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re:PDX is presented by Claire Widmark, broker affiliated with M Realty LLC in Portland, Oregon.
Phone: 971-275-3691
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Portland Area Market Likely to Continue Strong Performance
As noted in an earlier post, Portland Market Trends – 2006 Forecast, the fundamentals in the Portland metro real estate market are strong and point to continued equity gains. A recent report by the research arm of the National Association of Realtors confirms those same views.
Portland is playing catch-up to much of the West coast when it comes to employment, wages, and home prices. In fact, with median home prices around $238,000, the report calls Portland one of the most affordable cities next to the Pacific Ocean.
The NAR’s findings:
- Current appreciation is 17%. National average is 13%. Three-year Portland appreciation has been 35%.
- Foreclosure risk in Portland is reasonably low. Although many buyers are using interest-only loans and adjustable rate mortgages, loan-to-value ratios are better than 90% for the vast majority of properties.
- Jobs and wages are on the upswing, albeit moderately. From July 2004 to July 2005, 22,000 new jobs were added to Portland payrolls.
- The market is ‘mildly oversupplied’ with new single family construction, although that will likely change with continued new job additions in the area.
- Price declines are highly unlikely. The NAR’s ‘stress test’ suggests that only large-scale job losses or extreme interest rate hikes (>10%) would lead to price declines.
- Housing equity will continue to accrue, likely above the historical level of 4%. The report points to Portland’s continued job growth and affordability index.
- Outer areas (mountains and ocean properties) will benefit from second-home purchases by baby-boomers.
If you’re into charts and graphs, contact me for a copy of the NAR’s local real estate forecast. I’d be happy to pass it along.
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[...] In previous posts, I’ve noted that Portland’s real estate market has thrived despite slower-than-national-average job growth. The city is home to fewer and fewer headquarter companies each year, and over the years has suffered from an anti-business reputation among large employers. However, Portland has had a track record of being a little friendlier to the small business community. [...]