7 Reasons to Buy a House in Portland in 2021
Yes, Portland is a hot seller’s market right now, no question. So why would we encourage you to buy a home in Portland at this particular moment? Well, for one thing, your search for a home may take a while. We just completed a 5 step tip list to buying a home in a seller’s market here. And you deserve that time to find what’s right for you. Just because it’s a seller’s market in Portland right now doesn’t mean it’ll stay that way forever.
So the best thing you can do to ensure you find the right home for you is to start looking as soon as you feel the itch. Today we’ll be looking at 7 reasons to buy a house in Portland in 2021, as well as how to do so. We’ll lay out why buying a home in Portland right now is a good choice, considering rationales both monetary and emotional. Because what is more a combination of reason and emotion than buying a home?
1. Interest Rates Are at Record Lows
It’s not news that interest rates are low; this has been the case for a while now. But signs may be pointing to them rising. In fact, they already have with the change of administration. So now may be the perfect time to lock in a rate that could save you thousands over the course of your mortgage.
According to NerdWallet, the current average interest rate for a mortgage in the Portland area sits at just over 3%, which is higher than the historic lows we saw in 2020. However, when looking at the big picture, it’s still a very low rate. Last year we thought 3.29% was a huge drop, so you’re still looking at a very friendly number. Capitalizing by locking in that rate is a smart move.
2. Owning a Home Comes with Tax Benefits and Incentives
There’s no two ways about it – purchasing a home comes with tax incentives. First time homebuyers in particular have opportunities to make the most of financial programs that incentivize buying a home. But all homeowners will see tax breaks. You can deduct the interest you’ve paid on your mortgage from your income taxes. On top of that, the property taxes are also deductible. So while the fears of hidden costs of home ownership are legitimate, in the long run, the tax system has it in your best interest to buy. And having an experienced agent on your side reduces your risk of hidden costs in other areas.
3. Renting Costs More in the Long Run
Yes, it’s true that rental costs seem to be on the decline since the pandemic. It’s likely that simply fewer people are moving right now. But when you compare the numbers, it just doesn’t make sense to keep paying rent once you’re ready to take the step of buying a home.
According to ApartmentList, the median rent price for a 3 bedroom apartment in Portland right now is $1,639. We took the median home value of Portland homes – about $500,000 in Zillow’s estimate, and took a look at what a 3 bedroom house would likely cost. The average came out to about a $1,500 mortgage payment per month, assuming a 30 year mortgage and a 20% down payment. Keep in mind, this scale only includes the median – excluding many homes that would be more in a first time home buyer’s range. Plus, in many cases, you’ll be gaining land.
As painful as it can be to put so much money into interest, what you’re doing is putting your funds towards ownership. Which is a far cry from throwing money into rent indefinitely, and getting nothing back from it other than a bed to crash in. Home equity can also open doors that you’d never get while renting.
4. Buying a Home in Portland Will Pay Off
All signs point to home values in Portland continuing to increase. Fidelity National Title’s information shows that the median list price for homes in Portland is up by 12.65% from this time last year. If you take into account the past 2 years, you’re looking at an increase of 19.85%. This month has seen the first stagnation of median list price since this time last year.
Now this is likely a temporary plateau (remember the historic snow storm and power outages?). Consistent Portland real estate market history tells us that housing prices typically rise all spring and then plateau again in late summer or early fall.
5. Inventory is Likely to Spike, So Get in on the Ground Floor
On that note, let’s talk about one of the biggest real estate stories of 2021, the lack of inventory. We believe in delayed inventory, meaning that part of what’s driving Portland’s lack of inventory in the real estate market is related to the pandemic discouraging folks from listing their homes. If this proves true, the Portland real estate market may soon be flooded with new listings as more people are vaccinated and restrictions lift (soon as in this summer, not soon as in next week).
So why start looking now, if we think the market might be more buyer friendly later in the year? Well, buying a home may take months. Not just because of bidding wars or red tape. It can take time for buyers to figure out what’s out there on the market, figure out what they want from that market, and figure out what is in their best interest. So the best thing you can do is get in on the ground floor. Understand the Portland real estate market now, using an experienced agent, and you’ll be getting in earlier than other buyers regardless of when the market shifts. When and if it does, you’ll be ready.
6. New ADU Legislation Means More Possibilities for Portland Homeowners
Recent legislation in Portland allows owners a lot more flexibility when it comes to ADUs – accessory dwelling units. ADUs can basically be put to three purposes: housing extended family or friends, renting by term, or using as a daily rental through a service such as Airbnb. New rules say that owners may have not one but two licensed ADUs on any one Portland property. This gives owners a lot more flexibility when it comes to how to use their property. For more information on ADUs in Portland, see our guide for 2021. Fun fact, did you know that lenders will often let you use potential rental income to purchase your next home? Find someone you want to rent to, agree to basic terms, and then go house shopping!
7. Quality of Life Is Paramount in Portland
Finally, let’s not discount that Portland is just a fantastic city in which to invest. With a variety of amazing neighborhoods, a great school system, and some of the most beautiful parks in the country, there’s no doubt that Portland is a desirable city. So why not go all in and buy – for all the reasons listed above and more?
And Portland is a place that values quality of life. For example, a simple search into homes in Portland with garages will show how much Portland has to offer. It’s a city that wants to foster your hobbies – gardening, woodworking, music-making, you name it. And the Portland real estate market reflects that. While renting will always produce limitations, you might be surprised how affordable it can be to find the space for your dream projects by buying a home.
Whenever you’re ready to make the leap, we’re here to help. Our top 1% buyers agents are ready to steer you through the market towards the best Portland home for you.March 15, 2021