The daily questions I am receiving right now are “Lauren, how is the market?” or “Lauren, are you worried about a housing recession?”. Before I go any further, I,
Volume 2: Coronavirus and the Impacts on the Real Estate Market
Dated: April 15 2020
The daily questions I am receiving right now are “Lauren, how is the market?” or “Lauren, are you worried about a housing recession?”. Before I go any further, I preface, that there is NO WAY to really predict how our future market is going to end up. There are SO many moving pieces right now and things change weekly, if not, daily. However, I have been continuously following industry experts and communicating with colleagues to make sure I stay as informed as possible. In this week’s blog, I will address what I am currently seeing in our local market, provide some industry news that I think will play a big part in how we will be doing in a year, and lastly, I’ll give you some links to a few articles that I’ve read that are informative including a link to an interview with Pat Stone, co-founder of WFG that I found very helpful.
Locally, the market has slowed down since everything started to change in March. Prior to March, our Spring market was off to a sprinting start and any talk of a recession was a whisper though we had been expecting one to start for over a year. Currently, most of the buyers and sellers that were actively looking for a property or thinking about selling made the decision to just hold off until this is all over. Unfortunately, some had to stop because they lost their job or have the fear of losing their job. Because of these unexpected life changes, the market naturally slowed down. The slow down is in the form of inventory being less in the new listing department and a slowdown in buyer activity. With that said, there is still an active market in Portland and the surrounding counties. Buyers who are currently looking are serious qualified buyers. Because of low interest rates, there is still a buyer demand. I am seeing new listings every day that go pending fairly quickly when priced right and don’t have something unique that would cause time on the market no matter the current situation. In looking at all price ranges of the tri-counties, properties at the higher price range starting at $800k are showing the more significant drop in activity. I foresee the higher end market having a larger drop in prices when this is all said and done. One of the main reasons why is because a lot of lenders stopped doing Jumbo loans which is going to cause higher-end buyers to push off their home buying plans.
National and local economy news has become a part of my daily routine. Like I said before, there is no way to really predict the end result of the fall out in the economy due to COVID-19. However, I do agree with the viewpoints of many economists that say the recession we are entering into will be short lived compared to the Great Recession that started in 2007/2008,which took 5 years before we started seeinga recovery.. I feel this recession will bounce back faster due to what the FED is currently doing and that the housing market is still strong and seen as a stabilization factor in the economy. In national industry news, one of the recent big headlines that I feel will influence the future of the housing market is the fact that National iBuyers such as Open Door, Zillow Offers and Redfin have each put a pause on purchasing residential homes through their respective online platforms. I could see seller’s who are in hardship being more interested in the iBuyer platform due to the current crisis but will struggle at their options due to most of them putting a pause on their programs. (My brokerage, EXP, has the Express Offer’s program, which is an iBuyer platform. It is new to Oregon and eXp states it will remain active at this time). Another recent headline that is important is the Layoffs/Furloughs that we are seeing in large companies like Redfin, Zillow, Keller, Yelp, Walt Disney, Tesla, Boeing, Under Armour, airline companies, hotel industries, automotive industry, etc. Reports today state over 16 million people filed for unemployment. Lastly, any headline to do with the Mortgage industry and the Fed Stimulus package is important news. The Mortgage industry is volatile in their rates and are now starting to make it harder to get a loan. For example, some lenders stopped their Jumbo loans and/or Non-QM loans, and FHA increased their loan requirements. This is going to have an impact on the buyer demand overall, especially, buyers who are buying homes in the higher price range that requires a jumbo loan.
Here are some recent articles that I found interesting and/or informative and the Pat Stone, Co-Founder of WFG, interview that I found very informative:
Pat Stone Interview:
For some, real estate is simply a job. For me, it’s my passion. Growing up in both the construction and real estate businesses, I’ve spent a lifetime learning the intricacies of the industry. Prof....
Latest Blog Posts
Are you worried about the impact of the Coronavirus in regards to the real estate market? If so, I am here as your local resource to provide information and guidance during this difficult time.In