Portland, Oregon Homes with ADUs Sell for More per Total Sq. Ft.

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We update this article every year to let you know how much more Portland, Oregon homes with ADUs are selling for $X more per sq. ft. than those without. We keep doing this annual update so we can track the value of adding an ADU to a home over time. Keep reading to find out the latest numbers and see the past years’ reports.

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 select the “Extra Living Quarters” filter from the drop down menu. The results will be a dynamic real estate map of all Portland homes for sale with ADUs or at least with stated 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. You can also just click the map below:

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) completed, 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 total sq. ft., comparing homes with and without ADUs. So the total sq. ft. of the ADU is considered (added in) and contracted against total sq. ft. of properties without. This should give the true value difference between having an ADU or not.

2022 Portland, Oregon ADU Value Report – 8% More

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 total 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.

2023 Portland, Oregon ADU Value Report – 11% More

Taking a three month sample, 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 same three month sample, 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 total sq. ft.

2024 Portland, Oregon ADU Value Report – 4% More

For our report we are using detached homes that were built in 2020 or older (to remove new construction) and were between 2,000 and 4,000 sq. ft. We want to compare apples to apples. Homes that are too small or too big, can drastically swing the price per sq. ft. As a general rule (and per our research to prove it), the smaller a home is, the more it sells for per sq. ft., and the bigger it is, the less it sells for per sq. ft.

In the last six months (from the date of this updated article) 1515 detached homes sold that met the above criteria. Of those homes, 1458 did not sell with an ADU. These 1458 homes took an average of 40 days to sell. They sold for an average price of $742,992. Their were an average sq. ft. size of 2,653, and they sold for an average price per sq. ft. of $280.

In the same six month sample, 57 Portland detached homes meeting the above criteria sold with an ADU. They took an average of 39 days to sell and sold for an average price of $822,445. They were an average size of 2,837 sq. ft. and therefore sold for an average sq. ft. price of $290. This means Portland homes with an ADU sold for 4% more per total sq. ft.

Why was the increase so small in this report compared to the 2022 and 2023 reports (which represent the years 2021 and 2022 respectively). I think it could be because 2023 was a tough year in the Portland real estate market with price drops across the board. Selling highlights like a home with an ADU simply didn’t get the same measure of interest as those highlights might have gotten in previous years. Also, every increasing rules and restrictions on Portland landlords may have damped the desirability of ADU ownership in Portland. We’ll see. Time will tell. Bookmark this article for annual updates.

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 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.”

According to 2020 research by Freddie Mac, homes sold with ADUs across the country saw a 5.2% increase between 2000 and 2019. The study also found that from 2003 to 2019, listed ADU rentals increased by 2.3% and the number of leased rental listings increased by 1.7%. In the end, they identified 1.4 million single-family properties with ADUs in the U.S.

Freddie Mac also found that the Portland metro area had the fastest level of ADU growth. This is a clear indication that some of the city of Portland’s policies favoring ADUS are working. Based on the Freddie Mac survey, Portland saw a 22.3% increase in ADU growth between 2015 and 2018.

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’s RIP zoning law allows most homeowners to put two ADUs on their 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 went 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.

Read more about RIP2.

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 over 20 years, so we’ve seen a lot. The real estate market is ever-evolving and especially so over the past few years. We know the value of ADUs in this market. Give us a call at 503-714-1111 or chat with the bot on this site. We’d love to talk today!

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