Updated 2019 housing report

Leslie’s annual 2019 housing report
Now that RMLS's final numbers are in. for 2019, here is my 2019 housing report.

 What I said last year: I predicted 2019 would bring a slightly slower market, with market times closer to 60 days, and that buyers would have more power, and more houses from which to choose.  That the median price would rise 5%.  That the Portland area would continue to be a desirable place, with folks moving here from out of state, that volatility in the stock market, and slower growth in global markets would reduce the number of cash sales.

How’d I do?: Once again, I was kind of right.  Our market did slow, with the increase in the median price, year to date at 2.5% (so, slower than I had projected).  This left our median price at $410,000.  The year to date market time is at 55 days, up from 46 in 2018. 

Interest rates have stayed consistently low, and the number of properties sold is very close to 2018 (year to date 25,085 in 2019 vs 25,551 in 2018).    Oddly, with the slowing rate of price increases and longer market times, our inventory has remained low, especially in lower price ranges.  This low supply keeps some pressure on demand, and results in some multiple offer and bidding wars here and there.

A few interesting tidbits:  The National Association of Realtors reports that homeowners now stay in their homes for 9-10 years, up from the pre-recession stay of 5-7 years.  Lots of folks are moving over the river, to Clark County.  In Oregon, 34% of owned homes have no mortgages.

Some changes to our real estate landscape: 

Statewide rent control: In February 2019, the state legislature passed SB 608, which got lots of attention as the first state-wide rent control in the nation.  There were some lesser publicized sections of the bill, effecting the owners’ of rental properties ability to sell their property.  The basic premise is, to sell a tenant occupied property, the tenant must be given 90 days-notice, once an offer is accepted, from an owner occupant buyer.  This means the owner cannot move the tenant out and do fix up work in advance of selling.  It also means the seller is looking for an owner occupant buyer willing to wait for 90 days to purchase the property. These state rules are in addition to the City of Portland’s tenant relocation assistance. 

Tenant Screening: Coming, most likely in March of 2020, will be the City of Portland’s tenant screening and security deposit rules, which are pretty complicated, in their own right.  The screening rules offer two screening paths, based on how the owner chooses to screen.  In addition, there are limits on the amount of deposits that can be charged, they must be held in a separate account, and if interest is earned on that account, it must go to the tenants, and the tenant is entitled to an accounting of the interest at regular intervals.  I’m off to find a non-interest-bearing account, as it will cost more to keep track of and account for the interest than the amount of the interest itself. J  I’ll have more information on this as the actual rules are written.

iBuyers: Also, new to our market this last year is the influx of ibuyers, or instant offers.  The prevailing players in the Portland market are OpenDoor and Zillow, though Redfin is also starting a similar program.   While their models vary slightly, all are a good option for folks who need to sell quickly or with a minimum of interference in their lives. Think of these as the “easy button”, used for relocations, busy household, need to sell to buy….  OpenDoor only buys properties built after 1950, under $550,000, no swimming pools, on public sewer and ½ acre or less.  These companies make their money in the fees (they don’t call it commission).  In the Portland area, their fees run around 9%.  They do re-sell the properties, but aren’t flippers.  That is, as a practice, they aren’t fixing their inventory houses up.  Their fee structure does allow for a buyer or seller to have their own real estate representation (me!).  If you’d like more information on these programs, get in touch with me.

The hotspots: Gresham, Milwaukie, Oregon City, Beaverton, Hillsboro.  These areas are seeing above average % price increases.   They all have decent, affordable housing stock.  Some have sweet downtown areas.  Portland’s close-in neighborhoods remain popular, but are less affordable than they used to be.

My 2020 predictions: The Portland real estate market will be very similar to that of 2019; low interest rates, lower rate of price increase (but prices will still go up).  The construction of larger multi-family projects will wane.  Construction of high-end spec homes will also wane.  Buyers, in certain segments will have more power than they have had in recent years; new construction being one of those segments.  The slowed rate of price increase does mean a buyer should plan to stay in their home longer (at least 5 years?), before expecting to sell with any sort of gain.

I remain honored to help folks with some of the biggest decisions of their lives, and humbled by the trust placed in me.  My business is based on referrals.  I will always take good care of anyone you send my way.  Be it selling, buying or just curious, I am always here to help.

ps. I’m moving away from the monthly mailing, to an email newsletter.  I’ll be able to link to handy information, while losing the wasteful paper and envelopes.  Look for the email newsletter early in 2020.