Here’s the story of luxury real estate’s epic 2020 comeback.
We’re now entering the winter months, and it’s cold outside—is luxury real estate just as cold? Absolutely not! In fact, it’s the exact opposite. To get a clearer picture of how our PDX luxury market has fared, let’s back things up to March. (Let’s be honest, 2020 really only has two parts: pre- and post-COVID).
For Marion, Clark, and the Tri-County areas, we’ll define luxury real estate as $1 million and up. This November, the number of listed luxury properties is up 11% from March when COVID hit, and everything, including luxury real estate, came to a grinding halt. Thankfully, despite my own worst fears, the devastation to the luxury market only lasted about three weeks or so. In that time, however, the “jumbo” products (a jumbo loan is $510,000 or more) practically vanished. For a while, there weren’t any jumbo products available under 5%.
Since spring, however, luxury real estate came back with a vengeance. Not only have we seen significantly more listings as of late, but we can also happily report that closed sales are up 20%. Furthermore, in just the last six to seven weeks, we saw 40% more pending sales year over year. As you can surmise from these numbers, the traditional seasonal slowdown in real estate doesn’t apply to 2020. So, why is the real estate market—and the luxury market especially—so hot right now?
Well, in case you missed the recurring headlines amid the flurry of this year’s high-octane news cycle, money has been pretty cheap. We had a client purchase a $1.2 million home, and my good friend Ricky Guadarama at Finance of America was able to get him an interest rate of 2.68% on a jumbo loan, which is purely incredible! The second factor at play here is people’s need to preserve their sanity while staying cooped up at home; we can’t go to movies, restaurants, or bars right now, so having a spacious enough home with amenities that can accommodate our lifestyle is more important than ever.
That’s not to mention the fact that many of us can’t go into the office and/or our kids can’t physically attend school. We need our homes to have extra rooms that can be converted into office spaces or classrooms—be it for homeschooling or virtual learning. Ironically, the trend prior to COVID was to seek out smaller spaces situated in the heart of urban areas for convenience’s sake; at the moment, there’s not much that’s convenient about downtown Portland…
I don’t see this new trend toward more space and a more enriching at-home experience changing anytime soon, regardless of the election’s result. Luxury real estate is hot, and it’s going to stay hot! As always, reach out if you have questions on this or any other real estate topic. I’m here to help, and I love hearing from you.