Matthew Gardner, Windermere’s Chief Economist, has published his report reviewing market conditions and trends from the fourth quarter of 2018. The full report can be found HERE; in it, Matt mentions that job growth has continued, if at a slightly slower rate. Similarly, home prices have also continued to appreciate, albeit at a slower rate than over the past few years, and fourth quarter activity waned in comparison to the fourth quarter of 2017. These marginal slowdowns represent what is being termed a “rebalancing” of the market, as the Portland Metro area resets a little following the explosive growth of the last few years. Matt still has faith in the strength of the region’s housing market and is still terming it a “seller’s market”, although not as strong of one as it has been in the previous years.
As an anecdotal addendum to this report, the first month and a half of 2019 has been, if anything, hotter than we expected it to be based on the 2018 trends. We are still seeing multiple offers on well-priced listings, and rates have stayed low. It’s been a fun start to the year for us!
After the real estate market’s 2018 stats have been fully processed, the Portland Business Journal publishes a pair of slideshows. The first is the hottest neighborhoods in the Portland Metro area, which identifies the top 25 zip codes that had the most home sales in 2018. The other slideshow ranks the top 25 zip codes in terms of median sales price. Feel free to take a look at the links below and let me know what you think! There are some interesting results in both slideshows, and the relative lack of overlap between the two slideshows seems to be a reflection of how a lot of buyers are coping with the affordability issues we see in some of the Metro Area’s more established neighborhoods.
Matthew Gardner, Windermere’s chief economist and someone we trust to provide an unvarnished look at upcoming market expectations, has published his 2019 forecast in the Seattle Business Magazine. You can read the full version HERE, and we’d encourage you to do so. That being said, we’d also like to specifically highlight his thoughts on the real estate market.
While Matt sees some strong market fundamentals, including a strong labor market and continued free trade agreements, he is forecasting an upcoming recession in late 2019 or 2020 due to a flattening treasury yield curve and the expectation of the Federal Reserve raising short-term rates multiple times this year.
However, unlike the 2007/2008 recession that was spearheaded by a decline in the housing market, his expectation is for continued – if decelerated – growth. Rising rates will impact affordability and appreciation will slow as housing supply is predicted to swell, but a strong labor market, continued migration into the Pacific Northwest, and rates that are still historically low will keep the overall housing market strong. Matt does caution that the frantic growth of the last half-decade may not continue, and expectations will have to be recalibrated accordingly, but demand will remand strong even as supply continues and we move towards a more balanced market.
As fall turns to winter and school and work slows down, the holiday season can be a time to brave the cold and have some fun with friends and family. I’ve compiled a little list below of some relaxing winter fun, with links included!
- The Oregon Ballet Theater’s production of The Nutcracker is always fun!
- I’ve found the Grotto’s Festival of Lights to be truly beautiful.
- The Christmas Ships Parade down the Willamette River happens 15 nights this season!
- Viewing the lights on Peacock Lane is an easy drive through a beautiful Portland neighborhood.
- The Winter Wonderland lights show at the Portland International Raceway is high on my list this winter!
- And finally, Zoo Lights is a classic Portland holiday tradition that is fun for everyone.
I hope you have a lovely holiday season!
Autumn has kicked into full gear, which means everything is flavored with pumpkin, belts need to be preemptively loosened for the holiday feasts to come, and the rain has begun to fall in earnest. While the precipitation provides a welcome change to the summer heat, it is accompanied by a renewed need for yard maintenance and attention to landscaping. But what if you want a less seasonal and more permanent respite from landscaping chores? If having a low-maintenance yard sounds really appealing, then hardscaping may be for you. Hardscaping involves using manmade landscaping materials, as opposed to organic vegetation and plant life, to decorate your yard. I’ve summarized a few great hardscaping strategies below!
- Consider replacing your lawn with gravel by trimming or removing the grass, laying down landscaping fabric, and spreading the gravel.
- Think about a focal point for your yard, whether its a statue, a water feature, a fire pit, or even something more inventive like a gazebo!
- Treat your hardscaped yard as a continuation of your indoor living space by installing patios or decks, along with maintaining a stylistic connection between the yard and the home’s interior.
- While hardscaped yards are typically associated with modern homes due to the prevalence of materials like concrete, older homes can also utilize materials such as treated wood or river rocks to provide an aesthetic match.
- Although “hardscaping vs. softscaping” may be presented as an either-or choice, the two can work in tandem! Feel free to blend any existing foliage or vegetation with some hardscaped features.
I also wanted to include this link to Gardenista’s “Hardscape 101” page, which contained a lot of information I found informative and inspiring!
In addition, please feel free to run any ideas by me. I would be happy to chime in with both landscaper suggestions and input on how proposed changes may affect your home’s value.
Going to home inspections is one of the most interesting and favorite parts of my job. I’ve learned a tremendous amount about homes, how they are constructed, and how they function. However, for many of my fist time homebuyers, it can be one of the most worrisome times of the home buying process.
Here is a great short article that helps to alleviate those fears by know what questions to ask your home inspector. 5 Crucial Questions to Ask a Home Inspector
The RMLS Market Action provides a monthly update of the Portland Metro Area’s market activity, and its June 2018 report was just published. Anecdotally, it feels like we are starting to see a more substantial “leveling off” in the market place, and the latest data seems to support that feeling. Among other statistics, we’re seeing:
- An inventory level that’s above 2 months in June for the first time since at least 2015
- Less new, pending, and closed sales in June 2018 than in June 2017; indeed, June closings were at their lowest since 2014.
- A rise in year-over-year median sales prices of 6.7% from June 2017, which is below the double digit appreciation we’ve been seeing over the past few years.
See HERE for the full report. Of course, the question on everyone’s mind is if this signals another bursting bubble in the real estate market. Right now, it feels more like a return to normalcy after several years of unsustainable growth. It will certainly be worth monitoring if these trends indicate a longer-term plateau, the start of a downturn, or nothing more than the annual summer mini-swoon we see in the Portland market.
Feel free to get in touch with any questions or comments!
As the summer solstice and 90+ degree weather both mark our transition from spring to summer, we have a few exciting news items to share:
- Windermere Realty Trust ranked number one in 2017 sales volume in the Portland Metro area! While it is great to work with a company that has so many tools and resources available, what I truly value about Windermere is its commitment to service and how it empowers its agents to best serve their clients. For them to maintain such a high level of service, even while growing in size, is a true accomplishment. I’m happy to have my name next to the Windermere logo!
- Windermere will again be sponsoring July’s “Concerts in the Park” at the Sellwood Riverfront Park. July 16th will feature Lloyd Jones, while July 30th will feature Sabroso. The format has changed from the last few years, so none of our agents (including myself) will have tents, food, or a guest area. However, if you want to enjoy some great live music right by the Willamette, these can be great events!
- PSA to my sphere: the Springwater Corridor Trail will be CLOSED at the Oaks Bottom Habitat Enhancement project site from July 1st to October 31st. Get those bike rides in now! See HERE for more information and alternate bike route options.
Thanks as always, and please don’t hesitate to reach out if there’s anything I can do to help with your real estate needs!
My favorite local real estate economist, Mathew Gardner, just released his 1st quarter report for Oregon and SW Washington. I truly appreciate how he can take a complex picture and present it in an understandable and tidy format.
Some of his highlights:
- Oregon added 43,700 new jobs over the past 12 months.
- First quarter home sales dropped 0.8% compared to the same period last year.
- Average home prices in the region rose 9.9% year-over year.
- Washington County led the region with the shortest average days on market of 36. Clatsop and Tillamook Counties were last averaging 159 days on market.
Click on the following link to read this informative piece and see how the real estate economy is impacting your specific area.
As Alex and I continue to help buyers navigate the current market, we get a lot of questions on why the market is so skewed towards sellers. Inventory has been historically low in Portland for almost three years. “Months of inventory” is a statistic that divides active listings at the end of a given month by the number of home sales in that month, effectively showing how long it would take for that month’s inventory to sell. 4-6 months of inventory is considered balanced, with anything above that being slanted towards buyers and anything below that slanted towards sellers. The Portland Metro area has been below two months since March of 2015. Home buyers during this time period have experienced the results of this firsthand: multiple offers, homes selling above list price, needing to tour homes the same day they go on the market. While we are seeing these pressures alleviate a little – July through October 2017 were a shade above 2 months inventory before the numbers dipped below 2 in November – inventory is still remarkably low. Why? The following factors are responsible for these conditions:
- The “chicken and egg” problem of prospective sellers also wanting to buy in the Portland market but being loathe to enter the competitive fray of homebuying.
- Long-time homeowners have enjoyed the market’s recent appreciation and have no interest in cashing out. In addition, the Baby Boomer generation is working later into their lives, removing the traditional warm-weather relocation sales.
- Many homeowners have remodeled to fit their needs rather than sell outright and purchase a new home.
- The lack of new construction, stemming from an increase in material costs and the difficulty in procuring buildable land in Portland, means the inventory is dependent on the resale market.
- Increased life expectancy and the aforementioned remodels mean sellers are living in their homes longer.
- Sellers who have purchased at record low interest rates over the last decade are reluctant to give that up.
- Portland’s buyer demand remains extremely high.
Will we see these conditions alleviate any time soon? Inventory is expected to loosen, but only slightly. As prices begin to level off, sellers who are looking for the “right time” to sell may think 2018 is the right time, particularly as rising interest rates begin to shrink their available buyer pool. Other factors may be more difficult to ameliorate. If you do have any questions on how this impacts your specific situation, please don’t hesitate to give us a call or email. We’d be happy to discuss!