A month ago when the numbers showed that Portland Metro had almost 13 months of inventory I broke it down to the close-in neighborhoods and showed that we still have a balanced market. A couple days ago news came out that inventory has Dropped back to 10.4 months and the number of closed sales are way up over January – 28% more to be exact.
A couple more surprises… Median price is up 5.5% over last February …. Interest rates are going up very rapidly … Stated income loans are about to disappear in the next two weeks. Economists are starting to say buy now and that we might be at, or very close to the bottom. I don’t have a crystal ball but there are some amazing deals out there and they won’t last forever.
Here’s an example of the cost of waiting: Let’s say that you were able to make the payment on a $400,000 loan at 5.2% which = $1733/mo in interest [rates were at this point a month or so ago] Rates are at 6.2% and rising right now. That means the same monthly payment of $1733/mo in interest now only buys you $335,000 – that means you just might have lost $65,000 in buying power. Prices aren’t falling in Portland and even in areas where they are you still lose by waiting if interest rates go up. Here is the best explanation of how this works.
A great article about over-priced / under-priced markets and why to buy now.
Now – Don’t give up just yet. I think it is a great time to buy and you should feel good about getting in the game. The strength of the market will hopefully mean you will do well by buying and holding your home or investment property. Another thing is that rising interest rates signal a healthier econmony which means we’ll be making more and have better job security.