Demand for Vacation Homes Is Still Strong

21690 Butte Ranch Road, Bend, OR 97702
Presented by Mark Garcia | Offered at $1,999,999 | MLS# 220116465

From Keeping Current Matters

The pandemic created a tremendous interest in vacation homes across the country. Throughout the last year, many people purchased second homes as a safe getaway from the challenges of the health crisis. With many professionals working from home and many students taking classes remotely, it made sense to see a migration away from cities and into counties with more vacation destinations.

The 2021 Vacation Home Counties Report from the National Association of Realtors (NAR) shows that this increase in vacation home sales continues in 2021. The report examines sales in counties where “vacant seasonal, occasional, or recreational use housing account for at least 20% of the housing stock” and compares that data to the overall residential market.

Their findings show:

  • Vacation home sales rose by 16.4% to 310,600 in 2020, outpacing the 5.6% growth in total existing-home sales.
  • Vacation home sales are up 57.2% year-over-year during January-April 2021 compared to the 20% year-over-year change in total existing-home sales.
  • Home prices rose more in vacation home counties – the median existing price rose by 14.2% in vacation home counties, compared to 10.1% in non-vacation home counties.

This coincides with data released by Zelman & Associates on the increase in sales of second homes throughout the country last year.

As the data above shows, there is still high demand for second getaway homes in 2021 even as the pandemic winds down. While we may see a rise in second-home sellers as life returns to normal, ongoing low supply and high demand will continue to provide those sellers with a good return on their investment.

Full article on Keeping Current Matters


Faster, Stronger: May was a Record Month for U.S. Real Estate

1825 SW Vista Ave, Portland, OR 97201
Presented by Tami Ferrey | Offered at $2,900,000 | MLS# 21061105

From Mansion Global

The median home price, the speed of sales and premiums—a sign of bidding wars—hit all-time highs last month, according to Redfin.

The soaring housing demand, cutthroat competition and overall zealous market conditions seen across the U.S. in the past year built to a record-breaking month in May.

The national median home-sale price reached a record high of $377,200 last month, up a whopping 26% year over year, the highest annual jump recorded, according to a report Thursday from Redfin.

But they weren’t the only records set. The typical home sold in just 16 days, a record low and down from 38 days in May 2020; 54% of homes sold above their list price, a record high, up from 26% a year ago; and the number of homes for sale fell to a record low, down 27% from 2020.

It’s crucial to note though, in May 2020 the country was still gripped by pandemic-driven lockdowns, which drastically slowed the property market, “meaning the year-over-year trends for home prices, pending sales, closed sales and new listings are exaggerated,” the online property portal and brokerage said.

But with buyers and sellers now frequently vaccinated and gradually returning to pre-pandemic living, May is likely to have been the peak of “the blazing-hot pandemic housing market,” Redfin lead economist Taylor Marr, said in the report. “Sellers are still squarely in the drivers’ seat, but buyers have hit a limit on their willingness to pay. The affordability boost from low mortgage rates has been offset by high home price growth.”

The largest property price gains were recorded in the most popular destinations for migrating Americans, a separate report Thursday from Redfin said.

Nationwide, 31.4% of Redfin.com users looked to move to a different metro area in April and May, up from 27% at the same time last year.

Topping the list as the most popular spots for movers were Phoenix; Las Vegas; Sacramento, California; Austin, Texas; and Miami.

In Phoenix, the top destination for relocators, buyers from California, Oregon, Washington and the Midwest “are flooding the market, depleting inventory and pushing up prices,” Vincent Shook, a Redfin agent in Phoenix, said in the report.

“So many people can work remotely from anywhere in the country, so they started looking at Arizona versus a place like Los Angeles or Seattle and thinking, ‘why stay in such a high-priced market when I can get a larger home in Phoenix for a lower price?’” Mr. Shook said.

Those buyers, with higher salaries and the ability to make offers over the listing price, are causing almost every home to sell for more than its asking price, he added.

Sales prices in Phoenix jumped 33.3% annually in May to $400,000, the second-highest annual price jump across the 88 metro areas the report tracks and well above the national figure of 26%.

Sacramento logged the fifth-largest price increase with annual price gains of 29.3% leaving the median sale price at $550,000.

But Austin topped the list for soaring prices, where sale prices skyrocketed 42.4% year over year in May to $470,000.

Full article on Mansion Global


Homeowners Got $2 Trillion Richer During the First Three Months of the Year

13501 SW Riggs Road, Powell Butte, OR 97753
Presented by Perry Cross | Offered at $3,590,000 | MLS# 220114992

From cnbc.com

Homeowners are getting richer and richer as prices keep soaring – and the numbers are staggering.

Those with mortgages — about 62% of all properties — saw their equity jump by 20% in the first quarter from a year earlier, according to CoreLogic. This represents a collective cash gain of close to $2 trillion. Per borrower, the average gain was $33,400.

The massive gain is thanks to soaring home prices, which CoreLogic said were up over 11% in March, the end of the quarter, from a year earlier. That’s the sharpest gain since 2006. Prices rose an even stronger 13% in April.

High demand for homes spurred by the coronavirus pandemic amid an already low supply caused bidding wars in markets across the nation. Record-low mortgage rates for much of last year only added to the buying frenzy and helped fuel the price gains.

“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic,” said Frank Martell, president and CEO of CoreLogic. “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.”

As of June 1, there were still just over 2 million homeowners in Covid-related mortgage bailout programs, according to the Black Knight real estate data company. As these plans begin to expire, having home equity will help those in trouble. They can still sell and get out with a potential profit if they have to.

“This reduces the likelihood for a large numbers of distressed sales of homeowners to emerge from forbearance later in the year,” CoreLogic chief economist Frank Nothaft said, adding that the average homeowner now has about $216,000 in equity.

The share of borrowers in a negative equity position, owing more on their mortgages than their homes are worth, consequently dropped. From the fourth quarter of 2020 to the first quarter of 2021, the total number of mortgaged homes in negative equity decreased by 7% to 1.4 million homes, or 2.6% of all mortgaged properties. Annually, the number of underwater homes dropped by 24%.

Home values are expected to cool off in coming months because buyers are already hitting an affordability wall. Sales have begun to slow, and price drops usually follow.

Home prices are not, however, expected to crash, since there is still strong demand for housing, and the demographics support that going forward. As prices moderate, buyers will come back. Unlike the last time home prices crashed, today’s mortgage underwriting is far more stringent.

Full article at cnbc.com


Buyers are Realistic About Housing Shortage Challenges

25800 SW Petes Mountain Rd, West Linn, OR 97068
Presented by Kristen Kohnstamm | Offered at $2,895,000 | MLS# 21113135

From REALTOR® Magazine

House hunters are realizing they may need to expand their timelines to find a home. While they’re still anxious to buy, they are getting the messages about the competitive housing market and fierce bidding wars that they realize may delay their plans.

The share of consumers who hoped to buy a home in the next six months plummeted from 34% a year ago to 21% this year, according to a newly released homebuyer flash survey conducted by Point2 Homes, an online real estate marketplace.

But it’s not from a lack of eagerness: 50% of respondents said they were determined to buy as soon as they find the right property.

Concerns about housing shortages are increasing. But fewer respondents this year appear worried about their personal financial stability.

As such, the higher home prices aren’t scaring them away. Fifty-one percent of the more than 2,600 respondents said they were confident that the steep price hikes would not be a problem in their house hunt. On the other hand, 45% of consumers surveyed said they did not believe they’ll be able to keep up with the price hikes.

Also, buyers are still showing an interest in virtual home tours to shop for homes, but that interest does seem to be waning in favor of a return to in-person viewings. Interest in online pictures declined, while 11% of respondents expressed an interest in going to showing this year compared to just 4% last year, according to the Point2 Homes survey.

“Home seekers all across the U.S. remain positive about the home buying process, and seem more determined than ever to find the perfect home,” the report says. “Although the competition is fiercer than it has been in the past, many Americans are keeping their eyes on the market and are willing to play by the new rules—which imply more preparation, higher offers, and going through bidding wars without losing hope.”

Full article on REALTOR® Magazine