November 27, 2016
With those market forces, "we're seeing exactly what you would expect to see," Duy said. In order for price increase to cool, he said, "we've got to be able to build 'up' faster and 'out' faster, and we're not doing either."
Marc Fox, principal broker for Fox Real Estate Network/Keller Williams Realty, said the rise in rates could have the counterintuitive effect of priming the market in the typically slow holiday and winter season.
"We're starting to see some buyers get off the fence," he said.
Though financial markets remain unpredictable as investors try to sort out Washington's new priorities, analysts say further interest rate increases could be in the offing. The Federal Reserve Bank hinted recently that it could raise its benchmark federal funds rate next month. That interest rate doesn't track with mortgage rates as directly as the 10-year Treasury rate, but an increase would signal another move out of the extraordinarily low interest rate environment of the post-recession era.
David Blitzer, chairman of the committee that produces the monthly S&P CoreLogic Case-Shiller Home Price Index -- the 20-city survey that Portland has topped for 11 consecutive months --doesn't expect the latest interest rate increase or further modest increases to dampen housing's recovery.
"The rates are still lower than most people have ever seen them," he said.
Borrowers on the cusp of being able to afford a home can opt for variable rate loans or other cost-cutting mortgage options if rates get too high, he added.
"There's lots of room to dicker," he said.
Portland continues to show the strongest growth in home values of the 20 cities in the Case-Shiller index, which measures relative price changes using repeated sales of the same homes. That increase is more than double the 5.1 percent home-price appreciation for the 20-city composite.
"It seems that everyone wants to move to Portland, Oregon," said Blitzer, a New Yorker. "I'm not sure why."
The RMLS multiple listing service, another measure of housing demand, reported that the median Portland-area home sold for $350,300 in September, an increase of 15 percent from a year earlier. The inventory of homes for sale would meet demand for just two months, a supply measure low enough to indicate a seller's market. The supply of homes for sale hit a low of 1.3 months in March.
Fox, the real estate broker, said homes currently on the market that are priced right and display well continue to get multiple offers, but that fewer buyers are willing to bite on houses that push for peak prices. He worries that the rising prices are leaving behind would-be first-time buyers and homeowners who want to move up to a larger or nicer home.
But today's buyers now have confidence about moving into home ownership and the interest rate bump shouldn't be a deterrent, he said.
"The uncertainty from the 2008 crash is long gone," he said. "Everybody is understanding that real estate is a good long-term investment."
-- Gordon Oliver, Special to The Oregonian/OregonLive