10 Reasons to Buy a Portland, Oregon Home in 2023
If there’s something I’ve learned in my 20 years as a Portland Realtor, it’s that conditions are never perfect for buying a home, though there are certainly times that are more ideal, but the decision to invest in a home is one of the most worthwhile decisions you can make. Homeownership can enhance your life in many ways, and there are excellent reasons to choose a home in Portland, Oregon specifically. If you are unsure or considering taking the leap toward homeownership, here is a list of ten reasons why you can feel confident about buying a home in Portland this year.
1. Portland Housing Prices are Rising Slowly
According to a report from RMLS, the average home sale price increased by 5.9% in 2022 due to prices rising over 10% in the first half of 2022 and then dropping in the second half of that year. Prices continued to drop in the first few months of 2023, but have since leveled out and are starting to increase slightly.
Our 2023 forecast for Portland has prices declining slightly (expecting another drop this fall) in the city proper, but rising in every suburb around Portland. We expect prices to rebound again in the spring of 2024 – which will be good news for homeowners. There are several predictors that indicate Portland homes will only continue to appreciate in value: low inventory, a lack of new housing construction, and high employment.
2. Mortgage Rates are not as High as They Appear
Though mortgage rates have continued to increase, their starting point was the lowest rate in recent history in 2021 – 2.74% for a 30-year fixed mortgage – to their current average of 6.39%. This is still a much lower rate than the average of over 8% in the late 1990s and early 2000s – before that, it had reached over 10%.
Interest rate fluctuations over the past twelve months are represented on the graph below from Freddie Mac, and economists expect rates to fall even lower by the end of 2023. The mortgage rate prediction from Bankrate is a drop to 5.25%, putting homeownership even further within reach.
3. Oregon’s Unemployment is Decreasing
According to the State of Oregon Employment Department, the already low unemployment rate decreased by 0.3% in March 2023 and remains low overall.
Because more Oregonians are employed and their incomes are rising faster than the rest of the country’s, buying a home is a much more feasible prospect.
4. Portland Rents are Skyrocketing
The fact alone that rental rates in Portland are exceedingly high – currently a median of $2,295 while Oregon’s median monthly mortgage payment is $1,835 – makes buying vs. renting the logical conclusion. Homeownership does come with other costs, such as taxes, mortgage and homeowner’s insurance and possibly HOA fees, but these are paid up front or folded into the monthly payment. Renting also involves additional costs when you factor in the two-month deposit and extra fees for pets or garage space. And when it comes to the initial downpayment in buying a home, financial assistance options do exist. We’ve put together a comprehensive resource to help you explore your options.
5. Portland is one of the Best Places to Live on the West Coast
The metro around Portland, Oregon is simply a great place to live, with proximity to both the mountains and the coast, a top-notch food scene backed by world-class chefs, and a climate that produces some of the most high-quality produce in the nation, as evidenced by Oregon’s world-famous berries and renowned wine growing region. The U.S. News & World Report’s 2022-2023 list of Best Large Cities to Live in the U.S ranked Portland #22 out of the 150 metro areas it analyzed, pointing to these attractions and more, like expansive Forest Park, the craft beer and coffee scene, and our efficient mass transit system that allows Portlanders to get from one place to the next without the need for a car.
Portland culture revolves around individual expression and creativity and concern for the environment, and is supportive of local businesses, which continues to make it an attractive place to own a home for like-minded individuals from all parts of the country and even the world.
6. Homeownership in Portland Can Generate Additional Income
Because more recent infill provisions allow for two ADUs on a single property, now with even fewer restrictions, it is easier than ever to earn rental income from your home. And an ADU has the added financial benefit of increasing the value of your home: our most recent analysis revealed that Portland homes with an ADU sold for 11% more than similar homes in the metro area. To learn more about the possibilities of building and owning ADUs in Portland, check out our ADU guide.
7. Portland is Multi-Modal with Excellent Mass Transportation Options
In 2021 Portland was ranked ninth in the nation (tied with Minneapolis) for top mass transit systems by Metromile. Trimet’s 80+ bus lines employ almost 700 buses that transport Portlanders across the city and to surrounding suburbs, while its MAX Light Rail train connects Portland’s city center to the Portland International Airport to the north, Milwaukie to the south, Gresham to the east and Hillsboro to the west. The streetcar system consists of three loops centered around downtown, two of which carry travelers to either side of the river. Many bus lines connect with MAX Light Rail, Portland Streetcar, WES Commuter Rail, and even the Portland Aerial Tram.
Last year Portland was ranked the top most bike-friendly city in the U.S., with locals who are four times more likely to commute via bicycle, widely accessible bike share stations, and the most bike shops per capita than any other city on the list. Finally, the Safe Routes to Schools measure has provided funding for over 1,200 projects across the city that connect schools with safe walking and bicycling paths for children.
8. Portland is Home to Highly Ranked Schools
Some of the nation’s most highly ranked schools can be found in many of Portland’s neighborhoods. To learn about some of the wonderful neighborhoods where these schools are located, check out the Top 10 Portland Neighborhoods in 2023. If you want to investigate Portland schools further, Great Schools is an excellent resource that ranks schools according to useful criteria like equity and student progress.
9. Portland is Not Likely to Experience a Real Estate Market Crash
An unexpected housing market crash may be a concern for potential homebuyers, but we are here to put your mind at ease. There are actually many factors that can be reliable predictors of an impending housing crash. We’ve assessed these and can predict with a fair amount of certainty that there are no strong indicators of a crash in 2023.
10. Buying a Home in Portland Provides Financial Advantages
Paying a mortgage means building equity, and owning a home is one of the greatest financial investments many people will make in their lifetimes. The same cannot be said for paying rent, which goes directly to a landlord and offers zero financial return.
Homeownership provides benefits beyond a place to live: for one thing, it increases your overall net worth. An article on CNBC stated that in 2019, U.S. homeowners had a median net worth of $255,000 compared to renters at just $6,300 – making the net worth of homeowners forty times higher. And the equity you are building becomes a financial resource you can borrow against to pay off higher-interest debt or utilize for emergencies and home renovations. Yet another financial benefit for homeowners is the ability to claim not only your mortgage interest on your income taxes, but also your property tax.
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Thinking of Buying a Home in Portland?
Whether you are looking to buy a home in Portland for the first time or are looking to move to a new neighborhood, our experienced top 1% Portland buyer’s team would be happy to assist you. We have 20 years of experience working on behalf of buyers in the Portland Metro area and would love to be a part of your success story. Chat with the bot on this site or give us a call at 503-773-0000 today!May 1, 2023