By Danni Duggan
What a wild ride the Portland real estate industry experienced throughout 2020. It was a normal winter in January and February. We were all gearing up for the typical spring bump. None of us was truly aware of what the remainder of the year would yield.
Portland Real Estate – Lockdown
Everything changed in March with the state lockdown. Fear. Uncertainty. Many sellers pulled their listings from the market. The mortgage industry had a slight hiccup with jumbo loans. Rate locks were a source of Buyer stress. Things were bouncing around initially.
But then the strangest things started to happen in the Portland real estate market (and nationally, frankly). Buyers were suddenly everywhere. Interest rates were down. A lot. And with more of us spending our days at home working, cooking, DIYing, and finding new ways to entertain ourselves, suddenly being in a home became very important.
Apartment dwellers who initially thought they were a year or two out from buying accelerated their purchase schedule. There are still great programs out there with 0%, 3% and 5% down. These programs plus low interest rates mean that for those who have kept their jobs in the pandemic, home ownership has become a reality. Home owners in small homes suddenly needed home office space(s), or needed room for their children to attend school virtually. While most of us love our families, we suddenly need more space in order to co-exist peacefully. Outdoor spaces became critically important in 2020.
The 2020 Hunt for Inventory
Within a span of weeks, we suddenly had more Buyer clients than any typical winter, and with little inventory on the market, we needed to get creative. We started contacting colleagues of withdrawn listings, “Hey, are your clients sure they don’t want to sell after all? My client toured the home prior to the lockdown and they are ready to go for it. Let’s put something together.”
Pocket listings became more prominent, advertising on our office email lists. Colleagues had clients ready and willing to sell, but they were not prepared for the volume of buyers a listing in the RMLS might bring into their home during a pandemic. Knowing that inventory was so low, they knew they only needed a few Buyers to come into the home before they would receive an offer.
Flexibility in timing was critical. We were all navigating new safety protocols. Touring homes via FaceTime and WhatsApp and even Facebook Messenger became the norm. We had clients in the Midwest and at the Oregon coast, all touring with us via video apps on their phones. Each a very serious buyer ready to make a huge decision. We were in masks, and gloves, and single-use booties. We had hand sanitizer in our cars, in our purse, in our pockets. If we ran out, there was sanitizer at front doors and in kitchens. “Please look but don’t touch” was a common theme of many home tours. Disinfecting wipes were far and few between, but often used to wipe down every switch, knob, or surface touched by Realtor or client.
New Listings in 2020
You can see the steep decline in March into early April where people were reluctant to list during the lockdown. While real estate remained an essential economic activity, that did not mean that Sellers were necessarily on board with having strangers in their home. Activity picked up throughout the late spring and summer. The number of new listings was virtually indistinguishable from prior years once July rolled around. Normally we see a steady decline once the school year starts, but we even had a solid listing push into October and another uptick breaking with previous years in December.
Active Listings in 2020
Despite the optimism of new listings hitting the market. The amount of “Active” real estate inventory has been on a steady decline since March. Homes are gobbled up almost as soon as they hit the market. I have to explain to clients that while it may seem that it took a home 6 or 7 days to sell, the reality is that they probably had offers in hand within 24 hours, but they wanted to “give it the weekend” to drive up Buyer demand, price, and Buyer concessions. To be clear, a market with little to no inventory is a brutal landscape for a Buyer.
Pending Sales in 2020
Despite the dwindling amount of active listings in the Portland real estate market, our pending sales are far outpacing 2018 and 2019. Again, there was the blip during the first lockdown, likely due to Buyers who lost jobs losing their financing. But once mid-April came around, and we sorted out work-from-home, who was keeping a job and who was not, Pending Sales had a steep incline and then outperformed 2018 and 2019 both throughout the remainder of the year.
Average and Median Sale Prices
It should come as no surprise that low inventory, coupled with high buyer demand has seen a return of the multiple-offer scenario. With this scenario comes bidding over list price, waiving of appraisals or repairs (or both), offering to bridge appraisal gaps, promising to take the home “as is, ” etc. In just 12 months we have seen the average sale price in the Portland Metro Area climb from $459,000 in December 2019 to $494,000 in December 2020, a 7.6% increase. While large increases were common back in 2015 or 2016, more recent years have seen a less frenzied market, despite always struggling with inventory.
What about 2021?
Looking ahead, we expect 2021 to be more of the same. We are all hopeful that more inventory will become available as 2021 progresses. If you are considering selling your home, doing so soon assures little to no competition and an ability to continue to reap the benefits of the current market conditions. If you are looking to buy, our advice remains steadfast: (1) let’s chat, (2) let’s get you pre-approved with a local mortgage professional, (3) let’s shop with an eye toward value and a deep knowledge of current market conditions.
We are told that interest rates are, on the whole, likely to remain steady throughout 2021. There may be a slight blip in the coming months related to the changeover of administrations, but generally speaking mortgage rates have historically never been better. That is not expected to change. While none of us has a crystal ball, this is the best information we have currently.
If you are thinking of buying or selling, we want to be your Realtors of choice. Give us a call and let’s start planning your future.
We are Here to Help
Danni Duggan, Oregon Broker, Premiere Property Group, LLC, Licensed in Oregon.
503-719-2279 | danni@dannipdx.com
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