Portland, OR Real Estate Market Trends & Analysis [Updated 2021]

by Than Merrill | @ThanMerrill
Published on Mon, Jun 21 2021

Jump To Another Year In The Portland Real Estate Market:

The Portland real estate market endured the same fate as the rest of the country during the first year of the pandemic. “Shelter-in-place” orders all but brought real estate in Portland to a standstill in the first quarter of last year. However, much like the rest of the country, positive signs of activity become more apparent in just a few short months. In particular, Portland housing market trends became the beneficiary of continued buying and selling. The activity generated last year is more than enough to get investors excited about 2021. In fact, the most encouraging aspects of today’s market are the opportunities being created in the wake of the Coronavirus disruption. The new landscape has created buying opportunities for investors to capitalize on, as long as they know where to look and which exit strategies are the most viable.

Portland Real Estate Market 2021 Overview

  • Median Home Value: $536,921

  • Median List Price: $570,333

  • 1-Year Appreciation Rate: +14.0%

  • Forecasted 1-Year Appreciation Rate: +18.3%

  • Weeks Of Supply (Portland Metro): 4.1 (-6.0 year over year)

  • New Listings (Portland Metro): 1,116 (+23.5% year over year)

  • Active Listings (Portland Metro): 3,850 (-41.0% year over year)

  • Homes Sold (Portland Metro): 962 (+47.5% year over year)

  • Median Days On Market (Portland Metro): 5.0 (-11.0% year over year)

  • Median Rent: (Portland-Vancouver-Hillsboro): $1,608

  • Rental Vacancy Rate: 5.0% (+0.9% year over year)

  • Price-To-Rent Ratio: 27.82

  • Delinquency Rate: 3.4% (+1.7% year over year)

  • Unemployment Rate (Portland-Vancouver-Hillsboro): 6.1% (latest estimate by the Bureau Of Labor Statistics)

  • Population (Portland Metro): 654,741 (latest estimate by the U.S. Census Bureau)

  • Median Household Income (Portland Metro): $71,005 (latest estimate by the U.S. Census Bureau)

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Portland real estate investing

Portland Real Estate Investing 2021

The Portland real estate investing community has benefited from an overwhelmingly positive decade of growth. Nearly every indicator investors covet has improved dramatically since the first quarter of 2012. Flipping profits have increased, as well as home values and rental rates. Even demand has persisted in the face of increasing prices amidst a pandemic. Yet, against all odds, prospective buyers are still looking to take action.

When all is said and done, a lot has happened in a short period, which begs the question: Is Portland a good place to invest in real estate? The answer is simple: Portland can be a great place to invest in real estate with the right strategies.

The demand for housing is primarily due to a lack of inventory and vacancies. According to Freddie Mac, “Oregon has the largest [inventory] deficit (nearly 9%) followed by California (nearly 6%).” As the largest city in Oregon, Portland is primarily responsible for the state’s insufficient housing supply. It is safe to assume demand is pent up, and the Coronavirus has only exacerbated the situation. Buyers wanted to participate in the market before the global crisis, and they still want to today, which bodes incredibly well for the Portland housing market trends.

Demand has left the door open for local investors to practice nearly any exit strategy. However, high prices and demand combine to work in favor of a few particular strategies:

While rehabs and flips remain a viable option, years of appreciation have detracted from profit margins in the area. It is absolutely possible to rehab, but the strategies listed above are currently better suited for today’s market.

The Portland real estate investing community should first look to either start building or contributing to an existing rental portfolio. For starters, years of cash flow generated from tenants may be able to justify today’s higher acquisition costs. With a median rent price of $1,608, it shouldn’t take too long to offset years of appreciation. Besides what already looks like attractive rental rates, the lack of available housing and the city’s low vacancy rate should increase competition, allowing Portland real estate investors to increase their margins even further. Combined with low mortgage rates (2.93% as of June), buying a rental property could result in a great investment.

Not unlike everywhere else, real estate in Portland has experienced a significant run-up; there aren’t enough homes to satiate demand, which has enabled owners to increase prices accordingly. As a result, real estate investors in Portland have turned to long-term rental properties. The new market created by the Coronavirus caters more to landlords than rehabbers. That is not to say there aren’t opportunities to flip real estate in Portland, but rather that opportunities are growing thinner as prices march higher.

2021 Foreclosure Statistics In Portland

According to Attom Data Solutions’ Q1 2021 U.S. Foreclosure Market Report, a total of 33,699 U.S. properties received a foreclosure filing (default notices, scheduled auctions or bank repossessions) in the first quarter of this year. According to the latest research, nationwide foreclosures are up 9.0% from the last quarter of 2020 but down 78.0% from this time last year.

“The foreclosure moratorium on government-backed loans has virtually stopped foreclosure activity over the past year,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. “But mortgage servicers have been able to begin foreclosure actions on vacant and abandoned properties, which benefits neighborhoods and communities. So it’s likely that these foreclosures are causing the slight uptick we’ve seen over the past few months.”

Unfortunately, the Portland real estate market will not be an exception to the rule. Approximately halfway through 2021, in fact, the state’s eviction moratorium wasn’t renewed.

“This means that renters must pay their July rent or their landlords can evict them for nonpayment,” said Kate Brown, the Governor of Oregon.

It is safe to assume the entire state of Oregon will realize an influx of foreclosures, many of which will reside in Portland. Landlords will expect borrowers to come current. Those who aren’t able to make payments are expected to generate an influx of foreclosures. Therefore, investors who position themselves well today and line up financing could find the latter half of 2021 to be a great time to acquire a deal.

2021 Median Home Prices In Portland

Today, the median home value in Portland is about $536,921, according to Zillow. Local home values are the result of several years of appreciation and haven’t always been as high as they are. Nearly 10 years ago (February 2012), the median home value bottomed out at around $225,000; that means the city’s median home value has appreciated 138.6% in approximately one decade.

For a better idea of how the Portland real estate market has performed in recent history, it’s best to place it in context with the U.S. real estate market. At the same time, real estate in Portland appreciated 138.6% (February 2012 to June 2021), the median home value in the United States increased 77.2%.

The city’s median home value has appreciated at a much faster pace than the national average for the better part of a decade. The difference may be attributed to several factors, but the most prominent indicator appears to be availability. Supply and demand in the Portland area have increased competition dramatically, and homeowners have increased asking prices for quite some time.

The Coronavirus’s impact has yet to reveal itself fully, which begs the question: Will housing prices go down in Portland? The answer is most likely no. In fact, the median home value in the Portland real estate market will most likely increase as long as inventory remains thin. Forecasts expect the local home value to appreciate by as much as 18.3% over the next year.

Is it a good time to buy a house in Portland, Oregon? Once the economy gets up and running again, there’s a good chance prices will return to their peaks. Therefore, the current market environment may represent a great time to buy for investors and traditional homeowners who need to act fast. However, for those who can wait, the uptrend is expected to last at least another three years or until sufficient inventory can be brought to market.

Portland Real Estate Market Trends

The Portland housing market has suffered two setbacks in the last decade: The Great Recession and the introduction of the Coronavirus. Not unlike every other major metropolitan area across the country, real estate in Portland was dealt a significant blow when the housing bubble burst around 2008. Nearly every homeowner lost equity seemingly overnight, and new Portland housing market trends started to emerge. While residents didn’t know it at the time, The Great Recession catalyzed nearly a decade-long housing boom. For more than nine consecutive years, home values have increased in Portland, along with demand and confidence.

The second setback the Portland housing market experienced was the result of the Coronavirus. Government-mandated “shelter-in-place” orders all but brought the local housing industry to a standstill in 2020. Uncertainty and inactivity threatened to put an end to a decade’s worth of growth. That said, the pandemic is now responsible for an entirely new set of Portland real estate market trends, not unlike The Great Recession. While housing activity was tempered in the second quarter of 2020, the retraction was only temporary; all the activity taking place before the pandemic returned almost immediately.

In association with a government stimulus and record-low mortgage rates, pent-up demand gave prospective buyers the confidence they needed to get back in the market. Sales returned quickly, despite appreciation rates returning to pre-pandemic levels. As a result, local real estate is expected to appreciate at a fast rate for the foreseeable future. The increase will most likely result from demand (people who sat out of the market during the first part of the pandemic) and a distinct lack of supply. Homebuilders were out of work during most of the pandemic, which only contributed to the already tight inventory supply. As a result, it’s safe to assume prices will increase for at least a couple of years.

Prices will most likely increase in suburban neighborhoods, as many people find it easier to abandon metropolitan housing. More specifically, COVID-19 has awarded more people the opportunity to work from home, essentially eliminating the need to live within proximity to an office. That, in addition to people avoiding Coronavirus “hotbeds” within city limits, should drive more people to look for suburban alternatives. National trends have already seen people trading city life for suburban neighborhoods, and the Portland housing market doesn’t appear to be the exception.

The Portland real estate investing community should pay special considerations to recent trends. Even the most basic Portland real estate market forecast calls for an exodus from city living to “suburbia.” Metropolitan prices may drop, and vacancies could increase as a result. Those looking to take advantage of the latest trends should emphasize suburban areas. However, those in it for the long haul may find prices in the city dropping. In the event they do, apartments within city limits may be had at a discount.

Portland Housing Market: 2020 Summary

  • Median Home Value: $478,498

  • 1-Year Appreciation Rate: +4.9%

  • Median Home Value (1-Year Forecast): +5.2%

  • Median Rent Price: $1,975

  • Price-To-Rent Ratio: 19.73

  • Portland-Vancouver-Hillsboro Unemployment Rate: 8.4% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 653,115 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $65,740 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 6.78%

  • Foreclosure Rate: 1 in every 12,948 (0.7%)

Portland Real Estate Investing 2020

Portland housing market trends were in line with the national housing market. In particular, the local real estate market was generally shaped by newly created fundamentals leftover in the wake of the pandemic. At the start of 2020, fear and uncertainty brought about by the arrival of the Coronavirus caused the entire housing sector to take a step back. Prospective buyers were scared to tour strangers’ homes, and sellers pulled their listings from the market because of the threat of dropping home values. In a matter of months, the highly active Portland housing market became stagnant. Fortunately, the setback was only temporary, and the disruption actually turned out to be a catalyst for activity.

In response to the pandemic, the Fed announced it would keep interest rates near historic lows to attract buyers, and the plan worked. Interest rates dropped well below three percent and encouraged many people to buy before a future increase. Low rates, combined with increased savings (due to lockdown orders across the country), spurred a great deal of activity. At the same time, home values continued to appreciate at historic rates.

All of this spelled great news for the Portland real estate investing community. However, instead of resorting to rehabbing (the most common exit strategy of years past), investors turned to something more sustainable in a housing market where profit margins were growing thinner by the day: rental properties. The new indicators created by the pandemic made long-term rental properties more attractive than their rehab counterparts. Low interest rates simultaneously lowered acquisition costs and increased monthly cash flow. Unfortunately, demand created by lower borrowing costs also made it harder for buyers to find a home. There weren’t enough homes to keep up with demand, so more people had to resort to renting.

When all was said and done, Portland housing market trends leaned heavily in favor of rental property owners in 2020. That’s not to say flipping wasn’t a viable option at the time, but rather that the numbers were more in favor of long-term strategies.

Portland Housing Market: 2018 Summary

According to Portland’s real estate news at the time, the city was on track to maintain the positive momentum it managed to build since the recovery got underway. Nearly every economic indicator was better off in 2018 than it was in the previous years. At the time, the Portland real estate investing community was the beneficiary of desirable market conditions, not the least of which have lasted until today.

Portland Real Estate Investing 2018

Like the rest of the country, the median home value in the Portland real estate market made incredible gains in 2018. Around $413,300, median home values increased 0.7% from the previous year and—at the time—were expected to keep growing.

Due largely to the historically high appreciation rates, the city in the Pacific Northwest could cut back on its foreclosure rate in 2018. In one year, foreclosure filings dropped 52.0%, and the trend has continued to today.

According to RealtyTrac, “The median sales price of a non-distressed home was $355,000.  The median sales price of a foreclosure home was $246,854, or 30% lower than non-distressed home sales.” That means investors who know where to look could save more than $100,000 on a home at the time.

Despite experiencing an inventory shortage like the rest of the country, the Portland real estate market was robust in 2018. The right economic indicators were in place to support years of growth, and the city’s low unemployment rate made everything possible.

Portland Housing Market: 2016 Summary

  • Median Home Price: $356,700

  • 1-Year Appreciation Rate: 13.3%

  • 3-Year Appreciation Rate: 35%

  • Unemployment Rate: 5.1%

  • 1-Year Job Growth Rate: 3%

  • Population: 609,456

  • Median Household Income: $59,168

Portland Real Estate Investing 2016

The Portland real estate market was one of the hottest markets in the country in 2016. Real estate for Rip City became a commodity in a relatively short period, as home prices were outgrowing the national average at the time. Subsequently, life was good for real estate investors and homeowners. A combination of positive factors (new housing construction, employment, and unemployment rates) helped boost the Portland real estate market’s outlook and transform it into today’s.

As of July 2016, there were 1,404 properties in some stage of foreclosure. In July, the number of foreclosures was 2.0% lower than the previous month and 42.0% lower than the same period in 2015. The number of REO properties increased 12.0% from the previous month but fell 42.5% from the same time a year earlier.

In addition to rising home prices and equity gains, a thriving economy helped push the Portland real estate market in the right direction. One-year job growth at the time surpassed the national average, as new jobs increased at a rate of 3.0% during the second quarter, compared to the rest of the country, which grew at a rate of 1.9%. On the flip side, while unemployment was better than the previous year, it was slightly above the national average during the second quarter—5.1% compared to 4.9%.

The second quarter saw new home construction reach 63.7% above the long-term average, while single-family permits increased to 19.8%, compared to the national average of 10.6%. Although low housing inventory wreaked havoc across the nation, construction was rising relative to the previous year, suggesting the local inventory had already stabilized.

Portland Housing Market: 2015 Summary

  • 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 Real Estate Investing 2015

By 2015, the Portland real estate market had taken the recovery and run with it. The Portland housing market was one of the hottest in the country at the time. The housing sector was supported by an equally strong job sector, allowing more activity to take place. Homeowners were thrilled, as the median home price in the area was about $291,300, which was well above the national average. The average home price across the country was nearly $75,000 less than those in Portland. The valuation was a direct result of historically high appreciation rates across the country.

Portland was one of the few markets that outpaced the national average in terms of price appreciation in 2015. For nearly a decade, homeowners gained more equity than those living in other parts of the country.

One of the most encouraging aspects of the city in 2015 was the rate its population grew. That said, not many cities can claim to have done better since 2000. More people moving to Portland gave the city the demand it needed to prosper. According to the U.S. Census Bureau, the number of people residing in Portland at the time increased from 529,121 in 2000 to 594,687 by the end of 2013. Over that period, the population increased 12.0%, enough to make the city the 10th fastest growing city in that time.

Statewide, Oregon’s unemployment rate was the lowest it had been in six years. Unemployment across the whole state dropped from 7.0% to 6.7% at the time. In particular, Portland played a big part in reducing the state’s unemployment rate, as the city boasted a 5.7% unemployment rate. The city had an unemployment rate of 6.5% just one year earlier. As a result, workers found themselves with more job opportunities than before the previous recession.

Despite the strength of Portland’s housing market in 2015, the city remained affordable. By the end of last year, homeowners were accustomed to spending less than 15.0% of their income on monthly mortgage payments. Compared to the rest of the county, the average homeowner typically allocated more than 16 .0% of their income to mortgage payments at the time.


Portland County Map:

Map of Portland neighborhoods

Portland Real Estate Market Summary

The Portland real estate market was at the forefront of the latest recovery. No more than five years ago, real estate in Portland was one of the country’s hottest commodities. However, demand quickly outpaced inventory levels and continued to drive prices higher, so much so that the city experienced a bit of a slowdown about two years ago. While the rest of the country continued to appreciate, the Portland housing market experienced a temporary setback. Today, prices are expected to drop even further in the wake of the Coronavirus. However, the drop is expected to be short-lived. If anything, the disruption has allowed traditional homebuyers and investors to buy. Those who take action sooner rather than later could find the market more hospitable than people realize.

Have you ever wanted to invest in the Portland real estate market? Is Portland a good place to invest in real estate? Please feel free to let us know what you think in the comments below:

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