Winter 2020 Newsletter: Metropolitan Family Service

We hope that your 2020 has gotten off to a good start! As always, the new year is a time for us to reflect on all of our wonderful clients who make it possible for us to do what we love. We know many of you are eager to see what the housing market has in store for us this year so we’ve included a forecast from Windermere’s Chief Economist, Mathew Gardner, and from our resident “Economist”, Kathy MacNaughton. We know she’s not actually an economist but she does offer valuable insight into the Portland Real Estate Market. Before we get into what’s to come this year, we’d like to take a moment to highlight one of our most favorite local non-profits, Metropolitan Family Service.


METROPOLITAN FAMILY SERVICE

Metropolitan Family Service helps people move beyond the limitations of poverty, inequity and social isolation. They provide extraordinary services and have made a lasting, positive impact on countless Portlanders’ lives.

Their Focus
For over 60 years, they’ve joined forces with key community partners from education, healthcare, business and government to create opportunities that change lives and make communities stronger. Their commitment to children, families and older adults encourages people across the lifespan to realize their full potential. To accomplish this, they focus their work and expertise on three critical community initiatives:

  • Strengthening early childhood development and building youth success through collaboration and innovation so that every child gets a good start in life and has the opportunity to grow into healthy, educated, productive, and engaged members of our community. Two of their programs that help accomplish this goal are:
    • SUN Community Schools: Schools Uniting Neighborhoods offer a vibrant and welcoming atmosphere for individuals of all ages, languages, and socio-economic backgrounds means everyone can be part of their school and their community. By providing safe and engaging learning centers, children, families and neighborhoods grow stronger and students flourish.
    • CAFE Community Schools: Child and Family Enrichment sites work to integrate targeted academic support into a vibrant after school environment. Building on the SUN model, CAFE incorporates academic instruction and enrichment delivered by certified teachers, as well as access to credit recovery and college/career readiness activities for older students.
  • Developing and promoting effective approaches to community-based health and wellness throughout the lifespan so that people are equipped to play an active role in their well-being and societal costs for healthcare can be reduced. One way they accomplish this is through their Hunger Relief programs:
    • Last year, MFS served nearly 1 million pounds of food to over 20,000 people through their school-based food distributions, while they taught and learned from over 400 students and adults enrolled in their cooking and nutrition education classes.
    • They currently operate Food Pantries and “Open Markets” (smaller, perishable food distributions) at 8 schools in East Multnomah County. They also run cooking and nutrition classes for youth and families at 6 of these school sites, run Summer Lunch programs at all of their SUN school sites, and have built and maintained multiple school gardens in partnership with the MFS AmeriCorps members.
  • Advancing individual and family economic well-being so that people in our community can live with dignity, security and purpose. They offer assistance with auto loans, saving accounts, and tax returns to help accomplish this goal:
    • They have programs to increase affordability to purchase, repair, or refinance a car which can be life-changing for working parents. In partnership with local credit unions, they’re getting parents on the road when they need it most.
    • They offer Individual Development Accounts to participants who are already receiving services through other programs at Metropolitan Family Service, which allows them to create a savings plan where every dollar saved is matched by three dollars.
    • They partner with Intuit Financial Freedom Foundation to make free tax preparation accessible for Oregonians.

This is why we enthusiastically support this local non-profit. We hope you are as inspired by MFS as we are!

For more information visit their website or they can be reached at:

503-232-0007, ext 107
info@mfs.email


MARKET UPDATE
from Kathy MacNaughton

My last Market Update at the end of October predicted a slowing market in November and December but due to a combination of lowering mortgage interest rates and seasonal low inventory, pending sales increased. With this said, overall appreciation for 2019 was only 1.5% in the Greater Portland Metro Area. There are two things that I want to talk about in today’s update: the segmentation of the market by sale price and what areas actually had the most appreciation last year, as both these topics are related.

The vast majority of appreciation occurred in homes valued below $450,000. The $450,000 to $850,000 price range remained flat and homes valued above $850,000, in my opinion, depreciated from 2018 and certainly from 2017. Generally, the higher the market value is, the greater the depreciation in 2019.

Due to buyers’ search for affordable housing to purchase, the greatest appreciation rates occurred in Gresham/Troutdale, Oregon City/Canby, Hillsboro/Forest Grove, and Columbia and Yamhill counties. These areas experienced overall appreciation of close to or just above 5%. Besides lack of inventory and affordability, increasing property taxes are diminishing home appreciation in Multnomah County. I think increasing property taxes is the number one thing that is contributing to buyers’ decision to move outside of Multnomah County. Many buyers are foregoing the livability of Portland for the suburbs. Please know this phenomena is not unique to Portland and is experienced by many other metropolitan areas. Portland still remains desirable for buyers looking for shorter commute times, livability, and a history of higher appreciation rates.

And here are some of Breylan’s thoughts:

Here’s the good news:

Contingent offers are doable in 2020!

Positive appreciation and a less tense market are making it possible for home sellers to strongly consider moving up or down. Well maintained homes in sought after areas are seeing a slight increase in overall market time, providing more than “15 minutes” to decide if you’d like to move forward with making a lifestyle change.

Overall, the single-family home market in Portland is steady, and we’re seeing more sustainable market appreciation and a lower number of buyers in the market willing to risk future equity appreciation through heavy competition. Most deals we are seeing come together are homes selling within about 3% of asking price, in either direction. Prices are not incredibly vulnerable, and interest rates are expected to hover between 3.5-4% on purchase-money 30 year fixed conventional mortgages for the time being.

Low borrowing costs coupled with more amicable sellers is a great thing for our market. If you’ve been considering moving up or down, now is the time to do it, even if you need or want to buy before you sell!

The charts below show statistics by Portland zip code for 1/1/2018-12/31/2018 vs 1/1/2019-12/31/2019:

For a more general overview, here is a chart detailing statistics for the Portland Metro Area for 2018 vs. 2019. Click here to view the full RMLS Market Action Report.


2020 NATIONAL ECONOMIC AND HOUSING MARKET FORECAST
from Windermere Real Estate Chief Economist, Matthew Gardner

As we head into the New Year, it’s time to recap how the U.S. economy and housing markets performed in 2019 and offer my predictions for 2020.

U.S. Economy
In general, the economy performed pretty much as I expected this year: job growth slowed but the unemployment rate still hovers around levels not seen since the late 1960s.

Following the significant drop in corporate tax rates in January 2018, economic growth experienced a big jump. However, we haven’t been able to continue those gains and I doubt we’ll return to 2%+ growth next year. Due to this slowing, I expect GDP to come in at only +1.4% next year. Non-residential fixed investment has started to wane as companies try to anticipate where economic policy will move next year. Furthermore, many businesses remain concerned over ongoing trade issues with China.

In 2020, I expect payrolls to continue growing, but the rate of growth will slow as the country adds fewer than 1.7 million new jobs. Due to this hiring slow down, the unemployment rate will start to rise, but still end the year at a very respectable 4.1%.

Many economists, including me, spent much of 2019 worried about the specter of a looming recession in 2020. Thankfully, such fears have started to wane (at least for now).

Despite some concerning signs, the likelihood that we will enter a recession in 2020 has dropped to about 26%. If we manage to stave off a recession in 2020, the possibility of a slowdown in 2021 is around 74%. That said, I fully expect that any drop in growth will be mild and will not negatively affect the U.S. housing market.

Existing Homes
As I write this article, full-year data has yet to be released. However, I feel confident that 2019 will end with a slight rise in home sales. For 2020, I expect sales to rise around 2.9% to just over 5.5 million units.

Home prices next year will continue to rise as mortgage rates remain very competitive. Look for prices to increase 3.8% in 2020 as demand continues to exceed supply and more first-time buyers enter the market.

In the year ahead, I expect the share of first-time buyers to grow, making them a very significant component of the housing market.

New Homes
The new-home market has been pretty disappointing for most of the year due to significant obstacles preventing builders from building. Land prices, labor and material costs, and regulatory fees make it very hard for builders to produce affordable housing. As a result, many are still focused on the luxury market where there are profits to be made, despite high demand from entry-level buyers.

Builders are aware of this and are doing their best to deliver more affordable product. As such, I believe single-family housing starts will rise next year to 942,000 units—an increase of 6.8% over 2019 and the highest number since 2007.

As the market starts to deliver more units, sales will rise just over 5%, but the increase in sales will be due to lower priced housing. Accordingly, new home prices are set to rise just 2.5% next year.

Mortgage Rates
Next year will still be very positive from a home-financing perspective, with the average rate for a 30-year conventional, fixed-rate mortgage averaging under 4%. That said, if there are significant improvements in trade issues with China, this forecast may change, but not significantly.

Conclusion
In this coming year, affordability issues will persist in many markets around the country, such as San Francisco; Los Angeles; San Jose; Seattle; and Bend, Oregon. The market will also continue to favor home sellers, but we will start to move more toward balance, resulting in another positive year overall for U.S. housing.


MEET OUR CONCIERGE REAL ESTATE SERVICES COORDINATOR!

Rykie, team broker and escrow manager, also helps to coordinate all of your home maintenance needs with our tried and true vendors. She can help coordinate roof cleaning, window cleaning, carpet cleaning, and more! Please let us know if you are interested in using our Concierge Real Estate Services. There is no charge to you for our services nor do we receive any compensation from our vendors. Rykie is ready to assist you!

rykiek@macgroup.net
503.985.9524


UPCOMING EVENTS

We don’t let crummy winter weather keep us from enjoying all of the wonderful events that Portland hosts! Below we’ve highlighted a few upcoming local events:

VALENTINE’S DAY
Friday, February 14th

Hopefully your special someone isn’t too mad but just in case, here are some top rated Portland Florists on Yelp:
Sammy’s Flowers
Grand Avenue Florist
Euphloria Florist

If some extra wooing is required, Open Table has a list of restaurants offering special Valentine’s Day menus, or search for your favorite Portland restaurant if these are booked to make a reservation.

PORTLAND JAZZ FESTIVAL
February 19th-March 1st
Multiple Locations

The annual festival will include an array of artists spanning the full breadth of jazz during the 17th annual edition of the event; musicians, composers and producers who “take chances” with their art figure prominently.

 

ST. PATRICK’S DAY
March 14th and 17th

St. Patrick’s Day falls on a Tuesday this year which means the annual St. Patrick’s Day Run and festivities at Kells will take place on Saturday the 14th. If you are looking for for something a little different this year, the Oregon Irish Society puts on a family friendly celebration on the 17th from 3-8pm at Aquinas Hall in NE with traditional music, song, dance, and food.

 

TULIP FESTIVAL
March 20-May 2nd

Stop by Wooden Shoe Tulip Farm in Woodburn and enjoy the expansive views of their tulip farm and learn about the other crops they grow in the off-season! Taste some estate grown wine and wander through our summer event garden!

 

 


SOME OF OUR RECENT SALES

3523 SW JERALD COURT
PORTLAND, OR 97221
4 beds | 3 baths
2,867 sq. ft.

 

 

2144 NE 18TH AVENUE
PORTLAND, OR 97212
4 beds | 3 baths
2,776 sq. ft.

 

 

 

SOME OF OUR CURRENT LISTINGS

1920 SW RIVER DRIVE #E103
PORTLAND, OR 97201
2 beds | 3 baths
1,833 sq. ft.

 

 

2090 VALLEY VIEW DRIVE
PORTLAND, OR 97068
4 beds | 2.1 baths
2,506 sq. ft.

 

 


We’d be so glad to talk to you or your friends about our Concierge Real Estate Services and how we can make a difference with any of your upcoming real estate needs.