Home prices in Oregon have doubled over the last decade, with a steady rise in prices that increased sharply during the pandemic as more people wanted work-from-home spaces. Home affordability has hit a 35 year low.
Oregon’s housing prices are higher than the US average driven largely by home prices in Portland. As many people left the city proper for the suburbs, for Seattle, and other states, this created a housing supply shortage as affordable homes were snapped up quickly leaving many buyers priced out of the market altogether.
There is about one-third the inventory historically available, so even though home affordability is about the same as it was in 2006, the low inventory is keeping prices higher. This means that many new homeowners aren’t buying, even though they’d like to.
Mortgage demand is as low as it has been since 2018, but with increasing mortgage rates, bidding wars may start to cool down leaving more options on the table for first time home buyers. This downward trend suggests that those who were able to buy homes when the inventory was high, prices were average, and mortgage rates were as low as they’ve been in decades have already purchased their homes.
This shift in the market has led many sellers to drop their prices, including in the Portland market, where 40% of homes lowered their listing price in May of 2022, double that of May 2021 where only 20% of listed homes lowered their asking price. Demand is still high however with 60% of homes selling above their listing price.