Mark’s Market Minutes - 2025 Recap & 2026 Review
2025 in the Rearview — And What's Ahead for 2026
I'll be honest — heading into 2025, I wasn't sure what we'd get. Another year of paralysis? A correction? More of the same uncertainty that had everyone frozen in place?
What we got was a market that finally rewarded the right things: realistic pricing, solid preparation, and patience. Not perfect. But healthy. And after the chaos of the last few years, healthy feels like progress.
The 2025 Story
Year-to-date, the average sales price increased by 1.2%, with the median sitting at $550,000. Not the runaway appreciation of 2021. Not the paralysis of 2023. Just a market doing what markets should do — rewarding preparation and punishing wishful thinking.
Price per square foot settled at $308, down from $316 last year — a gentle softening, not a slide. The suburbs kept outperforming Portland proper, a five-year trend that shows no signs of reversing. Lake Oswego, West Linn, Beaverton — buyers with money continue voting with their feet.
But here's the number that tells the real story: 42% of all active listings saw at least one price cut this year, up from 34% in 2024. That's not a crisis. That's a recalibration. Sellers who showed up prepared still won. The rest got an education.
What the Experts See in 2026
The consensus: mortgage rates will average in the low 6% range, down modestly from 2025's 6.6%. If you're waiting for 4% to come back, you'll be waiting a long time. But the trajectory is finally pointing the right direction.
Home prices nationally are expected to rise about 1%, with incomes growing faster than prices for the first sustained period since the Great Recession. Redfin's calling it "The Great Housing Reset." I'd call it a return to sanity.
For Portland, local analysts predict gains of 1-3%, depending on where rates land. Not exciting. But stable. And after the whiplash of the last five years, stable sounds pretty good.
The Wild Cards
Forecasts are educated guesses. A few scenarios could change everything:
Rates drop into the 5s. If mortgage rates hit the mid-5% range, the market could dramatically improve — pent-up demand floods back, inventory tightens, competition returns.
Recession hits. Counterintuitively, a weakening job market could mean more Fed cuts and a surprising bump in activity.
Inflation roars back. Rates stay elevated. Buyers wait. Sellers wait. Everyone stares at each other.
Washington gets involved. Tariffs, tax changes, and Fed leadership transitions could throw off even the best predictions.
The Biggest Wild Card: Policy Shifts
There's a legislative proposal in Congress worth watching. The "Making the American Dream Affordable Again" framework includes provisions that could reshape the housing landscape:
Zero-to-low down payment FHA programs for creditworthy borrowers
Expanded mortgage portability — sellers could potentially transfer their low rate to buyers (this alone could unlock frozen inventory)
Capital gains tax elimination on sales to first-time buyers and tenants purchasing rental homes
Tax-advantaged savings accounts for first-time buyers
Penalties on foreign investors purchasing U.S. real estate
Will it pass? Unknown. But if even a few provisions become law, the ripple effects could be significant.
What This Means For You
For Sellers: The Effort Market Is Here
I walked a listing last month — great bones, solid location — but buyers weren't seeing that. They were seeing brass fixtures from 1998, soft deck boards, and carpet that had seen better days. They were seeing a to-do list.
The seller invested $15k in targeted updates. New flooring in key areas, fresh paint, deck repairs, updated hardware. Nothing extravagant. Just removing the obvious reasons to say no.
Eleven days. At asking.
This is the reality. Buyers have choices. They're comparing your home to ones that already show well — not imagining what yours could be. Deferred maintenance isn't charming. It's a discount.
Put in the work, or leave money on the table.
For Buyers: Know Where the Leverage Lives
You have more negotiating power than you've had in years. But be precise about where it actually exists.
The deals are in the problem properties — homes sitting because they're poorly presented, overpriced out of the gate, or have issues that spooked the first wave. That's where you negotiate. That's where you find value.
But a well-located, move-in-ready home priced correctly? Competition hasn't disappeared. I watched buyers lose a Multnomah Village gem this fall because they assumed leverage existed where it didn't. The same buyers won a Hillsdale place three weeks later — 45 days on market, motivated seller, $35k under asking.
Know the difference between a deal and a dream home. They require different strategies.
The Bottom Line
No one is ever right with forecasts — and if they say they were right, they're lying. But Portland's fundamentals remain solid. Supply is still constrained. People still want to live here. And we're finally approaching something that functions like a normal market.
The winners in 2026 will be sellers who invest in preparation and buyers who understand where opportunity actually exists.
Thinking about making a move this year? I'm happy to sit down and talk through your specific situation. No pressure. Just clarity.
Reach out anytime.
Mark
