During the last few years, Portlanders have found themselves in the midst of a housing boom. A contributing factor for this current state is that Portland has become a destination city. In fact, 2015 marked the third consecutive year that Oregon was the nation’s top relocation destination. We simply don’t have the supply to support the demand, and as a result, there’s been very healthy price appreciation.
The run-up in the market during the past three years reflects some of the same market dynamics seen between 2003 and 2008. That leaves some to question what was learned from that period of time, when the housing bubble ballooned and then painfully burst.
However, the current market is a completely different environment than the market of a decade ago. The aggressive lending practices of the early and mid-2000s have given way to a much stricter regulatory environment. Banks simply can no longer help people buy homes well above their means. In addition, the over-supply of new homes the market realized prior to the “great recession” does not exist in today’s market.
As a second generation Realtor, exposed to the business since the early 1980s, Jason Waugh says he’s never seen a market like this one.
Waugh is the president and CEO of Berkshire Hathaway HomeServices Northwest Real Estate, and he says that, “The market is so competitive right now that you just don’t have time to ponder your options. Buyers prevailing in this market must act swiftly with aggressive terms. If given the choice most people don’t want to move as quickly as this market demands.”
However, he says that while the market data do not reflect what we would traditionally define as a balanced market, buyers can do well in this market too.
It’s surely a seller’s market, Waugh says, from the perspective that demand is high and supply is low, allowing homeowners to command higher prices. But the market can favor buyers, too, because interest rates remain at historically low levels. Through the first ten weeks of 2016 the interest rates were as low as 33 additional basis points (0.33%) lower than where they ended 2015.
One of the biggest barriers to homeownership today, especially for first time buyers, is having enough money for the down payment in an appreciating market and a much stricter lending environment, he says.
“Often times we get discouraged or believe homeownership isn’t realistic because of the asking price of a home,” says Waugh. “Given the low interest rates coupled with escalating rents the first question in the purchase process of a market like today’s is what would be my monthly mortgage payment be followed by what amount down [payment] do I need?” If you can make the down payment and are comfortable with a mortgage that locks you in with a historically low interest rate on a 30-year fixed loan, is that a better financial investment?”
To help give prospective buyers a realistic sense of their potential payments, Berkshire Hathaway HomeServices places useful mortgage calculators on each home listing on their website.
To further support potential clients through the home selling and home buying process in what is a very fast-paced market today, Waugh says he and his team of Realtors’ ultimate goal is to create a great real estate experience for everyone they serve by being a trusted advisor, being a skilled negotiator and an expert facilitator of services.
In fact, the Berkshire Hathaway HomeServices’ team will walk homeowners and buyers through the daunting and time-consuming purchasing process every step of the way, from initial contact to contract through closing.
And those services aren’t only Portland-specific.
Waugh says Berkshire Hathaway HomeServices’s footprint covers not only the Portland metro area, but also Seattle to SW Washington through the wine country of Yamhill County, to the coast and Central Oregon.
The rise in the price of homes may leave people thinking that there’s never been a worse time to buy a home, but with today’s historically low interest rates, there may never be a better time to invest in one.