The real estate market in Oregon saw a decline in home prices in January 2023 compared to last year, according to a recent report. The number of homes sold was also down year over year, while the number of homes for sale was up. In this blog post, we'll examine the Oregon housing market trends for 2023 in more detail.
Oregon Housing Market Overview
The real estate market in Oregon is experiencing some notable changes. As per the report by Redfin, in April 2023, home prices were down 4.9% compared to the previous year, with a median price of $493,600. Additionally, the number of homes sold decreased by 38.6% year over year, with only 3,548 homes sold in April. The median days on the market also increased by 15 days, reaching a total of 27 days.
Median Sale Price – All Home Types
The median price of a home in the United States is currently $493,600. This figure is an important indicator of the housing market's strength and affordability.
Top 10 Metros in Oregon with the Fastest Growing Sales Price
Certain cities in Oregon have experienced significant growth in their sales prices. Here are the top 10 metros in Oregon with the fastest-growing sales prices:
- Klamath Falls, OR – 12.0%
- Sherwood, OR – 11.1%
- Albany, OR – 7.4%
- Eugene, OR – 6.8%
- Wilsonville, OR – 6.6%
- Coos Bay, OR – 5.0%
- Keizer, OR – 4.5%
- Aloha, OR – 3.9%
- Baker City, OR – 3.2%
- Lake Oswego, OR – 2.9%
Oregon Housing Supply
The availability of homes for sale plays a crucial role in meeting buyer demand. In April 2023, there were 12,510 homes for sale in Oregon, indicating a 5.1% decrease compared to the previous year. The number of newly listed homes also declined by 33.2% year over year. The average months of supply increased by 1 month, reaching a total of 2 months.
Oregon Housing Demand
Understanding the level of competitiveness in the market is crucial for both buyers and sellers. In April 2023, 34.2% of homes in Oregon sold below the list price, representing a 24.7-point decrease compared to the previous year. Moreover, the percentage of homes with price drops increased from 22.0% in April last year to 25.2% this year. The sale-to-list price ratio decreased by 3.9 points, reaching 99.6%.
Homes Sold Above List Price – All Home Types
The percentage of homes sold above the list price indicates the competitiveness of the housing market. A high or growing percentage suggests a competitive market with frequent bidding wars. Conversely, a low or shrinking percentage suggests a less competitive market.
Oregon Housing Market Forecast 2023-2024
The housing market in Oregon has experienced a slight decline in average home values over the past year. According to Zillow, as of April 30, 2023, the average home value in Oregon is $490,682, representing a decrease of 2.3% compared to the previous year.
1-year Value Change
Over the past year, Oregon has seen a 2.3% decrease in home values. This change indicates a slight decline in property prices within the state.
Median Sale to List Ratio
The median sale to list ratio in Oregon, as of March 31, 2023, is 0.994. This ratio reflects the percentage of the final sale price compared to the initial list price. A ratio close to 1 indicates that homes are generally selling close to their list price.
Percent of Sales Over and Under List Price
In March 2023, 26.8% of home sales in Oregon were above the list price, while 51.7% were below the list price. These percentages indicate the level of competition in the housing market. A higher percentage of sales over the list price suggests a more competitive market with potential bidding wars, while a higher percentage of sales under the list price may indicate a more buyer-friendly market.
Median Days to Pending
The median days to pending in Oregon, as of April 30, 2023, is 12 days. This statistic measures the average time it takes for a home to go under contract from the time it is listed. Shorter median days to pending indicates a faster-paced market where homes are selling quickly.
Housing Forecast for MSAs in Oregon
The housing market forecast for various metropolitan statistical areas (MSAs) in Oregon shows varying trends and growth rates. Here is an overview of the forecasted changes in home prices for some of the MSAs in Oregon:
Portland, OR: The Portland MSA is expected to see a modest increase in home prices, with a forecasted growth rate of 0.2% by May 31, 2023, and 0.1% by July 31, 2023. However, the forecasted growth significantly picks up to 1.6% by April 30, 2024, indicating a more substantial increase in home prices over time.
Salem, OR: The Salem MSA is projected to experience a more significant growth in home prices. The forecasted growth rate stands at 0.5% by May 31, 2023, and 1% by July 31, 2023. By April 30, 2024, the forecasted growth jumps to 4.2%, suggesting a robust housing market in the area.
Eugene, OR: The Eugene MSA also shows positive growth in home prices, with a forecasted growth rate of 0.3% by May 31, 2023, and 0.5% by July 31, 2023. The forecasted growth further accelerates to 4% by April 30, 2024, indicating a strong housing market in Eugene.
Medford, OR: The Medford MSA is expected to experience moderate growth in home prices, with a forecasted growth rate of 0.3% by May 31, 2023, and 0.4% by July 31, 2023. By April 30, 2024, the forecasted growth reaches 2.1%, indicating steady growth in home prices.
Bend, OR: The Bend MSA shows a slightly slower growth rate in home prices compared to other areas in Oregon. The forecasted growth stands at 0.1% by May 31, 2023, and 0.3% by July 31, 2023. However, the forecasted growth significantly increases to 4.8% by April 30, 2024, suggesting a more substantial increase in home prices in the long term.
Albany, OR: The Albany MSA is expected to see positive growth in home prices, with a forecasted growth rate of 0.5% by May 31, 2023, and 1.2% by July 31, 2023. By April 30, 2024, the forecasted growth reaches 5%, indicating a robust housing market in Albany.
Roseburg, OR: The Roseburg MSA shows strong growth in home prices, with a forecasted growth rate of 0.6% by May 31, 2023, and 1.4% by July 31, 2023. By April 30, 2024, the forecasted growth reaches 5.6%, suggesting a thriving housing market in the area.
Corvallis, OR: The Corvallis MSA is projected to experience positive growth in home prices, with a forecasted growth rate of 0.4% by May 31, 2023, and 0.9% by July 31, 2023. By April 30, 2024, the forecasted growth reaches 3.8%, indicating a steady increase in home prices.
Hermiston, OR: The Hermiston MSA shows robust growth in home prices, with a forecasted growth rate of 0.4% by May 31, 2023, and 1.1% by July 31, 2023. By April 30, 2024, the forecasted growth reaches an impressive 6.4%, indicating a strong and thriving housing market in Hermiston.
Overall, while some areas may experience more moderate growth, others, like Salem, Roseburg, and Hermiston, are expected to witness significant increases in home prices. These forecasts suggest a generally positive outlook for the Oregon housing market, with varying growth rates across different MSAs.
Will the Housing Market Crash in Oregon?
It's difficult to predict with certainty whether the Oregon housing market will crash or not in response to rising interest rates. While higher interest rates can have a cooling effect on the housing market, it's important to consider other factors that could impact the market as well.
One such factor is the strength of Oregon's economy. According to the latest data from the Bureau of Labor Statistics, Oregon's unemployment rate was 4.8% in January 2023, which is lower than the national average. Additionally, the state has seen strong job growth in recent years, particularly in industries like technology and healthcare.
Another factor to consider is the supply and demand dynamics of the housing market. While interest rates are rising, there is still a significant shortage of housing inventory in many parts of Oregon, particularly in urban areas like Portland. This can help support home prices even as interest rates increase.
It's also worth noting that while interest rates have risen in recent months, they are still historically low compared to previous decades. This means that while some buyers may be priced out of the market due to higher rates, there will still be many who can afford to buy homes.
Population growth can also have a significant impact on the housing market. Oregon has been experiencing steady population growth in recent years, with many people moving to the state for its natural beauty, job opportunities, and quality of life. According to the United States Census Bureau, Oregon's population grew by 9.3% between 2010 and 2020, making it the ninth-fastest-growing state in the country.
This population growth has increased the demand for housing, which has helped to drive up home prices in many areas of the state. However, it has also led to a shortage of affordable housing, particularly in urban areas like Portland. As a result, policymakers are exploring ways to address this issue, such as increasing funding for affordable housing programs and encouraging the development of more housing units.
Overall, population growth is likely to continue to have an impact on the Oregon housing market in the coming years. While it will help to sustain demand for housing, it may also exacerbate affordability challenges and put pressure on local governments to address these issues. As such, it is important for investors and homebuyers alike to carefully monitor population trends and their impact on the housing market.
Ultimately, whether the Oregon housing market crashes or not will depend on a complex interplay of factors, including the strength of the economy, supply and demand dynamics, and interest rates. While rising interest rates can have an impact on the market, it's important to consider these other factors as well when making predictions about the future of the housing market
Sources:
- https://fred.stlouisfed.org/series/ORSTHPI#
- https://www.zillow.com/or/home-values/
- https://www.redfin.com/state/Oregon/housing-market
- https://www.neighborhoodscout.com/or/real-estate
- https://sos.oregon.gov/blue-book/Pages/facts/economy-overview.aspx
