname.lastname@example.org
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