ARE HOME VALUES GOING DOWN in Portland, OR & the surrounding cities? 🏡📉🧐
We've got mortgage rates above 5%, the highest Housing Inventory since Jan 2021, and, per our days-on-market trends, the market is slowing down. The next logical assumption would be that home prices will be affected, which would be a correct assumption. The problem is that most people believe home values will instantly fall off a cliff the second there are any indicators of a slowing market. That's not true, and I've got the market trends to back it up!
In markets like Portland, OR & the surrounding cities, where the trends indicate a slowdown, home values typically don't drop; they just don't increase as quickly. Meaning instead of home values rising by 12% a year, they will increase by 2%. And we are seeing that activity showing up in the annual appreciation graph.
As we can see above, some locations show a negative appreciation amount in a particular year, but that doesn't necessarily need to be a cause for concern. The average annual appreciation should be approximately 4% to 6%. You will have years higher and lower, but the average should be within that range. NW Portland is one of the locations with a negative appreciation, so let's use NW Portland as an example:
2019: (1%)
2020: 4%
2021: 15%
2022 to date: 13%
= 8% Avg Annual Appreciation (2019 to Aug 2022)
So even with that negative appreciation in 2019, the average is still above the benchmark average annual appreciation of 4% to 6%. And that's a lesson that can translate across all of the locations. Even if we begin to see negative appreciation amounts in 2022, the market has been so overheated for the past few years that most locations will still average above the benchmark average of 4% to 6%.
Long story short, the trends aren't indicating a significant decrease in home values in the near future. But I will send out these graphs each month so we can keep an eye on the activity.
I hope you find this information helpful. Feel free to contact me with any questions.🙋♀️Have a great day!