Thinking of buying or selling a home in Eugene anytime soon? Then you’re probably doing your best to figure out: what the heck is going on with Eugene’s real estate market?
Entering the market is, after all, a potentially life-altering decision. At the very least, there could be vast financial consequences.
2008 is still fresh in many people’s minds. No one wants to be saddled with a debt that will become unmanageable later due to a sagging market. A home should be an investment for your future, or at the very least a stepping stone, a solid foundation that you can count upon.
So, before you dive into Eugene’s real estate market–or a market anywhere else for that matter–you’re going to want to know which end of the pool you’re going to land in. In other words, you need an accurate forecast for Eugene’s housing market. Unfortunately, there’s a lot of conflicting information out there.
Digging Deeper: What You Really Need to Know about the Eugene Real Estate Market
It’s not so much that misinformation is spreading about Eugene’s real estate market. Rather, much of the information you’ll find about market trends is either too broad or too narrow to really tell you what you need to know to make an informed decision.
We’ve all seen the headlines pointing to a leveling-off of the national real estate market. Hot markets like Seattle, Portland, and the Bay Area are cooling off.
Then there are the local headlines: first we read that Lane County home prices are surging, and shortly thereafter that the market is heading for a cooldown. Just two days later, a report came out that there actually hadn’t been a slowdown in October. All of it can make your head spin.
Looking at nationwide real estate trends or those in California or even Portland simply won’t tell you much about Eugene’s real estate market. Earlier this year, we made the case that Eugene (and) Bend’s markets aren’t as vulnerable to a housing bubble as other larger markets on the West Coast.
But even if you’ve narrowed your data down to the most local level, it isn’t possible to make sweeping statements based on month-to-month shifts. Summer is the hot season for homes in most markets, so a Fall slowdown is par for the course.
Then, even if you have a decent overall picture of the Eugene market, the forecast could still look very different depending upon what price point you’re looking at. So which data are Eugene buyers and sellers to trust?
We’d like to help you out. That’s why we’ve combed through all the available RMLS statistics in order to give you a more accurate forecast for Eugene’s housing market in 2019 than what we’ve seen elsewhere. In addition to looking at the market as a whole, we’ve also looked at snapshots of Eugene’s real estate market at a number of different price points.
Taken together, these tell a very interesting story. We see evidence that the market for premium homes in Eugene is, indeed, beginning to plateau. But a plateau is much different than a drop, much less the collapse that some folks have prognosticated.
And the numbers also show that the market for affordable starter homes in Eugene is tighter than ever. Continuing into 2019, our housing market forecast shows that options for first-time home-buyers will only become fewer. Eugene’s market for trade-ups also looks to remain robust into 2019.
Read on as we dive further into the data.
Starting from the Bottom Up: Eugene Starter Home Forecast for 2019
If you’re a first-time home-buyer in Eugene (or you’re looking to relocate to Eugene to buy your first home), you’ve maybe held off on entering the market because you’ve heard it’s due for a slowdown.
If you’ve read our article on finding affordable housing, this won’t be news to you. We’ll repeat it anyway, though: the time to buy a starter home in Eugene was yesterday. The longer you wait, the more likely you are to face rising interest rates and decreasing inventory.
Let’s talk inventory for a moment: Eugene’s current supply of homes in this price range is just 1.3 months. Basically, over the past two years, an average of 172 homes in this price range sold per month. Currently, only 217 homes between 200k and 300k are available for sale, excluding FSBOs.
In other words, supply for starter homes in Eugene is only barely meeting the demand. Compared to 2017, the inventory is significantly less, and we forecast that this trend continue into 2019.
The slowdown that we’ve seen in Eugene at other price points heading into the fall simply isn’t happening in the 200-300k range. These homes are selling at just as quick a tempo as in 2017, but there’s simply less of them.
From January through November of 2018, 2,182 homes at this price point went on the market, compared to 2,409 during the same period in 2017.
It isn’t the case that numbers for all price points are down overall. On that account, 2018 is so far right on par with 2017.
Prices for Eugene starter homes are simply migrating towards a higher tier, and 250k or even 300k simply won’t get you what it did two years ago.
Needless to say, go under 200k and you’re almost certainly taking on a significant project, likely in a less desirable neighborhood. Not that there are many of those, even. There are currently only 40 Eugene properties for sale in the 125-200k range, with an inventory of 1.1 months.
In the past, buyers priced out of Eugene could head to Springfield or even the more rural areas around Eugene’s perimeter. But prices in these areas have inched closer and closer to those in Eugene.
Forecasting Eugene’s Market for Trade-Up and Premium Homes in 2019
The summer of 2018 was a hot one for homes in the 300-400k range, with home sales for this price point reaching 118 in June, a two year high. Overall sales numbers for 2018 are already higher than for 2017 at this price point. But things have cooled off significantly heading into the fall.
As we mentioned, a fall cool-down is typical. But let’s compare Fall 2018’s numbers to last year’s. 108 homes sold through October and November of 2018, compared to 138 in 2017. The volume of listings also fell, with 99 in 2018 compared to 123 in 2017.
The picture changes, however, with listings in the 400-500k range. Fall sales at this price point are almost the same between 2017 and 2018, while overall sales figures for all of 2018 are significantly higher.
The simplest explanation for these figures is, again, that Eugene home prices are migrating upward. For many, a price point around 300k represents the new “starter home,” while a trade-up increasingly entails a 400k+ price tag.
The median price for all homes sold in Eugene peaked at $313,000 in June of 2018. That’s significantly higher than 2017’s high of $285,000. In November 2018, that figure dipped to $295,000, but that’s still $20,000 higher than the same figure for 2017. The surge between 2016 and 2017 was similar: Eugene’s market, it’s tempting to say, is simply on the up and up.
The question is really whether or not the market can sustain this trend. Federal interest rates are rising, and we seem to be entering into a climate of increasing economic uncertainty.
Looking at the local market, however, do we see any of the telltale indicators that would forecast an uncertain housing market in 2019? As we’ve already seen, inventory is dropping for starter homes. In the trade-up range, more homes are going on the market, but they’re also going off the market just as fast, if not faster than before.
But, looking at the data for all homes in the 500k+ range, an interesting picture emerges. Available listings of premium homes jumped significantly September through November 2018, with 146 compared to only 87 in 2017.
The change is most striking for November, with 43 listings compared to 16. We also see a big jump in November for homes in the 400-500k range: 53 compared to 32.
It may be that people are trying to unload these higher-end properties now due to anxiety about the future of the market. We will have to see if this pattern continues into the New Year. But these numbers do point to a strong possibility that the market for premium homes in Eugene is beginning to plateau.
So, What’s the Overall Forecast for Eugene’s Real Estate Market?
As we mentioned, however, a plateau is much different than a crash, or even a slump. Whatever shift occurs in Eugene’s higher-end housing market, expect it to take a while for the effects to trickle down toward the lower end. People are still moving to Eugene at a steady clip, and they’re going to need housing.
This is a given, and the market for starter homes in Eugene is tight. Like, crazy tight. Our not-so bold forecast is that Eugene’s market will stay that way at least through 2019. The longer you wait to enter the market for a starter home, or even a home in the 300-400k range, the more compromises you will likely have to make.
The buying season will begin in earnest in the spring, and from there through the summer and even into the fall of 2019, expect the same dogfight that we’ve enjoyed through 2018, with multiple offers above list price and the most desirable homes going off the market in less than a week.
This, unfortunately for buyers, is the new reality of Eugene’s market. We’ve already outlined the scenario in another article, Tips for Home Buyers in a Tight Real Estate Market.
For sellers at these price points, it’s going to be a fine time to put your home up on the market. Inventory of starter homes and trade-ups should remain very light through 2019.
That doesn’t mean it’s going to be a cakewalk: the bids won’t necessarily just come rolling in unless you, and your Realtor, do the extra work to make your property really stand out. Most of the normal laws of real estate still do apply to Eugene’s market!
If you’re in the market for a premium home, you can expect to perhaps gain some leverage on the buyer’s side. With inventory increasing in the 500k+ range, sellers will need to do even more to go the extra mile.
At LOHR Real Estate, we’re all about informing and empowering our clients to make the choices that are best for them. In order to give you the best information, we have to stay at the cutting edge of the market ourselves, and that’s why we’ve done all of this number-crunching.
We can’t and won’t promise any magic when it comes to your real estate transaction. But we will work with you and for you every step of the way, from discerning whether you’re even ready to enter the market all the way to the negotiating table and beyond.
At the risk of sounding like a broken record, we really do believe it’s essential in tight markets like Eugene’s to start working with a Realtor sooner rather than later, so you can establish a much more accurate sense of what the market is like relative to your particular needs.