Should We Expect a 30% DROP In The Market?!

Question: I'm thinking about buying or selling and I'm hearing we should expect a 20-30% drop in the market. Is that going to happen?

​If you're like most people, you have seen lots of information being tossed about in the media about what's happening in the real estate market. Shocking headlines are meant to generate clicks and site visits, not necessarily to offer a complete explanation. I'd rather clarify the situation than terrify. To clear this up, let's take a look at one piece of the puzzle today: inventory of available homes to buy in the US.

First, here are two definitions to know:

Active: homes that are currently on the market and do not have an accepted offer.

Pending: homes that are under contract (have an accepted offer, working toward closing).

According to NAR (National Association of Realtors), there are 970,000 units (properties) on the market now. To see a chart, please click here. Historically speaking, this is a very small amount of homes for sale, especially when compared to 2008 (have a look at where inventory was then! Holy smokes!).

However, if we take away homes that are under contract/pending, Altos reports that it's more like 456,990 homes available NATIONWIDE. While not the lowest level we have seen in the past year, this number is nowhere near where we'd need to be to start to see massive price decreases on a broad scale. That's not to say that in some markets we don't see these decreases to some extent, because real estate is hyper local and flows with what is happening in those areas specifically.

The rules of supply and demand economics (less available+lots of demand=$ increase) mean that we will continue to see pressure on pricing. NAR estimates that we are 4 Million units short in housing inventory! If we take inventory as one piece of the equation, it certainly doesn't seem like we can expect broad scale market decreases.

If you're selling: my suggestion is to make your home as presentable as possible. Buyers are savvier than in past years. Paying higher interest rates means buyers are more selective in what they buy today.

If you're buying: be prepared for demand on nicer homes that are well cared for, especially in those lower price points (in Oregon, under $500K). We may see a return to multiple offer situations like we saw in Winter 2022. Is it a similar feel? Yes, but not nearly as bananas. 

Want to know what is happening in YOUR backyard? Connect with me, Jennifer Schurter. I am a Portland Metro Area Realtor and I would be happy to walk you through what's going on on and how these trends affect you locally.