Portland Real Estate Appreciation to Slow in 2019
Growth in Portland home prices has slowed and most real estate agents agree that we’re now approaching a buyer’s market (we are already in a buyer’s market in some segments, still a seller’s market in others). The official end-of-year numbers aren’t out yet, but the Regional Multiple Listing Service is showing that home prices in Portland increased 5.3% between January and October 2018. (My 2018 prediction was 5.5%!) Hard to get closer than that. My housing market prediction for 2019 is 1.5%. Compare that to the growth rate in 2016, when home prices went up over 10%.
It’s important to remember that the Portland economy, in which the housing market is just one variable, moves in cycles. Good years followed by not-so-good years. Recessions followed by strong growth. Of course, the Portland housing market saw its last “down cycle” in 2009-12 after the financial collapse that reverberated through markets worldwide.
Now the Oregon Office of Economic Analysis is predicting a less dramatic, but still noticeable downturn in the real estate market. They emphasize that not all of the factors that were in play — lax mortgage regulations, high average household debt — before the 2008 bubble burst are in play today. This will look more like a normal “market adjustment”.
Of course, that euphemism is no help to those who were expecting big gains out of their recent Portland home investment and don’t see any in the next couple of years. But the Portland real estate market will be set to take off again after this readjustment, thanks to overall economic health in Oregon and the United States in general. See our article here on how local wages and interests rates will play into this recovery. In fact, for those that are able to purchase a home in the next few years, this could be one of the very best opportunities to buy in Portland for a long time to come.
If investors do shy away from Portland in the short term, it may be possible to score some great deals on a home this winter and play the long game in growing your investment. In the meantime, if you’re renting now, buying a home still makes sense for the simple reason that your monthly payments go toward your own equity and not someone else’s.
What about selling a home in Portland? Although population growth is also slowing down for the city itself, the demand for homes is expected to remain strong throughout the metro area. That’s because population is not the only factor involved in whether or not people want to buy homes — another variable that economists consider is something called “household formation”, or the rate at which people decide to buy a home and settle down. For a large number of millennials now coming of age, that time will be in the next few years.
Stay tuned for our 2019 update on the best time to list your home on the Portland real estate market.
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