Portland Homes with ADUs Sell for 11% More per Sq. Ft. 2023 Report
Have you toyed with the idea of putting an ADU on your property or buying a Portland home with an already-existing ADU? More and more, owning a home with extra living quarters is becoming a desire for many. Having extra space will allow you to house extended family or generate consistent rental income. It will also increase your home’s future resale potential. Portland’s housing profile is changing, and it’s important for all Portland home owners to stay on top of all the recent trends.
To top it all off, Portland Homes with ADUS sell for more. Read on to learn more about the benefits of owning a home with an ADU.
Find a Home for Sale with an ADU in Portland, it’s Easy!
If you’d rather buy a home with an ADU than build one, head to PortlandHomesForSale.com. There, you can refine a search that will take you directly to all properties for sale with ADUs in the Portland metro area. Simply go to the site and do a general “Portland, OR” search. Once inside, select “Single Family” (rather than “All”) in the top navigation bar. Then, select “Extra Living Quarters” from the drop down menu on the right. The results will be a dynamic real estate map of all Portland homes for sale with ADUs or at least ADU potential.
You can refine your search even more by setting minimum and maximum price ranges, number of bedrooms and bathrooms, square footage, price per square foot, days on the market, and much, much more.
Add an ADU to Your Existing Home, it’s Easier than it Used to Be
If you’re happy with your current home and have a lot size that can accommodate an ADU (or two) new regulations make it easier than ever before. With the second phase of the Portland Infill Project (RIP 2) underway, homeowners across Portland proper can start rethinking how to utilize their properties and whether they want to become landlords.
The new regulations have eased up on parking requirements and restrictions around how many ADUs a single property can have, among other guidelines.
How Much Will an ADU Increase the Value of Your Home?
According to the National Associate of Realtors (NAR), having one ADU on your property will increase the value of your home by 35%. This isn’t great reporting though, as it is simply comparing homes with ADUs vs. homes without. Certainly, if someone bothers to add an ADU, it is likely the existing property is already more valuable than average for the local market. Also, adding an ADU typically increases the finished sq. ft. of a home, which increases the price. A better way to determine value is focus on sold home prices per total sq. ft., comparing homes with and without ADUs.
In our 2022 Portland, Oregon ADU report, we found that Portland homes with ADUS (and we had a much larger subject pool we worked with than the journal below), sold for 8% more per sq. ft. than those without an ADU.
Additional data published in a peer reviewed article from 2012 in the Appraisal Journal, cites a study of fourteen properties with ADUs in Portland using an income capitalization approach. Sales prices on these homes ranged from 7.2% to 9.8% higher, on average, than homes without ADUs. Pretty comparable to our 2022 report.
Homes with ADUS in Portland, Oregon are Now Selling for 11% More per Sq. Ft.
In the last three months of the date of this article, 909 Portland, Oregon detached homes built in the year 2019 or less (removing new construction) with over 2,000 total sq. ft. sold without an ADU. They sold for an average price of $778,692 and took an average of 36 days on the market to sell. They had an average sq. ft. total of 2769, and therefore sold for an average of $281 per sq. ft.
In the last three months of the date of this article, 34 Portland, Oregon detached homes built in the year 2019 or less (removing new construction) with over 2,000 total sq. ft. sold with an ADU. They sold for an average of $1,067,820 and took an average of 76 days to sell. They had an average sq. ft. total of 3376, and therefore sold for an average of $316 per sq. ft. This means Portland homes with an ADU sold for 11% more per sq. ft.
Is the ADU Craze Portland-Specific? No… It’s Nationwide
While the pandemic was a hardship, it also shined a bright light on one of this country’s biggest issues: the lack of affordable housing. Based on the NAR’s 2021 State and Local Policy Strategies to Advance Housing Affordability Report, the U.S. is short 5.5-6.8 million necessary housing units. As David Bank, senior vice president for Rosen Consulting Group and a co-author of the NAR report, says, “You need a federal role, a state role and a local role. You’re not going to tackle that kind of problem without building all types: market-rate and affordable, smaller housing on smaller lots, small multifamily and a full range of larger multifamily.”
The Biden administration has stepped up and released a Housing Supply Action Plan intended to not just ease housing costs over time, but to also make financing for ADU projects easier for property owners, thus creating more affordable housing for lower-income earners, allowing them to live in neighborhoods that would have previously been out of their reach.
Portland was mentioned in the report, giving a nod to the second phase of the Residential Infill Project—or RIP2—which took effect on August 1, 2022, making it legal to have up to four units on most residential lots, with as many as six, if dwellings that fit “affordable housing” criteria are included.
How is Portland Responding to the New ADU Laws?
In June, 2022 Portland hosted an ADU tour to give property owners a firsthand look at how to incorporate an accessory dwelling to their yards, and how to generate additional income. Depending on your lot size and layout, you could, potentially, become a landlord of one or more units.
Garages, attics, and basements are a great low-cost way to move yourself into the ADU world. With the “container” for the ADU already in existence, you’ll save plenty from not needing to excavate and build a shell. If you have the space and budget, you can get creative with a variety of standalone ADUs and even cottage clusters—a small grouping of cottages that surround a garden area or courtyard.
What are the New ADU Laws in Portland?
To begin with, Portland instituted the first phase of the RIP in August, 2020, which, among other things, made it legal to put two units on your property. (This is on the heels of Oregon making it legal to have an ADU, state-wide.) Duplex owners gained the right to add to their properties, as well. And basement ADUs got a bump up in allowable square footage from 800 to 1,000.
Other changes and allowances included: two street-facing entrances (rather than only one) and no need to reserve any driveway or garage space. Get more information about wheelchair accessibility and lot requirements for ADUs in Portland.
RIP2 goes even further to
- Permit attached houses, cottage clusters, and additional ADUs, like duplexes, triplexes, fourplexes on all R10 and R20 zoned buildable lots (check out our Portland ADU guides).
- Permit cottage clusters and attached houses in R2.5, R5, and R7 zones to elevate middle housing possibilities already approved in the first phase of the RIP.
- Make cottage clusters and attached houses possible in all zones with new, more relaxed rules.
- Maintain an awareness of and to protect environmentally fragile areas by limiting building in natural hazard areas, per state requirements.
- Simplify the land division process to expedite building for homeowners.
Looking for a Home with an ADU or Want to Add One to Your Existing Property?
Our top 1% seller’s agents and top 1% buyer’s agents have been working in the Portland metro area for 20 years, so we’ve seen a lot. The real estate market is ever-evolving and especially so over the past few years. Give us a call today or chat with the bot on this site. We look forward to helping you with your next real estate transaction.