Home prices for Oregon real estate have increased significantly in the past year, and the 2016 housing market looks to continue that trend. Homes are spending fewer and fewer days on the market. Why? Nestled between Washington and California, Oregon proceeds to grow as Californians are forced to leave because they can no longer afford housing and Washington residents look for an alternative to the expensive Seattle market. Popularity in the Oregon real estate market owes a lot to the continued soaring influx of residents that the city of Portland brings into the state.
Looking at online realtor Zillow Portland Oregon has the highest home values and home sale prices in the state. The city continues to modernize and evolve in order to meet the demands of cultural needs and habits of their growing population. According to Trulia Portland public school districts overwhelmingly and consistently perform above average on a national level. Downtown revitalization projects keep the city feeling energetic, youthful, and ready for whatever new trends need to be addressed. This is a reason that Portland is a major draw for college graduates. But if there is an area that Portland is lacking in it’s in the housing availability, or lack thereof. And this will keep housing costs going up.
Compare This Year’s Market Report to the 2015 Oregon Real Estate and Housing Market
“There is more pressure on new listings than we had last winter, and a higher number of homes are selling within the first 30 days,” says CEO of John L. Scot Real Estate Lennox Scott. “This is setting up the stage for a frenzy market in the spring of 2016. Even if interest rates go up slightly, buyer demand and low inventory still push prices up.” A search on Craigslist Portland shows 1-bedroom apartments renting for a minimum of $1,000. This has caused the Portland City Council and Multnomah County Board of Commissioners to declare housing states of emergencies. Areas outside of Portland are being driven up exponentially as well. In Lake Oswego and West Linn the median home price is around $450K. Likewise, the Tigard, Tualatin, Sherwood, and Wilsonville markets are all above $362K. But there is still desirable Oregon real estate not far outside the Portland city limits that remain affordable. Median prices in Beaverton and Aloha are below $280K, and in Gresham, Troutdale, Sandy, Corbett, and Fairview prices are still below $260K.
According to the moving company, United Van Lines, Oregon was the most popular state to move to last year. In fact, it has been the top-moving destination 3 years running as the number of residents coming into Oregon has increased 10% in the last 6 years. One positive for the state is that it’s economy has been able to sustain the growing population. The state’s labor market saw gains in 2015 that were the best in 20 years and translates into higher wage gains for the average worker. This is due to broad based increases throughout all the major industries and regions of the state and not just the growth in the state’s growing tech field.
Like Portland, Oregon’s biggest problem is its lack of housing. New supply has not kept up with demand and this applies to rentals as well as homes for sale. Because of this supply/demand issue prices have risen dramatically and unaffordability is becoming a larger risk. New construction is expected to pick up in the near future which will help to alleviate price increases. But a solution must be implemented soon. Home prices and rental costs increasing faster than income or wages for the average household is a major concern.
This beautiful home is currently for sale in the Portland real estate market
Influencing Factors for the 2016 Oregon Housing Market
- Median sale prices in the state are $262,000. This marks an 11% increase in the past year. It is also $70K more than the median sale price was four years ago in February 2012.
- With the heavy flow of homeowners, foreclosures have been and will continue to be an issue in the state. Around 4.3 houses are foreclosed per 10,000. The national average is 2.7.
- Housing availability continues to be a problem for Oregon real estate. Rental prices in Oregon are around $1,533 on average. This is higher than the national mark of $1,380.
- Job growth has been positive in recent years. Oregon added 57,000 jobs last year, a 3.3% increase over 2014.
- The drought that impacted the West Coast and Southwestern United States is concerning. Drought conditions reached Oregon and were felt in the agriculture industry. The severity and duration of the drought’s effects on the upcoming year is unknown but they remain a risk to the state’s rural economies.
Best Places to Live in the Oregon Real Estate Market
The Portland real estate market finished 2015 with a bang, capping off a year of record-breaking December sales numbers. The 2,700 closed home sales were the highest recorded totals since 1992 and were a 21% increase over the previous December. Even the inventory was at its lowest in 16 years at 1.2 months. This number estimates how long it would take for all homes currently on the market to sell at their current listing price. “In a healthy balanced market you typically see 4 to 6 months’ supply, so this illustrates how little there is for sale right now,” says chief economist for Windermere Real Estate Matthew Gardner. The current demand for homes is driving up prices closer to the levels seen before the recession. The average sale price last year rose nearly 7% from $333,000 to $354,000.
So with high prices and low demand why is Portland still a great place to live? The beach is 90 minutes to the west. To the east are the mountains. The food and wine scene is one of the best in the country. The weather is great. And the economy is constantly strong because of tourism and a growing tech sector. People want to live here for a reason, and with demand comes high prices.
It’s not a surprise that the success of the Portland market is spilling over into surrounding regions and this is true for the Oregon City real estate market. Located on the southeast fringe of Portland the market for Oregon City is comparable in average sales price at around $318,000. However, just across the Clackamas River from Oregon City is Gladstone. Gladstone real estate is about $40,000 less than Oregon City and has been a draw for Portland residents who want to spend less while still enjoying the benefits that the area has to offer.
The most popular areas of Portland may be the southeast and West, but some great areas for people looking to be close to the city are Aloha and Beaverton. Home values in Aloha have risen nearly 14% in the past year and forecasts see this trend continuing, albeit at a slower clip. The median sale price as of January was $267,000, and the average rental goes for $1,584. Beaverton has seen a similar increase in home values percentage wise, but the median sales price is higher at $289,000. Rentals are only slightly higher at $1,662. Both Aloha and Beaverton cost less to buy or rent in than the Portland metro area.
Further south of Beaverton and Aloha, Salem real estate is also on the rise. And with a median sales price of $206,000 and a rental price that matches the national average it’s an affordable alternative to some of the higher priced neighboring markets. Salem’s largest employer is the state government. But because of several higher college facilities the capital offers many other employment opportunities including healthcare, transit, and education. Salem is also a strong agriculture hub.
On the southern end of the Oregon real estate market are the cities of Eugene and Bend. These two cities are separated by the Willamette National Forest, but what they have in common is that they’re little known havens for great real estate. Eugene real estate has not increased by double digit percentages in home values like much of the state has but it still saw an increase last year of 6.5%. Homes in the Eugene market are selling at an average price of $234,000, and the rental costs in the city are below the state and national averages.
On the other hand, Bend real estate is not priced as low as Eugene and it’s also seen a higher rate of home sales in a shorter period of time. Homes are selling for around $339K, a 13% increase in the past year. Rentals are also beginning to exceed supply, driving rental unit costs above state and national norms. Bend has become a outdoor recreational and arts center that has been drawing in new residents in recent years.
Check out the Neighboring Competitors to the Oregon Real Estate Market:
- 2016 California Housing Market
- 2016 Washington Housing Market
- 2016 Nevada Housing Market
- 2016 Idaho Housing Market