Here are a few of the most common questions I’m being asked right now about the Lake Oswego real estate market.
Question: Should I buy right now?
Answer: It depends. Interest rates have gone up from where they were a year ago (although they dropped just this last week) which means that your mortgage payment will be higher each month than what it would have been. However, the market is correcting itself somewhat so we are seeing some homes selling closer to the listing price than a year ago. So while your mortgage rate may be higher, the loan amount may be lower because you haven’t had to bid $100,000 over asking to get the deal.
Another thing to consider is that somewhere down the road, when interest rates come down again, you could refinance. The rate you lock in today doesn’t have to be your forever rate. Depending on your situation and your comfort level with that type of scenario, you may want to move forward.
One thing that’s probably NOT going to happen is a housing market crash like back in 2008. What’s fueling the current situation is basically supply and demand. Higher interest rates may push some folks out of the market, lessening the demand. As Robert Dietz, chief economist at the National Association of Home Builders explains, “I think you want to be strategic and you want to be patient…Patient is different from waiting for a crash.”
And of course if you’re a cash buyer, cash still speaks volumes and puts you in a strong negotiating position with fewer buyers driving up the prices right now so this could be your moment.
Question: Should I put my house on the market right now?
Answer: It depends. It depends on how motivated you are to sell and move on. As I mentioned, the market is correcting itself which means it’s not last year’s seller’s market but homes are still selling. In Lake Oswego in June, 62 homes sold with a median five days on the market and a sale-to-list price ratio of 101% with 50% of Lake Oswego homes selling over the original asking price. Inventory favors sellers in the under $2.2 million and over $3.7 million price ranges. There still is a limited supply which buoys value. If you stand on the sidelines and wait for things to heat up again, you could run the risk of adopting a popular strategy which means there could be more competition for buyers when you do decide to wade in.
If you do decide to sell now, it’s important to work with a Realtor who knows the local market so you are going in with realistic expectations and a list price that reflects current value, not necessarily the inflated values driven up by the bidding wars of the last couple of years.
And if you are planning to buy something else, the market adjustment could work in your favor on the buying side of things.
Question: Should I rent instead of buying right now?
Answer: Not if you think you’re doing it to avoid bidding wars. Major news outlets like The Wall Street Journal and NPR report bidding wars taking place now in the rental market. Again, it’s a supply and demand issue as well as some landlords trying to make up for the frozen rent they sustained during Covid.
But if you are currently renting at a price you can comfortably afford, then employ that patient strategy I mentioned earlier. You can start working with a Realtor to better understand the market and appreciate when a house looks like a good investment.
Here’s another thing to just file away in your “things to consider” homebuying/selling file. I recently showed a house to a woman who is moving up here from San Luis Obispo because…of the increasing drought situation in California. That could be a factor that plays into more Californians migrating north to the Portland metro area. If that’s the case, that will be another force driving demand. From where I sit, I don’t see demand going away. So the good news is, whether you look to be a buyer or a seller, the Lake Oswego housing market is strong and will continue to stay that way.
Have a question you’d like me to answer for you? Leave a comment here, give me a call at 503.939.9801 or email me at firstname.lastname@example.org. I’m more than happy to sit down with you and answer any questions you may have.