Portland tops the charts for home price increases in July-August 2015
According to a report issued last week from Standard & Poor’s/Case-Shiller home price index, Portland properties increased in value 1.1%, the biggest increase in any metro area in the US. For the year, Portland property values have increased to date 9.4%, lagging behind only San Francisco and Denver at 10.7% each.
Nationally home prices increased only 4.7%, with only a .3% increase in July-August 2015.
This is great news if you already own a home, but for home buyers, a 9.4% increase since this year means a $300,000 home you could have purchased last year would now cost you $328,800.
For those thinking about selling, can this trend last? And for home buyers, are you being priced out of the market?
Mortgage rates remain very low. The Feds announced last month that they were not raising rates, but left the window open to a rate increase in December. If mortgage rates rise just .25% in the coming months, that equates to a monthly payment increase of $58.75 just for the price appreciation this year.
The housing market remains robust in Portland. While we saw a brief slowdown in purchases in September, as compared to the summer months, activity picked up again in October (final numbers will be released soon). With our inventory still way too low, no one sees anything but continuing inflation in our prices as we close out 2015 and move into 2016.
Investors cashing in on rapidly increasing home prices
The fact that property prices are skyrocketing in Portland has not escaped the notice of investors: whether purchasing property for rentals or fixers to renovate and flip, investors from around the country are buying Portland properties as quickly as they are listed.
Businesses moving to Portland citing affordability as #1 reason
One of the factors that had kept home prices low relative to Seattle and San Francisco, was our inability to attract big businesses to Portland. This has all changed recently. According to an article in Portland Business Journal, Portland is still affordable relative to other big business locales around the country. But, “Economic development agencies statewide have been using Portland’s affordability to aggressively recruit companies from high-dollar markets.” The strategy has succeeded in attracting “Google, SalesForce.com, Airbnb and eBay, who all now have Portland offices and collectively employ more than 1,000 workers. Additionally, startups like the targeted email provider Customer.io and rental management software maker Cozy have relocated their companies from New York and San Francisco, respectively, to take advantage of Portland’s lower costs and availablity of talent.” And of course, business giants like Nike and Intel have been in Portland forever.