- Mortgage rates. We are probably looking at higher-than-we’ve-seen-recently mortgage rates for the next three quarters. Looking at the combined average projections of the big four forecasters (Freddie Mac, Fannie Mae, Mortgage Brokers Association and National Association of Realtors) we can expect a rate of 5.4 in the fourth quarter of 2022, followed by 5.3 in the first quarter of 2023, 5.2 in the second quarter and 4.8 in the third. Many Lake Oswego home buyers are cash buyers so they will certainly retain bargaining power and may find themselves with less competition in the short term. Mortgage rates can vary depending on the lender so it’s more important than ever to shop around. A good place to start is with getting a recommendation from your Realtor.
- Buyers are being more cautious. The tales of buyers waiving all contingencies or offering to name their firstborn child after the seller (yes, someone in Maryland tried that tactic but it didn’t work) are history. Instead, we are seeing a higher rate of sale fails as buyers walk away after inspections that raise issues or just because a bad case of buyer’s remorse seems to be going around. And we are seeing price drops. Sellers need to take this into consideration when putting their homes on the market in several ways. One, is to do all they can beforehand to bulletproof the transaction including addressing issues that might come up in the inspection BEFORE the inspection. Sellers want to remove any obstacles that might give buyers pause. Another is to listen to their Realtor when he or she suggests pricing their home based on the LISTED price of comparable homes, not the SOLD prices which were inflated by the frenzy that was fueling the market months ago.
- Rent increases. Landlords with units 15 years and older can raise their rents by as much as 14.6% starting in 2023. This is quite a jump from the 9.9% increase allowed in 2022. Given that kind of inflation, mortgage rates in the five’s might seem more attractive, bringing more renters into the market than we are seeing today.
- Oregon Household Formation Boomed During the Pandemic According to the Oregon Office of Economic Analysis, Oregon added a net 28,500 housing units between 2019 to 2021. But during that same time period, the number of households in the state increased by 53,200, meaning household formation outpaced net new construction by nearly 25,000 units. That is one of the factors contributing to the tight housing market and until that imbalance is corrected, could keep supply lower than demand.
- Millennials have overtaken Baby Boomers as the largest living adult generation. And, for a variety of reasons, they are arriving at many of life’s transitions later in life from marriage to homebuying. But once they do, since they represent almost a 20% larger demographic than baby boomers, it stands to reason that their entry and movement within the housing market will keep demand high.
- Lake Oswego’s desirability continues. Some things don’t change. And the fact that Lake Oswego is deemed such a desirable place to live remains a constant and continues to keep home values stable. In August to-date, 41% of the homes sold, sold over the original asking price and the median sale price still reflected a 12% increase over the median sale price a year ago. Inventory is still low at 0.9 compared to 1.9 just a month ago. The total number of homes sold in Lake Oswego year-to-date is 27% lower than the same time last year which reflects both the limited supply and the more cautious approach buyers are taking to the process.
Another thing that doesn’t change in the Lake Oswego housing market is my desire to help you make your next move your best one. Along with my daughter, Riley, we are here to help you navigate today’s market and put our expertise, hyperlocal knowledge and energy to work to ensure you come out ahead whether you’re a buyer or a seller. Get in touch today and get your questions answered! 503.939.9801; email@example.com.