The average home in Portland Oregon increases in value $2.82 every hour
Did you know that the average price of a home in Portland has risen to $357,500 as of the end of February 2016? That’s a huge increase over the average sales price of $283,300 at the end of February in 2013. Put another way, a home owner who purchased a home in February 2013 at an average price of $283,300 has seen their value increase by $74,200! That means that home owner was actually earning $2.82 in equity every hour from the day they closed until now.
Remember this represents an average price and value increase over the last three years. In some areas of the Portland metro area, values were increasing at a much higher rate, and of course the reverse is true that many areas saw lower rates of inflation.
For those who are still waiting to buy a home, or are trying to save for the down payment, are you saving at a rate of $2.82 every hour?
Yes, this is all based on averages. Not all future potential home buyers can afford an average priced house or $357,500. If this is you, should you just give up on your dream of home ownership?
The truth is that less than half of all home buyers can afford an average priced home in Portland anymore. These last two years in particular have seen an explosion in home values due to low inventory, low mortgage rates, and the number of competing buyers (which is being exasperated by the high migration rate to Portland.
Many buyers are moving further out from downtown to make the dream of home ownership a reality. The end result is that prices east of I-205 and south of I-84 are now sky-rocketing too. Yes, the hottest neighborhoods are still predominantly close in to downtown Portland, but areas way further east, such as Gresham, or southeast, such as Oregon City and SE Portland are in high demand lately, and this is likely to continue as we move through 2016 and even into 2017-2018. In the southeast, Woodstock and Milwaukie have seen almost astonishing growth.
Where will the next hot neighborhoods be?
There is really no definite way to predict which areas will take off and become the next Alberta, Sellwood or Hawthorne, but buyers should look for anchor restaurants that see a lot of traffic. Just look at what happened on Division Street after PokPok opened just 10 years ago. Also watch for great little coffee shops to open nearby. Sure Starbucks is a good indicator, but a boutique coffee shop where residents are comfortable hanging out with laptops and tablets are even more significant. Little shops are likely to follow to hopefully cash in the traffic generated by the anchor establishments, and a new “in” neighborhood can emerge. You’ll know your area has fully emerged if a Trader Joes or New Seasons opens nearby, but that takes a while.
In the meantime, enjoy your new home and work with neighborhoods to beautify where you live.
Your piggy bank will thank you.