Lauren's Blog

World Turmoil and Portland Real Estate (WTF)

If an ongoing global pandemic wasn’t enough for us all to navigate, sure, why not throw in some evolving world conflict. We’re all facing an increasingly complicated and uncertain future, but here’s something that never changes: our need for housing. The market has been unbalanced to the benefit of sellers for a while now, and a sudden international event – a war, for example – can really rattle housing interest rates. I’m not here to discuss what’s happening in Ukraine (or Palestine, or Syria…) right now. I’ll leave that to the experts, and also encourage you to seek out unbiased, expert opinions, as well. I’m here to talk about what I know, and that’s my experience and opinions regarding real estate. So let’s dig in to it.

Everyone has their thoughts on what a potential war in Europe could mean for the real estate in the United States, and here’s mine: will it slow the housing market down? Not that I can tell. The core conundrum? People need homes, and homes are not being made fast enough. Supply is not meeting demand, and to be honest, it hasn’t for a while. Hence perpetual seller’s market.

After the 2008 crash, new construction was paused for far too long. Add to that the forest fires along the Western coast over the past decade or so, driving up prices on increasingly scarce lumber reserves. This is related to climate change, by the way, and we’ll be seeing far more folk (“climate refugees”) relocating up North as the weather gets harsher and less predictable. You don’t have to look too deeply to see how all of this is connected, internationally. The system we’re currently operating under has been dysfunctional for a long time.

Now throw in a global pandemic, in its third year with no real sign of letting up. Everyone started working from home, and realizing how viable that actually is. Even corporations and businesses are reluctantly ‘fessing up that having their employees working remotely is cost effective and doesn’t adversely affect productivity (thanks, big business, we’ve been saying that all along). This also dramatically affects housing demand. Nearly every Realtor will tell you that their business was good during 2020, and 2021. Existing clients were re-evaluating their housing needs – more space, room for an aging parent, or a kid that won’t (or can’t) leave home, etc. And new clients were hopping on board with a much expanded range in where to buy their next home, now that commuting was no longer a consideration.

I just don’t see housing demand going down and supply going up anytime soon, and this is what actually makes prices decrease. I’ve been saying this for years, that I don’t see a “housing crash”, per se, but I do see an eventual leveling out. Probably not this year, however.

We’re currently hovering around 15% in appreciation on home value (which is already kinda bananapants, and faster than your average first time buyer can save up for a downpayment, or generate income to buy a home). A more stable market would be around 5% appreciation. Still technically a seller’s market, but far more accessible, far healthier for an evolving economy. So ideally what would happen is that there would be enough supply and less demand to reach that 5% appreciation. And I just don’t see that happening, even with the world on the brink of war (yay).

Okay, now let’s talk locally, and personally. I’m mostly addressing my clients who specifically own a “tricky” home – on a busy street, with an awkward or not-ideal layout, or a house that’s just too small for them. This Spring, before the interest rates go up as we anticipate they will, now is your time to consider selling. I expect a coming, short window of opportunity where the market will favor your particular circumstances and create a fortuitous moment in timing to sell.

If I could click my fingers and make the world a safe and fair place for everyone to thrive in (kinda like a reverse Thanos power move), please know that I would, without pause. For now, I’m advocating for my clients to their best benefit in a shifting market where nothing is set in stone.

If you want to chat more about this, I’m here for it. My ultimate goal is to smartly, safely meet my client’s housing needs, not roll around on a mountain of gold bullion like Scrooge McDuck, or buy a second yacht (I don’t even have a first yacht). So my personal motivation isn’t bottomless wealth, it’s navigating real people through a constricting capitalist industry and society with our ethics and kindness and empathy intact. That’s not easy, and I’m not here to convince you that the world isn’t flawed.

If you’re a stats nerd and want to check out the cold, hard facts, I highly recommend following Keeping Current Matters on Instagram.

If you’d like to help out in Ukraine for their emerging, urgent needs, I highly recommend superchef José Andrés’ World Central Kitchen, who run towards global conflict and feed escaping refugees wholesome, nourishing meals.

If you’d like to learn more about underreported conflicts happening around the world to get you started on finding ways to help, here’s some refugee statistics that we should be hearing more about. This can all feel overwhelming, but as I’ve said in the past, find one or two areas of focus, and do what you can do, there.