Selling Today is a Safe Bet

The state of the economy today, and whether we are at the end of a growth cycle or if the growth will continue, seems to be a frequent topic of conversation.

I like to remind folks that if they sell and are planning on buying a replacement property in the same marketplace, then market conditions don’t really matter. However, for those of you who plan to downsize significantly, or move to a less expensive market, selling your home in Portland today is a conservative, safe bet.

Currently, we are experiencing an incredible seller’s market as inventory has once again diminished while sales have soared due to remarkably low interest rates and a robust economy. That said, over the past 7 years of market appreciation there have been a few periods when the market appeared to be shifting. In each case, the inventory began to grow, and we as agents were seeing what appeared to be the coming of a buyers’ market. In each case, it never happened.

Today, there are multiple considerations that could impact that growth trend in the next 6 to 18 months. Any of the following factors could be the beginning of a tipping point. As we all know good things don’t last forever. While the typical list might be focused on the economy or interest rates, today’s list of influential factors is far larger.

Here are 6 Economic Factors that could impact our currently robust seller’s market:

1. The Stock Market is at an all-time high and last November major indexes clinched 10 record highs in a single month. Despite the Coronavirus, it is still bouncing around and setting records. If the market has a down month or quarter, sales of homes will likely soften as buyers become wary of today’s home prices.
2. The Coronavirus is unlike anything most of us have ever experienced in our lifetimes. While the stock market may still show stability, global companies are going to be absorbing significant financial losses. Here are some examples of the impact:

• The dollar decline in US Stock markets between February 24^th and February 28^th (last week) was $3.6 Trillion.
• 200,000 flights to, from, and within China have been cancelled by airlines worldwide over the past month.
• Adidas reported an 85% decrease in business activity from January 25^th through February 19^th in China compared to the same period in 2019.
• Proctor and Gamble has 17,600 products that rely on materials from China.
• Vehicle sales declined 92% in China during the first 16 days of February.
• The estimated drop in container volumes through the Port of Los Angeles in February was 25%. LA is the largest US gateway for seaborne imports from China.

3. Interest Rates were just lowered again! How low can they go? And when they do increase, how will the economy respond?

• Conforming rates = 3.375%
• Jumbo rates = 3.50%
• The Federal Reserve’s next meeting is March 17^th and 18^th. Current speculation is for a Fed Funds cut of .50 bps (1/2%), in a coordinated rate move amongst the major central banks.

4. Presidential Election: The one thing we can count on is things can change in an election year.
5. World Events: On January 3^rd, US strikes killed the top Iranian general in Baghdad. For many of us, it seemed imminent that we could be embarking on a new conflict in the Middle East. Since then, for better or for worse, the Coronavirus took over the world stage.
6. Economic Growth: According to the National Bureau of Economic Research, the U.S. is officially in its longest expansion, breaking the record of 120 months of economic growth from March 1991 to March 2001, .

If you are interested in evaluating your home value, considering downsizing, or feel now is the time to cash in on this record economic expansion, we at ELEETE Real Estate would appreciate the opportunity to help you achieve your goals. Please call us today.