Last fall, according to the “click-bait” headlines, 2019 was going to be a disastrous year for the real estate market. Some went so far as to say that we might experience a housing crash like the one that occurred during the last decade.
Fast forward a few months and it’s clear that the real estate market is back in a big way. Buyer demand has increased dramatically over the past three months and nationally, both the ShowingTime Showing Index and the National Association of REALTORS Buyer Traffic Index reflect the surge in buyer activity.
Why the increase in demand? Increased buying power.
According to the National Association of Realtors’ Economists’ Outlook Blog, purchasing a home has become more affordable, which has led to increased demand.
“Due to the combination of falling home prices and mortgage rates, the income needed to make an affordable mortgage payment (mortgage no more than 25% of income) on a median-priced home with 10% down payment and 30-year fixed rate mortgage decreased from $60,425 in June 2018 to $53,783 as of February 2019, and the difference of $6,642 represents a gain in buying power because one can afford a home purchase at a lower level of income.” The Portland market peaked in June of 2018 with a median sales price of $419,000. As of the end of March 2019 the median price was $399,000.
It appears the spring buyers’ market is going to be much stronger than many had projected. Whether you are selling or buying, this is important news.