Since the pandemic has started, we’ve gotten a lot of questions as to how the real estate market has been impacted. In March and April of 2020, our answers were pretty pessimistic, with the “stay home” orders just sinking in. Over the summer, we were more upbeat, as a lot of first time buyers – motivated by lower interest rates and cramped apartment living – decided to enter the market. Over the last six months, however, we have seen appreciating prices and competitive offers situations that are more reminiscent of the frenzy of 2014 and 2015, when Portland was seeing double digit appreciation in most of its neighborhoods.
So what’s happening? In the most general of terms, it’s an artifact of supply and demand. The supply of houses is exceptionally, historically low. The Portland Metro Area’s “months of inventory” – a statistic measuring how long it would take the existing housing stock to sell off at current market times – has hovered right around one month since Fall 2020. For context, a “balanced market” is 4-6 months, with anything higher being a buyer’s market. One month of inventory is about as strong a seller’s market, from a supply perspective, that we can get. The demand is bolstered by what we outlined above: historically low rates, hovering around 3% or sometimes below, and buyers chafing under the COVID-19 restrictions and wanting more space.
We’re not entirely sure, frankly, when this might change. Forebearance programs and eviction moratoriums were introduced during the pandemic to prevent those with pandemic-related job loss from losing their homes. As vaccination rates increase, we may see these begin to be phased out as (hopefully) those jobs return, which could give homeowners more optionality. Some homeowners who want to sell may also be unwilling to sell during the pandemic, and once they feel safe enough to sell, those houses could crop up on the market. That being said, all appearances point towards Portland remaining a strong seller’s market for the foreseeable future.
Is this the right time for you to sell? If you’re comfortable with Oregon’s safety protocols and your plan is to either 1. rent after selling or 2. relocate to an area with a more buyer-friendly market than Portland’s, this might be a great time to sell. If you’re planning on relocating within the city, this may be feasible depending on the type of home you’re selling and the property you plan on purchasing (for example, selling a detached home and purchasing a condo can be an advantageous move). There are also some more creative options available if one is able to negotiate possession after closing for their sale or uses a bridge loan/home equity line for their purchase. If you have any questions about your specific real estate situation, please don’t hesitate to reach out! We’re always happy to help, and our goal is always to apply our expertise to someone’s personal needs and questions.