An Unreal Market – Eugene Weekly
In the span of half a year, Malori Musselman submitted more than a dozen offers on houses in the Eugene-Springfield area, only to be outbid by another buyer each time.
“If the advertisement for the house doesn’t say they’re looking specifically for first-time buyers or for those looking for their forever home,” Musselman says, “I’m going to assume I’m going to be outbid by between $25,000 and $75,000.”
Musselman, who’s nonbinary and uses they/them pronouns, is one of many would-be first-time home buyers competing in today’s red hot housing market. Except for a small hiccup at the start of the COVID-19 pandemic, real estate in Eugene and Springfield has been a seller’s market.
The Eugene-Springfield real estate market is moving fast because of low interest rates, a low housing inventory, a global pandemic and the geographic perks of the Pacific Northwest, says Ben Fogelson, principal broker at InEugene Real Estate.
Since the Eugene-Springfield area is located in a region with plentiful water and a relatively low number of natural disasters, it’s attractive for transplants from California and Colorado, Fogelson says. And then there are people leaving nearby large cities — Seattle and Portland — who no longer want to live in a high traffic area, he adds.
“There are far more buyers on the market,” he says. “Some from higher markets with a ton of cash and competing against one another and the locals. It makes it very difficult as a buyer to get into contract with a property.”
He adds that for sellers, “You’re sitting pretty, you’ve got the goods and you can call the shots.”
Due to equal housing laws, the housing market is bound by the free market — a system that favors the buyer with the most money. He recommends that buyers consider using programs for first-time buyers to raise their mortgage loan limits, though the person with cash will likely win over someone who needs a loan.
“Cash is going to typically attract a seller’s attention more than a financed offer because out of the gate you’re eliminating one party from the transaction,” Fogelson says. “If I’m trying to buy a house with a lender, there’s three parties that can ruin the transaction.”
Without the lender present, he adds, the process doesn’t require an appraisal, so the transaction moves faster.
Musselman is one of many bidding on houses with a conventional mortgage (one without government assistance). Their highest mortgage amount is $375,000, which they say would have been a tough monthly payment. “A lot of the houses in the sweet spot of affordability under $350,000, there are so many bids on them,” Musselman says. “Our Realtor would let us know that the house had 20 bids or more on some of them.”
But $375,000 is below the median selling price for a house in Eugene, according to Redfin, a real estate data aggregator. In June 2021, the median home price was $425,000, up 26 percent compared to 2020. Before the pandemic, one in four buyers paid more than the asking price for a house, and in June 2021, two out of three buyers paid more than the asking price. Houses in Lane County often stay on the market for just six days.
The median household income in Lane County is $57,325, according to 2019 data from the American Community survey.
The rising real estate market prices don’t translate into higher property tax revenue, says Lane County Assessor Mike Cowles. Measure 50 limits the maximum assessed value growth to 3 percent, he adds, and most property transactions meet that cap.
Hoping to stay within the mid $300,000s, Musselman says there were houses that they and their partner considered even if they didn’t meet expectations. They sent in bids for houses that were too small and some that didn’t have the yard space for their dog to exercise.
Fogelsen says he often tells his clients to be ready to concede some desires they have for their dream home. “At first they give me a list of everything they want,” he says. “I’ll warn them once, almost everyone who buys in the market today has to make compromises.”
He adds that by knowing what you’re willing to compromise on, such as fenced backyards, neighborhood desirability and other amenities, clients are less likely to have buyer’s remorse.
A few weeks after talking with EW, Musselman finally closed on a house. The housing market is a communal and social issue, and sellers should be educated about what their choices do to the community, Musselman says.
“It’s worth it to make properties for sale to people who need them. That’s a choice that each one of these sellers is making to accept large cash bids from investment companies,” Musselman says. “It’s not something that we talk about or what it does to a community or why making that decision isn’t as individualistic as it seems. It can ultimately ruin a community; it can overly gentrify an area or completely force out people completely, leaving out empty homes.”