At North Star, we have seen tremendous housing fluctuations due to Covid, all of which had very strange timing. The lockdowns of 2020 slowed our business a bit, but created a backlog of demand for housing that exploded beyond all expectations in 2021. By the time the spring of 2021 hit, the demand from tenants and buyers moving to Portland and Bend from larger cities like San Francisco and Los Angeles skyrocketed. The focus of people moving here was anything suburbia, as they told us they were tired of being locked down and wanted space. This mirrored what we saw in Portland, as places like the Pearl District dropped in demand while any suburban home in Portland, and any home at all in Bend, were having multiple offers.
Due to the limited supply and tremendous demand, housing sale prices spiked, pulling most of the available inventory from the rental market to the sale market, causing a surge in sale prices and an even greater jump in rental prices. In Portland, as fast as this went up, it came back down in late August of 2021, causing some confusion for owners who wanted spring 2021 pricing, not fall 2021 pricing. In Bend, the demand has remained steady and high.
Looking ahead to 2022 and the jump in the Omicron virus, we are watching closely. Our housing demand is like a flowing river, in the spring it flows faster, in winter it flows slower. When lockdowns happen, it is a dam in the “river” of demand, causing dips and subsequent surges. The trick is to look ahead so that we can anticipate what to do for our own investments as well as the investments for our (and your) clients. All while looking down from the 10,000 foot level (see next article).
For 2022 our opinion is that demand will remain high in Portland and extraordinarily high in Bend, where the sun shines a bit more. If we lock down again, be prepared for a flat market, then a greater than normal surge later. We believe that the spring should once again be the market high, but with a higher than normal demand due to people still migrating in from out of state.