The residential real estate market remains strong as buyer habits change.
Jenelle Isaacson, CEO of Living Room Realty, founded her company in 2009 at the height of the financial crisis. Now her real estate firm has offices across the state and in Washington.
Although COVID-19 has provided a seismic shock to the economy, she says the real estate market is still robust as far as she can see.
“This is a recession that we all saw coming rather than smashing right into it,” she says. “In 2009, banks were pulling lines of credit. This time banks are so capitalized we aren’t seeing any of that.”
Normally the housing market experiences an uptick in the spring months as more people start looking for homes. While Isaacson says that bump has not yet happened, she has not seen any downward pressure on home values.
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Nationally, the economic fallout from the pandemic could eventually lead to a “see-saw recovery with ups and downs,” according to Realtor.com. The real estate analysis firm predicts home prices will flatten nationally in the calendar year as a result of future rises in infections and lingering unemployment that dampen buyer demand.
Another constraint on residential housing market is the likelihood that lenders will impose stricter criteria on mortgages. Buyers will need more cash for a down payment and high credit scores to obtain a loan.
Isaacson says the pandemic has opened up opportunities in the real estate market for in-person realtors to take back market share from online sellers.
“You need really confident salespeople right now to do a deal,” says Isaacson. “Zillow announced they aren’t buying homes anymore. Redfin furloughed 60% of their agents. I don’t want to say we’re taking back a portion of the market that’s rightfully ours, but we get to show our value right now in a way we don’t in other markets.”
The shelter-in-place policies are making both buyers and sellers evaluate their living situation, she says.
“People are asking themselves, “Where do I really see myself over the next five years?” To be a realtor right now you also have to be sort of a life coach.”
COVID-19 has made buyers more interested in backyard space and proximity to the outdoors, something that benefits Oregon’s cities as well as suburbs, says Isaacson.
“Everyone seems to be taking one step back from where they’re currently living. People who live in New York are looking at Portland and people in Portland are looking at Hood River,” she says.
After spending so much time at home, more buyers are looking for space and quiet, says Realtor.com. This may lead to more people moving to the suburbs, the reverse of a recent trend of people moving closer to downtowns.
Andy Green, CEO of Green Group Real Estate, says the pandemic might cause more interest in planned communities like the Villebois neighborhood in Wilsonville, which his company leases.
“It’s just too early to tell if that’s going to be a larger trend, but this point in time is making people want to have better relationships,” he says. “More family-friendly places like Villebois, like Wilsonville, might trend up. I’ve had multiple properties sell with multiple offers in a matter of days.”
Certain technologies that were once an afterthought in the real estate business, such as virtual tours, have become industry standard overnight.
“For a two week period we really shut down, and we figured out how to do more business virtually,” says Green. “We’ve seen dramatically higher demand in terms of virtual tours, 360-degree tours and video tours throughout the property. That was a layer that used to be so rare you barely ever saw it.”
Leia Carlton, who owns Portland’s Alternative Realtors, says that while COVID-19 has caused a change in business practices the Portland market is still “crazy town.”
“I’ve gotten a big uptick in people wanting to move here from out of state,” she says. “ I had a client in New York make an offer on a property sight unseen. I also had a client put in a very aggressive offer, $42,000 above asking price, and they didn’t get the listing.”
Carlton says that the housing market usually has sellers who are only testing the waters, and buyers who are not very serious, only looking. She says this is no longer the case.
“There are a lot fewer ‘looksies.’ It’s serious buyers only,” she says. “People have to be shown homes one at a time and the agent has to open everything and wear gloves. I don’t think we’re going to be seeing a lot of people attending open houses for a while.”
She expects the housing market to get even hotter in the summer, as more people who have delayed their home buying come online.
“I think everyone is thinking about how they want their life to work. Whether they can work from home, want multigenerational housing or if they will be homeschooling,” she says. “The importance of home is making real estate workers essential workers.”
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