While COVID-19 is having an impact, the market remains seller-friendly and buyer activity is sufficient to hold prices steady
Coldwell Banker Bain, a leading provider of real estate brokerage services throughout the Pacific Northwest and a market leader in home sales in 2019,* releases its first-quarter 2020 market report providing a variety of statistics for the sale of homes in neighborhoods and counties in SW Washington and Oregon, as well as for segments including luxury and condos. This report reflects activity between January 1 and March 31, 2020.*
Reflecting on the overall market, Ward Spears, Oregon regional manager for Coldwell Banker Bain, said, “As we entered the first quarter of the year, the real estate market was off to a strong start. Compared to 2019, January and February saw increases in both pending and closed sales with increases of 14.2 percent and 12.1 percent, respectively. During those months, it appeared the real estate market was set for a busy spring season.
However, as we entered March, the new reality of COVID-19 began to increasingly have an impact on the market with a month-over-month decrease of pending sales of almost 10 percent. At the same time, the level of inventory dropped a bit while an increase in new listings actually came on the market. While seemingly contradictory, an explanation is that some listings were otherwise removed from the market. The impact of the virus on the real estate market so far has been an overall decrease in both buyer and seller activity. Yet on balance, in general the market remains seller-friendly. Buyer activity is sufficient to hold prices steady as continued in part due to historically low interest rates.”
View Oregon Full Report and Stats
View SW WA Full Report and Stats
Principal and managing brokers in specific Oregon and SW Washington markets had the following observations:
Portland
Said David Sly, principal managing broker of Coldwell Banker Bain of Portland Uptown, “Looking back at the first quarter, we saw a good start to the year. The Portland Metro region continued to see strong sales, price gains and overall signs of a positive year ahead. The main obstacle facing us was and still is a lack of inventory, especially in our condominium market. We were looking forward to the spring season.
However, we were thrown a curve ball with COVID-19. The lack of inventory suddenly took a back seat to an economic obstacle no one had seen before. Our industry and how the public interact with it has changed. Yet, we continue to evolve — we have to. As an essential service provider, our industry has found new and creative ways to do this. Our goal is to ensure that our current and future clients’ dreams of homeownership move forward and are fulfilled.
We have the technology and tools to ensure we can still do what it takes to get a property listed and sold, and by adhering to COVID-19 protocols and guidelines.”
Lake Oswego
“The Lake Oswego market behaves a little differently compared to the general market, in part because of the comparatively higher median prices,” said Ward Spears, who also serves as principal managing broker for Coldwell Banker Bain of Lake Oswego. “For example, the median price of the lowest quartile of homes in Lake Oswego is currently $717,000, while for the city of Portland the lowest quartile median is less than half of that at about $351,500. Reflecting the more discretionary nature of higher-priced markets, as general market activity slowed during late March, overall activity in Lake Oswego declined slightly more than in other Portland area markets. Similarly, a reasonable level of activity continues and the relationship between buyers and sellers still favors sellers.”
Bend/Central Oregon
Brandon Fairbanks, principal managing broker of Coldwell Banker Bain of Bend, said, “The first quarter of 2020 was almost record-breaking for our Bend office in terms of the number of sales and an average price increase of 5.7 percent for single-family homes. This year, unlike last, our weather cooperated in January and February which helped boost home sales — making the first quarter strong. Buyers were in full force bidding on very limited inventory.
Luxury homes priced over $1 million saw a tremendous increase in the numbers sold over the same quarter the previous year — over 58 percent. Low interest rates and low inventory along with a continued surge of buyers relocating from higher-priced markets in California and Washington drove demand for luxury real estate in Bend.
However, in mid-March we began to see a much different picture. COVID-19 suddenly changed the home-buying and -selling process. Buyers could not personally visit and view homes. Sellers, nervous about having people in their home, began to pull listings off the market. Interestingly enough, the decrease in buyer demand seems to be in line with the decrease in inventory, therefore not putting much downward pressure on prices.
There is much speculation regarding the second quarter and how real estate will fare with the abrupt changes in our economy. Key indicators to watch will be inventory levels with the amount of new homes coming onto the market. In Bend we are seeing approximately 50 percent fewer new listings coming to market since COVID-19. Interest rates and unemployment numbers are also key.
We expect prices to flatten and buyer demand to slow. This will be temporary because, unlike the recession of 2008, which was caused by the housing crash and took years to recover, this time the federal government is injecting trillions into the economy and once businesses reopen and people return to work, housing will come back in a very strong way. We believe there will be a lot of pent-up demand from sellers who were hoping to sell during the prime selling season and buyers trying to find a good home.
We also anticipate that rural communities with open spaces such as Bend may very well see an increase in demand as more people may want to leave larger cities and as companies and employees are adapting to new ways of working remotely.”
SW Washington – Vancouver and Longview/Clark and Cowlitz Counties
“It seems as if with every turn of the head, every nod, every change of the channel on TV, we’re talking about COVID-19 or reading another related story,” said David Knode, principal managing broker of Coldwell Banker Bain of Vancouver East. “Unfortunately, this worldwide pandemic is on the top of our mind and every waking thought. Real estate in Southwest Washington is no different. The company’s primary focus is keeping clients, brokers and staff safe.
We have altered the way we communicate with our brokers, and they have altered the way they communicate with their buyers and sellers. We are doing exactly what the CDC and Governor Jay Inslee are allowing us to do in respect to completing our real estate activities. Restricted though it may be, we are still seeing good activity in the area. The trends for the first three months of 2020 were quite similar to the trends of the first three months of 2019. In both Clark and Cowlitz counties the median sales price has risen: In Cowlitz it was just over 11 percent, and in Clark just over 5 percent. The number of closed sales in Clark County was almost exactly the same compared to 2019; however, in Cowlitz County it was up by just over 9 percent. Both counties have seen lower days on the market and a reduction of inventory. It feels (and has for some time) that the market in Cowlitz County has heated up due to prices and relative proximity to the Portland area.
So, the question is where does the market go from here? We are smack dab in the middle of a “Stay Home, Stay Safe” order. The business in this first-quarter report had been initiated before any COVID-19 concerns. In just the past two weeks or so, we have noticed a slight slowdown in new listings hitting the market and new sales turned in — however, there is still activity. The real story will be how the second quarter of 2020 compares with the same period in 2019.”
*Information and statistics derived from the Regional Multiple Listing Service (RMLS) each quarter. Statistics not compiled or published by the Regional Multiple Listing Service.
