As we all know and most likely have experienced over the past couple years, inventory has become an issue for industries of all kinds, including real estate. Finally we are seeing the light at the end of the tunnel. Although the inventory levels are still at a low, they’re slowly rising and will hopefully be back to normal in the near future. Not only is inventory improving, but the Mid Columbia market is already returning to where it was pre-COVID era. As demand is gradually declining, properties around the gorge are becoming more obtainable. Today we’re examining these real estate trends and how they are affecting the national market and our market in the Columbia Gorge.
If you’ve been delaying your home search in the U.S., now is the time to get back in the market. As inventory is increasing, supply will begin to match the demand, which is the ideal time to start searching for a potential home. “Nationally, the inventory of homes actively for sale on a typical day in April decreased by 12.2% since April 2021, a smaller rate of decline compared to the 18.9% drop from March 2021,” Grace Townsley explains in a recent article, Why inventory is becoming less of a problem. Despite the fact that the inventory has decreased from April 2021, there is a smaller rate of decline from March 2021 which indicates that inventory will continue to rise.
There are many variables that affect inventory in real estate and COVID-19 has been one of the major factors over the past couple years. As we know, the housing market came to a screeching halt in March 2020, when the nation shut down in response to COVID. But the summer rebound, when many strict lockdown measures were lifted, was huge. We also saw that Americans, many now working remotely, began buying farther away from cities and traditional job locations.
Although COVID is far from over, many are still eager to buy/sell and start living life again, which makes 2022 an ideal time to make real estate moves.
See graphs below for details.
“In April, newly listed homes were close to matching last year’s levels and only declined by 0.9% compared to the previous year. However, sellers were still listing at rates 13.0% lower than typical of 2017 to 2019 April levels. Nonetheless, while last month the moderation in active inventory was not a supply-driven improvement, this month, home sellers are playing a role. Sellers listed more homes than last year in 4 of the 5 weeks ending in April,” Sabrina Speianu explains in April 2022 Monthly Housing Market Trends Report.
Sabrina Speianu goes on to clarify that, “in addition to an increase in new listings, buyer demand has moderated due to the combination of rising interest rates and all-time high listing prices that have increased the cost of financing to 80% of the typical home listing compared to almost 50% a year ago. The number of pending listings on a typical day (listings that are at various stages of the selling process, but not yet sold), has declined by 9.5% compared to last April, indicating that a moderation in demand is also softening the rate of turnover in inventory. For homebuyers who are still actively searching for a home, lower competition and more seller activity will provide some relief.”
MID COLUMBIA MARKET
Many of us who have been in the housing market in the Gorge have encountered high prices and extremely slim pickings over the past 18 months. Whether you lost a bidding war, or just couldn’t find anything in your price bracket, we’re happy to say that as demand has started to slow down, properties for sale have experienced less bidding wars and even occasional price drops. Not only has Hood River supply been opening up due to subsiding demand, the bordering metros have been experiencing this as well, including Portland, The Dalles, White Salmon, Parkdale and beyond.
See figures below for local market summaries for March, April and May 2022.
According to RLMS, as shown above, the number of closing sales is rising each month along with a jump in new listings by about 50 properties. The total market time is increasing, which most likely means less demand and reduced biddings. Although there’s not much change in the sales price between these 2 months, we have continued to see small price drops compared to 2020 & 2021.
Due to higher interest rates, gas price surges and the unknown economic future, demand has lessened and properties that are available in the Gorge are not experiencing as many bidding wars and inflated prices. 2022 should be a great opportunity for you to start putting in offers, thinking about a possible remodel, or even a full build if construction costs decline. With businesses getting back into full swing, production and general contractors are becoming more readily available.
TRUST THE EXPERTS
Our team of friendly and knowledgeable agents are eager to work alongside you from start to finish, helping you understand the local market and how any changes affect your own purchase or sale. Please reach out if you have any questions and know that even though this can be a confusing time in the real estate market, it could be an ideal time to jump back in and the JDRE team is here to help.