In today’s housing economy, months of inventory isn’t a clean dividing line between winners and losers. It’s just a market speedometer—it tells us how fast homes are moving, but not who has the leverage. And when it comes to making strategic real estate decisions, that distinction matters.
Let’s look at the Portland Metro market as a case study.
Inventory Was Tight in 2023—But Prices Still Dropped
In 2023, Portland’s housing market never rose above 3.5 months of inventory—not once. In fact, for most of the year, inventory hovered between 1.6 and 2.9 months. According to the traditional model, that should have been a strong seller’s market.
But here’s the reality: Home values declined by 2.1% year-over-year. That means even in an environment with low inventory—historically seen as favoring sellers—we saw price contraction. Why? Because leverage had shifted.
What Really Determines the Market? Leverage.
Leverage comes from motivation, affordability, and negotiating power—not just supply and demand.
In 2023, buyers were still facing high interest rates and affordability constraints. Meanwhile, many sellers were sitting on low-rate mortgages and unwilling to drop prices. The result? Fewer deals, longer time on market, and price softening—despite a low supply of inventory.
Now, in 2025, inventory has continued to rise. As of June, there are over 6,000 active listings for sale. However, buyer activity remains cautious. Pending sales have barely budged from last year’s numbers, indicating that demand isn’t accelerating at the same pace as supply.
Again, it’s not about inventory—it’s about who has the power to walk away from the table or who can walk to it. The Portland metro area is still facing massive affordability issues, restricting the number of people who can participate in the market.
The Affordability Crisis: A Deeper Dive
Affordability is a critical factor in determining market dynamics. In Portland, the median home value is approximately $526,500, while the median household income is $94,573. This results in a home value-to-income ratio of 5.57, placing Portland among the top 15 least affordable metro areas in the U.S. kptv.com+1rightnoworegon.com+1rightnoworegon.com
Moreover, affording a typical home in the Portland metro area now requires an income of $152,000 annually, nearly three times higher than a decade ago. This growing disparity is a result of rising home prices, elevated mortgage rates, and a persistent shortage of available homes. axios.comaxios.com
The Smarter Way to Read the Market
It’s time we upgrade how we talk about real estate. Here’s how I recommend thinking about the market in 2025 and beyond:
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Months of inventory tells us speed—how fast homes are turning over.
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Leverage tells us control—who’s negotiating from a position of strength.
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Affordability tells us sustainability—how many buyers can actually perform in today’s financial conditions.
If you’re a homeowner, investor, or buyer trying to time your move, don’t rely on outdated shorthand. Get context. Understand leverage. And make moves based on today’s market, not last decade’s rules.
If you're wondering who holds the leverage in your specific neighborhood or price point, let's have a real conversation. Because real estate today is nuanced—and that’s exactly why you need a local expert on your side.
