Who are the biggest winners when there’s the lowest number of houses for sale and high demand for extra living space during the pandemic? People willing to let go of their homes in the suburbs, say experts.
On average, sellers of residential properties in the Portland area received 12.3% more – $56,300 – in December 2020 than those who sold in December 2019, according to the latest Regional Multiple Listing Service (RMLS) report.
More than the pandemic, years of declining inventory of Portland metro homes for sale have been pushing prices higher to sellers’ benefit.
December’s inventory registered at 0.8 months, when a market balanced between buyers and sellers is four to six months. This is the lowest level reported in the 30-year history of the RMLS.
If sales continue at the same pace, it would take about three weeks to zero out all the available homes on the market.
“At 0.8 months, we are well beyond records and in a crisis now,” says Dustin Miller of Windermere Realty Trust in Lake Oswego. “With new listings down from last month by 22.3%, pending sales down 21.7% and closed sales up a tick, we are in for quite a start for 2021.”
The 1,740 Portland metro homes put on the market last month were a 22.3% decrease from the 2,238 listed in November, which was a 36.3% plunge from the 3,515 listed in October, according to RMLS.
In Portland metro, the 2,003 homes with an accepted offer, called pending sales, in December dropped 21.7% compared to the 2,557 offers accepted in November 2020, but were a 13% jump from the 1,772 offers accepted in December 2019, according to the report.
This last December, 2,789 residential properties in Portland metro changed hands, a 1.6% bump from November 2020, and a 26% spike from the previous December, the report shows.
Inventory is calculated by dividing the active residential listings at the end of the month by the number of closed sales and homes proposed and under construction.
“There is not enough new construction in the foreseeable future to make up the difference so the market is expected to move at a similar pace in 2021,” says Marie Conser, a broker from John L. Scott’s Beaverton-Sunset Corridor office.
When compared to the previous 12 months, the median cost to buy a Portland metro home jumped 7.3%, from $410,000 to $440,000, the RMLS report shows.
The median sale price is the point in the middle in which half of the properties sell at a higher price and the other half at a lower price.
Yet, historically low mortgage interest rates can make a home payment less than rent, if the buyer has a down payment.
A 30-year, fixed interest rate is in the 2.79% range as of Jan. 14, according to the Federal Home Loan Mortgage Corporation, known as Freddie Mac.
The suburbs, which have long been attracting buyers who want more living and yard space, are even more valuable during COVID 19-driven confinement, says Conser, who specializes in marketing properties in Bethany, Oak Hills and Cedar Mill.
The suburb is convenient to U.S. 26 and Hwy. 217, close to major employers and offers condos to luxury homes plus new construction.
“With a large array of homes to choose from and the help of expected low interest rates, which afforded people the opportunity to buy their first home or to ‘buy up’ and move into a larger home, the neighborhoods in the 97229 zip code will likely remain strong in 2021,” predicts Conser.
Real estate trends suggests home shoppers will continue to want a home with flexible spaces in which to easily live, work, study, exercise and relax.
Outdoor entertainment areas, pools, even RV parking spaces have also been in demand, as well as proximity to parks and trails, Conser says.
The average time Portland metro residential properties were for sale last month before receiving an acceptable offer was 40 days.
With sellers in the power position, many buyers are facing a bidding war or having to wait for other owners to list their residential property, which requires them to have confidence that they can find another place to live.
Many anxious buyers are making fast offers.
“However, balancing needs, wants and budget remain the key, and this market, more than ever before, requires sellers and buyers to be prepared,” Conser says.
— Janet Eastman | 503-294-4072
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