What is Going on in the Real Estate Market in Clatsop County?
Everyone knows that the national real estate market is smoking hot right now, but exactly how hot is it? It depends on who you ask, where you’re located, and the home’s price point. In October, Forbes reported an average appreciation of home prices in the USA at over seven percent from the previous year. Nationally, home prices are expected to appreciate a rate of about 10% for 2021. It also depends on the price point of the home. For example, According to Realtor.com, “In December 2020, the median listing prices for single-family homes shot up to $340,000, a 13.4% increase from the same time the previous year.” In any housing market, there are winners and losers. Here we highlight some trends and what is going on in the real estate market in Clatsop County.
First of all, why is the real estate market going so crazy? I reached out to a local agent, Jody Conser of RE/MAX River and Sea, to get her insights. Ms. Conser says that it’s primarily due to the pandemic and interest rates being so low. “More people are working out of their homes, which means they are staying put or looking for a new home that is more conducive to work at home arrangements.” Also, many people that may have wanted to sell their home are hesitant because of uncertainty surrounding the pandemic, unemployment or underemployment, and feeling unsure about being able to afford a new home
Ms. Conser explained that nearly every new listing has multiple offers within a day of being put on the market. She recently listed a home for $425,000 in Clatsop County and had a cash offer of $475,000 within eight hours! For the past year, Clatsop County inventory has hovered somewhere around less than one month’s supply. That means at the current rate of home sales, all homes would be purchased within less than 30 days. A healthy buyer/seller market is usually considered at about six months of inventory. So, it’s evident that sellers currently have the upper hand. Add to that record low interest rates, and now people can qualify for a larger or more expensive home for the same monthly payment. These events have made demand skyrocket, and supply has yet to catch up.
I asked Ms. Conser who is buying, and she said the majority of buyers in our area are coming in from out of town. She currently is working with home buyers from Texas, Hawaii, and several from California. Relocating is trending up because when people work from home, they can live just about anywhere. As a result, there has been a mass exodus from big cities to rural America, where there tends to be less crime and more affordable housing options.
The median home price in Clatsop County is now well over $400,000, according to local agents. Anything that is listed for $300,000 or less is likely a teardown. That makes it more difficult for first-time homebuyers to afford their American dream. That’s why some people are moving in with family into mother-in-law suites or accessory dwellings (ADUs). Down-sizing is also a big trend right now. I personally know several people who have decided to move to Arizona or Texas and live in a trailer, manufactured home, or tiny house.
All this craziness in the real estate market is stressing out people in the industry. It means that agents have to work longer with buyers who years ago could find a home to purchase within a few days or weeks. Now it takes months. Also, in the past, they only had to present a couple of offers to sellers. These days they have to submit multiple offers and go through them all in detail. Since real estate brokers are only paid commission and not by the hour, it means they have to do twice the work for the same amount of money. As a result, many agents are leaving the industry.
What can you do to increase your chances of buying a house when competing against many offers? First of all, make sure you have a great real estate broker in your corner. Also, get pre-approved for a loan or have proof of funds if making a cash offer. Lastly, be patient. Be prepared for the process to take much longer than you anticipate.
Real estate markets tend to correct themselves over time, but this market is continuing to baffle analysts and frustrate consumers. Hopefully, we’ll see a return to a “normal” real estate market as the pandemic winds down, but when that will happen is anyone’s guess.
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