Are you looking at investing in the Portland real estate market in 2020? Let’s take a look at the current state of Portland, Oregon. Then we’ll discuss the investment opportunities in Portland for real estate investors. Portland is home to around 600,000 people. However, the Portland housing market in reality includes the more than two million people who live in the Portland metropolitan area.
That makes Portland the second largest city in the Pacific Northwest. The current trends show us that the Portland’s hot housing market is cooling off. The supply of homes remains low by historic standards. Despite the slowdown, the home prices are still rising but not like two years back. The price rise has mainly been supported by rising incomes as Portland has seen a lot of job growth.
For a long time we’ve been hearing how the major housing markets in the Pacific Northwest (like Seattle and Portland) have been on fire with fierce competition and limited supply of properties. Is Portland going to be one of the hottest real estate market for investors in 2020? Well, the Portland housing market is currently undergoing some changes. Property appreciation has slowed considerably over the last year or so. Even though home prices are rising more slowly, and sales are down, there’s still a lot of competition among real estate buyers in Portland.
Anyone planning to invest in Portland real estate in 2020, should start early. In a tight housing market like Portland, it can take some time to find a property that meets all of your criteria. In the latest quarter, real estate appreciation rate in Portland has been around 1.9%. If it remains steady, the annualized appreciation rate would be around 7.6%, which could trigger huge interest in the Portland real estate investment opportunities.
Let us discuss the some more housing market trends which make investing in Portland real estate potentially profitable for new investors. Please note that there are many variables that can potentially impact the value of a home in Portland (or any other market) and some of these variables are impossible to predict in advance.
Portland Real Estate Market Forecast 2020
What are the Portland real estate market predictions for 2020? Is Portland housing market 2020 shaping up to continue the trend of the last few years as one of the hottest markets in the nation. Well, the hot Portland housing market of two years ago has cooled dramatically. Home price gains have been slowing since 2017. Two years back it saw an annual home price appreciation of nearly 10%. Since 2015, the median home price in Portland has increased from $337,000 to $465,000.
The latest real estate data from Zillow shows that the current median home value in Portland is $454,628. Portland is currently a balanced real estate market – which means there is a healthy balance between demand and supply of homes. The home prices have risen by 0.6% over the last year. Looking forward in this year, the Portland real estate market forecast is that home prices will continue to increase by 2.3%.
Here is the Portland, OR real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 2.3% till Dec 2020.
The median list price per square foot in Portland is $289, which is higher than the Portland-Vancouver-Hillsboro Metro average of $232. Zillow reports that 10.4% of the listings in Portland had a price cut in Dec 2019, which is a good thing for buyers. The median price of current listings in Portland is $449,900.
Homes are selling below their asking prices as the median price of homes that have been sold out is $432,800. It shows sellers were willing to negotiate on prices as they were finding it more and more difficult to sell homes at asking prices. The median rent price in Portland is $1,995, which is higher than the Portland-Vancouver-Hillsboro Metro median of $1,900.
Here is a snapshot that shows the median home values in the some of the neighborhoods of Portland.
Portland Housing Market Forecast 2019 – 2021
Here is a short and crisp Portland housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Portland is 77% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Portland is 77% during this period. If this price forecast is correct, the Portland home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Portland, Oregon Real Estate Forecast.
Portland Housing Market Trends
We shall now discuss some of the most recent housing trends in the Portland area and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
2019’s Data – The median sales price for homes in Portland for Mar 1 to May 29 was $420,000 based on 2,419 home sales. Average price per square foot for Portland was $296, an increase of 1% compared to the same period last year. The median rent per month for apartments in Portland for May 4 to Jun 4 was $2,135. As per a report published in Oregonlive.com, in June 2019, the Portland area saw 3,187 home sales, a decline of 7.6 percent from a year earlier. The median sale price, meanwhile, climbed 7.2 percent to $417,900. There were more than 6,000 homes on the market, the most the metro area has seen since 2014.
The latest real estate market trends in Portland show that the median home prices have fallen for first time in nearly 7 years. The year-over-year median home sale price dropped in January 2020 for the first time since February 2012 in metro Portland. The month’s median sale price of $384,900 represented a 1.3 percent decline from a year earlier. It’s been nearly seven years since they fell on an annualized basis.
Trulia has currently 2,326 resale and new homes for sale in Portland, OR, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median price of sold homes in Portland is $430,000 and home are selling for about $297/sqft.
As per the real estate company called Neigborhoodscout.com, the median house price in Portland is $451,428, which indicates that home prices in Portland are well above the national average for all cities and towns in the United States. One and two bedroom single-family detached homes are the most common housing units in Portland. Other types of housing that are prevalent in Portland include duplexes, row houses and homes converted to apartments. Portland has a mixture of renter-occupied and owner-occupied housing units.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
Currently, there are 882 single family homes for sale in Portland, OR on Zillow. Additionally, there are 357 single family homes for rent in Portland, OR. Under potential listings, there are about 25 Foreclosed and 185 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
In the past month, 607 homes have been sold in Portland, OR on Redfin.com. In addition to houses in Portland, there were also 576 condos, 158 townhouses, and 78 multi-family units for sale in Portland last month. The median listing price is around $480,000. According their statistics, the Portland housing market is somewhat competitive. Homes in Portland receive 1 offers on average and sell in around 30 days.
The average sale price of a home in Portland was $433K last month, up 5.6% since last year. The average sale price per square foot in Portland is $244, up 2.7% since last year. A hot listing in Portland can sell for about 1% above list price and go pending in around 7 days.
Here is the latest Portland housing market data for the month of Jan 2020 from Redfin.com. The sale to list price ratio shows us that it was a trending more like a seller’s market in the past month.
Portland Real Estate Market Trends
|Median List Price||$480,000|
|Avg. Sale / List||99.2%|
|Median List $/Sq Ft||$265|
|Median Sale Price||$244,000|
|Median Sale $/Sq Ft||$244|
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. There are currently 3,217 homes for sale in Portland on Realtor.com. Recently homes on the market have been stacking up in Portland. There were more than 4,700 homes for sale in January 2020, representing a 3.3-month supply, according to Regional Multiple Listing Service.
Though it suggests that Portland is currently trending like a seller’s market, it’s also the highest observed supply of housing in Portland since 2015. The asking price of single family homes can start from $85,000 and can go up to $8.6M for a luxury property located in Northwest Portland neighborhood in the city of Portland, OR. The median home price in Northwest Portland neighborhood is $525,000.
Portland is also a big rental property market. There are currently 1,089 rental properties in Portland and their rent prices range from $625 to $5,500 per month. There are only 263 new construction homes for sale in Portland within a price range of $330,000 to $1.8M. The most affordable new construction homes can found in the Southeast Uplift neighborhood in the city of Portland, OR. The home prices in Southeast Uplift neighborhood is $485,000.
According to Realtor.com, in December 2019, the Portland housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. In Portland, the sellers have held good leverage in these negotiations in the past month. On an average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
In December 2019, the median list price of homes in Portland, OR was $459.9K, flat year-over-year. The median listing price per square foot was $249. The median sale price was $426K.
The median list price in Portland, OR is $689,900 on Movoto.com. The median list price in Portland was less than 1% change from January to February. Portland’s home resale inventories is 229, which decreased 4 percent since January 2020. The median list price per square foot in Portland is $252.
As you can see in the graph, the median price per sq ft in Portland rose to its peak value in Dec 2019, when it was $250. In January 2020 it was $251. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in February.
Portland is a moderately walkable city in Multnomah County. If you are looking to invest in the Portland real estate, you should that three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Portland investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in Portland must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Southwest Hills has a median listing price of $958.6K, making it the most expensive neighborhood in Portland. Powellhurst-Gilbert is the most affordable neighborhood, with a median listing price of $315K.
Some of the most popular neighborhoods in Portland are Bethany, Southwest Hills, Hazelwood, Multnomah Village, Raleigh Hills, St. Johns, Eastmoreland, Lake Oswego, Laurelhurst, Downtown Portland, Tigard, Alameda, Cedar Hills, Montavilla, Hillsdale, Lents, Woodstock and Kenton.
Portland, OR Foreclosures And Bank Owned Homes Statistics
As per the Portland foreclosure data given by Zillow, in Portland 0.4 homes are foreclosed (per 10,000). This is lower than the Portland-Vancouver-Hillsboro Metro value of 0.8 and also lower than the national value of 1.2. The percent of delinquent mortgages in Portland is 0.4%, which is lower than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Portland homeowners underwater on their mortgage is 3.7%, which is higher than Portland-Vancouver-Hillsboro Metro at 3.4%.
|Total No. of Foreclosures in Portland||373 (RealtyTrac)|
|Homes for Sale in Portland||889|
|Median List Price||$425,000 (1% drop vs Nov 2018)|
There are currently 373 properties in Portland, OR that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 889. In December 2019, the number of properties that received a foreclosure filing in Portland, OR was 38% higher than the previous month and 12% lower than the same time last year.
In Portland, the zip code with the highest foreclosure rate is 97221, where 1 in every 1349 housing units is foreclosed. 97211 zip code has the lowest foreclosure rate, where 1 in every 2702 housing units becomes delinquent.
Is Portland a Good Place For Real Estate Investment?
Is Portland a Good Place to Invest In Real Estate? Investing in real estate is touted as a great way to become wealthy. Is buying an apartment in Portland a good investment? Many real estate investors have asked themselves if buying a property in Portland is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Portland housing market 2020 forecast for answers on why to put resources into this sizzling market.
Although, this article alone is not a comprehensive source to make a final investment decision for Portland, but we have collected ten evidence based positive things for those who are keen to invest in the Portland real estate in 2020. Here is the list of 10 positive things going on in the Portland real estate market which can help investors who are keen to buy real estate in this city. And no, we’re not going to cite things like the TV show “Portlandia” or vague things like “it’s hip and diverse!”
1. Portland is a “Hot” Market for Millennials
One of the major factors driving the Portland real estate market is the fact that the city is hot with Millennials. Nor is it just students coming to Portland driving up prices in the Portland housing market. They want to buy homes in a family-friendly, cultural city, something many cannot afford to do in California.
2. The Likely Future Demographic Momentum
When a city sees people move there for work, this could include everyone from 25 year old grads to 50 year old mid-career professionals. The fact that the Portland real estate market is especially attractive to young adults trying to buy houses, means there will be a strong demographic momentum into the future as they start families, increasing the local population and the odds they’ll stay.
3. The City Lacks Room to Grow
One of the beautiful things about Portland is proximity to the ocean and the mountains, while much of the area is covered in protected forests. The downside of this is that the city lacks room to grow the way many inland real estate markets do. Developers could tear down older buildings and build skyscrapers, but that’s expensive compared to going five miles down the highway and building a new suburban neighborhood. The relative lack of room to grow keeps rents high in the Portland real estate market for both residents and commercial firms.
4. Property Is a Deal Compared to Silicon Valley
While Portland residents complain about the rent, Silicon Valley’s insane rents are pricing firms out of San Francisco Bay Area, and enough have moved north to get the area called Silicon Forest. Google’s moved both people and jobs here. Other tech firms followed suit, opening offices here or simply relocated. Increased demand for housing guarantees higher rental rates and property values. The Portland housing market could adapt somewhat by turning older single family houses into multi-family units or building micro-hotels; that certainly creates renovation opportunity for investors in the Portland real estate market.
5. Jobs, Jobs, Jobs
Portland may have a growing tech sector, but the overall job market is growing rather quickly, too. Oregon experienced the fifth fastest growing job market in the country between 2017 and 2018. When you look at only private employers, it came in second. Furthermore, most of those jobs are in the big cities like Portland. For example, when you look at logging and mining – traditional rural employers – Oregon only came in 9th in the U.S. This means many people are moving to Portland for work, whether or not they’re in the tech pool. In short, the wide range of jobs and growth in demand for labor are powering the Portland real estate market.
6. Work-Life Balance Is Better Here
Work-life balance is better in Portland. An estimated 7% of the population in Portland telecommutes compared to 2.6% nationally. The city’s high walk-ability score and somewhat better traffic than California’s cities are another plus, though many love the fact you can bike to work. And the music scene and art museums – and the time and money to visit them – and it is no wonder so many Silicon Valley refugees move to Portland. That’s driving up rents and property prices in the Portland real estate market.
7. The Massive Student Market
There are more than three dozen private and public universities within 150 miles of Portland. The University of Oregon and Oregon Institute of Technology both have massive campuses here. Student enrollment for the STEM and IT programs is exploding because graduates are entering the hot tech market created by Silicon Valley refugee firms. This means there is a strong Portland housing market for students in the vicinity of multiple campuses. Compare that to places like College Station, Texas – your property values and rents depend on the attractiveness of the one main school to students.
8. The Better Business Climate
If you ask people and businesses why they relocated to Portland, one answer is the lower cost of living. For many, the lack of a state income tax is another attraction. In national surveys on business friendliness, Oregon is middle of the pack. However, business friendliness is relative. In terms of effective tax rate, it beats Washington and California. In fact, Oregon beats California in every regard. Forbes Magazine came out with an article in mid-2018 describing how California is unsustainable. Infrastructure is crumbling, and they build trains to nowhere instead of roads and dams people need. It is hard to run a water dependent industry when they’re rationing water for homeowners soon.
We already addressed taxes, but regulations are insane. The new California rule mandating that businesses have at least one woman on the board by the end of 2019 is merely the camel’s nose under the tent; they could start mandating ethnicity based board membership, union or employee representation on boards and board membership based on sexuality. A business could try to solve this by going private, or they can move their headquarters to Oregon. It is certainly easier to move a business and team north to Portland where their salaries go further, since the Portland real estate market is so much more affordable.
9. Portland is Relatively Landlord Friendly – for Small Landlords
There’s an interesting situation in the Portland real estate market. If you own a large apartment building, you’ll find the Portland area difficult to manage because it is so tenant friendly. A small landlord with a single home for rent, though, is in a different category. People buying and renting out a single home in the Portland housing market will have a much easier time.
They don’t have to follow the same rules on renter protection like rental assistance payments if you evict someone without cause (like you’re going to rehab or sell the property). Rental rates for smaller landlords can go up more in accord with market rates instead of being capped around 5%. Regardless of how many properties you own, Portland has only discussed rent control – and seen significant opposition to it.
10. The High ROI on Portland Real Estate
The median home price in Portland was around $400,000. Rents for a single family home hover around $2000 a month. And that number includes a massive number of two bedroom starter homes that command $1700-$1800 a month. To calculate the expected rental rates for a given property, multiply the square footage by $1.60. If you can find three and four bedroom houses or renovate a two bedroom into a four bedroom, you’ll have one of the premium properties on the Portland housing market.
Investing in Portland Real Estate or Not: The Conclusion
Maybe, you have done a bit of real estate investing in Portland, OR but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Should you consider Portland real estate investment? The Portland real estate market is booming because the economy is doing well on its own and the area is head and shoulders above California’s deteriorating situation. The Portland housing market has experienced double-digit annual price growth in recent years. Home values rose 11.4% in 2016 alone, according to a report from the real estate data company Clear Capital.
The home prices in the Portland, Oregon housing market have slowed considerably over the last few months. And that’s a good thing, from a sustainability standpoint. A good cash flow from Portland investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Portland real estate investment opportunity would be a key to your success. If you invest wisely in the Portland real estate, you could secure your future.
If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. You must also collaborate and learn from savvy investors who have retired early on in their lives by investing locally in the Portland real estate market. As with any real estate purchase, act wisely. Evaluate the specifics of the Portland housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Portland.
If it is your first time to invest in Portland real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Portland real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Good Markets To Invest in Real Estate in 2020
Another hot market for investors in 2020 is the Charlotte housing market. Charlotte is the largest city in North Carolina. The city proper is home to more than 800,000 people. The metropolitan area is even larger – home to roughly two and a half million people. It is one of the country’s fastest growing metro areas, and it was the second fastest growing city in the southeastern United States. Only Jacksonville, Florida was growing faster between 2004 and 2014.
One advantage to living in a big city like Charlotte is the constant demand for homes. Buying a home in Charlotte is a better investment, depending upon several factors. There are so many major companies and professional sporting events that people will always be interested in residing here. Therefore, interested investors aren’t likely to allow the listing prices to get to low before they swoop in and take advantage.
Similarly, the St. Louis real estate market 2020 is red hot! Homes are selling fast because inventory is low, creating a banner selling season for homeowners looking to move. If you’re looking for an amazing opportunity, the St. Louis real estate market can’t be beat. There are many opportunities in the St. Louis real estate market to investors regardless of who you want to target for renting or selling a newly renovated home. St. Louis is old enough to have aging inner-ring suburbs. You can find redevelopment opportunities in suburbs like University City, home to Washington University in St. Louis. About 800 acres are slated for redevelopment in University City. Wellston is receiving funds from HUD specifically for redevelopment.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Silicon Valley moving people and jobs here – and quality of life
California is unsustainable
Hot with millennials
effective tax rate
Rent control discussions
Home values and rents
Housing Market Data, Trends and Statistics