The 2015 housing market has seen record highs in Oregon. The market was so strong that realtors’ main complaints were that they had difficulty in finding contractors to perform repairs on their listings, and there was a shortage in appraisers available to complete appraisal reports. Due to these difficulties many closing deadline extensions had to be negotiated in order to keep deals going forward. But with all of the problems that the real estate market has had in the past couple of years few will complain about being busy.
According to the Regional Multiple Listing Service (RMLS) there is a 1.7-month backlog for residential housing inventory. That is a great number and the backlog has not exceeded 4 months since the beginning of 2014. This means that as homes go on the market buyers are quick to view the home and make an offer. Average sale prices are 6% higher year-to-date, and median sale prices increased 7%. And if you’re hoping for the stranglehold on the Oregon housing market inventory to ease up, you might be in for some disappointment. “If you think the inventory’s tight right now… over the winter, it gets even more scarce,” says Lennox Scott, chairman at John L. Scott Real Estate. “There’s just not a big backlog of homes available. And normally we build up a little inventory during the later summer to take us through the winter time. But this year, we’re virtually sold out.”
Portland real estate in particular saw strong numbers through the summer with a total of 3,452 closing sales in July alone. This is nearly 30% higher than July 2014. Home appreciation rates increased in north and southeast Portland by 12.3% and 10.4%, respectively. Many new listings would garner twenty or more showings in the first 48 hours, resulting in several competing offers for one listing. While this would seem that sellers have the advantage, buyers in the area are aware of what the fair asking value for homes are. As such, sellers looking to take advantage of the hot market by pricing their homes too high can expect little showing traffic and a longer time listed on the market. And the demand stretches past the city borders. Even though Portland’s metro areas are hot its suburbs have the highest median sales. For instance, West Linn OR real estate and the Lake Oswego area have median prices of $464,000. Newly constructed homes in these neighborhoods are selling for $1 million or more.
So why are people moving to Portland? The same reason that people are moving to Oregon. Not only is this a very healthy real estate market. The region also boasts a hip-centric lifestyle. The state’s cities are full of personality, and people love Oregon for its world-class outdoor activities. Oregon is a very sought after market, and if you’re thinking of jumping in, be ready to compete with a backlog of buyers. “This will continue to keep up at an extremely low level of inventory well into next year and we see no relief in the current sellers’ market,” says Israel Hill, a managing broker in John L. Scott’s Northeast Portland office.
Influencing Factors for the 2015 Oregon Housing Market
- According to Zillow Oregon has a home value index of $259,400. This represents a 9.5% increase in the past year, and housing market predictions forecast that it will increase another 4.3% by this time in 2016.
- One negative on the Oregon housing market is that they have a higher foreclosure rate than the national average. In Oregon 5.1 homes per 10,000 become foreclosed. The national value is 3.3 per 10,000. Likewise, Oregon also has a higher percentage of delinquent mortgages (5%) than the national average (4.8%).
- On the Market Health Index Oregon is rated at 6.6 out of 10. The Market Health Index is based on up to 10 metrics including past/projected home values, prevalence of foreclosures, foreclosure re-sales, negative equity/delinquency, and the rate in which homes are selling.
- Homes on Zillow spend an average of 70 days listed.
- According to rental statistics on sites such as Zillow and Craigslist Oregon averages a rental price of $1,508. This is higher than the national average of $1,382.
Best Places to Live in Oregon
As stated earlier there is no hotter market in the state than Portland.
Currently being reported on Trulia Portland has an average listing price of $460,339 for the week ending November 18, and the median sales price was $329,000 between August and November of this year. Leading into the winter Portland has posted 2,996 pending sales from August through October. These are the strongest numbers in a decade. This is following a July that saw all-time records for closed sales, and continues what has been a market of increasing home values and low vacancy rates. And this doesn’t look to change. “When we focus on the greater Portland metro area we see a similar picture of low inventory and prices escalating,” says Matthew Gardner, chief economist at Windermere Real Estate. “I would suggest that demand will continue to exceed supply and I don’t not anticipate that we will see any significant increases in inventory level any time in the foreseeable future.”
And this sentiment is confirmed on almost all real estate websites other than Trulia. Reported on Zillow Portland OR has a Home Value Index of $336,300. This is a 13.5% increase from last year and Zillow forecasts that it will increase another 5.7% increase in the next year. This is also nearly a $100,000 increase from only 4 years ago. Today this market is one of the healthiest not only in the state, but also in the country.
And like the rest of the Oregon housing market, don’t expect the winter to slow down the market in Portland. “Yes home sales will be lower during the winter, but as evidenced by the steady increases over 2014, the market continues to be hot,” says Lennox Scott. “ The really big story is just ahead right after the first of the year… be prepared for another vigorous market next spring.”
For those looking to stay close to Portland but not within the metro limits they should look to the Beaverton OR real estate to the west of the city. But just because Beaverton is not in the heart of Portland, the housing market looks very similar. The median home value is $300,100, and the average rental price is $1,653, just $31 less than that of Portland’s rental price averages. But with its close proximity to Portland and its small size, Beaverton is able to make itself a desirable location by being a small city with the big city perks. Named by Money Magazine as one of the 100 “Best Places to Live” in 2010, Beaverton has a strong economy due to the large number of corporations and industries that call the city home.
Oregon City real estate also lies on the outskirts of Portland, just across the Willamette River. Like Beaverton, Oregon City also has a hot and expensive housing market similar to Portland. So in order to compete with Portland, Oregon City must provide all of the accouterments of the big city in a smaller package. Once dominated by the forest industry and paper mills, today Oregon City has reinvented itself into a technology and manufacturing hub. This has enabled the city to enjoy economic stability. To go with the strong job market Oregon City also houses 22 parks and a great public school system, making it a great place for families.
An hour drive south of Portland lies the Salem OR real estate. Making the drive is worth it as the Home Value Index is only $195,200, about $140,000 less than Portland. As the capital of Oregon it’s not surprising that the largest employer in the city is the state government. But the city is also a hub for farming communities and is a major food-processing center. And having 4 post secondary schools in its borders is a plus as well. This enables Salem to keep a rotation of youth constantly infusing the city with diverse culture and arts. Salem is able to walk the line between country living and city life.
And if you’re still willing to go even further down south from Portland the Eugene real estate is a real gem of western Oregon. With a Home Value Index of $237,300 it is a little more expensive than Salem, but still well below that of Portland and its surrounding suburbs. Home to the University of Oregon, Eugene is well known for its serene setting and recreational opportunities. Today Eugene is viewed as a place for people with alternative ideas and high environmental consciousness.