According to a recent Zillow survey of economists and housing experts, the real estate market is expected to be in favor of home buyers in 2023. The Zillow Home Price Expectations Survey suggested that higher mortgage costs are driving down competition among home shoppers.
Home values have been on the rise since the beginning of the pandemic, but survey respondents project a deceleration coming soon, which is a good sign for buyers looking to enter the market.
The Federal Housing Finance Agency House Price Index report for the second quarter of 2022 showed that home prices had gone up 14.2% in Oregon, 17.3% in Washington, and 19.19% in Idaho.
The CoreLogic Market Risk Indicator, a monthly update of the overall health of housing markets across the country, predicts that four cities in the Pacific Northwest are at very high risk of a decline in home prices over the next year: Bremerton-Silverdale, WA, Bellingham, WA, Boise City, ID, and Olympia-Tumwater, WA.
As mortgage rates have started to climb, it has reduced the number of buyers in the market. “High mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” Jerry Konter, the NAHB chairman, said in a statement. The NAHB’s chief economist, Robert Dietz, believes that a large number of prospective buyers will be priced out of the market, due to the rising interest rates and elevated construction costs.
Bringing it closer to home, Sammamish Mortgage, a Bellevue, WA mortgage company, predicts that home prices in the Portland area will rise more slowly in 2023. They say it’s part of a cycle that has repeated itself in the past. Whether the dip in prices will be a long-term trend remains to be seen.
Sammamish goes on to say that they expect the number of buyers in the Portland market to decrease as rising costs and interest rates has decreased the competition among buyers. In addition, with more houses coming on the market, and many of them had price reductions, the market will benefit buyers into the new year.
As far as the housing supply goes, it has been increasing in the Portland area over the last year. However, if homeowners decide to stay in their homes due to rising interest rates, there may be less inventory on the market. This could reduce the options for buyers, causing a tight housing market overall.
All of this may lead some homeowners into deciding that they’d rather stay where they are and spend their money improving their current home. If this is you, there are several projects you can do to improve your home that will also increase your home’s value.
- Kitchen remodels or update – Updating or refreshing your kitchen is one of the best projects you can do to increase your home value. If it’s been a while since your cabinets and floors were finished, it may be time to update their look. And today’s appliances offer smart home connectivity, allowing you to do more than just cook in the kitchen.
- Bathroom Remodel – For those looking for a less expensive project to get started on, a bathroom remodel or update can be a great place to start. It doesn’t cost much to change the finishes (paint and floor), or you can change out the fixtures for a whole new look. Today’s homebuyers are sensitive to water conservation, so be sure to use low-flow fixtures.
- Basement Finishing – If you have an unfinished basement, it can significantly affect how many people want to buy your home. It can be seen as a largely unfinished project by prospective buyers. Finishing your basement doesn’t have to cost a lot, and it’s a great way to add living space without building an addition.
No matter what you decide to do with your current home, we can help you design just the look you want. Our design centers can help create the kitchen or bathroom of your dreams. Whether you hire a contractor or do the work yourself, Parr has all the materials necessary to spruce up, remodel, or add on to your current home. Investing in your home is always a good choice that will pay dividends for years to come.