Portland is a Top Ten Real Estate Market in 2016

Zillow released a report last week that squeezed Portland into the #10 spot on the list of what it predicts will be the top-ten hottest housing markets in the coming year.

The report takes into account unemployment, income growth and home values, so it’s a little different than the RMLS report we usually look at, which only provides real estate data. When Zillow looked in on Portland, it found that while unemployment in the metro area is relatively high, income growth is positive and home values are climbing. All of this adds up to a hot real estate market — but you don’t have to take Zillow’s word for it.

RMLS Reveals Inventory Shocker

In the last part of 2015, nobody would have been impressed if we’d predicted that Portland homes would be scarce going into the new year. However, when we opened up our RMLS report for December, there was a bit of a jaw-dropper in the “inventory” column: 1.2 months! We haven’t seen inventory this low since 1999 — in any month, leave alone the fact that it’s winter and holiday season.

The rest of the RMLS report also showed a booming real estate market for Portland. The number of homes sold set another record at 2,710. Overall, we saw 20 percent more home sales in 2015 than in 2014. With all that demand, home values were sure to rise, and rise they did — about 6.5% year-over-year for the average home value, and the median home value rose almost 8%. At the median, homes that sold for $285,500 in 2014 sold for $308,000 in 2015.

Southeast Busy; North Gaining

That’s just the sales price for Portland overall. For a more accurate picture, it helps to dig in deep with the RMLS figures for specific neighborhoods. For example, the average home price in Southeast Portland was nearly $370,000 in December 2015. With 370 closed sales, it saw more activity than any other part of the metro area, and the average sales price rose 9% (RMLS figures). The winner for sales price gains in 2015 was North Portland, where the price rose 15% over the last year.

Portland’s Vital Economy

What’s causing all of these gains? Portland’s real estate market is strongly tied to the strength of its economy. In good economic times, people buy and sell more often, and inventory stays low while home values climb. That’s certainly what’s happening now, but ask why it’s happening and you’ll get a different answer from economists.

Retirees with Google Glasses

While it would be hard to pinpoint what exactly is driving Portland’s strong economic growth in the past few years, there are certainly some strong contributing factors. Heard the term “Silicon Forest” yet? Portland’s it — tech is a growing field, and companies old and new added jobs in 2015. Intel is still a top employer, and 2015 brought Google, Airbnb and others into the mix of 1,200 tech-based companies that operate here.

In addition, Portland has long been seen as a great place to retire, and now that the baby-boom population is reaching that age, they’re coming to Portland in droves. Retirement brings disposable income to be spent on culture, the arts, in retail establishments and eateries across the cities. You can bet they’re looking for comfortably sized homes and condos in good neighborhoods, too!

Gainfully Employed Like It’s 1999

While Portland’s unemployment declined for most of 2015, at last report it was still at 4.4%. That’s high compared to Seattle and San Francisco, but below the US average of 5.5%. There’s more good news on this front, according to the Portland Tribune. An article posted on January 19th, 2016 quoted state economist Christian Kaylor. According to Kaylor, there was a 3.3% increase in the number of jobs available this past year, for a total of 152,000 new jobs added in the eight years since the recession. “It’s the first time since 1999 that the Portland area has seen an annual job growth rate over 3 percent,” he said.

Portlanders Get 13% Raise

In a healthy economy, job growth should be matched by income growth. Even if there’s a net gain in jobs over a given period, if they don’t pay well, the overall income of the community goes down. That’s not Portland — the Portland Tribune also reported that the average income in Portland has gone up 13% over the past ten years. That makes Portland the 10th best city in the US for full-time worker salaries. All of those high-paying tech jobs have driven the average salary here to $65,634, though growth in professional services, healthcare and social assistance jobs have also contributed.

Time To Leverage Your Portland Real Estate Power

The bottom line is that with gains in jobs and incomes, an influx of new residents and an expansion of what was previously considered to be the “urban core” through public transit, Portland is a very hot place for real estate right now. People are moving to Portland for good paying jobs and finding that homes here are very affordable compared to Seattle and San Francisco.

Meanwhile, home owners already in Portland are calling their real estate agents to find out how they can benefit from increased home values and super low inventory. They may choose to leverage their home equity to buy a rental home in Portland. Others are “moving up” into better homes after finding that their home is worth more now than when they bought it, even if it was just a few years ago.

Buyers, on the other hand, need to keep a close eye on the market and act quickly when something they love comes up. It may not be there tomorrow!

Take The Plunge

Are you ready to buy or sell your home in Portland? It takes a professional to navigate this top-ten US real estate market. We’re ready to help you out with fast, friendly service, in-depth research and market analysis, and expert advice. Contact your Portland real estate agent team today!