This is always our most asked “realtor at a party” question, but boy is there a lot of heat around this question right now. Our high energy spring selling season seems to have started a month early and the buyer audience is clamoring for new listings! Our HouseLovePDX 2020 listings thus far have all had multiple offers resulting in “over asking” sales prices. Colleagues are telling stories of 18, 20 and even 30 offers at a time for that perfect pad. Here’s why:
- Inventory continues to be low at 2.2% (that means it would take 2.2 months to sell everything that is currently on the market in the greater Portland area, if no new listings were added to the market). In many “close in” Portland area neighborhoods, that number is more like 1.6%.
- Interest rates are hovering under the 3.5%* mark which means that money is incredibly cheap. (*3-4-2020)
- Oregon is in a never-before-experienced year 11 of economic growth. We’re going to say that again: 11 straight years of economic growth. Traditionally Oregon has a recession every nine years or so. We are in some seriously uncharted waters, people!
So, what do we think? Well, we think that if you are considering selling in the next few years, you’ll want to seriously consider selling ASAP, or plan to hold for a few years to get through a down turn. Data just can’t help us out here so this is our gut feeling. Heck, data can’t even help us out with appraisals right now because the market data for our sluggish and low energy fourth quarter 2019 in no way reflects the buyer demand (resulting in a large increase in sales prices) for property we are seeing right now.
Our guess is that by late summer the strong seller position that we are experiencing right now will have run out of steam just in time for the election to be taking center stage. Come September 2020, the Portland buyer audience will likely be even more distracted than normal with the election frenzy. Additionally, we think that it’s highly likely that late 2020/early 2021 will bring on some kind of recession or market softening (along with all the economic forecast folks we’ve been following).
The good news? Fourth quarter 2020 could be an awesome time to be a first-time home buyer! The wild card? Interest rates. It’s really hard to pass on a 30-year fixed rate mortgage with interest rates UNDER 3.5% (as of 3-4-2020)! That’s a lot of money saved if interest rates go up, even if prices go down in many cases. (Here’s a good article on buying power and the relationship of interest rates vs sales price.) Unfortunately our gut feeling has opted out of trying to predict 2020 changes in interest rates given the whole never before 11-year economic growth cycle coinciding with the highest ever national debt amount of $23.3 trillion.
If you are a seller and want to explore the idea of selling sooner rather than later, give us a call and we’ll schedule a walk through of your property and develop a custom listing plan that makes the most sense for you and for your property.
If you are a buyer and want to take advantage of the incredible low interest rates, we’re here for you too. We’ve had success for our buyer clients in all kinds of markets and while it can just take some time and a few offer attempts, we have some tricks up our sleeves to strengthen your chances of getting an accepted offer in a multiple-offer situation.
And having said all of the above, real estate sales happen all the time regardless of what the market is or is not doing. If you need or want to make a change, we can help you make informed decisions in all kinds of markets. We’d be happy to review your situation and help you evaluate your options.
