Is 2019 the Right Time to Buy a House?

We’ve broken down buyer trends for 2019 to help you decide whether or not it’s a good time to for you to buy a house. From questions about interest rates to concerns about another recession, we cut through the noise and outline a practical approach to decide whether or not it’s the right time for you to buy a home.

2019: An Equal Market for Buyers and Sellers

In Portland we saw a 2.4 increase in home prices from 2017 to 2018. While to many, this felt like a big slowdown in the market after five years of astronomical growth, these rates still show an increase in value on top of the huge growth experienced in previous years. What this means for 2019 is a balanced leverage market for buyers and sellers. As realtors, we’re happy to have a balanced market for the first time in years.

How Do Interest Rates Affect Mortgages?

At the end of December the Federal Reserve raised interest rates for the fourth time in 2018. The Feds are currently in a “wait and see” stance on interest rates, and as of January 10, 2019 say they plan to hold off on interest rate hikes until at least May. Today’s mortgage interest rate for a 30 year fixed mortgage is 4.75%. This is good news for buyers this year because although interest rates have increased from the historical lows of 2016, they are still very low and are likely to stay that way through April.

It’s important to know that Fed hikes in interest rates do not always cause mortgage rates to increase at the same rate. The fed hike at the end of December caused the ten year treasury yield to tumble, which is what mortgage rates follow. One of our amazing loan officers, Jen Bell, reported that this actually caused an improvement in loan rates. She locked a jumbo loan at 4.5% with no points.

What About a Recession?

Some buyers are scared to get into the market right now. They wonder if it’s a risky market where property prices could go down because of a recession. Oregon historically has had a recession about every nine years, which means we are overdue at this point. Having said that, there are many analysts who think that Portland’s population growth will continue on an upward trend and as a result, real estate values will also continue to follow that trend.

The 2008 financial crisis can provide a blueprint for decision making in 2019. For people who bought at the height of the market in 2007 or early 2008, it took five years to recover the value of their homes and start seeing an increase in the value of their property by early 2013.

We understand buyers’ desires to plan for a worst case scenario, so here’s why it still can make sense to purchase a primary residence now.

Is 2019 a Good Time to Jump Into the Market?

In 2019 we recommend buyers plan to remain in their new homes for at least four years. Ask yourself these questions to help determine if 2019 is the right time for you to buy a home:

• Financially, will I be able to afford to pay a mortgage for four years?
• Is my income stable enough to pay the mortgage for four years in a worst-case scenario recession where my property losses value?
• Are there any changes on the horizon in the next four years – retirement, a new job or a reason I will need to move?
• Am I going to be both a buyer and seller – selling my current home and buying a new, better home for myself and my family?

If you can afford to pay your mortgage and you are not planning on moving for four years, then there’s absolutely no reason to delay in buying a house in the current market.

A delay in purchasing is just a delay in building equity in your house. Although there are many emotional and lifestyle reasons to buy a new home, financially the end goal is building equity in your home. Eventually you can leverage that equity to build an accessory dwelling unit (ADU), finance college education or even purchase an additional investment property. If you are currently renting, then you are paying money for a roof over your head without building equity in your own property.

If you are considering both buying and selling in 2019, again there’s no reason to delay. When you are buying and selling in the same market, you may have more leverage as a buyer and less leverage as a seller, or vice versa, depending on the market. Either way, your leverage will balance out (remember 2019 is shaping up to be an equal market for buyers and sellers). If your goal is to secure a home that is going to be better for you and your family for the next four years, then now is the time to make that move.

On the other hand, if there is uncertainty on your horizon – a job opportunity elsewhere or other life changes that could impact your income – then it’s probably not a good time for you to purchase a new home.

If you have questions about buying or selling your home, please reach out to us! We are happy to discuss your financial situation and goals in depth. Reach us at 503-349-5449 or karianderika@livingroomre.com. 

Erika + Kari

Broker | Esquire & Principal Broker

The HouseLovePDX Team fuses comprehensive real estate knowledge and legal expertise in the dynamic landscape of Portland, Oregon.

Realtor Erika George brings to the table 20 years of experience as an attorney specializing in construction and contracts. Principal Broker Kari McGee has helped clients successfully navigate the evolving Portland real estate market since 2005. Regardless of the market or your particular circumstances, these highly skilled real estate agents will ensure that your goals become your reality. WHAT WE KNOW We know that real estate is not a one size fits all endeavor. It’s easy to find real estate data on the internet these days, but it’s what we do with the data that counts. HouseLovePDX provides a thoughtful and proactive analysis of current market data for every one of our clients. We know that small details can make a big difference. We consider factors you may not be aware of when buying a house, selling a condo or planning an ADU. From open permits to missing credits on escrow statements, these issues can cost you money. Let us guide you through the real estate process, from big picture dreams about your future home to the nitty gritty of contract negotiation. We know that your “why” often comes before your “how” in real estate. We take extra time with our clients to fully understand all the reasons why you want to make a move to, from or within the Portland area. We use this insight as the key to develop a comprehensive plan for you. Don’t be surprised if we start our meetings by delving deep into your real estate knowledge, your past experiences, your goals and your dreams! WHAT WE LOVE It’s a privilege to help a client sell a beloved home and move on to the next chapter of life. We love seeing Portland, neighborhood by neighborhood, through the eyes of someone who is new to the area and full of excitement. As Northwest natives who grew up together (we’re cousins!), our love for Portland runs deep. And we adore the the moment when a buyer walks into a house and we all know it’s the one: aka HouseLove! We would be honored to help guide you through your changing real estate needs in Portland Oregon. CONTACT Erika George and Kari McGee 503.349.5449 | 971.322.6612 karianderika@livingroomre.com

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• T: 503-349-5449
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