This past week I had a client email me with a really interesting concern. She said she was looking at one of the websites like Zillow or Redfin and her house was valued at $500,000. She seems shocked at the high value and a little bit concerned about this discovery. Most people would be happy to see their home value rising so much. I will say that her home is in a very popular south east neighborhood, has nice updates and is a very typical 3 bedroom, 1 bathroom, Portland bungalow.
I responded to her email with a conversation that I seem have nonstop with both clients and other Realtors. One of the main factors driving prices is inventory. Portland has the lowest inventory in months (1.2 months when 6 months is a healthy market) that we have had in the past 20 years. Our density is increasing, but not at a rate to sustain the number of people moving to Portland. Builders are having trouble finding areas to build single family homes and all of these issues are pushing prices up. The past two contracts I wrote with a client had 25 competing offers and 5 competing offers.
On her end, or with any seller, it doesn’t make sense to sell your home even with the high value if you plan to stay in Portland (without downsizing or trading up) because you will have to find your new home in this very difficult inventory situation. On the other hand, if you are a seller right now you can pull a lot of appreciation out of your home to trade up or downsize and do something else with the value. I do not see the inventory increasing substantially in Portland anytime soon, so the competition will continue to be strong with buyers and home values will continue to push upwards. Interestingly, I just looked at her home value on Zillow and it is $592,000 now. That may not be market value, but it is another indicator of the direction we are headed in Portland prices.