2018 Portland Real Estate Market Forecast (1st)
Here is our early 2018 Portland real estate market forecast. We will follow up with our final forecast for the 2018 housing market this coming January. Below are early industry forecasts for housing price increases in 2018.
National Real Estate Market 2018 Prediction:
Corelogic – 5.1% Housing Price Increase
Zillow – 3.2% Housing Price Increase
Portland Real Estate Market 2018 Prediction:
Zillow – 4.4%
My prediction – 5.5%
Five reasons why home prices will increase in Portland in 2018 (but not as much):
At the time of writing this article Portland is experiencing a yearly price increase of around 8.9%. This is down from the previous year (2016) where the price increase was well over 10%. Most analysts predicted a Portland real estate market cooling this year and it did occur. Most analysts are predicting a further cooling in the market in 2018 and it is likely to occur.
- Portland will experience good, but slower population growth. For many years Portland has been a top five moving destination in the country. No longer! According to PSU growth expert Tom Potiowsky, the city of Portland’s growth may quickly slow to national averages over the next few years, or around 1% total annual growth. Population growth in Portland slowed from 2015 to 2016 (around 1.7% growth) and reports for 2017 are expected to be lower. Portland is no longer the fastest growing metro area in Oregon, it is Bend. Regardless of this slower growth pattern, Portland will still likely experience above average population growth in 2018.
- Portland will experience slower job growth. The good news is, Oregon has a very low unemployment rate at the moment, 3.7%. The bad news is, job growth has recently slowed as the area approaches “full employment.”
- New home construction in Portland is still slow. This data is available at Portlandmaps.com. In 2017 the city of Portland proper will have experienced (as it did in 2014-2016) less than half the new home construction the city did in 2006. This looks to continue through 2018. The reason for this is in part a lack of land to put new homes on within the city limits, and is also due in part to the large number of apartment complexes under construction or recently built. This low rate of new home construction will still help demand for single family homes even as the number of available apartments in the city quickly rises.
- California and Washington real estate markets are still strong. Having great neighbors provides excellent stability to the Portland real estate market. Home prices are much higher in CA and WA metro centers and population growth is strong in both states. These exceptional neighbors ensure long term transfer growth (at least at reasonable levels) for population looking for lower home prices and overall cost of living.
- Mortgage rates are still historically low (currently hovering around 4%) and will likely stay there. The threat of much higher mortgage rates in 2017 never occurred. So far, it does not look like there will be any major rate hikes in 2018.
With decent population growth, a good employment rate, low housing construction rates, good neighboring real estate markets, and a continuation of reasonable mortgage rates, the Portland real estate market in 2018 should experience growth, likely a 4% to 8% hike in housing prices. The years of 10% housing price increases are gone and not likely to return anytime soon. However, Portland should have a good real estate market for the foreseeable future. If you are thinking of selling your home, you should know that the Portland real estate market is incredibly seasonal. There are much better and much worse months of the year to sell. Read my article on the best time of the year to sell your home, a full month to month breakdown. If you want to keep in touch with the Portland real estate market, be sure to follow our local Portland top 100 real estate blog in the world.
Our final 2018 Portland housing market forecast is in. Read it here!August 21, 2017