Portland Real Estate Nearly Stronger than Pre-Recession

Article thumbnail

Federal Reserve policy makers met last month to decide whether to raise the federal interest rate, and their decision to keep it at the near-zero level reverberated through the real estate industry. The rate fell six years ago in response to the crash in the housing market, and the extended period of low interest has boosted home prices by encouraging more people to buy homes.

The Portland housing market is a great example of that housing recovery. Looking at the RMLS report for September, the numbers are close to what we saw before the housing crash of 2008 and subsequent recession (which hit Portland real estate market prices around 2011-12). Although September is always a month of cooling after a hot summer real estate market, all numbers are ahead of what we typically see in September. With over 3,000 closed sales, we are up a whopping 27% from the same month in 2014, making it the best September for closings since 2005!

Portland Real Estate market September 2015
(click to make bigger)

The graph here of average and median sales prices is taken from that Portland RMLS report, and it tells a similar tale. Although our June was barely above the peak of June, 2008, the last three months have shown a much more gradual drop-off in prices into the fall. That’s a very positive start to the “slow” real estate season!

For a more exacting look at how well the Portland housing market has recovered in these years of rock-bottom interest rates, we can look at the Homes.com rebound report. The report uses a housing index rather than bare prices, so it gives a more complete look at the market. The July 2015 report showed that the Portland metro region has rebounded 98% of its pre-recession housing market activity. According to the website, only 55% of US housing markets have rebounded 100% or more.

On the ground level as a top local real estate agent that closes around 100 sales a year all over the Portland metro, I can tell you that close-in Portland is experiencing home prices 20% or higher than the top prices in 2008. If you go out into far east, west, or south Portland, home prices meet 2008 values or are just below. If you go further to a far suburb like Gresham, Happy Valley, Oregon City, Aloha, most numbers will be below 2008 prices, but are getting quite close. This is why the Homes.com report says the Portland “metro” as in the entire city plus suburbs is back to 98% of 2008 prices.

As a general rule, the city center rebounds faster after any crash and the farther out you are from the city center, the longer it takes to recover. Rural Oregon is 20% or more below 2008 values. Interesting right? You are actually safer to buy a close-in expensive home than a rural property, at least you are more recession proof.

The era of super-low interest rates won’t last forever. Federal Reserve policy makers are expected to raise interest rates by the end of the year to avoid another housing bubble. Now just might be the perfect time to buy or sell your Portland home. Contact our buyer’s team or myself, your Portland listing specialist, to get started.

Let's Connect
Contact us.

What My Clients Are Saying

Stephen was just simply a fantastic realtor to work with in selling our home. If we had another 50 properties to sell, Stephen would be in charge of all of them. He was so professional in handling every detail of our sale, and he was so responsive to every question that came up in the course of our transaction. My wife and I are very thankful that we found Stephen.

Alan