A Look at 2020

Being an election year, we all expected 2020 to be a wild one, but no one could have guessed how wild. Despite the general tumult – both locally and across the country – the real estate market in Portland stayed strong. Overall, home prices across the Metro Area increased by over 7% during 2020, setting new record highs while inventory set new record lows.

During a typical year we see both prices and activity start relatively low during the beginning of the year, rise through spring and early summer, then begin to decline into fall and winter. Election years tend to further depress real estate activity during the fall months, but 2020 was anything but a typical year. When the pandemic hit in March the Median Sales Price was $425,000 – a record high at the time – and inventory* had been bouncing around 2.0 for a few months . But after six weeks of lockdown and no one quite sure what was coming next, prices fell. The Median Home Price only fell by $1000, but it was the first time in over a decade that prices decreased from March to April – typically one of the busiest times of the year for real estate. In May the Median Home Price regained that $1,000, and in June began to climb again, eventually reaching historic highs.

The pandemic essentially halted real estate activity during the busiest time of the year. But once safety protocols were put in place and people got accustomed to virtual tours and video meetings, the real estate market began to rebound. In the last five years prices have always peaked in July or earlier. But in 2020 prices peaked in October, confirming that the pandemic didn’t wipe out the busy season, it just delayed it by a few months. Prices did come down a bit in the last two months of the year, but with inventory still dropping, it’s unlikely that this trend will continue.

Change in Prices:

Overall, the Median Home Price for the year was up 7.3% compared to 2019. Home prices have been increasing in Portland since 2012, but the rate at which they’ve been climbing has declined over the past three years – from 12.7% in 2016 down to 2.5% in 2019. This makes the increase of 7.3% this year a notable reversal.

Days on Market:

Another metric we often look at is Days on Market (DOM). This measures the average length of time it takes a home to sell once it’s been listed. Typically, the lower the number, the more of a “seller’s market” it is. Due to the seasonal nature of real estate, the DOM tends to peak in the winter months and reach its lowest point in the summer. Looking at this chart, over the last five years we clearly see that 2020 did not follow the expected pattern. Inventory peaked in January, then fell through May. Then, instead of steadily increasing again, it stayed low and actually spent the second half of 2020 lower than the lowest point in 2019.

Inventory:

Inventory doesn’t typically follow as predictable a pattern as DOM, but it is often a more accurate measurement of what buyers and sellers are experiencing. Inventory tells us how many homes are on the market in relation to the number of active buyers. It’s measured as the number of months it would take for all the homes currently on the market to sell. Generally, higher inventory is better for buyers while lower inventory is better for sellers. In September inventory dropped to 1.1 months – the lowest ever recorded by RMLS in the Portland market. Bucking seasonal trends, inventory continued to fall from this point, ending at a new record low of 0.8 months in December.

Looking Ahead:

So, given the volatility of 2020, what will 2021 hold? We anticipate that despite the ongoing pandemic and general economic and political anxiety, the market will continue to be busy in Portland. The unusually low inventory coupled with record low interest rates (that show no sign of increasing any time soon) means it will take some time for the market to absorb all the active buyers. Expect to see a very busy spring and summer with prices continuing to climb and inventory staying low.



The content relating to real estate for sale on this website comes in part from the IDX program of the RMLS™ of Portland, Oregon. Real estate listings held by brokerage firms other than Think Real Estate are marked with the RMLS™ logo, and detailed information about these properties includes the names of the listing brokers. Listing content is copyright © 2020 RMLS™, Portland, Oregon.

This content was last updated on . Some properties that appear for sale on this web site may subsequently have sold or may no longer be available.
All information provided is deemed reliable but is not guaranteed and should be independently verified.

Real estate data API provided by the Velocity web hosting platform, powered by Benish Design.