Housing forecast for winter 2015 through 2016 in Portland metro area
2015 has seen just about the hottest housing market in Portland’s history. Sales were up about 25% over 2014, and it seems there is no shortage of buyers in sight as we wind out the year. We did see a bit of a slowdown in September, but this is typical as families get into back to school mode. Year-to-date, we have seen metro wide price increases of almost 10% for 2015 (higher in some areas).
October housing activity has picked back up again and this trend is expected to continue throughout the winter months and into 2016. Inventory has been at 1.9 months for a few months now, and isn’t budging as buyer demand is still outpacing the number of new listings hitting the market. According to Zillow, “The median value in the region is $295,600, and the median sale price is north of $300,000.” Many buyers have already been priced out of the market, and for those waiting for prices to drop, don’t hold your breaths. That scenario is not forecast for the upcoming year at all.
In fact, most economist believe that while price appreciation should slow when inventory finally catches up to demand, we are unlikely to see any “housing crash” any time in the near future. Due to much more stringent lending standards, forecasts are for a stable housing market at least through 2022!
Investment property prices rising as much as single family housing
We are seeing the same pricing increases in multi-family properties as we are seeing in single family homes. In fact, there are some statistics that point to even greater increases in multi-family pricing because of the recent huge increases in rents here in the Portland metro area. Multiple offers are common as competition heats up to grab a share of the rising rental income.
For buyers of multi-unit properties, location is every bit as important as for home buyers. Buyers should be watching for properties in areas with easy access to mass transit, though should expect to pay a premium for properties in the best locations. Renters always expect to pay higher rent in good areas than in marginal areas, so you will recoup your investment even when you pay more for the property.
It’s important for investors to be realistic about prices for multi-unit properties. If the average house price is $300,000 for a given area, you shouldn’t expect to purchase a duplex (basically 2 houses) for at or close to the same price. In fact some investors are rehabbing multi-unit properties and selling each unit individually for great profits.