How much is TOO much?
Statistics from the Realtors Multiple Listing Service (RMLS) show that Portland’s year-over-year appreciation was up 11.9%, and according to the Case-Shiller Housing Index, Portland’s market has been the top market in the country for five straight months. While this is great news for sellers, buyers are beginning to ask the questions: am I paying too much and how long is this going to last?
Here are 8 factors that could influence your decision when it comes to paying, what appears to be, a premium price:
- Portland’s appreciation rate was 7.4% in 2015 and presently is climbing at 11.9% in 2016. To put things in perspective, there was 16% appreciation in 2006, the height of appreciation before the housing crash.
- There are presently 4,003 properties for sale and 2,896 closed sales from last month. At this pace, if there were no new listings, the current inventory would sell out in 1.4 months. In comparison, 2006 inventory level was 2.7 months. However, the one primary difference in 2006 was the significantly higher amount of new construction. Today, there is less available land and fewer builders, which has contributed to the limited supply of new homes.
- Interest rates are truly unbelievable. To think that they have been at, or less than, 4% for several years makes it still an amazing time to buy.
- Portland has found international fame and from it we are seeing an influx of cash buyers purchasing nearly 1 out of every 10 homes for sale.
- Paying a premium price becomes less significant the longer you live in a home. At today’s appreciation rates, it would appear that one can make a profit in as little as one year. However, living in a home five years or longer provides a homeowner with a larger cushion of appreciation,which could be advantageous in a “down cycle”.
- Location, Location, Location – if the home of your dreams comes up in a coveted neighborhood where homes rarely come available, you will pay a premium, but you remain unlikely to get stung in a down market.
- When it comes to the exceptional home, whether it’s curb appeal, the ideal great room layout, timeless high quality remodel, or the perfect floor plan for you, it becomes likely that paying a premium is well worth it. When it comes time for you to sell, the home will likely still be a highly sought-after item.
- Any time you have scarcity, whether it is a rare, one-of-a-kind home site, a level acre in a beautiful neighborhood setting, a view lot on top of the hill, or waterfront property, chances are the home will be irreplaceable and in high demand in any market.
Our years of experience and expertise can help you navigate these tricky waters when it comes to your next home purchase. Contact your Eleete Realtor® today to discuss your real estate plan