Q1 2021 Oregon and Southwest Washington Real Estate Market Update

The following analysis of the Oregon and Southwest Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

The region’s job recovery, which stalled in the fall of 2020, has picked up again and I am hopeful this will continue.

Of the more than 285,000 Oregon jobs that were shed at the onset of the pandemic, 153,000 have now returned. Although employment levels are still 132,000 below the prior peak in February of 2020, the trend is again heading in the right direction. That said, rising COVID-19 infections have led the state to pull back on reopening and it is uncertain how this might impact the job market this spring. In Southwest Washington, 10,400 of the 22,000 jobs that were lost have returned and the trajectory appears to be similar to Oregon’s. With more jobs returning, the unemployment rate in Oregon continues to trend lower and now stands at 6% — a significant improvement from the 14.9% rate last April. The jobless rate in Southwest Washington currently stands at 6.7%, matching the level at the end of 2020.

oregon and southwest washington Home Sales

❱ In the first quarter of 2021 sales rose 7.1% compared to the same period a year ago, with a total of 12,342 homes sold.

❱ Sales rose in 14 counties but dropped in 12. As I mentioned in the last edition of the Gardner Report, most of the counties that saw sales drop were small and these markets can see significant swings. It appears as if this trend continues as smaller markets again saw lower sales.

❱ Following the trend seen last fall, sales were lower than fourth quarter. This can be attributed to a very significant lack of homes for sale rather than a slowdown in demand.

❱ Housing demand remains strong and is only being impacted by a lack of supply. Additionally, buyers are even more active today given the recent rise in mortgage rates. I expect an increase in inventory and sales in the coming year as homeowners who are able to continue working remotely sell and move to more affordable markets.

oregon and southwest washington Home Prices

A map showing the real estate market percentage changes in various Oregon and Southwest Washington counties

❱ Home prices in the region continue to skyrocket. The average sale price was up 21.7% year over year to $503,089. Prices were 5.7% higher than in the fourth quarter of 2020.

❱ Tillamook County led the market with the strongest annual price growth, but this is a very small market prone to significant swings. The most expensive market was Hood River County, where the average sale price was $694,333.

❱ Prices were higher in all counties contained in this report, with double-digit appreciation in all but one.

❱ Home prices continue to rise at a very significant pace, but I anticipate some headwinds—mainly in the form of higher mortgage rates—that may cool the market somewhat. That said, the pace of appreciation will remain above its longterm average throughout 2021.

A bar graph showing the annual change in home sale prices for various counties in Oregon and Southwest Washington

Days on Market

❱ The average number of days it took to sell a home in the region dropped 30 days compared to the first quarter of 2020. It took 6 fewer days to sell a home compared to the final quarter of last year.

❱ The average time it took to sell a home in the first quarter of 2021 was 51 days.

❱ All but one county (Tillamook, +1 day) saw the length of time it took to sell a home drop compared to a year ago.

❱ Homes again sold fastest in Washington County, where it took 17 days to sell. An additional eight counties saw the average market time drop to below a month.

A bar graph showing the average days on market for homes in various counties in Oregon and Southwest Washington

Conclusions

A speedometer graph indicating a seller's market in Oregon and Southwest Washington

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Home sales continue to grow, and robust demand is causing prices to rise significantly, resulting in a market that strongly favors sellers. The additional supply of homes that I’m predicting for 2021, combined with modestly rising interest rates, may start to slow the momentum in price growth, but for now I have moved the needle further in favor of sellers.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q1 2021 Oregon and Southwest Washington Real Estate Market Update appeared first on Windermere Real Estate.

Q4 2020 Oregon and Southwest Washington Real Estate Market Update

The following analysis of the Oregon and Southwest Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

 

Regional Economic Overview

Although it is encouraging to see jobs return to the region following the massive contraction caused by COVID-19, it is clear the recovery is losing steam. Oregon lost 285,200 jobs when the economy essentially closed last spring, but the state has now recovered 131,700 of them. This is certainly good news, but it must be acknowledged that statewide employment is still 153,500 jobs short of the levels we saw in February. In Southwest Washington, 11,000 of the jobs lost have returned but, like Oregon, the pace of recovery has stalled.

The unemployment rate in Oregon is improving as jobs return, with the rate dropping from a peak of 14.9% in April to 6% at the end of the year. The unemployment rate in Southwest Washington dropped from 14.6% to 7%. The recovery has slowed, which is not surprising given the increase in new COVID-19 infections. I still anticipate that more jobs will be added as we move through 2021, but I am expecting that the pace of growth won’t improve significantly until vaccines become readily available.

oregon and southwest washington Home Sales

❱ The final quarter of 2020 was a good one for home sales. Total transactions were up 18.1% compared to the same period a year ago, with a total of 18,216 sales closing.

❱ Sales rose in a majority of counties, but five counties saw modest declines. However, these are small markets that can be subject to significant swings.

❱ Sales were lower than in the third quarter, but this can be attributed to seasonality and a significant lack of inventory.

❱ The housing market continues to impress, and I expect we will see more transactions as we move through 2021. Demand will come from owners who no longer need to live close to their offices as they move away from the more expensive counties to areas where they see more value.

oregon and southwest washington Home Prices

❱ The average home price in the region rose a very significant 16.5% year-over-year to $476,051. Home prices were 3.4% higher than in the third quarter of 2020.

❱ Skamania County led the market with the strongest annual price growth, but this is a very small market prone to significant swings. Prices were lower in Jefferson County but, again, this is a very small market.

❱ All but one of the counties contained in this report experienced price growth compared to the final quarter of 2019. All but four counties experienced double-digit appreciation.

❱ Home prices are rising at a very significant pace, but mortgage rates are unlikely to drop much further and income growth remains muted. As such, I expect to see price growth start to slow this year.

 

Days on Market

❱ The average number of days it took to sell a home in the region dropped 19 days compared to the fourth quarter of 2019. It took 4 fewer days to sell a home compared to the third quarter of 2020.

❱ The average time it took to sell a home in the fourth quarter was 57 days.

❱ All but one county (Benton, +7 days) saw the length of time it took to sell a home drop compared to a year ago.

❱ Homes again sold fastest in Washington County, where it took only 21 days to sell.

Conclusions

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Sales and prices are significantly higher, and demand for housing is very much in place. This favors home sellers who are still in control of the market. I do expect to see listing activity rise this year, which, in concert with modestly rising interest rates, will likely start to take some of the steam out of the market. However, any moderation in the market has yet to appear.

Given these factors, I have moved the needle further in the favor of sellers.

 

About Matthew Gardner

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

The post Q4 2020 Oregon and Southwest Washington Real Estate Market Update appeared first on Windermere Real Estate.