Virus outbreak expected to affect local housing market
Changes are expected in the local housing market due to the coronavirus outbreak, but so far experts are unsure how severe of an impact to expect.
Evidence of a potential slowdown have emerged since the social distancing mandates began in Oregon, but they have been relatively minimal. According to Kim Gammond, communications and public affairs director for Central Oregon Association of Realtors (COAR), local agents have not seen an impact on prices at this point.
"The median Crook County sales price (for March 2020) was up 15.8% (252,500) from February 2020 and 16.14% over March 2019," she said. "The number of homes sold (in March 2020) was up 14% from February 2020 and down 16.7% from March 2019. Pending sales were similar to March 2019."
The City of Prineville Planning Department issues planning permits for residential development. Planning Director Josh Smith has seen a "definite slowdown" since the outbreak arrived in Oregon, but interest in permits and construction activity has continued.
"We have actually approved single-family (dwelling applications). People are still paying their SDCs (system development charges)," he said. "We haven't seen a ton of applications come in, but a few have."
A hit to the market is anticipated, but how big of a hit is hard to predict. Gammond said that since most current figures represent transactions before the Stay at Home order came down, they expect to see more dramatic impacts in the numbers later this spring. In Central Oregon, price reductions were up 15% in the second half of March compared to the first half.
"What will be interesting to see is the money side of things – not so much the builders, but the demand for building," Smith said. "Is the demand going to drop off? Is there going to be too much debt? Will people be cautious?"
He went on to point out that a small apartment complex is planned on Deer Street and another complex with more than 150 units is under construction.
"There is a lot of building that is going to flood the market with new units," he said. "Is that going to bring prices down and help people out?"
While local experts wait to see the impact on building and home demand, realtors have already noticed a substantial change in buyer behavior. Gammond said that 43% of COAR members had a buyer stop looking due to uncertainly and 28% of members had a transaction fall through due to a COVID-19 related issue.
But the change in behavior may not last.
"Most our members remain cautiously optimistic that as uncertainly leaves the market and the economy comes back online, the housing market will continue the strong position it was in at the beginning of this year," Gammond said.
Meanwhile, buyers aren't the only ones changing their approach. The outbreak has forced realtors to change how they show homes.
"In-person showings during the first week of April were down 56% compared to the first week of March," Gammond said. "We have recommended that members stop open houses and observe all the sanitation and social distancing recommendations when showing property."
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