Top 3 Economic Forces in the Portland Real Estate Market
A generation or two ago, Oregon would have been considered a nice place to live, but not necessarily a hotspot for real estate investment. Today, the dynamic has been turned on its head, with Portland emerging as an influential U.S. city and the Oregon economy continually growing, bringing home values up with it (prices over 600K are dropping in most areas, but under that are still appreciating, for more on the luxury and condo Portland real estate market cooling go here). But can this growth be sustained long term? Fortunately, we don’t have to guess at the answer to that question — thanks to the Regional MLS and state economists, we have data. Here are the top 3 reasons we believe you should invest in the Portland real estate market for the long term.
1. Portland’s Housing Market is Stable and experiencing a normal summer swing. According to the most recent RMLS report, home buyers, sellers and their real estate agents have kept busy in the past month in Portland, closing more sales in May than the same month last year. In fact, it was the busiest May since 2006! Nonetheless, the median sales price of a Portland home remains stable, indicating that buyers — backed by low mortgage rates — still have the upper hand. Over the past year, the median sales price of a Portland home has risen just. 0.7%, to $402,400. Inventory, meanwhile, is at 2.1 months, which is down from prior months in 2019 but still higher than it was at the same time last year. Homes are spending an average of 48 days on the market. So bottom line, for most homeowners the Portland real estate market is treating them well. For luxury home owners and condo owners (area depending) it can be a different story.
2. Recession-proof? Yes, for now. The Oregon Office of Economic Analysis reported in May 2019 that although Oregon’s economy may be growing more slowly than it was a few years ago, it’s a sustainable pace. The labor market is tight, there are fewer people moving to the state, and the federal fiscal stimulus funds that jump-started things after the Great Recession are dwindling away. That said, the report emphasizes that “Oregon continues to hit the sweet spot. Growth is strong enough to keep up with a growing population but also deliver economic and income gains to Oregonians.” This means that not only is another recession unlikely, but that the Portland real estate market — which tends to reflect the economy as a whole — will continue to move homes and gain value, but not at the feverish pace we’ve seen in years past.
3. Portland’s role as an economic driver is about to get more serious. The OOEA also reports that something unprecedented in modern history is now happening in Oregon: The “natural” rate of population growth is decreasing. In other words, more people are dying than being born here, and the state’s population would eventually bottom out at zero if people weren’t moving in from other places. The blog states, “Oregon’s ability to attract and retain working-age households is the key driver of our stronger economic growth compared to most other states.” And where in the state do most working-age households want to move into? That’s right, Portland.
Are you ready to invest in Portland? Give our top 1% buyer’s agents a call today, and get in on the deals this summer.June 17, 2019