Top 5 Portland Real Estate Market News Stories – 2019 Recap
Like previous years, 2019 was one in which technology dramatically shifted the age-old practice of buying and selling real estate. On one hand, the increased access to real estate market data that we now enjoy allows both buyers and sellers to make better decisions. On the other hand, technology has also clouded the real estate market by inserting iBuyers and corporate investors into what has primarily been a person-to-person exchange. In addition to these stories, we’ve covered important news on affordability and housing here in Portland, including local changes to the way new housing is developed.
All in all, we published over 100 articles here on the real estate blog in 2019! Now we’re asking what we can learn from the real estate news in 2019 that will help us make better investments in 2020.
Is 2020 your year to buy or sell a home? Here’s the insight we’ve gleaned from the past 12 months.
1. Affordability gains in Portland
As real estate agents, we are always encouraging people to buy a home because it’s an investment — something that makes sense in the long term. In 2019, we found that buying a home also makes sense in the short term, at least in the Portland market.
To be specific, for those earning the average median income for the area, paying rent absorbs about 34% of their monthly paycheck. Those who buy, however, end up paying only about 25% of their income on a mortgage payment. Read the whole article to learn more.
There’s another important reason that buying a home makes more sense than renting, both in the long and short term: the average Portland income is growing. According to the Oregon Office of Economic Analysis, Portland’s income gains are the 4th fastest out of 100 major metros in the US. The bottom line for real estate buyers is that while rents are always going up, the payment on a fixed-rate mortgage is constant. If your income increases over the lifetime of the mortgage, your housing gets relatively cheaper. First-time homebuyers are also at a distinct advantage in Portland in 2020: Most of the first-time homebuyer assistance programs we wrote about in 2019 will still be in play.
2. iBuyers are claiming market share
Zillow Offers, Opendoor and other “instant buyer” services gained popularity in Portland in 2019. Sellers simply fill out a form online, send in a few photos, and receive an offer. According to HousingWire, the industry grew 25% in 2019, and it’s not slowing down.
Some home sellers are finding the service useful, especially because they are working with a licensed real estate agent on their side, but most are not getting a price advantage over the traditional sales process. In fact, HousingWire also reported that those who use an iBuyer end up paying up to 15% more to sell their home. For some, the convenience is worth it.
Watch for our updated iBuyer information in 2020. Meanwhile, check out our blog post fact-checking iBuyer claims here.
3. Biggest change in residential zoning rules in Portland history?
In summer of 2019, the Oregon legislature passed a bill that effectively bans single-family-only housing zones in cities. While the bill was somewhat controversial, most housing experts agree that allowing “missing middle” housing (duplexes, accessory dwelling units and the like) in urban areas is a smart move.
Is Portland ready for the change? Yes, in fact, Portland has been working on a plan to encourage infill since 2015. It’s called the Residential Infill Project. It allows single-family homeowners to convert their dwelling into a duplex, triplex or even a fourplexes, and allows the addition of accessory dwelling units on more lots than the zoning rules previously allowed.
Yes, it’s a big change on paper, but on the streets, the conversion to a denser Portland is not going to happen overnight. The upshot for real estate buyers is that there are more options going into 2020 — you can sublet part of your home, or add an ADU for additional income.
4. Strides in clean energy; thousands more homes scored
This year, Portland was rated #10 Clean Energy City by the American Council for an Energy-Efficient Economy. Out of the 75 US cities on the list, Portland was a top performer for our ambitious approach to improving energy efficiency and transitioning to clean sources of energy on a city-wide basis. For example, neighborhoods are built around public transit, the city uses fuel-efficient vehicles, and the Home Energy Score program helps buyers choose homes that are more energy efficient.
Although the Home Energy Score program, which requires that all home sellers get an official Score for their home before it can be listed on the real estate market, is still pretty new, it’s gathered some interesting results so far. 2019 numbers are not out yet, but we expect the number of homes with Home Energy Scores to be significantly more than the 8,700 that were scored in 2018. That year, the average score was 4.6 out of 10 (with 10 being the most efficient home, 1 the least). As more buyers become aware of the Home Energy Score program, energy efficiency will play a bigger role in their home-buying decision.
5. Home buyers, sellers are putting natural disasters on the map
With fires in some parts of the country in 2019, and floods in others, those buying and selling homes in Portland seem to be paying closer attention to the natural disaster risk in their neighborhood. Or, maybe they just love a good map, because our article on the top natural disaster risks in Portland was one of our most popular articles this year! We included maps to Portland’s flood zones, wildfire risk areas, earthquake hazard zones and more (hint: they’re all here at Portlandmaps.com/advanced).
Portland isn’t any more or less risky a place to live than other places in the country. That said, information is your best defense: for example, don’t buy a home in one of Portland’s notorious landslide zones! Every home should have an emergency supply kit; it’s the best way to ride out a disaster, including the expected Cascadia earthquake.
That’s it — your 2019 recap! To stay on top of Portland real estate market changes, make reading our blog a goal for 2020. It’s easy when you subscribe by email.December 20, 2019