It might be!
First, in our local market, prices have dropped 2.7% year over year from $550,000 down to $534,900, creating some buying opportunities. However, according to economists from Zillow, prices are expected to jump 6.5% by July of 2024. That would increase the median home price in Portland to $569,668!
Second, our inventory continues to stay low at only 2.2 months, meaning there is still competition for homes. This low inventory is keeping prices high and is a large contributor to the expected increase next year. It’s been hard to predict what rates will do, but if they do drop 1% or more, many home buyers will jump back to the buying pool, likely driving sales prices back to 3-5% above list price as we saw previously.
Lastly, at the end of the day, the thing that matters most is your monthly payment. If you add up all of these numbers, the average monthly payment today is hovering around $3748. If you wait until next year, hoping that rates drop down by 1%, this will create a payment of $3709 for a total savings of only $39 per month. BUT…by waiting, you will most likely be paying $50,789 more for the same home and can’t get the principal or the purchase price to drop later.
In short, while high-interest rates do create a higher payment, that payment is temporary and can be refinanced later. Once rates begin to drop, prices are expected to rise rapidly, creating bidding wars again. So, if you’re giving even the slightest consideration to a change next year, we should talk and plan now!