New Year, New Hope, Low Interest Rates, Lowwwww Inventory
Every housing market is local and it is cyclical.
The Portland Oregon housing market is, as you can imagine, largely driven by school schedules and weather: school is out and the weather is good = people would rather travel than house-hunt.
In the Spring, school is normally in session, the weather is not quite nice enough to race to the beach, so Buyers are out en force, looking for their next homes.
They vacation in the Summer, come home, and resume the hunt but maybe a little more casually than they did in the Spring.
But now we have a lingering pandemic, our Nation’s transition from one administration to the next that was anything but smooth, local issues that have been exacerbated by the pandemic and become critical, and…a housing market that is white hot!
The side-effects of COVID-19 are beyond lingering physiological symptoms and the growing tally of those lost to the disease. The effect on our local economy is enormous.
Now, in 2021, sitting in my home office somewhere on this sunny January day, I can tell you a few things of which I am certain;
Homeowners, uncertain about the future, who have decided to ‘hold off’ selling and moving forward, are behind the lowest inventory of desirable homes to purchase in recorded history in the Portland Metropolitan Area.
Buyers who were eager to find their next places in in Spring of 2020, are, largely, still out there looking. Their numbers are exponentially increased by the normal crowd of Buyers we see in the Spring, doubling or tripling the Spring Rush we traditionally see in our area.
It can be difficult to get in to see the few homes that are on the market because home-owners work from home and have school-aged children who must remain in front of laptops as they attend school remotely.
Home mortgage interest rates are at historic lows and. we think, will likely never be this low again.
Are there good deals out there? Yes! Every single house is a great deal!
How? The interest rates Buyers are getting are so low, the difference between what they would normally pay for their monthly house-payment, and what they are paying today, is astounding. So astounding, Buyers can actually do other things with the money they save.
Here is an example: a payment on a $600,000 loan at 2.5% interest is $750.00/month less than the the payment on that same loan at 4%. That is a difference of $9,000/year, EVERY YEAR.
If the Buyer holds the house for 5 years, that is an additional $45,000 they could do many, many other things with!
Looking for a unicorn?
Your unicorn is the interest rate.
For first-time home buyers, this difference in payment can be the door that opens to their step-up house in a few years. That door is a big one and is not easy to open in traditional times. Ultra low interest rates make moving up a LOT easier. It is the snowball that may look modest initially, but that will grow and grow over time until it eventually becomes just the advantage the homeowner needs to move up.
Moving up is important here in the West - it is part of our culture and is the cornerstone of our progressivism.
As we do better, we elevate all aspects of our lives. Our homes are a pinnacle statement of that upward mobility.
I know house-hunting is tough out there right now if you are a Buyer. I know.
Right now there is far less than one month of inventory on the market to buy which means there just isn’t much to look at.
My advice to you is this: Keep at it! Write letters! Write clean offers! Use a Realtor who plays really really well with others! Include the goodies you feel comfortable including and don’t do anything you are not comfortable doing. This is still, after all, your home we’re talking about.
Perserverence is key!
It is what we do here in the West particularly well.