Portland broker Alicia Selliken and SW Washington broker Marci Caputo have rejoined Cascade Sotheby’s International Realty. The firm has attracted an additional 55 brokers so far this year.
Cascade Sotheby’s International Realty is a full-service brokerage that offers a high level of marketing and sales support. This model is ideal for brokers who wish to focus on serving their clients rather than spending time on administrative and marketing tasks. It is for brokers who seek more balance in their work and life.
Alicia Selliken, based out of the NE Portland office, is proud to be part of a brokerage that has a growth mindset and values community. “CSIR is hitting their stride with the expansion of their incredible agent services and marketing team. Their renewed efforts to create a stronger community both inside CSIR and beyond is refreshing.”
A woman-owned firm, Cascade Sotheby’s International Realty has seen continued growth over the years. Backed by a highly experienced and agile local leadership team, the firm provides unmatched broker support fueled by powerful marketing initiatives.
Portland’s Regional Marketing Director, Amanda Knutsen, describes the firm’s collaborative culture. “Our brokers appreciate the power of a global brand, paired with a local family feel. We help each other succeed and thoughtfully give back to the communities in which we work and live.”
Brokers at Cascade Sotheby’s International Realty are part of a global referral network that generated over $2.9B in 2020. In September of 2021, The Portland Business Journal ranked Cascade Sotheby’s International Realty the fastest-growing real estate company and the third fastest-growing company across all sectors in Portland.
Marci Caputo, based out of the Vancouver, WA office is happy to be back. “I have owned my own brokerage in the past which helps me truly understand the great value in all that Cascade Sotheby’s International Realty offers for support, marketing, global networking, community engagement and so much more.”
Cascade Sotheby’s International Realty has 400 brokers and 17 offices serving Oregon and SW Washington. In addition to being ranked the fastest-growing real estate firm in Portland, the firm has achieved top market share in Central Oregon. The firm is also expanding in Southern Oregon, with the grand opening of its Ashland office scheduled for November 5th, 2021.
Many consumers may not realize it, but they’re increasingly competing against institutional investors and contending with soaring building costs.
Agents are exhausted and consumers are stretched thin. But despite everyone being fed up, the ongoing housing supply shortage drags on with no end in sight.
As Inman has previously reported, the problem is multifaceted. The coronavirus pandemic, for example, has reshuffled job markets. And at the same time, a years-long building shortfall and wave of millennials hitting homebuying age has further exacerbated the problem.
But those aren’t the only issues. In fact, there are multiple other forces that have, perhaps inadvertently, conspired to make housing both more scarce and more expensive — but which are also largely off the radar of most consumers. Despite their lower profile, though, these forces are having a tremendous impact on the housing market right now.
For our purposes here, we’ll focus on two such forces: the soaring cost of building materials, and the spiking interest in housing among investors. Together, these two things are major contributors to today’s housing market, and the lack of inventory that is sweeping so many markets.
Building supplies are getting way more expensive
The cost of building supplies has been ticking upward for a long time now, but according to David Logan — a senior economist with the National Association of Home Builders (NAHB) — the pandemic made the problem worse. That’s because the companies that make things like lumber bet that there would be a “precipitous drop in housing demand” during the pandemic, and that bet proved to be wrong.
“Producers of lumber, they shut down like most every other business needed to,” Logan told Inman. “But when production came back, mills had curtailed their production by as much as 50 percent.”
Logan called this a “fatal mistake” on the part of lumber companies, in part because demand for housing itself has surged and in part because on top of that DIY home remodeling has also become more popular during the pandemic.
The result is a kind of triple whammy where supply is low, while demand from both contractors and everyday consumers is higher than ever. It’s no surprise then that, according to Logan, the cost of lumber has tripled since a year ago.
“I would say it’s certainly unprecedented in so far as a surge of demand unexpectedly coincides with a large decline in supply,” Logan added.
Just by February, the NAHB estimated that this trend had added more than $24,000 to the cost of a newly built single-family home.
Data from the U.S Bureau of Labor Statistics further bears this out, showing that the prices for plywood, lumber, veneer, pallets and various other items have jumped up recently.
Lumber may be the most prominent material impacted by this trend, but Logan also said it is “by no means the only culprit in this increase of the cost to built a home.” Other materials that have seen price increases include concrete, the oriented strand board (OSB) that is used in home wall paneling, and many other products.
Another NAHB report further notes that the price of steel mill products has jumped 22 percent in just the last three months.
The consequences of these price increases are far-reaching. In a series of reports, NAHB has revealed that contractors this spring are now having difficult conversations with their clients about the cost of materials, and that those costs are delaying critical home repairs. The costs are also cutting into the supply of affordable homes, especially in lower-cost suburbs where wood-frame building is the most common construction method.
Logan doesn’t expect these conditions to last forever, but in the meantime he said the prevailing sentiment among builders is one of “concern.”
Institutional investors are flocking to the housing industry
At the same time that building homes is getting more expensive, deep-pocketed investors are also snapping up more and more housing. Rick Palacios Jr., director of research for John Burns Real Estate Consulting, told Inman that right now investors are buying 20 percent of all homes in the U.S. Asked if that was enough to sway prices and housing supply, Palacios answered without hesitation: “yes.”
“That percentage gets even higher in a lot of markets,” he added. “Almost a quarter of all housing transactions are going to investors.”
Palacios pointed to Phoenix as an example, saying that nearly 30 percent of sales in the Arizona city are to investors. Las Vegas, Houston, and Tampa, Florida, also all have higher-than-average numbers of sales going to investors. Many of these markets also happen to be iBuying hotspots, and Palacios said firms such as Opendoor can end up having a major impact on the supply landscape in cities where they are active.
Of course, “investors” is a broad category. Palacios explained that it includes everyone from fix-and-flip operators to iBuyers to rental companies. But the result of all this interest among investors is that would-be homeowners are facing more competition and higher prices.
A report from John Burns Real Estate Consulting — which was provided to Inman — further teases this idea out, showing that investors have zeroed in on lower-cost homes. The report also notes that “cash purchases account for 67 percent of homes sold below $100k and 31 percent of homes sold between $100k and $200k.”
Some of this investor activity makes obvious sense. Given that there is a supply shortfall, as well as soaring prices, flippers stand to make a significant profit by simply buying houses and then selling them a short time later. Palacios said places like Phoenix and Boise, Idaho, are ideal backdrops for that kind of activity.
Interest from landlords, on the other hand, may be slightly less understandable given that right now they have to pay top dollar for their properties. That contrasts significantly from the housing bubble in 2008, when institutional investors were able to snap up thousands of houses at a relative bargain.
However, Palacios said that “there’s a global quest for yield” going on among investors right now. At the same time, yields from vehicles like U.S. Treasuries have tanked while investment in commercial real estate became unappealing thanks to COVID-related shutdowns of stores, restaurants and hospitality businesses.
Residential real estate, and especially single-family housing, looks relatively safe by comparison. And Palacios said recent years have ultimately offered a kind of proof-of-concept that shows this type of investment works. As a result, institutions like pension and sovereign wealth funds — which may have mandates to invest in U.S. real estate — have increasingly gravitated toward housing. And if they have to pay top dollar for the properties, so be it because they’re in it for the long haul.
“Today’s investors are investing for both quick appreciation as well as yield and safety compared to other alternative investments,” Palacios added.
The John Burns report further notes that investors have gravitated toward residential real estate as a hedge against inflation and in an effort to diversify their assets.
This trend may not be readily apparent to consumers or their agents. When someone loses a bidding war, after all, they may never find out exactly who won. But like rising material costs, it is happening in the background and having a big impact. And that impact is likely to stick around for the foreseeable future.
“Housing investors are going wild, again,” the report ultimately concludes. “Limited new and resale housing supply, low mortgage rates, a global reach for yield, and what we’re calling the institutionalization of real estate investors are setting the stage for a home price boom that could stretch on for years, similar to the early 2000s.”
Last year, many homeowners thought twice about selling their houses due to the onset of the health crisis. This year, however, homeowners are beginning to regain their confidence when it comes to selling safely. The latest Home Purchase Sentiment Index (HPSI) by Fannie Mae shows that 57% of consumers believe now is a good time to sell.
Doug Duncan, Vice President and Chief Economist at Fannie Mae, explains:
“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale.”
Normally, spring is the busiest season in the housing market – the time when many homeowners decide to list their houses. While this is obviously not a normal year since the pandemic is still very much upon us, experts are optimistic that consumer positivity around selling will lead to more homeowners making moves this year. Duncan continues to say:
“We will pay close attention to see if this newfound optimism develops into a trend.”
What does this mean if you’re thinking of selling your house?
The fact that there are so few houses available for sale today is one driver that’s encouraging consumers to think more positively about selling. The National Association of Realtors (NAR) states:
“Total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million).”
With so few homes available to buy, your house will be more likely to rise to the top of an eager purchaser’s wish list in this competitive market. Today’s high buyer activity is creating upward pressure on home prices and more multiple-offer scenarios. According to the Realtors Confidence Index Survey from NAR, the average home for sale is receiving 3.7 offers today, up from 2.3 offers just one year ago. This makes selling even more enticing.
In this kind of sellers’ market, you have a huge advantage in the process. And here’s another win – you can also use your equity toward a down payment on a new home when you move.
Wondering where you’ll go if you try to move while it’s so challenging to find a home to buy? Well, in many areas, there are more homes available at the higher end of the market, so finding a move-up home may be less of an issue if you’re ready to search for your dream home this spring.
Sales of newly built, single-family homes in January moved 19% higher than a year ago, as home buyers sought more options under a lean number of existing homes for sale.
Newly built single-family home sales increased 4.3% last month over December 2020, reaching a seasonally adjusted annual rate of 923,000, the U.S. Department of Housing and Urban Development and U.S. Census Bureau reported Wednesday.
“Historically low mortgage rates and solid demand spurred an increase in new home sales in January,” says Chuck Fowke, chairman of the National Association of Home Builders. “However, rising affordability issues are looming this year, particularly increasing building material costs, including lumber, which is adding $24,000 to the price of a typical newly built home. Builders also cite rising regulatory issues as a potential concern.”
As existing-home inventory remains at all-time lows, more buyers are considering new home construction, says Robert Dietz, chief economist of the National Association of Home Builders. “Though rising building and development costs, combined with recent increases in mortgage interest rates, threaten to exacerbate existing affordability conditions,” he says. “Builders are exercising discipline to ensure home prices do not outpace buyer budgets.”
Inventories of new homes also remain tight at just a four-month supply at the current sales pace. New-home inventories are 6.3% lower than January 2020.
The median sales price for a new home was $346,400 in January, up 5.3% from a year earlier.
New-home sales rose by the highest amounts in the Midwest last month, up 12.6% annually. New-home sales also posted a 6.8% increase in the West and a 3% increase in the South. The only region of the U.S. to post a decline in new home sales in January was the Northeast, where new home sales fell 13.9% annually.
Nicholas Family Vineyards will now be the new name of the estate, Bella Vida Vineyards, after being sold last January 21st for an undisclosed price.
Its new owner, Blair Nicholas, a resident of Olivenhain in San Diego County, settled on Bella Vida after touring multiple properties in the region. A retired attorney, living with his wife LJ, and four children, Blair is looking forward to experiencing the lifestyle and the community of the Dundee Hills.
The sale entailed a residence, which includes a tasting room on the first floor, a barn and farm equipment. However, Blair plans to design a new stand-alone tasting room and a wine cave. The family is also considering building a winery.
On the other hand, the seller, Steven Whiteside, bought the estate in 1996 and planted the vineyard in 1998. Until a few years ago, Whiteside split his time between Arizona, where he made pediatric orthotics and prosthetics, and the Willamette Valley.
Now 70, Whiteside, who loves his community, is now renting a property nearby. He looks forward to seeing the changes the Nicholas family plans to make to the Bella Vida property.
New owners of this vineyard estate were represented by Cascade Sotheby’s International Realty’s very own, Tina Jacobsen and Laura Piccard.
2020 changed the way we use our time to where we work, how we socialize and gather together, and our needs at home. This also meant making decisions as to how we can best support and reach out to our extended families.
Some families, with maybe older children who moved back home. While some families, with relatives living in senior facilities, wanted them to move into their home.
These changes led more homebuyers to invest in multi-generational homes to accommodate more long-term plans. According to the 2020 Profile of Home Buyers and Sellers from NAR, a multi-generational home has adult siblings, adult children over the age of 18, parents, and/or grandparents in the household.
Based on a recent study from NAR, there’s been an increase in purchasing trends for homes since the health crisis began. There are many reasons for this uptick in preference toward multi-generational homes. The top reasons show that buyers wanted to safely take care of and spend more time with aging parents.
Contact a real estate professional if you are in a similar situation to learn more about your local options and maybe even have your whole family under one roof by early next year.
The National Association of REALTORS® reported last Tuesday that existing-home sales in November climbed 25.8% compared to last year.
Existing-home sales include completed transactions on single-family homes, townhomes, condos, and co-ops, slightly decreased by 2.5% in November compared to October’s unseasonably high levels. The slight decrease last month ended a five-month streak of month-over-month gains. Still, all four major regions across the country posted significant year-over-year growth.
Buying frenzy continued to press on housing markets in November. NAR reported that home prices are rapidly climbing up due to the high demand, posting double-digit increases compared to a year ago.
NAR’s Chief Economist Lawrence Yun said that circumstances are far from being back to the pre-pandemic normal. However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021.
According to reports from Census Bureau, single-family housing starts continued their seven-month climb in November, coming in to the highest level since 2007. Housing starts increased by 1.2% in November compared to October and increased by 12.8% year over year to a seasonally adjusted annual pace of 1.58 million starts. Single-family housing starts rose 0.4% from October and 27.1% compared to last year.
The Mortgage Bankers Association’s associate vice president of economic and industry forecasting, Joel Kan said that the report is consistent with other housing data showing that the housing market has substantially rebounded from Q2 of 2020. The demand for larger homes has strengthened because of the pandemic that led to more construction, home sales, and mortgage applications. He added that the permits for new single-family construction also rose to 2007 highs, potentially an indication that we might see the increase in homebuilding continue into early 2021.
Single-family authorizations in November were at a rate of 1.14 million, up 1.3% from the revised October rate of 1.12 million. Actual single-family housing completions dipped again in November, down 0.6% from October’s rate of 879,000 to 874,000.
First American’s Deputy Chief Economist Odeta Kushi said that the rise in housing starts is a welcome sign of new single-family inventory to come and that 2021 may be the year of the homebuilder.
Zillow’s Economist Matthew Speakman said today’s numbers showcase the enduring strength of the housing and homebuilding markets and that builders are overcoming the constraints that have limited activity in the last few months.
The National Association of Home Builders and Wells Fargo Housing Market Index measuring builder confidence faltered a bit this month after three months of record highs, falling four points to 86. But it’s still the fourth month in survey history the score broke 80.
Bend, Oregon is the epitome of COVID-19 accelerated real estate sales. After only a few weeks’ pause in March from new restrictions, out of town buyers doubled down on Bend as the perfect escape from their respective cities. After evaluating the quality of life and relatively lower cost of living in Bend compared to our feeder markets like the Bay Area and Orange County/ LA, for example, Buyers have been even quicker to move here in the second half of 2020 than in past years. Why Bend? Buyers are choosing Bend over other markets for many reasons, including the year-round outdoor lifestyle (skiing, hiking, mountain biking, kayaking on the rivers & mountain lakes, golf, horseback riding & more), easy direct flights to West coast markets for ease of visiting clients and friends & family, luxury amenities with a laid back lifestyle, and an overall better quality of life. Bend is the perfect escape from restrictive or chaotic worlds.
COVID-19 set the precedent for working from home, so people started asking themselves, why not work from home in another city? It’s now common for lenders to ask for written proof from Buyer’s employers that the Buyers can indeed work from home in Bend. Contingent purchases are more commonplace as Buyers are willing to put their homes on the market the minute they write an offer on a home in Bend, but even more so cash offers are dominating our sales. Bend has recently been named by WalletHub as the second-fastest growing city in the nation, with COVID-19 clearly a contributing factor.
Examples showing the accelerated growth in Bend since COVID-19 based on sale prices and days on the market (DOM) abound. One of my listings in a desirable neighborhood sold for $905,000 in April, 2020 after 171 days on the market with 2 price reductions. A home on the same street with almost identical specs is currently pending in just 10 days. Listings at all price points have yielded multiple offers – as many as 22! – and are selling for up to $200,000 over asking price which is a new phenomenon in our market since COVID-19.
This graph depicts a sharp increase in median price in 2020 compared to past years during June through September across multiple years. From just the same period a year ago, we saw a 2% decrease in median price in 2019 compared to an 18% increase in 2020. We will continue to be in a strong Seller’s market until new inventory can catch up with demand, but since most people don’t want to leave Bend we’ll rely on new construction to fill the gap.