Before the coronavirus pandemic, real estate agents already noticed a growing trend of urban professionals, able to work from anywhere, choosing to live on the North Coast.
But the pandemic has accelerated the urban exodus and, combined with record-low interest rates and a dearth of new home listings, contributed to a market hotter than some long-time realtors and lenders have seen since before the Great Recession.
Debbie Morrow, who manages listings for the Clatsop Association of Realtors, said she had 100 listings in mid-October, compared to 300 the year prior.
“Some brokers say it’s the livability of our county,” she said of Clatsop County. “The COVID quarantine made people want to live by the beach. Other brokers say that people have done very well in the stock market and are looking for a second home on the coast.”
Stories abound of rural markets around the U.S. inundated with out-of-town buyers escaping urban areas. The National Association of Realtors reported home sales and prices in the U.S. increasing by double digits. Total housing inventory in September was down nationally by nearly 20% compared to a year ago, and properties stayed on the market for 21 days, an all-time low.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” Lawrence Yun, the association’s chief economist, said in a recent news release. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”
Hottest market since 2007
Michele Johnson, a real estate agent of more than 20 years who works for Windermere Realty Trust in Cannon Beach, said she hasn’t seen such a hot market since 2007 before the Great Recession. Home prices have been ramping up significantly since 2014, she said, and 2020 was earmarked to be another good year before coronavirus temporarily shut down much activity. But Johnson described a perfect storm of factors when business reopened.
“You have historically low interest rates, COVID, people working from everywhere… and then I think the social unrest too in a lot of major cities, Portland and Seattle’s markets, has driven people to say, ‘We want to get out of these metro areas,’” she said.
Many of Johnson’s buyers are coming from Portland and Seattle. But they’ve come from as far away as a Montana couple she said bought a house to be close to their son while he attends college in Portland.
“I had one Portland city employee buy a lot down here to build for that reason,” she said. “He said that he most likely wouldn’t be going back into his office, or maybe have to go into Portland for a meeting once a month or something like that. But otherwise, he can work remotely, so he and his wife are planning on building a house on the coast.”
Mortgage lending: 'It’s just gone nuts'
Greg Cross, with Northwest Lending Group, has been doing mortgage loans since the mid-1980s and in Astoria since 1992.
The pandemic and the resulting stimulus packages caused some short-term pricing anomalies and some government-backed financing options to go away, Cross said, along with new income verification requirements for business owners and sole proprietors to qualify for mortgages. But overall, Cross has seen another record year.
“Because the rates are so low, and they’ve been low for a while, it’s just gone nuts,” he said. “I would say it’s probably tripled… over the last year.”
Much of that increase is people taking advantage of low rates to refinance their mortgage, Cross said, but home sales are also up despite the dearth of inventory. He has also seen the average loan amounts he issues increase faster than usual with ballooning home prices.
“As far as the first-time homebuyer, it’s gotten a little bit tougher, not because of the qualifying criteria of the loan itself, but just because the prices are higher,” he said. “Some people are getting priced out because of that.”
Astoria prices up and up
Andrea Mazzarella with Re/Max River & Sea became a real estate agent several years ago after 20 years in the service sector. The majority of her sales are in Astoria, where she said the pandemic has only exacerbated affordability issues for locals buying their first home.
“It’s really, really challenging,” she said. “I thought that the prices were topping out a year ago, and now they’re even higher. And what you’re seeing now is every single house that is move-in ready that’s under $400,000 on the market is getting multiple offers. They all seem to turn into a bidding war.”
Mazzarella doesn’t blame people for wanting to escape the city for the North Coast but said she feels compelled to remind more well-heeled buyers about their privilege and the pressure it puts on local buyers with less money. She sees housing costs on the North Coast approaching those of Portland and Seattle.
“I think we have a crazy, inflated cost of living in Astoria,” she said. “And it’s fascinating to me that a lot of people don’t see it, because they live here, and it’s just been this slow, gradual increase over the last 10 years.”