Are you interested in selling your house in 2023? The Hatch Homes Group consulted various resources in our industry (including Keeping Current Matters, Buffini, Realtor.com, and NAR), and have compiled our honest predictions for sellers in the Portland metro for 2023.
Many of the sources we consulted refer to what’s happening in housing nationally, and it’s important to note that, while this data does inform trends in our area, taking these numbers at face value is like applying a national weather forecast to our local area. That’s why it’s so important to interpret national statistics through a Portland-centric lens.
The four important market indicators we analyzed are home price, mortgage rates, home inventory, and sales volume.
Home Prices
Overall, there is a wide range of national predictions as to what will happen regarding home prices from 5% increase in price to 5% decrease in price. The average of our sources says home price will increase ever so slightly, but certainly not as much as it has in recent years. In the Portland metro area, it’s also important to note that there are some neighborhoods that are not thriving where prices will likely decline. Similarly, there are neighborhoods in Portland that tend to see year-over-year increases no matter what the national market predicts. On average, however, our prediction for home price in 2023 is that home prices will increase by about 0.5%, which is good news for sellers.
Mortgage Rates
2022 saw a lot of volatility in mortgage interest rates. The sharp increase in rates over a short amount of time saw many buyers disillusioned about the homebuying process. Nationally, predictions vary for 2023. However, our conservative prediction is that rates will come down to the high 6s. We also predict that there will be more stability in interest rates. It is important to note that predicting mortgage rates is very difficult because of economic and global factors that contribute. Again, while interest rates are high, affecting affordability, we will see some buyers returning to house hunting as rates stabilize.
Sales Volume
Sales volume is predicted to decrease from previous years. We agree that this will be reflected in Portland, but what does this mean for buyers? Let’s look at our fourth metric, which goes hand-in-hand with sales volume.
Inventory
Nationally, inventory is expected to hover slightly lower than where it has been in recent months. Our prediction is that inventory will remain relatively low. Sellers locked into a low interest rate are less inclined to sell if it means they will have to buy their next home at a higher interest rate, so sellers are only going to sell if they are motivated to or have to. We predict we will stay in a seller’s market where inventory is still in demand. With few new builds happening and a population still moving to the area, as well as millennial buyers who are increasingly able to afford to buy, there will still be more buyers than available properties in the Portland metro area.
PROS/CONS for Sellers in 2023
CON: higher interest rates means your house is simply less affordable than in the last couple of years.
What this means for you is that comparing your home sales price to your neighbor who sold a year ago isn’t going to be realistic. Also, from a buyer’s perspective, the same house they could afford 8 months ago is now a much higher monthly payment, so your house will have to be worth it in buyers’ eyes as buyers are looking for the most value right now.
CON: not all neighborhoods have appreciated
If the home you want to sell is in a neighborhood where we expect to see depreciation, then it may be tough for a seller to sell, depending on when they bought the house and what sales strategy they employ.
CON: fewer buyers
Since there are fewer buyers, they tend to be more discerning. You, as a seller, need to impress them. This is a huge change from a year ago when buyers were willing to settle for less to get a house.
CON: longer days on market
This may feel like a con compared to when houses sold in two days. However, longer days on market is the expectation currently. If you’re well coached by your realtor on what to expect in the current market, this doesn’t have to be a con.
PRO: the market is still high
It may feel like you, as a seller, missed the top of the market. While we won’t see over list price offers like we did a year ago, the market is still high and it’s still a seller’s market. There are a lot of good reasons to sell.
PRO: it’s MUCH easier to buy another property while selling your current property
Many sellers in the previous market wanted to sell but didn’t want to compete in the crazy competitive market as a buyer, which caused them to reconsider selling. Now, you can buy in a less competitive market while taking your time and still benefit from selling in a seller’s market.
PRO: certain areas of the Portland metro are in high demand
If you live in a suburb like Milwaukie, Oregon City, Beaverton, Tigard, or Hillsboro, there is likely high demand for your home. Many Portlanders are looking to move outside the city limits.
PRO: the seller’s market is predicted to continue in 2023
While it may feel like a vastly different market, all indicators point to 2023 being a seller’s market.
Watch the full video here to see us talk more in depth about these predictions with all all of the data and graphs!