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Portland, OR: Real Estate Market And Trends

Published on Friday - January 23, 2015

Portland seems to have taken the housing sector recovery and run with it. That said; the Portland housing market is doing very well for itself. In fact, Portland is one of the hottest housing markets in the entire country.

The Portland housing market epitomizes the best parts of the recovery. The housing sector has been supported by an equally strong job sector, allowing more activity to take place. Not every market shares the same sentiment as those in the Pacific Northwest. Homeowners are particularly happy, as the median home price in the area is currently $291,300, which is well about the national average. The average home price across the country is nearly $75,000 less than those in Portland. The current valuation is a direct result of historically high appreciation rates. Over the past three years, homes in the Portland housing market have appreciated by more than 30 percent. And while gains are still expected, they should come at a much slower pace than in the last year.

portland housing market downtown

Homeowners in the Portland market were the beneficiaries of a lot of equity. The following highlights how much equity has been gained relative to the year of the home’s purchase:

  • Homes purchased in the Portland housing market one year ago have appreciated, on average, by $19,216. The national average was $12,783 over the same period.
  • Homes purchased in the Portland housing market three years ago have appreciated, on average, by $78,746. The national average was $55,406 over the same period.
  • Homes purchased in the Portland housing market five years ago have appreciated, on average, by $64,670. The national average was $49,675 over the same period.
  • Homes purchased in the Portland housing market seven years ago have appreciated, on average, by $18,019. The national average was $9,474 over the same period.
  • Homes purchased in the Portland housing market nine years ago have appreciated, on average, by $71,859. The national average increased $3,419 over the same period.

Portland is one of the few markets that has outpaced the national average in terms of price appreciation and consecutive years. For nearly a decade, homeowners in Portland have gained more equity than those living in other parts of the country – nine years to be exact.

One of the most encouraging aspects about Portland’s current situation is the rate of population growth the city has experienced since the turn of the century. That said; not many cities can claim to have outpaced Portland in population growth since 2000. As you may have guessed, the number of people calling Portland home is contributing to the city’s real estate recovery.

According to the U.S. Census Bureau, the number of people residing in Portland increased from 529,121 in 2000 to 594,687 by the end of 2013. Over that period, the population increased a staggering 12%, enough to make Portland the 10th fastest growing city in the country. Similar to that of Seattle, Portland has benefited immensely from the influx of new homeowners.

The strength of the Portland housing market really comes into focus when you combine its growing population with a relatively low unemployment rate. Statewide, Oregon’s unemployment rate is the lowest it has been in more than six years. Unemployment across the whole state dropped from 7 percent to 6.7 percent. Portland, in particular, played a big part in reducing the state’s unemployment rate, as the city currently boasts its own rate of 5.7 percent. No more than one year ago, Portland had an unemployment rate of 6.5 percent. Portland actually has more jobs now than it did before the recession. Over the last 12 months, Portland has exhibited a job growth rate of 2.6 percent, well above the national average. Even with recent growth, Portland’s job sector has shown no signs of slowing down. For all intents and purposes, it should continue to serve as the main driver of local supply and demand.

The neighborhoods most benefiting from the current housing market, according to Trulia, are as follows:

  • Southwest Hills
  • Centennial
  • Brentwood – Darlington
  • Pearl
  • Powellhurst – Gilbert

Of those mentioned on this list, Southwest Hills and Centennial are the most popular, with average listing prices of $1,329,539 and $205,183 respectively. Investors interested in the Portland housing marked are advised to at least look into these areas. However, while Goose Hollow may not have been added to the most popular list of neighborhoods in the Portland area, it did exhibit the largest week-over-week growth in the most recent listing prices. With an average listing price of $638,620, Goose Hollow increase more than 26% from the previous week.

Despite the strength of the Portland’s housing market and the recent rates of appreciation, the city remains relatively affordable. By the end of last year, homeowners in Portland were accustomed to spending less than 15% of their income on their monthly mortgage. In comparison to the rest of the county, the average homeowner typically allocates more than 16 percent of their income to mortgage payments.

With a market as hot as Portland, it is no surprise that homes are expected to increase by as much as 4% over the next year. According to Zillow’s Market Health Index, which represents the health of a city’s market relative other markets in the United States, Portland is very healthy. To quantify how healthy the Portland housing market is, Zillow gave it an 8.4 out of a possible 10.

However, as there is with any market, Portland has its fair share of delinquent mortgages. More than 5% of homes in Portland are late on their payments. Those that are actually underwater on their home are just a few percentage points higher, at 7.8 percent.

For what it is worth, Portland is actually one of the stronger markets in one of the stronger regions in the country. Not only has it begun to show very encouraging signs, but it also shows no signs of slowing down. The coming year appears primed to favor those that invest in the Portland housing market.

Portland Housing Market Summary:

  • Current Median Home Price: $291,300
  • 1-Year Appreciation Rate: 5.5%
  • Unemployment Rate: 5.7%
  • 1-Year Job Growth Rate: 2.6%
  • Population: 609,456
  • Median Household Income: $59,168

Portland Housing Market Q1 Update:

The Portland housing market is trending in the right direction, and all signs point to a sustainable recovery. Nearly every housing indicator has improved over the course of this year. Appreciation rates have increased to 6.4 percent, and home values are still well above the national average. Supply and demand continue to receive a lot of support from the local economy as well. Job growth has increased, and unemployment has dropped.

The whole of the Portland housing market is in a position to make some big moves, but it is the investors who look primed to succeed under the current conditions. Portland real estate investing is expected to take full advantage of the distressed property market. According to RealtyTrac, Portland has about 1,223 homes in some state of foreclosure. That means these properties are readily available for Portland real estate investors to take advantage of. In fact, there are even more foreclosures this year than they were last year, 55 percent to be exact.

Of the distressed properties on the market, 47.2 percent are scheduled to be placed up for auction. Another 25 percent have been repossessed by the lending institution and are just sitting on their books as non-performing loans. The remaining homes are all in pre-foreclosure, meaning the homeowner is at risk of losing the property because of a failure to pay mortgage obligations. Each of these scenarios is a great opportunity for the Portland real estate investing market.

Perhaps even more importantly, is the discount these properties offer over traditional housing. Distressed properties sell for a lot less than non-distressed ones. In fact, the median sales price of a non-distressed home was $301,828. The median sales price of a foreclosure home was $191,413, or 37 percent lower than non-distressed home sales. That is a savings of more than $110,000 for those keeping track.

Portland Real Estate Investing Statistics:

portland-investing-stats

Portland County Map:

Map of Portland neighborhoods

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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