Healthy Growth Ahead for the Portland Area
It’s getting closer to the end of the year and that means economic and market forecasts are starting to show up on the internet. Danielle Hale, realtor.com Chief Economist, released their 2021 housing forecast. The report reviews the unprecedented events from 2020 and how they affected the housing market and will continue to moving into 2021.
It reminded us that the normal seasonality of the real estate market was thrown way out of whack by the pandemic as stay at home orders were issued in March right when sellers are getting ready to put their homes on the market. This caused an uneven balance of buyers to sellers in the market, as sellers refrained from listing their homes, buyers came back in earnest and paid a premium for homes on low supply.
This is the base of their predictions heading into 2021. They write that, as the seasonality of the real estate market returns to normal in the Spring of 2021, more inventory will cause year over year price increases to slow somewhat in 2021 compared to 2020. They forecast that home prices in 2020 will be 7.6% higher than 2019 by the end of the month, when 2020 is over 🥳. For 2021 they forecast home value increases to slow somewhat to 5.7% above 2020 levels. Also, they predict a 7% increase in overall home sales nationally for 2021 compared to 2020.
Locally they are forecasting an 8.1% increase in home sales and 6.2% increase in home prices for 2021 for the Portland area, compared to 7% and 5.7% nationally. This is positive news for the Portland area, we’ve enjoyed excellent growth in the past several years and it appears the good luck will continue. But our area was far from the most bullish forecasts, other interesting market predictions included a 17% increase in sales, and 7% price increase for the Sacramento area, 10% in both sales and price in the already expensive Silicon Valley area and 9% in both sales and prices in Boise. Overall 2021 looks like a seller’s market, but buyers may regret sitting it out if the price increases continue over the next several years due to favorable demographics.