The global health crisis put an economic freeze on our country this Spring. Since March, sellers have been cautious about putting their homes on the market. This hesitation stemmed primarily from fear of the spread of the coronavirus, and understandably so. An abundance of caution by sellers has greatly impacted the number of homes for sale and slowed the pace of a typically busy Spring real estate season. Mark Fleming, Chief Economist at First American notes:

“As more homeowners are reluctant to list their homes for sale amid the pandemic, the supply of homes available to potential home buyers continues to dwindle.”

The Portland Metro area usually sees an annual average inventory of 2.3 months of supply on the market with fluctuations in supply as low as 1.6 months (Mar 2018) and as high as 3.3 months (Jan 2019). May’s housing inventory supply was reported at 2.3 months which is the highest in the last 3 years for May (1.9 – ’18, and 2.1 – ’19) but it is still holding right at our annual average. The real estate industry likes to see about 3 months supply of homes for sale in a balanced market.

With many states beginning a phased approach to reopening, real estate virtual best practices as well as updated health and safety guidelines for the industry are in place to increase the comfort level of buyers and sellers. What we see today, though, is that sellers are still making a very calculated return to the market. In their latest Weekly Housing Trends Report, realtor.com indicates:

“New listings: On the slow path to recovery. Nationwide the size of declines held mostly steady this week, dropping 23 percent over last year, a slight increase over last week but still an improvement over the 30 percent declines in the first half of May.”

Our area did see dips under 2 months of inventory in February and March, but April saw an almost 1 point up-tick in supply with May holding almost steady compared to April.

Although we’re starting to inch our way toward more homes for sale throughout the country, the number of homes on the market is still well below the demand from buyers. In the same Weekly Housing Trends Report, Javier Vivas, Director of Economic Research for realtor.com shares:

“Sellers have yet to come back in full force, limiting the availability of homes for sale. Total active listings are declining from a year ago at a faster rate than observed in previous weeks, and this trend could worsen as buyers regain confidence and come back to the market before sellers.”

The key indicator of “Day On Market” shows us that the low inventory in the Portland Metro Area is in jeopardy of becoming an issue as listed homes were only on the market for an average of 38 days in May. This is a 20% drop in days on market from May of 2019. Homes listed are moving faster as buyers ramp up their searches after only being able to “look” virtually for the last 3 months.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR)seems to agree:

“In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”

What we can see today is that homebuyers are more confident than sellers, and they’re ready to make up for time lost time during the traditional Spring market. Summer is usually the time most homes are bought and sold, but Summer 2020 is gearing up to be a crazy season.

If you have been considering selling your home, including your house in the Summer offerings may well be one of your best opportunities to sell and quickly. Interest in your house may be higher than you think with so few sellers on the market today. As Vivas says:

“More properties will have to enter the market in June to bring the number of options for buyers back to normal levels for this time of the year, nationwide and in all large markets.”

Buyers are in a very difficult position with low inventory and hungry buyer competition. We have seen buyers with full-price offers, and a lot of cash for a downpayment, lose out to offers that are $10,000+ over list price with a similar downpayment. That strategy may end up biting either the buyer or the seller.

Making or accepting an offer over list price is always contingent on the home being appraised at that value. If a buyer with financing offers a seller $500k for a home that only appraises for $475k the deal is in jeopardy unless the buyer can come in with a lot of cash to make up the difference in appraised value to satisfy the lender’s desire for secured collateral in the property.

Bottom Line

If you’re ready to sell your house this Summer, let’s connect today. Buyers are interested and they may be looking for a house just like yours!

If you are looking to buy a home this Spring or Summer, call us to get expert help with sound strategy and strong negotiations to get you the home you are looking for.

If you are not planning a real estate purchase or sale soon due to the fallout of the new COVID-Economy, I am here to help you in any way I can with your present situation. Check out our home value analysis for the specific possibilities on your home, and check out our recent Market Update for your area to give you a general look at what’s happening in your city. I appreciate you looking us up, and letting us be your information source for anything you may have a question about or need help with. We love people, and we love properties. Just reach out and call us at (503) 799-8354 to get in touch.

Cheers,

Michael Jester
Oregon Licensed Real Estate Broker
My Real Estate Advisor Team
Powered by eXp Realty, LLC

(503) 799-8354 Direct
michaelj@myreateam.com
www.myreateam.com