Portland homebuyers get pickier
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It's a picky buyer's market in Portland residential real estate, but both sides still feel squeezed, experts tell Axios.
The big picture: High interest rates are making buyers more likely to demand concessions and scrutinize every flaw, while sellers with anything short of a turnkey home are facing longer waits, price cuts and tougher negotiations.
- "Buyers feel like they are overpaying, and sellers feel they aren't getting enough for their homes," Rachel Freed, owner of Urban Nest Realty, said. "It's a catch-22 — no one feels satisfied."
State of play: The homes catching multiple offers within days of listing are the ones that are well-prepared, well-presented and priced right, according to Dirk Hmura, managing partner and broker at The Agency.
- That means sellers who put in more work — and money — up front with professional staging, landscaping, cleaning, painting and photography.
- Hmura said several of his recent listings drew three to eight offers when they checked those boxes and didn't price too aggressively.
By contrast, homes that go on the market unprepared and overpriced are more likely to sit, suffer hefty price reductions and come with concession requests from buyers such as repair credits and sale contingencies.
- While buyers may have more negotiating power now than they did during the pandemic-era frenzy — when interest rates were below 3% — they don't necessarily have more buying power.
"If your credit isn't perfect, you're going to be in the 7% range for interest rates," Hmura said.
- First-time buyers in particular are asking sellers to help permanently buy down their mortgage rates, he said, rather than banking on rates falling later.
- At the higher end, it's a different story. Hmura said $2 million-plus homes have been selling well, in part because those buyers are more likely to pay cash and aren't as exposed to mortgage rates.
Keeping deals together during inspection has also become "a massive challenge," Hmura said. He estimates 25% to 30% of sales are going back on the market because of inspection issues.
- In one recent deal, Hmura said, buyers backed out of a two-year-old home after bringing in a mold-sniffing dog.
Meanwhile, Freed said, many sellers don't have the luxury of holding out for top-dollar offers. She's been seeing more people sell due to major life changes, including divorce and job relocation.
- One of her recent clients sold for $100,000 less than they paid after buying during the height of the COVID bidding wars, and they still had to negotiate about repairs.
- "With rates this high, buyers and sellers aren't in the market to have fun," Freed said. "They are in the market because they have to be."