The year 2020 brought many changes in how we live and has made many reflect on what their home means to them. In the Portland and Vancouver area, the velocity of the housing market is in tight rotation, with the sales activity intensity for each new listing going under contract at a frenzy level and higher for most price ranges
and areas.
Looking toward 2021, we anticipate the residential real estate market will continue to be very active, with strong buyer demand.
FRENZY LEVEL OF SALES ACTIVITY INTENSITY
In Seattle and on the Eastside, we anticipate a frenzy market, with home price appreciation for homes priced up to $1 million to reach 6%+. This price range makes up 81% of sales activity in Seattle and 71% on the Eastside.
Homes up to $500,000 in SE and SW King County, as well as Snohomish County, are projected to reach extreme frenzy sales activity intensity and appreciate 8%+. This price range makes up 70% of sales activity in SE King County, 75% in SW King County and 64% of sales activity in Snohomish County. From $500,000 to 750,000, we will see a frenzy market, and home appreciation will reach 6% in SW and SE King County, as well as Snohomish County.
Home price appreciation projections
In 2020, we will see seller gridlock in many areas in the more affordable and mid-price ranges. These gridlock conditions occur as a result of sellers hesitating to put their home on the market for fear that they may not be able to lock in their next home. This leads to fewer new listings coming on the market.
More affordable and mid-price ranges
In the high-end and luxury market close to the job centers, sales activity intensity is projected to be up in spring 2020, then shift to moderate during the summer. Luxury sales activity intensity will be slightly lower starting in summer as more luxury listings start coming on the market, with an approximate 15 point reduction in intensity. Buyers may have the opportunity to secure a home-for-sale contingency when negotiating to purchase a luxury home.
In Seattle and on the Eastside, we project a frenzy market, with home price appreciation of 5% in the luxury price range of $1 to 1.5 million. Sales activity intensity will be strong from $1.5 to 3 million, then selective above.
Current luxury market
Every year, the housing cycle can be divided into six phases. When comparing the number of new resale listings by month, the trends are cyclical and predictable. Though every year is slightly different, the main trends remain the same.
The six phases of the yearly housing cycle
No matter what phase of the housing cycle we’re in, the best time to sell is
when the timing is right for you. There is no issue with buying and selling within same-market timing – the result is often the same net seller asset equity any time of the year. While this is typically the case, there are certain scenarios that could have a differential. When looking to sell, it’s important to work with an experienced broker to showcase your home in the best light to get the best price.
Selling in today's market
The building blocks of a strong housing market are in place for 2020. For many
consumers, the biggest challenge they will face when looking to buy a home in 2020 is related to available homes for sale in the more affordable and mid-price ranges.
For those looking to buy this year, it’s highly recommended to begin the process early by connecting with a trusted broker for a market consultation. Being Buyer Ready, Day One™ is essential to get a home in today’s real estate market. Beginning the financing conversation early is also key – it can help buyers understand what they can afford and create a higher level of seller certainty. The latter can provide a leg up above other buyers in the market, leading a seller to accept your offer.
Lawrence Yun, National Association of REALTORS® Chief Economist, projects interest rates will remain low and fairly stable in 2020.
With excellent interest rates, strong home price appreciation and more, there will be many opportunities for buyers and sellers in the markets we serve in Washington, Oregon, Idaho and California.
Home buyers: looking ahead to 2020
939597
2021
HOUSING
FORECAST
PORTLAND / VANCOUVER
By J. Lennox Scott, Chairman & CEO
CYCLONE OF
SALES ACTIVITY INTENSITY
MULTIPLE OFFERS
PREMIUM PRICING
INSTANT RESPONSE MARKET FOR EACH NEW LISTING
BACKLOG OF BUYERS
HISTORICALLY LOW
INTEREST RATES
Year 2020 Recap
1st Quarter (Q1)
There was a high level of sales activity in many areas locally.
Additional major events in 2020 to consider:
• The inflection point in society to further support diversity, equity and inclusion.
• Natural disasters, with wildfires and smoke affecting Western states.
Fortunately, we saw a checkmark-shaped housing market recovery in the year 2020.
COVID-19 led us to adjust our business practices to support social distancing for buyers, sellers and agents. Additionally, home mortgage interest rates lowered.
The number of buyers increased to pre-COVID seasonal levels, but sellers lagged creating a virtually sold out situation.
Many lifestyle/destination/surrounding markets became virtually sold out as buyers were able to work from home.
All of this led to market conditions of multiple offers for each new listing in most price ranges, creating premium pricing which benefits sellers.
March/April
May
June
Summer / Fall
1
After the 2020 holiday season, a surge of buyers will come into the market on Jan. 1, 2021.
However, there will be few new listings until March 2021.
We anticipate the “cyclone” of housing market sales activity intensity will continue at extreme
frenzy-level velocity (where about 90 percent of sales activity takes place) through April 2021.
Then, sales activity intensity will probably go down one level of hotness to frenzy or surge over
the summer as more listings come on the market for potential purchasers.
We will remain virtually sold out throughout 2021 in the more affordable, mid-price ranges and
into the upper end. The luxury market will remain strong due to the wealth effect in the economy.
Unsold residential inventory, particularly condos in downtown Portland, is not as constrained as it is in surrounding areas.
The strong price appreciation we saw in 2020 will continue in 2021 as the biggest price boost will
occur within the first four months of the year.
2021 Forecast
Tips for Buyers and Sellers in 2021
For buyers, it’s crucial to be Buyer Ready - Day ONE™. Your Broker Associate can consult with you to share strategies to win in multiple-offer situations, get pre-approved or fully underwritten through a lender, and receive instant email/text notification of newly listed properties.
Although it’s a seller’s market, being Market Ready - Day ONE™ as a homeowner elevates the interest of the backlog of buyers who will put an offer on your property. Our Seller Listing Launch® system
combines the best in marketing and pricing strategy to help sellers obtain the best price.
Possible Headwinds in 2021
In 2021, possible headwinds include decreased affordability due to price increases, a slight interest rate increase when the economy improves, and the potential for higher taxes on the state and federal level.
John L. Scott’s 90th Anniversary Project
In celebration of John L. Scott’s 90th anniversary, we have committed to sponsoring several scholarships for deserving Black Americans to obtain their teaching certificate. Research has shown that if a Black student has two or more Black American teachers, their chance of going to college increases by 32%.
To support this cause, we are following the “A Path to Equity in Education” program created by the Institute of Urban Education at the University of Missouri (IUE). This program will support more Black students in education, which will help create financial equity and inclusion.
John L. Scott’s Approach to Supporting Diversity
We are driving the conversation to right some of the wrongs caused by redlining and other discriminatory processes that occurred 70-80 years ago. One way we’d like to create a positive change is by helping lead the charge to remove racist language still present in some neighborhood documents. This language is not enforceable but is still harmful, and should be removed. We are also advocating to have mandatory diversity education for all REALTORS® to support the Fair Housing Act. Additionally, we’re having continual internal discussions on how we can support diversity, equity and inclusion.
VIRTUALLY SOLD OUT OF UNSOLD INVENTORY
2021
PORTLAND / VANCOUVER
By J. Lennox Scott, Chairman & CEO
HOUSING
FORECAST
In Seattle and on the Eastside, we anticipate a frenzy market, with home price appreciation for homes priced up to $1 million to reach 6%+. This price range makes up 81% of sales activity in Seattle and 71% on the Eastside.
Homes up to $500,000 in SE and SW King County, as well as Snohomish County, are projected to reach extreme frenzy sales activity intensity and appreciate 8%+. This price range makes up 70% of sales activity in SE King County, 75% in SW King County and 64% of sales activity in Snohomish County. From $500,000 to 750,000, we will see a frenzy market, and home appreciation will reach 6% in SW and SE King County, as well as Snohomish County.
Home price appreciation projections
In 2020, we will see seller gridlock in many areas in the more affordable and mid-price ranges. These gridlock conditions occur as a result of sellers hesitating to put their home on the market for fear that they may not be able to lock in their next home. This leads to fewer new listings coming on the market.
More affordable and mid-price ranges
In the high-end and luxury market close to the job centers, sales activity intensity is projected to be up in spring 2020, then shift to moderate during the summer. Luxury sales activity intensity will be slightly lower starting in summer as more luxury listings start coming on the market, with an approximate 15 point reduction in intensity. Buyers may have the opportunity to secure a home-for-sale contingency when negotiating to purchase a luxury home.
In Seattle and on the Eastside, we project a frenzy market, with home price appreciation of 5% in the luxury price range of $1 to 1.5 million. Sales activity intensity will be strong from $1.5 to 3 million, then selective above.
Current luxury market
Every year, the housing cycle can be divided into six phases. When comparing the number of new resale listings by month, the trends are cyclical and predictable. Though every year is slightly different, the main trends remain the same.
The six phases of the yearly housing cycle
No matter what phase of the housing cycle we’re in, the best time to sell is
when the timing is right for you. There is no issue with buying and selling within same-market timing – the result is often the same net seller asset equity any time of the year. While this is typically the case, there are certain scenarios that could have a differential. When looking to sell, it’s important to work with an experienced broker to showcase your home in the best light to get the best price.
Selling in today's market
The building blocks of a strong housing market are in place for 2020. For many
consumers, the biggest challenge they will face when looking to buy a home in 2020 is related to available homes for sale in the more affordable and mid-price ranges.
For those looking to buy this year, it’s highly recommended to begin the process early by connecting with a trusted broker for a market consultation. Being Buyer Ready, Day One™ is essential to get a home in today’s real estate market. Beginning the financing conversation early is also key – it can help buyers understand what they can afford and create a higher level of seller certainty. The latter can provide a leg up above other buyers in the market, leading a seller to accept your offer.
Lawrence Yun, National Association of REALTORS® Chief Economist, projects interest rates will remain low and fairly stable in 2020.
With excellent interest rates, strong home price appreciation and more, there will be many opportunities for buyers and sellers in the markets we serve in Washington, Oregon, Idaho and California.
Home buyers: looking ahead to 2020
939597
John L. Scott’s 90th Anniversary Project
In celebration of John L. Scott’s 90th anniversary, we have committed to sponsoring several scholarships for deserving Black Americans to obtain their teaching certificate. Research has shown that if a Black student has two or more Black American teachers, their chance of going to college increases by 32%.
To support this cause, we are following the “A Path to Equity in Education” program created by the Institute of Urban Education at the University of Missouri (IUE). This program will support more Black students in education, which will help create financial equity and inclusion.
John L. Scott’s Approach to Supporting Diversity
We are driving the conversation to right some of the wrongs caused by redlining and other discriminatory processes that occurred 70-80 years ago. One way we’d like to create a positive change is by helping lead the charge to remove racist language still present in some neighborhood documents. This language is not enforceable but is still harmful, and should be removed. We are also advocating to have mandatory diversity education for all REALTORS® to support the Fair Housing Act. Additionally, we’re having continual internal discussions on how we can support diversity, equity and inclusion.
Possible Headwinds in 2021
In 2021, possible headwinds include decreased affordability due to price increases, a slight interest rate increase when the economy improves, and the potential for higher taxes on the state and federal level.
"While we are very thankful for the housing recovery we have seen in 2020, we know this has been a difficult year for many, including those who have lost a loved one due to COVID-19. Our hearts go out in support of those infected with COVID-19, as well as everyone impacted by job losses or the wildfires in Western states. We hope 2021 brings healing and peace, as well as an enhanced focus on diversity, equity and inclusion."
Tips for Buyers and Sellers in 2021
For buyers, it’s crucial to be Buyer Ready - Day ONE™. Your Broker Associate can consult with you to share strategies to win in multiple-offer situations, get pre-approved or fully underwritten through a lender, and receive instant email/text notification of newly listed properties.
Although it’s a seller’s market, being Market Ready - Day ONE™ as a homeowner elevates the interest of the backlog of buyers who will put an offer on your property. Our Seller Listing Launch® system combines the best in marketing and pricing strategy to help sellers obtain the
best price.
2021 Forecast
After the 2020 holiday season, a surge of buyers will come into the market on Jan. 1, 2021.
However, there will be few new listings until March 2021.
We anticipate the “cyclone” of housing market sales activity intensity will continue at extreme
frenzy-level velocity (where about 90 percent of sales activity takes place) through April 2021.
Then, sales activity intensity will probably go down one level of hotness to frenzy or surge over
the summer as more listings come on the market for potential purchasers.
We will remain virtually sold out throughout 2021 in the more affordable, mid-price ranges and
into the upper end. The luxury market will remain strong due to the wealth effect in the economy.
Unsold residential inventory, particularly condos in downtown Portland, is not as constrained as it is in surrounding areas.
The strong price appreciation we saw in 2020 will continue in 2021 as the biggest price boost will
occur within the first four months of the year.
Fortunately, we saw a checkmark-shaped housing market recovery in the year 2020.
All of this led to market conditions of multiple offers for each new listing in most price ranges, creating premium pricing which benefits sellers.
Additional major events in 2020 to consider:
• The inflection point in society to further support diversity, equity and inclusion.
• Natural disasters, with wildfires and smoke affecting Western states.
Year 2020 Recap
1st Quarter (Q1)
There was a high level of sales activity in many areas locally.
COVID-19 led us to adjust our business practices to support social distancing for buyers, sellers and agents. Additionally, home mortgage interest rates lowered.
March/April
Many lifestyle/destination/surrounding markets became virtually sold out as buyers were able to work from home.
June
The number of buyers increased to pre-COVID seasonal levels, but sellers lagged creating a virtually sold out situation.
May
All of this led to market conditions of multiple offers for each new listing in most price ranges, creating premium pricing which benefits sellers.
Summer/Fall
FRENZY LEVEL OF SALES ACTIVITY INTENSITY
MULTIPLE OFFERS
PREMIUM PRICING
BACKLOG OF BUYERS
HISTORICALLY LOW
INTEREST RATES
INSTANT RESPONSE MARKET FOR EACH NEW LISTING
VIRTUALLY SOLD OUT OF UNSOLD INVENTORY
The year 2020 brought many changes in how we live and has made many reflect on what their home means to them. In the Portland and Vancouver area, the velocity of the housing market is in tight rotation, with the sales activity intensity for each new listing going under contract at a frenzy level and higher for most price ranges and areas.
Looking toward 2021, we anticipate the residential real estate market will continue to be very active, with strong buyer demand.
CYCLONE OF SALES
ACTIVITY INTENSITY
"While we are very thankful for the housing recovery we have seen in 2020, we know this has been a difficult year for many, including those who have lost a loved one due to COVID-19. Our hearts go out in support of those infected with COVID-19, as well as everyone impacted by job losses or the wildfires in Western states. We hope 2021 brings healing and peace, as well as an enhanced focus on diversity, equity and inclusion."