Let’s face it, Q4 is never a great time to look at real estate numbers and stats and expect to see positives. People are busy with family, friends, the holidays, and life. In fact, the Portland Metro housing market has seen a Q3 to Q4 decline in the number of houses sold for the last five years straight.
With everyone eager to discover what 2023 will bring, this Q4 update should give you a general consensus. If you are hearing that the market is slowing down, it may be accurate, but a slowing is not always a negative.
The Portland Metro housing market remained strong in Q4 despite declining median sales prices and increasing median days on market. However, when we look at numbers over time, pricing is still considerably higher than we saw back in 2020. The number of homes sold has declined over the last few quarters, but it may be on its way back up in 2023.
Median Sales Price
The median sales price in Portland Metro dropped from $590,699 in Q3 to $561,000 in Q4. We saw a similar decline between Q2 and Q3, but in early 2022 we actually saw an increase in median sales price.
The Q4 numbers dropping 5% don’t have any of us concerned. In fact, some of this is just the settling out we expected after the peaks we have seen throughout 2021 and 2022. As buyers become more comfortable with the new normal, we expect these median sales prices to level out and remain more consistent.
Median Days on Market
The Q4 results for median days on market in Portland Metro were 24. In Q3, the number was 11 days. Again, we can’t stress enough the importance of considering the time of year.
Throughout the last five years, we have seen Q4 have a longer road to closing than any other quarter. People struggle to move in the last few months of the year, and it impacts the time it takes to complete a deal.
In 2019 we saw some of our highest median days on market in the Portland metro area, and Q4 is still below those numbers. The bottom line is that you can expect to wait a little longer for a buyer when listing a home, but we are still not seeing homeowners having to sit on their homes for long periods.
Number of Home Sales
The number of home sales decreased to 4,153 in Q4. The Q3 number of homes sold was 6,021. Obviously, this is a significant drop, but again one that we are used to seeing in the last quarter of the year.
One thing to note here is that the Q4 2022 number of home sales was the lowest we have seen in any quarter in the Portland area for the last five years. The numbers are almost half of what they were in Q3 of 2021.
With interest rates still moving around a bit and a boom from Q3 of 2020 to Q2 of 2022 that we have not seen in years, the decrease in the number of home sales is not a significant concern at this point.
The most positive data point in this Q4 Portland Metro Housing Market Update is that the interest rates seem to be on their way back down. We know you probably hear that rates are still sky high, but let’s remember what we were looking at in the 1980s and 1990s when rates were as high as 17 percent.
We get it that you are not worried about what people had to pay back then, and you want more information on how this impacts you.
The bottom line is that mortgage rates in the 5, 6, and even 7 percent range are low, all things considered. The highest we saw in 2022 was in week two of November, when rates went a little over 7 percent.
In Q4, we saw rates back to around 6.3 percent at the time of this writing.
In the last quarter of 2023, we saw some declines in the real estate market that make sense historically. Pricing and volume decreased while median days on the market increased. This happens every Q4.
The key for home buyers in 2023 is to keep a close eye on interest rates. If interest rates continue to increase, there will be more negotiations in total sales price. If inflation and interest rates settle down in 2023, which is what we expect, it will still be a good time for sellers to get their homes listed and expect positive results.