My crystal ball that forecasts future Lane County residential real estate trends has been requested frequently in recent conversation surrounding the ongoing pandemic-ridden market. There is also curiosity as to what the post-pandemic market will bring. When asked what I see I begin by reminding my audience that I have not experienced a worldwide pandemic previously. And therefore, my thoughts and forecasts will be incomplete at best and irrelevant at worst. As we call upon the experts, regardless of how comprehensive the research or how educated the source, we must recognize these limitations.
First let us look at the local consumers actions of recent past. Surprisingly, the Eugene Springfield area is continuing to see supply-side activity similar to last year. While the number of homes put on the market for sale during the month of May was down 28% from May of 2019 (all data per RMLS, detached single family residences zip codes of 97401-97408 and 97477-97478, May 26, 2020) by month end, we were down only 2.3% in number of homes for sale as compared to the same period in 2019. It appears that today’s sellers have enough confidence to proceed with their plans to sell.
Let us look at the demand in the market. An extemporaneous indicator of viable buyers proceeding with their plans to buy is reflected in the number of pending sales during the month. A pending sale occurs when the buyer and seller first agree to price and terms in a sales agreement. Near the end of May we were down 21% in number of homes that went ‘pending sale’ as compared to the same period in 2019. (This is up 2% from April which was our first full month of ‘sheltering in place.‘)
Of the homes that sold, (closed sales in May 2020) the median sales price was $315,000. The homes that sold were on the market 26 days on average and sold at their list price. (Buyers did not negotiate a price below the list price.)
In the month of May, 20% of the homes that sold did so for over $500,000. The high-end market typically does not follow the same market trends of the average priced homes. Today’s market is true to form with an increase in the number of pending sales of 22% from May 2019. The inventory looks like last year, only two percent down in new listings for May 2020 versus May 2019.
Currently, it appears that the residential real estate market is ‘holding its own’ amid this crisis. While housing was the epicenter of the last recession, the robust recovery since then has resulted in a more resilient homeowner. Homeowners in the United States currently average 40%+ equity position in their homes. Many homeowners have taken advantage of low interest rates and refinanced their home mortgages. And lien holders are actively engaged in deferring payments or other modifications to assist households experiencing a loss of income.
Back to the crystal ball… what comes next in the Lane County housing market? Oversimplified, the driving force of today’s market is consumers’ confidence in the resilience of our local housing market. We have every reason to have that high confidence. I believe that homes will continue to appreciate (albeit at a slower rate than recent years). The continued shortage of new home starts will contribute to the supply shortage while the demand will continue to grow. This area is positioned well to experience continued in-migration as people seek out alternatives to major metropolitan areas as well as areas that do not have adverse weather-related events.
Marcia Edwards, MBA is a Principal Broker at Windermere Real Estate of Lane County. Marcia offers expertise to homebuyers and sellers in the Eugene area. To learn all the steps to selling smart, contact Marcia at me@marciaedwards.com or 541-221-1454. RealEstateSmart.org.