Coronavirus vs. Portland Real Estate Market
First, as a Portland local, I wish to express my deepest sympathies for everyone hurt by the virus, whether it be physically, financially, or mentally. Second for your safety and others, please follow the guidelines as outlined by the CDC and encourage everyone you know to do so.
The market is changing weekly right now. See our most up-to-date Portland real estate market information here.
Portland Real Estate Market Forces vs. COVID-19
1. The Great Real Estate Balance vs. Coronavirus
Local real estate markets are most fundamentally determined by a VERY simple formula: How many able and willing buyers are there vs. how many homes are for sale? This is and will always be the fundamental question. The Coronavirus in 2020 in the Portland real estate market will lead to less available inventory, fewer homes for sale. The Coronavirus in 2020 will also lead to less home buyers in the market.
See this note by NAR, National Association of Realtors, Chief Economist Lawrence Yun:
The coronavirus is leading to fewer homebuyers searching in the marketplace, as well as some listings being delayed. In the latest flash survey, 11% of REALTORS® indicated a reduction in buyer traffic and 7% are reporting lower seller traffic when asked directly about the coronavirus impact on the market … But the survey is implying in the short-term at least that home sales will be chopped by around 10%, compared to what would have been the case, due to the spread of coronavirus.
Basically when considering the most powerful factor in Portland real estate, how many buyers vs. how many sellers, the Coronavirus will reduce both. There will be fewer transactions in 2020, but if a seller wants to sell, they will likely be successful in finding a buyer due to lower inventory (less competition) and if a buyer wants to buy, they will likely get fantastic mortgage rates and will still find a reasonable number of homes to choose from.
2. The Need to Sell a Home in Portland vs. Coronavirus
The greatest reasons for selling a home in Portland, or anywhere else in the country, is death and divorce, followed closely by job relocation. In other words, all of the most fundamental needs to sell a home in Portland will not change. Sure, the Coronavirus may stop some people from selling who are looking to upsize or downsize, but it is unlikely to stop sellers in the first mentioned situations. Most home sellers, even in calm times, are forced sellers.
3. The Need to Buy a Home in Portland vs. Coronavirus
There are so many reasons to buy a home in Portland in 2020, we wrote an entire article on this and recorded a podcast. First off, it is cheaper in Portland right now to pay a mortgage than it is to pay rent, but check out the article for nine more solid reasons. When it comes to the Coronavirus and home buying, follow all the CDC rules to keep yourself safe, but I could see a home buyer desiring to move from a crowded apartment high rise to a single family home on a regular size lot. Also, the way mortgage interest rates are going, owning a home is only going to get more and more affordable. In fact, statistically Portland home affordability rates have been improving since 2017, see the 2020 Portland housing affordability rates here.
Northwest Real Estate Market Prediction in Light of COVID-19
Matthew Gardner, chief economist of Windermere Real Estate and based in Seattle, WA said:
“I would not be surprised to see demand soften for a period,” said Gardner, “but, when we start to see some stability in the U.S. economy, I believe buyers will get back into the market very quickly.” Gardner also said an optimistic forecast for average annual price growth in the Portland area this year could be around 6%. “Even in the worst-case scenario, we still firmly believe that home prices in 2020 will be higher than in 2019,” he added.
Portland Real Estate Market so far in 2020
The Portland housing market in Jan. and Feb. of 2020 was very strong, stronger than most had forecasted. We saw an increase of inventory and an even great increase of buyers to purchase. All signs pointed to a Portland real estate market surpassing expectations in 2020 and the first potential signs that the Portland housing market would (soon) end its cooling off session. Of course it is too early to give accurate numbers on the Portland real estate market in March, but what I can tell you from a “boots on the ground” perspective is that we are still seeing strong home buyer traffic at every level of the industry, from starter to luxury homes.
See how the Portland real estate market will perform depending on the type of property you own or want to buy.
For a segmented prediction (that still holds true, though potentially with less overall transactions) see our in-depth 2020 Portland real estate market forecast.
Will the Portland Housing Market Crash in 2020?
We have a very strong local economy to bolster our real estate market. See all the reasons why the Portland real estate market will not crash in 2020. While COVID-19 will likely lead to less home sales in 2020, unless the entire economy of the U.S. is ruined, the local Portland real estate market has nothing but strong economic fundamentals to back it up (see above link for details).March 16, 2020