2018 Portland Real Estate Market Forecast (final)
Here is our final Portland real estate market forecast. Below are the real estate industry forecasts for housing price increases in 2018.
6 National Real Estate Market 2018 Predictions:
- 3.2% housing price increase – Realtor.com
- 3.2% housing price increase – Zillow
- 4.0% housing price increase – VeroForecast
- 4.6% housing price increase – Federal Housing Finance Agency
- 4.7% housing price increase – CoreLogic
- 4.9% housing price increase – FreddieMac
4 Portland Real Estate Market 2018 Predictions:
- 3.7% housing price increase – Zillow.com
- 4.98% housing price increase – Realtor.com
- 5.5% housing price increase – My prediction
- 8.3% housing price increase – VeroForecast
5 reasons why Portland housing prices will increase in 2018:
- Portland’s population growth will continue to slow but is higher than average. Portland was the number 2 moved to destination in 2016 and then dropped to the number 7 moved to destination in 2017. Portland is expected to drop further still, perhaps even out of the top 25 moved to destinations in the country, but will remain above average in overall population growth.
- New home construction in Portland continues to slow and as a result, Portland’s housing low-inventory problems are worse than much of the rest of the country. This low-housing inventory keeps prices moving up. Portlandmaps.com reports only 657 new home construction permits pulled in 2017 in contrast with 676 in 2016, 689 in 2015, 723 in 2014 – and get this 1,319 in 2005. In 2017 there were roughly half the new construction homes added to the Portland housing market as there were in 2005. There are a number of reasons for this. See my article for this here.
- Exceptional neighbors. Seattle’s average home price is $463,800 and San Francisco’s average home price is $893,100 while Portland’s average home price is $370,700. That’s nearly $100,000 less than Seattle’s average price and $500,000 less than San Francisco’s. As long as Portland’s average price is significantly less than the major metro areas in Washington and California, our local real estate market will continue to benefit.
- Portland’s unemployment rate is low, 3.7%, while the national average is 4.1%. As we wrote about before, Portland will experience slower job growth than in recent years. This is because Portland already has a very low unemployment rate, so low there is very little room to improve. New jobs often equates to more first time home buyers, but there will be very few new jobs. On the other hand, many Portlanders will be able to afford a home if they are currently renting. Overall, the Portland area housing market will be better than the national market due to a strong employment rate.
- Mortgage rates will rise, but not by much. The Mortgage Bankers Association predictions mortgage rates could increase to 4.9% before the end of 2018, slowly creeping up throughout the year but not increasing past 5%. Time will tell! Mortgage rates were predicted to rise over 5% in 2017 – and that never happened. Either way, mortgage rates will remain low overall and will not be a negative factor in the Portland real estate market.
With a strong economy, increased population, low new home construction, low mortgage rates, and good neighboring real estate markets, we can expect the Portland housing market to continue to be strong for the near future. Portland’s insane years of over 10% housing price increases are gone and perhaps never to return. I’m all for a strong, stable market. If you are thinking of buying or selling a home in Portland, you should know that the Portland real estate market is incredibly seasonal. There is a best time of the year to buy and a best time to sell your home. If you want to stay informed on the Portland housing market, be sure to follow our top 100 real estate blog in the world.