The past five months that we've been experiencing this Covid-19 Pandemic, there have been fewer homes for sale than we have seen in past years. Our prices, which many people predicted were going to decline, actually have not. What we've ended up with in Central Oregon is what John L. Scott referred to last week as an "extreme frenzy" and we agree!
The Deschutes County housing market has been very, very hot this summer, more than we have seen historically in years.
Many out of state buyers or those living in cities, want to move to Central Oregon...they want to purchase a home somewhere where they feel good about living. And this is a wonderful place to live, as we all know. The buying demand has created an intense market though.
We are often facing a multiple offer situation with our clients and we, as the Powell team, are continuing to work our way through it so that our clients that are selling and buying can get in the best offer and accept the best offer.
We initially thought with Covid-19 things might slow down. In some industries it has, but Real Estate has not. And most Brokers that we have talked to say, "I didn't really foresee that this would happen". It's a good thing. But the inventory is low creating a competitive market.
The shock waves that Covid-19 sent across the country, led many Home Buyers to the Internet with the common question of, "Is this a good time to buy?".
If we go back to the "2008 Great Recession", a lot of people asked that question in the beginning, "Is this going to burst the housing bubble and is there going to be a new flood of foreclosures hitting the market?".
But now, five months into Covid-19, it's clear that the current recession is nothing like the last one. Instead of swelling inventories in Real Estate, there are even fewer homes for sale now than there were at this time last year. There's over 20% fewer in our area and pretty much no price decline.
We don't think we'll have a repeat of the 2008 housing crisis because that resulted from the Lending and the Mortgage industry. Now we have more guidelines and rules put in place. Buyers really have to be well qualified for a loan. This results in Buyers who are serious, have assets, money, and jobs.
What is going on in Central Oregon?
1. The Summer market is busy
2. Interest Rates have remained historically low
3. Inventory is low
4. Prices have not declined
5. More people are working remotely allowing them to live where they want instead of where they need to
Side note: New builds have lagged behind this last year and especially when Covid-19 hit.
What can we expect to see for the new year?
Skylar Olsen, senior principal economist at Zillow, said "Early signs indicate a surprising degree of buyer confidence. There are signs buyers are showing up. Mortgage purchase applications and pending home sales initially dropped off in March, but then quickly snapped back..."
What behaviors are we seeing?
Some Buyers are frustrated with the low inventory, they are looking for a good deal and wanting to lock in at a favorable rate. Meanwhile, some Homeowners are hesitating to list until the economic picture becomes clear. These two behaviors are offsetting each other resulting in low inventory. It explains why even as COVID-19 was hitting the economy we were starting to experience bidding wars. You do have to act fast if you want to be in the market.
What is driving the Housing Market Shortage?
Since 2012 our Nation has been in an expansion period (low unemployment rates before Covid-19 and people saving to buy in 2020)
Historically low interest rates
New (sizable) generation of Home Buyers and Baby Boomers are staying put
A drop in new home construction and bare land within the Bend Urban Growth Boundary
Rents have increased driving people into the buying market
Expect the Real Estate market to stay steady. It may slow down this Winter due to weather, but if you are thinking about selling your home, it's a great time and we are happy to help.