Are Californians responsible for high home prices in Portland?
Recently some realtors in Portland have noticed stickers on their For Sale signs in front of their listed properties like the one in the photo. There is no indication yet who is doing this, but it’s also no secret that many Oregonians blame the influx of Californians for the high home prices in the metro area.
The reality is that we are seeing an influx of people from all over the country, though California residents make up the biggest numbers of immigrants moving here. This has been going on for decades but until recently, housing prices remained among the lowest on the west coast. Prior to the recent strengthening of the dollar, we were seeing Portland housing being snapped up by investors from all over the world. But the hard truth is that people are moving into the Portland metro area from around the country.
Housing inventories are at a 10 year low
The real culprit in the rapidly increasing home values and prices in Portland is the 10 year low housing inventory. There is so much demand for housing, and so few homes to choose from that multiple offers on homes for sale is inevitable. While the hottest selling neighborhoods are in inner NE and SE Portland, a full 58% of Portland’s lower priced neighborhoods have seen gentrification since 2000, and this, as much as immigration to our city, has caused increased property values.
In recent years, especially since the recession, three quarters of all new home construction was apartments and condos, which were specifically geared towards our younger population. Currently there are 4000 new apartments under construction within the Portland city limits, and 7000 throughout the metro area. It is only in the last couple years, as rents rose to almost out of control levels, that many renters have decided that home ownership makes more financial sense.
Builders are aware of our housing shortage, but it takes time to get a new housing development approved and up and ready for sale. And, with our urban growth boundary, and some of the other difficult housing restrictions placed on developers, where to build new housing has become a challenge as well. The urban growth boundary limits the amount of land for sale, and height restrictions in the downtown and close in Portland neighborhoods make building high rise structures almost impossible.
Portland continues to outpace the country in growth
Portland is and has been among the fastest growing metropolitan areas in the country for several years now, and this trend is likely to continue. In fact, in 2013 and 2014 Portland topped the list of major cities in the U.S. with highest growth rates. The features that we love about our area are among those that are luring people here. According to an article in Golocalpdx.com, “Unique amenities such as outdoor recreation, arts and entertainment activities, and green space protection likely continue to propel Oregon to the top of the list for the second straight year.” In addition, Portland ranked #5 in the nation for job growth in 2014.
What else is causing our population explosion?
Young people are moving here in droves. In fact, as of this year, the median age in Portland is 35! Millenials have named Portland their number 1 choice for all of the above reasons and more. Millenials are technologically and environmentally oriented, and feel that Portland supports those life style choices better than other large cities in the U.S. Thousands of young people are moving here every year, with and without jobs.
The city of Portland will be addressing its Comprehensive Plan, a 20-year blueprint for development next spring. Of course, the plan will have to tackle the topic of how to handle our growth and lack of affordable housing. Clearly gentrification is pushing too many residents of Portland out of their own homes, and as more and more neighborhoods gentrify, there is no where for these residents to go. High on the list of must haves in this plan will be affordable housing. It is anticipated that growth of new affordable housing centers will be close to mass transit corridors, though specifically where these corridors are has not been specified.
We will need to keep an eye on the Comprehensive Planning, or even get involved to make sure our voices are heard.