Portland Metro Highlights
Portland Real Estate Market Wrapup
2017 Year to Date market activity was cooler than 2016.
- New Listing of 40,805 decreased 0.8%
- Closed sales of 31,624 resulted in a decrease of 3.6%
- Pending sales of 31,330 decreased 5.7%

Average and Median Sales Prices continued to rise in 2017
- Average sales price rose 8.5% from $395,000 to $428,700
- Median sales price rose 9.5% from $347,000 to $379,900

December Inventory decreased to 1.6 months
Total Market time in December ended in 55 days on market

Check out 2018 Housing Forecast by Matthew Gardner - Chief Economist for Windermere

Matthew_Gardner_2018_Forecast(1).pdf

For the Latest Portland Real Estate Market Highlights - check out the Market Action Report & Neighborhood Stats below.
In the event you or someone you know is thinking about selling or buying a home, give me a call at 503-319-5684 or email arnett@arnettnorris.com to discuss current market activity and conditions.
What the New Tax Bill Means for Homeowners


The Mortgage Interest Deduction Cap is Lower

Mortgage interest will still be deductible, but on mortgages of up to $750,000 rather than the current top limit of $1 million. This applies to new mortgages only. For current mortgages, as well as refinances not larger than the original mortgage, the old limits still apply.

What It Means: Prospective sellers in areas with high property values may choose to stay put rather than take out a new mortgage of over $750,000 for their next home. Buyers in high price ranges may adjust their top price point in order to compensate for the lost deduction.


Some People Will Have Limited Deductions for Property and State Taxes

Before the new bill, taxpayers were able to deduct an unlimited amount for state and local income, sales and property taxes (referred to as SALT). Now single and married taxpayers alike are subject to the same maximum deduction of $10,000.

What It Means: This is expected to affect coastal cities with high property values the most. According to Ed Kilgore of New York Magazine, in 2015 the average SALT deduction for Californians was $18,400, and over a third of California taxpayers took it. In New Jersey, owners of properties assessed at over $425,000 already pay over $10,000 per year in property taxes, in addition to paying state income and sales taxes.


Fewer People Will Choose to Itemize Deductions

Itemizing deductions will no longer make sense for many people because the new bill roughly doubles the standard deduction.

What It Means: The National Association of Realtors® believes this drop in itemization will decrease the appeal of the mortgage interest and property tax deductions.


The Home Sale Gain Exclusion Is Safe

This beloved tax break was in jeopardy for a while, but remained intact in the final version of the bill. As long as a home has been a primary residence for two of the five prior years, a single seller can still exclude from capital gains taxes up to $250,000 of gain (profit on the sale), and married couples filing jointly can exclude up to $500,000.

What It Means: Losing the exclusion would have created a strong incentive for current homeowners to postpone selling. Keeping the exclusion avoids the drop in inventory this would have created, and maintains a huge benefit of homeownership.


No Mortgage Interest Deduction for Home Equity Loans

2017 is the last year that homeowners will be able to deduct interest on home equity loans of up to $100,000, even for pre-existing loans.

What It Means: This may affect remodeling plans for homeowners who wanted to use a home equity line to pay for renovations. It also changes options during the purchase process for buyers who planned to use a home equity loan to avoid paying private mortgage insurance when putting less than 20% down. (A common purchase scenario has been an 80% conventional loan, 10% home equity loan, and 10% down payment.)


The Big Picture:

Most real estate experts believe the new bill is likely to have some kind of dampening effect on the U.S. real estate market, although opinions differ as to the extent. Moody's Analytics predicted that by mid-2018 property prices would end up 4% lower nationwide than they would have been without the bill, but in reality this is likely to vary widely according to location.

Lower-value areas with low property taxes will probably be largely unaffected, while high-value areas and/or those with high property, state, and sales tax rates - typically coastal and some Midwest cities - could see greater effects because the new law increases the cost of homeownership for more people in those locations.


Other Trends to Watch For:

The Suburbs Are Getting Hotter

Millennials priced out of in-city areas are reshaping the suburbs, according to Zillow chief economist Svenja Gudell. Expect amenity-rich, walkable neighborhoods in more affordable areas to experience increased demand.

Interest Rates Will Probably Go Up, But Slowly

Experts appear baffled as to why interest rates are still in the low 4-percent range, even after a .25% rate hike in December. Many financial gurus now expect them to reach from 4.5% to 5% by the end of 2018.

(A rate increase of .50 percent means a borrower pays around $30 more per month in principal and interest for every $100,000 of loan amount.)

Age-In-Place Features Are More Valuable than Ever

Wider hallways, grab-bars in bathrooms, and easily accessible mother-in-law living quarters are smart investments for homeowners preparing for the growing buyer demographic of seniors and multi-generational families.

The "Unicorns" in the Housing Market Are...

Homes priced at the first-time-buyer and mid-range levels, according to the Urban Land Institute. According to Gudell, there are 12% fewer homes for sale than a year ago, and 51% of those are in the top one-third of price tiers - which means that many buyers in lower price ranges are finding slim pickings.


** The new law will affect taxpayers in 2019 when they file for the 2018 tax year, not when they file for 2017. The information here is not meant to be taken as professional tax or financial advice. Please always consult a qualified professional.


Recent Market Highlights
Market chart icon

U.S. home prices rose 6.2 percent year-to-year in October, according to a recent S&P/Case-Shiller report. They rose 7.0 percent year-to-year in November, according to CoreLogic, a data and analytics company.

The national average 30-year fixed mortgage rate is in the low 4-percent range.

The November Pending Home Sales Index rose .8 percent year-to-year, according to the National Association of Realtors®.
Note: Housing statistics based on closed sales typically reflect market conditions of two or three months ago. To find out what's going on right now in your local market, please contact me directly.


Contact Me for Market Information
Are you curious about your home's current market value, or do you have a question about home buying? Just reply to this email, or call me at (503) 319-5684.
Links that Make Life Easier

Sometimes real estate-related, sometimes not... these are assorted links that come in handy:

"News In Slow" Language Learning
Learn French, German, Spanish, or Italian by listening to current news at speeds ranging from Beginner to Advanced.

2018's Hot Home-Buying Markets to Consider
Forbes gives its list of real estate markets ranked by projected price growth in 2018.

Mushroom Puff Recipe
A relatively easy-to-make appetizer that's perfect for potlucks.



The Lighter Side



If only we could all start out the New Year with as much exuberance as this hilarious sheep playing with its pack of dog friends! Click here or on the image above to watch the video on The Dodo's YouTube channel.


Are you thinking of buying or selling a home in the next year, or could you use some remodeling advice? Even if you just need the name of a good service provider, please remember that I'm always here to help you. I welcome the opportunity to serve you, your friends and associates with my expertise and recommendations.
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