Portland is a tale of two residential real estate markets: Well-priced, single-family homes are selling fast — sometimes a bidding war breaks out regardless of the location and condition — while sales of turnkey condominiums with concierge services and killer views have stalled due to the coronavirus pandemic, say real estate agents.
Collectively, the median sale price for a Portland metro home has risen 4.5% to $426,500 when comparing 2020 to 2019 through July, and inventory of homes for sale last month decreased to 1.2 months, offering the fewest choices for potential buyers in years, according to a report by the local listing service RMLS.
"Inventory in Portland doesn't have a chance," says Dustin Miller of Windermere Realty Trust in Lake Oswego. "Correctly priced homes are selling with multiple offers and even surprising agents like me, who have been around for 15 years. 'Even on that street?' or 'That house?' slips out of our mouths once in a while."
While it's a seller's market for single-family homes, low condo sales, which had been lagging before stay-at-home orders were issued in late March, have owners motivated to make a deal, says Sean Z. Becker of Portland-based Sean Z Becker Real Estate.
The uncertainty of the coronavirus and 'headlines of civil unrest' have some home shoppers steering clear of dense urban housing, says Becker, who has been selling real estate for 16 years.
High-end condos in Portland's Pearl District sold on average at $507 a square foot last year while the price per square foot has dropped to $481 so far in 2020, he says.
Condos in the South Waterfront have dipped from $469 a square foot last year to $441 a square foot so far in 2020, he adds.
"The communal aspects of condos present a challenge, especially if it's to be owner occupied," says Becker. "When you look at single-family homes, which we sell a lot of, there's nothing for sale. Then you look at the condo market and it's the exact opposite. I can't think of any time when they have been polar opposites."
Although the fundamentals of living in a condominium in the city are the same — single-level living and the simplicity of a second home in a nice climate or near grandchildren — buyers in a COVID-19-vulnerable age group, over 65, are not moving to downsize into a condo now, says Becker.
Not only are condo sales dwindling, but so are showings.
In early March, three potential buyers looked at a $1.5 million condo Becker has listed. Two returned several times and he expected a sale. Then restaurants, cafes and bars — one of the walkability perks of living downtown — were shuttered due to the pandemic.
The condo is still on the market, he says, and "we've only had two showing in four months."
The good news: It's a condo buyer's market.
"If you've been looking for a condo, now's your chance," says Becker, who has active listings that range from $465,000 to $1.63 million. "Mortgage rates are low, and we're seeing rising inventory and falling demand, and sellers are getting motivating."
July's housing report by the RMLS shows that even during the world-changing health and economic crisis, people continue to buy and sell real estate.
Buyers who haven't lost their source of income and have acceptable debt-to-income ratios are cashing in on mortgage rates in the historically low 2.9% range, according to the Federal Home Loan Mortgage Corporation, known as Freddie Mac.
Home sellers at almost all levels continue to profit from the low number of residential properties for sale in Oregon, the state with the largest housing shortage in the nation.
In Portland metro, inventory dropping to 1.2 months hasn't happened since December 2017. "That was a frenzy year in real estate right after we came out of double-digit appreciation and the national spotlight for a run," says Miller.
Inventory is calculated by dividing the active residential listings at the end of the month by the number of closed sales and homes proposed and under construction.
The seller's market and economic fallout caused by the coronavirus have encouraged more owners to put their homes up for sale.
The number of new listings of Portland area homes in July — 4,236 — bolted 15.8% compared to the previous month (3,658), and were 6.8% more than the 3,966 new listings in July 2019, according to the RMLS.
The 3,656 homes with an accepted offer, called pending sales, in July was unchanged from offers accepted in June 2020 but were a 21.9% jump from the 2,998 offers accepted in July 2019.
The number of closed sales — 3,391 — in July increased 25.2% from the 2,709 transactions recorded in June 2020 and there was a 15.2% jump from the 2,944 closings in July 2019.
The average time residential properties were for sale in July before receiving an acceptable offer held steady compared to June 2020 at 42 days.
