A growing number of Portland homeowners are facing the prospect of selling their homes at a financial loss as the local real estate market continues to cool. According to recent data from Redfin, more than 6% of homes listed in the Portland area during May 2025 were at risk of being sold for less than their original purchase price. That figure represents a sharp rise from about 4% recorded during the same period last year, underscoring a significant shift away from the frenzied seller’s market that defined the pandemic years.
This shift reflects a broader national trend, with nearly 6% of all U.S. listings now facing a similar risk. Economists attribute much of the current vulnerability to the cohort of buyers who entered the market during or immediately after the peak in housing prices around mid-2022. In Portland, these buyers—especially those who paid premium prices fueled by historically low interest rates and intense competition—are particularly susceptible to negative equity or minimal profit margins if they choose to sell now.
Despite the risk of losses, not all sellers are facing a financial crisis. Redfin senior economist Asad Khan emphasized that many homeowners still possess significant equity, especially those who purchased prior to the pandemic or in its early stages. For these sellers, listing at a loss may be a strategic decision driven by relocation, financial need, or changing life circumstances rather than a sign of distress. Khan also cautioned that while the percentage of loss-risk homes has risen, this does not equate to widespread foreclosure threats.
Still, the implications for homeowners who bought recently are more precarious. Redfin data shows that approximately 16.4% of Portland homeowners who purchased after July 2022 are now at risk of selling at a loss if they list their homes today. By contrast, only 9% of those who bought during the pandemic and a mere 1.8% of pre-pandemic buyers face the same situation. This disparity highlights the impact of timing in real estate and the challenges faced by recent entrants into the market.
The local real estate environment has also become more challenging for sellers in other ways. Home sales have slowed considerably compared to previous years, and inventory levels have seen a modest uptick. As competition among listings increases, homes are sitting on the market longer, and price reductions have become more common. According to recent market snapshots, Portland’s average price per square foot declined slightly year-over-year, dropping from around $321 in April 2024 to $313 in April 2025. Although not dramatic, this trend reinforces the perception that Portland’s housing market is no longer the seller’s playground it once was.
These conditions require a strategic response from realtors and their clients. Agents are increasingly advising sellers to adjust their expectations, particularly those hoping to recoup high purchase prices paid in 2022 and 2023. Competitive pricing, enhanced staging, and targeted marketing strategies have become more essential than ever. Additionally, some realtors are encouraging sellers to consider postponing listings until market conditions stabilize or improve, especially if the homeowner has flexibility on timing.
For buyers, the current environment presents new opportunities. Increased inventory, longer list times, and more willing sellers mean that negotiation power has shifted in favor of those looking to purchase. First-time homebuyers and investors in particular may find better deals and less bidding pressure than in recent years. However, interest rates remain elevated compared to the ultra-low levels seen during the pandemic, which tempers some of the affordability benefits for buyers.
Looking ahead, Redfin forecasts that home prices across the U.S. could decline by approximately 1% by the end of 2025. If that prediction holds true—or if declines accelerate—more homeowners could find themselves underwater or forced to accept less-than-desirable sale prices. Redfin estimates that a 3% to 5% price dip would put roughly a quarter of post-pandemic buyers at risk of loss, which could further slow listings and dampen market activity.
Despite these headwinds, Portland remains a fundamentally strong housing market with long-term upside. Neighborhoods such as the Pearl District, Sellwood-Moreland, and the Alberta Arts District continue to attract interest due to their amenities, cultural offerings, and walkability. The city’s steady job market, relative affordability compared to the West Coast’s largest metros, and lifestyle appeal will likely continue to support housing demand, even as short-term corrections play out.
In this transitional period, realtors and sellers must pivot from the aggressive pricing tactics that characterized the boom years and instead focus on market realism, buyer psychology, and personalized strategy. For many in the industry, this moment represents not a downturn, but an adjustment—one that favors adaptability, transparency, and patience.
