“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”
In a year where consumers shifted spending from services to goods enabling piggy banks to get fatter for those who were still employed, the Golden Child of Real Estate has been key to keeping the economy going and we at YogaBug are deeply grateful.
Despite the pandemic, protests and riots, devastating fires and a divisive election, Portland’s real estate market forged on. Now as we enter the post-election phase and amongst rumors that people are fleeing the city, how does the future of Portland Real Estate look? Here are a few insights collected from the October RMLS Market Action Report as well as local and national experts.
Historically Low Interest Rates are driving the health of the real estate sector. Purchasing power is REAL! The monthly payment for a 400K mortgage in Aug. 2008 vs. Aug. 2020 went from $2523/mo. to $1673/mo. In 2020, $2523/mo. buys you a 603K mortgage! Sources indicate that interest rates are expected to remain low short term and for perhaps a couple of years.
Historically Low Inventory: For 7 out of 10 months, Portland has seen home inventory levels below the 2.0 months level. The typical ebb and flow of inventory throughout a year did not happen in 2020. We simply need more sellers to bring their homes to the market.
Rising Appreciation Levels (6.5% in October) have outpaced yearly expectations after two past years of slowing. Low interest rates combined with low inventory are driving prices upward.
Average Time on the Market is Down 15% from October of 2019. Although the stories of homes selling in 2 days are plenty, not every property falls in that category. With average time on the market being 38 days, for every home that sells quickly, another sits longer.
Portland’s Affordability Index is back to 2016 Levels. Despite our recent growth, we are still more of a suburban city and less expensive than other West Coast cities..
Biden’s Proposed Long Term Cap Gains Increase and Changes in Real Estate Industry Deductions could slow real estate investment activity and hurt savers and Baby Boomers.
Biden’s Proposed First-time Home Buyer Tax Credit of $15,000 could be a welcome boost for this segment of home-buyers who are often priced out of the market.
Now for the rumors that people are fleeing Portland… Since it is too soon to see the long-term effects of 2020, I will convey my personal experience. I have helped as many people settle in Portland as leave Portland this year. They have come and gone to and from a variety of states. Rarely was the move stimulated by a decision to flee Portland. My observation is that a person’s 5-year plan has become a 5-week plan in 2020. We are all more keenly aware of the importance of NOW.