Let’s take a look at the current state of the Portland real estate market amid the coronavirus pandemic. Then we’ll discuss the investment opportunities in Portland for real estate investors. When COVID19 hit Oregon hard in March of 2020 the homebuyer turnout decreased massively. In April, things improved a bit. Portland buyer traffic increased about 40% from March but it was still down about 30% from April of the previous year. Things improved further in May when pending sales and new listings surged in the Portland housing market.
The average sale price in the Portland-area dipped by a mere 0.8% to $467,500 in May compared to April 2020′s $477,400. The median sale price held steady from April ($424,000) to May ($425,000). In May 2020, there was a 2.3 month supply of homes for sale, which was steady with April 2020′s 2.4 month supply but an increase from March 2020′s 1.8 month supply. The latest “PORTLAND HOUSING MARKET REPORT” is given below.
Let’s talk a bit about Portland and its real estate market before we discuss what lies ahead for investors and homebuyers. Portland is a very ethnically-diverse city and home to around 600,000 people. However, the Portland housing market, in reality, includes more than two million people who live in the Portland Metropolitan Area or Greater Portland—comprising Clackamas, Columbia, Multnomah, Washington, and Yamhill Counties in Oregon, and Clark and Skamania Counties in Washington.
The Oregon portion of the metropolitan area is the state's largest urban center. That makes Portland the second largest city in the Pacific Northwest. The real estate trends from last year show us that Portland's hot housing market is cooling off. The supply of homes remains low by historic standards. Despite the slowdown or cooling off, the home prices are still rising but not like two years back. The price rise has mainly been supported by rising incomes as Portland has seen a lot of job growth.
For a long time, we’ve been hearing how the major housing markets in the Pacific Northwest (like Seattle and Portland) have been on fire with fierce competition and limited supply of properties. The question is whether Portland would continue to be one of the hottest markets in the U.S. for real estate investment? Well, the Portland housing market is currently undergoing some changes. Property appreciation has slowed considerably over the last year or so.
Even though home prices are rising more slowly, and sales are down, there’s still a lot of competition among real estate buyers in Portland. Anyone planning to invest in Portland real estate in 2020 or 2021, should start early. In a tight housing market like Portland, it can take some time to find a property that meets all of your criteria. In the latest quarter, the real estate appreciation rate in Portland has been around 1.20%, which equates to an annual appreciation rate of 4.87%.
Could this forecast trigger some interest in the Portland real estate investment opportunities? Let us discuss some more housing market trends which make investing in Portland real estate potentially profitable for new investors in the long term.
Portland Housing Market Trends & Prices 2020
We shall now discuss some of the most recent housing trends in the Portland area and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. Portland is a moderately walkable city in Multnomah County and the Portland housing market has outpaced itself every year.
2019's Data – The median sales price for homes in Portland for Mar 1 to May 29 was $420,000 based on 2,419 home sales. The average price per square foot for Portland was $296, an increase of 1% compared to the same period last year. The median rent per month for apartments in Portland for May 4 to Jun 4 was $2,135. As per a report published in Oregonlive.com, in June 2019, the Portland area saw 3,187 home sales, a decline of 7.6 percent from a year earlier. The median sale price, meanwhile, climbed 7.2 percent to $417,900. There were more than 6,000 homes on the market, most of the metro area has seen since 2014.
The Portland housing market in Jan. and Feb. of 2020 was very strong, stronger than most had predicted. We saw an increase in inventory and an even great increase of buyers to purchase. All signs pointed to a Portland real estate market surpassing expectations in 2020 and the first potential signs that the Portland housing market would (soon) end its cooling off session.
The median home prices fell for the first time in nearly 7 years. The year-over-year median home sale price dropped in January 2020 for the first time since February 2012 in metro Portland. The month’s median sale price of $384,900 represented a 1.3 percent decline from a year earlier. It’s been nearly seven years since they fell on an annualized basis.
Impact of COVID-19 Pandemic on the Portland Housing Market
The pandemic affected the Portland real estate market as well but the impact was much lesser, and it is on the recovery. Portland's strong economy kept it from crashing in the crisis. Starting in March, people began losing jobs at an alarming rate. Fewer homes went on the market. In April, buyer activity increased backed by about 40% over the previous month.
Housing prices remained nearly stable but there was a massive drop in homebuyers and available inventory (homes for sale). Both sellers and buyers remained out of the market which led to a decrease in overall real estate activity in the spring season.
Below is the latest monthly report of the Portland Housing Market released by the Portland Metropolitan Association of Realtors® for June 2020.
- The median sales price was $423,000.
- The average sales price was $468,500.
- No. of closed sales was 2709, an increase from the previous month (1963).
- No. pending sales were 3654, an increase from the previous month (3112).
- New listings were 3658, an increase from the previous month (3419).
- Months of inventory equaled 1.5, a decrease from the previous month (2.3).
- The average no. of days on the market was 42, an increase from the previous month (38).
Portland Real Estate Market Forecast 2020 – 20121
What are the Portland real estate market predictions for 2020? In 2003, home prices began to grow at a significantly faster annual clip of 14.09% through mid-2006. This incredible growth ultimately proved unsustainable as home prices crashed in 2007, eventually bottoming out in 2012. Since then the Portland MSA has seen a strong average annual growth rate of 9.85%.
The hot Portland housing market of two years ago has cooled dramatically. Home price gains have been slowing since 2017. Two years back it saw an annual home price appreciation of nearly 10%. Since 2015, the median home price in Portland has increased by about 38.7%, from $337,000 to $467,621.
The Zillow Buyer-Seller Index (BSI) currently lists the current market temperature in Portland as “Neutral” – which is a sign of a balanced real estate market. This is computed monthly. According to their index, there exists a balance in the supply and demand of homes in Portland. In other words, based on the last month’s key housing market indicators, the demand has met the supply, giving both sellers and home buyers and equal advantage in price negotiations.
As mentioned before the Portland housing market has cooled off. The home prices have gone up by a mere 0.6% over the past year. The latest Portland real estate market forecast is that the home prices will fall by 2%—in the next twelve months. It may be perhaps due to COVID-10 that has led to a situation in which supply meets demand due to lower buyer activity. That's how the prices remain flat or drop.
Here is the visual representation of historical Portland home prices and the latest forecast until March 2021.
Here is a short and crisp Portland housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Portland is 77% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Portland is 77% during this period. If this price forecast is correct, the Portland home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The historical change in home prices for Portland-Vancouver-Hillsboro, OR-WA are shown below for the three-time periods in the table below. The Portland Home Price Index has increased for the last 25 consecutive quarters. The highest annual change in the value of houses in the Portland Real Estate Market was 22% in the twelve months ended with the 2nd Quarter of 1978.
The worst annual change in home values in the Portland Market was -11% in the twelve months ended with the 3rd Quarter of 1981. The historical change in home values has been calculated until the 3rd Quarter of 2018. For the upcoming updates, you can visit LittleBigHomes.com.
|Time Period||Portland Metropolitan Area Real Estate Appreciation|
|Last 5 Years||57%|
|Last 10 Years||41%|
|Last 20 Years||152%|
The question now is what happens moving forward. Is Portland going to remain a balanced real estate market amid the ongoing Coronavirus pandemic, which no one knows when it is going to end? These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers have taken their homes off the market. With the re-opening of the economy, the demand is rising again.
The Portland real estate market had strong economic support coming into 2020 from nearly every angle. “Portland does better than average in booms, worse in recessions,” says Portland City Economist Josh Harwood. He expects this to be no different given Portland's exposure to Asia, as they manufacture more things here and are, thus, more dependent on global markets.
While buyer activity continues to be robust, the decrease in the number of active listings indicates that new sellers are still not willing to put their homes on the market until the pandemic or its threat is completely over. Home sales have rebounded in June as compared to the previous month and the inventory has decreased.
Many housing experts believe sellers remain reluctant to list their homes due to continued concerns over COVID-19, which was beginning to see a resurgence in June. At the same time, the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges. Effective July 15, indoor social gatherings of more than 10 people are prohibited in Oregon.
For Tenants: House Bill 4213 statutorily extends bans on both commercial and residential evictions for three months, until September 30, 2020. Until that date, evictions for nonpayment of rent are forbidden statewide. The bill creates a six-month grace period for tenants to repay unpaid rent accrued during the emergency period.
Any balance of unpaid rent and other charges amassed between April 1 and September 30 must be paid in full by March 31, 2021, and tenants are still required to pay rent as it comes due after September 30. Of importance, the bill requires tenants to notify the landlord that they intend to utilize the grace period.
Landlords now can pursue evictions for nonpayment that occurred before April 1 and the statute of limitations will be paused so that landlords can pursue claims once the moratorium and grace period is over.
Nationally, June showing activity was up notably from the COVID-19 depressed levels in recent months but was also up from June 2019, reflecting pent-up demand by prospective home buyers. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, the Portland housing market can become a buyer’s real estate market if the supply increases to more than five months of inventory.
And that’s not going to happen. In June, the month's supply of inventory for the Portland metro area dropped to 1.5-Month. Until sellers regain confidence, housing inventory will continue to be constrained during what is expected to be an active summer selling season. The housing inventory is down but so is the home buyer traffic which has resulted in balanced real estate market conditions. Home prices are unlikely to go up or down in a significant way, anytime soon, due to this great balance between supply and demand.
Due to an unprecedented pandemic situation, we conclude that the Portland housing market would remain a balanced real estate market for the remainder of this year. This is also confirmed by the data of Zillow as well as Realestateagentpdx.com. Now that's a good indicator for homebuyers who cannot afford a home in the median price. This means you can probably buy a home for less than list price, and the seller might be willing to pay some or all of your closing costs.
According to Realestateagentpdx.com's analysis of the current market situation, if you have a home to sell, it will likely still sell for a good price in a reasonable amount of time. Real estate sales will continue in Portland, Oregon, (almost as normal) but with significantly fewer transactions due to Covid-19 pandemic. Luxury home sales and condo sales, which require activity from a smaller buyer pool, will suffer more than they already were going to as per their previous forecast.
Do buyers have any advantage? For buyers in Portland, mortgage rates are at their lowest. Therefore, this is a good time for them to enter the market and scoop up their favorite deals. If buyer demand eases, we could see a positive influence on the low houisng inventory while at the same time seeing a negative impact on sales. Also, if listings linger on the market for longer, buyers have a special edge in negotiating sales prices.
As a result, Portland homebuyers who enter the market at this should have more options than usual when it comes to choosing a property. So they should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.
Nationally, the houisng market has begun to heat up with an increase in home buying despite the COVID-19 pandemic. The real estate sector has been one of the most resilient areas of the economy during the severe economic shutdown. The latest housing market trend to be seen is that the lack of supply is leading to a decline in existing home sales even though new home sales have jumped nearly 13% year over year.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Portland in 2020 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Portland Real Estate Market: Where To Find Homes For Sale?
If you are a home buyer looking to find homes for sale or rent in Portland, we recommend you to do that online or hire a local real estate agent. There are many sites where you can find homes available for sale on the market. Portland has a mixture of renter-occupied and owner-occupied housing units. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Portland. Other types of housing that are prevalent in Portland include duplexes, rowhouses, and homes converted to apartments.
Single-family detached homes account for roughly 55% of Portland's housing units. At the national level, the single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
As we write this, there are 1071 homes for sale in Portland, OR on Zillow. Additionally, there are 180 homes for rent. Under potential listings, there are about 5 Foreclosed and 105 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Portland is $288, which is higher than the Portland-Vancouver-Hillsboro Metro average of $232.
- The median price of homes for sale is $449,950.
- The median price of homes that were sold is $439,500, which indicates that homes are selling near or just below their asking prices.
- The median rent price in Portland is $1,975, which is higher than the Portland-Vancouver-Hillsboro Metro median of $1,895.
There are currently 4161 homes for sale and 978 homes for rent in Portland, OR on Realtor.com, a real estate listings website. As we write this, the newly listed homes are 442. According to their statistics, in June 2020, Portland was a seller's real estate market, which means there were roughly more buyers than there were active homes for sale. The higher buyer turnout and low inventory heated the market in June.
Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Portland have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher. The median list price of homes in Portland, OR was $490K, trending up 2.9% year-over-year. The median listing price per square foot was $267. The median sale price was $468.8K.
Portland Housing Market: Foreclosure Statistics 2020
Here are some foreclosure statistics of the Portland real estate market. As per the Portland foreclosure data given by Zillow, in Portland 0.4 homes are foreclosed (per 10,000). This is lower than the Portland-Vancouver-Hillsboro Metro value of 0.8 and also lower than the national value of 1.2. The percent of delinquent mortgages in Portland is 0.4%, which is lower than the national value of 1.1%. The percent of Portland homeowners underwater on their mortgage is 3.7%, which is higher than Portland-Vancouver-Hillsboro Metro at 3.4%.
There are currently 165 properties in Portland, OR that are in some stage of foreclosure (default, auction, or bank-owned) while the number of homes listed for sale on RealtyTrac is 1,134. In June, the number of properties that received a foreclosure filing in Portland, OR was 400% higher than the previous month and 71% lower than the same time last year.
|Potential Foreclosures in Portland||165 (RealtyTrac)|
|Homes for Sale in Portland||1134|
|Median List Price||$449,500 (2% rise vs May 2019)|
According to RealtyTrac, in Portland, the zip code with the highest foreclosure rate is 97218, where 1 in every 5957 housing units is foreclosed. So, you’d find a lot of distressed sellers in this area and get some discounted off-market deals. 97206 zip code has the lowest foreclosure rate, where 1 in every 21153 housing units becomes delinquent.
Portland Real Estate Market: Is It A Good Place For Investment?
Should you consider Portland real estate investment? Now that you know where Portland is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Portland is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. Although this article alone is not a comprehensive source to make a final investment decision for Portland, we have collected evidence-based positive things for those who are keen to invest in the Portland real estate market.
Let’s take a look at the number of positive things going on in the Portland real estate market which can help investors who are keen to buy an investment property in this city. And no, we’re not going to cite things like the TV show “Portlandia” or vague things like “it’s hip and diverse!”
Portland is a “Hot” Real Estate Market for Millennials
One of the major factors driving the Portland real estate market is the fact that the city is hot with Millennials. Nor is it just students coming to Portland driving up prices in the Portland housing market. They want to buy homes in a family-friendly, cultural city, something many cannot afford to do in California. When a city sees people move there for work, this could include everyone from 25-year-old grads to 50-year-old mid-career professionals. The fact that the Portland real estate market is especially attractive to young adults trying to buy houses, means there will be a strong demographic momentum into the future as they start families, increasing the local population and the odds they’ll stay.
Portland Lacks Room to Grow Which Drives The Home Prices Up
One of the beautiful things about Portland is proximity to the ocean and the mountains, while much of the area is covered in protected forests. The downside of this is that the city lacks room to grow the way many inland real estate markets do. Developers could tear down older buildings and build skyscrapers, but that’s expensive compared to going five miles down the highway and building a new suburban neighborhood.
Relative to the strong migration and income-driven demand, the supply is lagging in the entire Portland MSA. New housing permits have been among the slowest recovering economic indicators in the Portland MSA after bottoming out in 2012. Not only is the Portland MSA producing new buildings at a relatively slow rate, but also fewer homes are
available for sale than ever before.
The relative lack of room to grow keeps rents high in the Portland real estate market for both residents and commercial firms. While Portland residents complain about the rent, Silicon Valley’s insane rents are pricing firms out of San Francisco Bay Area, and enough have moved north to get the area called Silicon Forest. Google’s moved both people and jobs here.
Other tech firms followed suit, opening offices here, or simply relocated. Increased demand for housing guarantees higher rental rates and property values. Considering the affordability problems in San Francisco and Seattle, Portland’s relative cheapness is leading people to migrate from those cities—which has contributed to the population growth of Portland MSA.
Portland’s Relatively Affordable Housing Market
Work-life balance is better in Portland. An estimated 7% of the population in Portland telecommutes compared to 2.6% nationally. The city’s high walkability score and somewhat better traffic than California’s cities are other pluses, though many love the fact you can bike to work.
Despite the recent surge in home prices, Portland remains among the cheapest major West Coast cities to buy a house. This is partly because home price levels have historically been lower in Portland than its neighbors, but also because Portland’s growth in home prices is average for these cities since 2010.
Places like San Francisco have had significantly higher rates of growth until 2015. The combination of a strong job market with relatively lower house prices, Oregon, and the Portland MSA has among the nation’s highest rates of in-migration – which in turn increases the demand for housing.
And the music scene and art museums – and the time and money to visit them – and it is no wonder so many Silicon Valley refugees move to Portland. That’s driving up rents and property prices in the Portland real estate market.
Portland's Strong Economic Factors
Two of the most fundamental economic indicators are employment and income. In terms of home prices, income, and employment indicate whether people can afford current and future increases. A report by Northwest Economic Research Center (NERC) forecasts employment in the Portland MSA will continue its strong recovery until reaching the rate of full-employment indicating that buyers will continue to enter the housing market (assuming home prices are correctly valued).
Portland may have a growing tech sector, but the overall job market is growing rather quickly, too. Oregon experienced the fifth fastest-growing job market in the country between 2017 and 2018. When you look at only private employers, it came in second. Furthermore, most of those jobs are in big cities like Portland. For example, when you look at logging and mining – traditional rural employers – Oregon only came in 9th in the U.S. This means many people are moving to Portland for work, whether or not they’re in the tech pool. In short, the wide range of jobs and growth in demand for labor are powering the Portland real estate market.
Portland's Massive Student Market For Rental Property Investment
There are more than three dozen private and public universities within 150 miles of Portland. The University of Oregon and Oregon Institute of Technology both have massive campuses here. Student enrollment for the STEM and IT programs is exploding because graduates are entering the hot tech market created by Silicon Valley refugee firms. This means there is a strong Portland housing market for students in the vicinity of multiple campuses. Compare that to places like College Station, Texas – your property values and rents depend on the attractiveness of the one main school to students.
Portland Rental Market Statistics: 48% of the households in Portland, OR are renter-occupied while 51% are owner-occupied. That makes a huge population of renters. The average rent for an apartment in Portland is $1,499, a 1% increase compared to the previous year, according to RENTCafé.
The average size for a Portland, OR apartment is 765 square feet. Studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.
According to RentJunge, as of June 2020, the average rent for an apartment in Portland, OR is $1544 which is a 4.53% decrease from last year when the average rent was $1614, and a 1.42% decrease from last month when the average rent was $1566.
- One-bedroom apartment in Portland rent for $1452 a month on average (a 2.62% decrease from last year).
- Two-bedroom apartment rents average $1704 (a 7.81% decrease from last year).
- The average apartment rent over the prior 6 months in Portland has increased by $100 (6.9%).
- One-bedroom units have increased by $114 (8.5%).
- Two-bedroom apartments have increased by $105 (6.6%).
More than 50% of the apartments can be rented for $1,500 or less while about 26% fall in the range of $1,500 t0 $2,000. The median rent is close to $2,000 but only 12% of the apartments fall in that price range. The most expensive Portland neighborhoods to rent apartments in are Pearl District, Downtown, and Corbett-Terwilliger-Lair Hill.
Some of the most affordable neighborhoods where the average rent is below $1,500/mo:
- Powellhurst, where the average rent goes for $1,087/month.
- Parkrose, where renters pay $1,107/mo on average.
- Bridlemile, where renters pay $1,153/mo on average.
- Wilkes, where the average rent goes for $1,198/month.
- Center, where the average rent goes for $1,217/month.
- Reed, where renters pay $1,237/mo on average.
Portland's Better Business Climate
If you ask people and businesses why they relocated to Portland, one answer is the lower cost of living. Oregon is one of only five states in the nation that levies no sales or use tax. State government receipts of personal income and corporate excise taxes are contributed to the State's General Fund budget, the growth of which is controlled by State law. Oregon has property tax rates that are nearly in line with national averages. The effective property tax rate in Oregon is 1.04%, while the U.S. average currently stands at 1.08%.
Oregon is ranked number fifteen out of the fifty states, in order of the average amount of property taxes collected. It is ranked 16th of the 50 states for property taxes as a percentage of median income. Oregon's median income is $62,418 per year. The median property tax in Oregon is $2,241.00 per year for a home worth the median value of $257,400.00. Counties in Oregon collect an average of 0.87% of a property's assessed fair market value as property tax per year.
The exact property tax levied depends on the county in Oregon the property is located in. Oregon's Multnomah County, which encompasses most of the city of Portland, has property taxes near the state average. The county's average effective tax rate is 1.07%.
To understand why Portland property taxes go up every year nearly regardless of real estate values, let’s take a quick look at how taxes are usually calculated. The standard way is to multiply the value of your home by the property tax rate for your area of the county—which is estimated by county assessors through in-person inspections and comparisons to similar, recently-sold home. But Oregon’s system of property taxes was modified by a 1997 bill that uncoupled property taxes from the actual value of homes.
Now, Oregon pegs the taxable value of a property to its 1995 property values, plus 3 percent a year thereafter. In 2019, we had a cooling real estate market but now the market conditions are neutral amid the pandemic. That means that your home’s value may stay the same this year, or even go down a little bit, as per the Oregon property taxation system, the value is still going up 3%. In many areas, real home values have risen much faster but the assessed property value still has a long way to go to catch up to them.
The caps have succeeded in keeping property taxes relatively predictable and far lower than if they rose in sync with their home value — the price homeowners could fetch for their house. According to Metro, the current average assessed value of a Portland home is just $231,000. In 2019, Oregonlive.com ranked Oregon counties by their effective tax rates — the amount of tax imposed per $1,000 of real market value across the entire county. This is an average, and individual homeowners within those counties might have dramatically different rates. Also, These numbers reflect the previous tax year (2018), the most recent for which figures were available from the Oregon Department of Revenue.
Portland metropolitan area comprises Clackamas, Columbia, Multnomah, Washington, and Yamhill Counties in Oregon and Clark and Skamania Counties in Washington.
In Multnomah County, the average tax rate is $20.12 per $1,000 of assessed value, but the average homeowner is taxed $9.87 per $1,000 of real market value.
In Clackamas County, the average tax rate is $16.00 per $1,000 of assessed value, but the average homeowner is taxed $10.60 per $1,000 of real market value.
In Columbia County, the average tax rate is $13.32 per $1,000 of assessed value, but the average homeowner is taxed $9.40 per $1,000 of real market value.
In Washington County, the average tax rate is $17.07 per $1,000 of assessed value, but the average homeowner is taxed $10.88 per $1,000 of real market value.
In Yamhill County, the average tax rate is $15.21 per $1,000 of assessed value, but the average homeowner is taxed $10.52 per $1,000 of real market value.
Caveat: On Nov. 6, 2018, voters approved a million dollar general obligation bond to create affordable housing for approximately 12,000 people in the greater Portland region. The total amount to be raised through property taxes is nearly $653 million over 30 years. Due to this property owner in the tri-county Portland area would pay the bond back through higher property taxes over the next 30 years.
In 2019, property taxes to pay for this bond went up by 24 cents per $1,000 in assessed value for Portland homes in each of the three counties. That comes out to about $60 for a home with an assessed value of $250,000. Although the region's average home market value is far higher than $250,000, the average home's assessed value was $231,000 in 2018.
Now coming to its business friendliness, various national surveys put Oregon in the middle of the pack. However, business friendliness is relative. Forbes Magazine came out with an article in mid-2018 describing how California is unsustainable. Infrastructure is crumbling, and they build trains to nowhere instead of roads and dams people need. It is hard to run a water-dependent industry when they’re rationing water for homeowners soon. We already addressed taxes, but regulations are insane.
The new California rule mandating that businesses have at least one woman on the board by the end of 2019 is merely the camel’s nose under the tent; they could start mandating ethnicity-based board membership, union or employee representation on boards and board membership based on sexuality. A business could try to solve this by going private, or they can move their headquarters to Oregon. It is certainly easier to move a business and team north to Portland where their salaries go further since the Portland real estate market is so much more affordable.
Portland is Relatively Landlord Friendly – For Small Landlords
There’s an interesting situation in the Portland real estate market. If you own a large apartment building, you’ll find the Portland area difficult to manage because it is so tenant-friendly. A small landlord with a single home for rent, though, is in a different category. People buying and renting out a single home in the Portland housing market will have a much easier time.
They don’t have to follow the same rules on renter protection like rental assistance payments if you evict someone without cause (like you’re going to rehab or sell the property). Rental rates for smaller landlords can go up more in accord with market rates instead of being capped around 5%. Regardless of how many properties you own, Portland has only discussed rent control – and seen significant opposition to it.
The High ROI on Portland Real Estate
The median home price in Portland was around $400,000. Rents for a single-family home hover around $2000 a month. And that number includes a massive number of two-bedroom starter homes that command $1700-$1800 a month. To calculate the expected rental rates for a given property, multiply the square footage by $1.60. If you can find three and four-bedroom houses or renovate a two-bedroom into a four-bedroom, you’ll have one of the premium properties on the Portland housing market.
Portland Investment Properties: Where To Invest?
Are you looking for an investment property in the Portland real estate market? Maybe you have done a bit of real estate investing in Portland but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Should you consider Portland real estate investment? The Portland real estate market is booming because the economy is doing well on its own and the area is head and shoulders above California’s deteriorating situation.
The Portland housing market has experienced double-digit annual price growth in recent years. Home values rose 11.4% in 2016 alone, according to a report from the real estate data company Clear Capital. The home prices in the Portland, Oregon housing market have slowed considerably over the last few months. And that’s a good thing, from a sustainability standpoint.
Good cash flow from Portland investment property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Portland in a growing neighborhood would be key to your success. If you invest wisely in Portland's real estate, you could secure your future.
The less expensive the Portland investment property is, the lower your ongoing expenses will be. When looking for the best real estate investments in Portland, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Portland might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods.
Portland home prices are some of the most expensive in all of the United States. According to Realtor.com, there are 83 neighborhoods in Portland. Southwest Hills has a median listing price of $1.1M, making it the most expensive neighborhood. Powellhurst-Gilbert is the most affordable neighborhood, with a median listing price of $329,900. Centennial is also an affordable neighborhood having a median listing price of $339,000.
Some of the most popular neighborhoods in Portland are Bethany, Southwest Hills, Hazelwood, Multnomah Village, Raleigh Hills, St. Johns, Eastmoreland, Lake Oswego, Laurelhurst, Downtown Portland, Tigard, Alameda, Cedar Hills, Montavilla, Hillsdale, Lents, Woodstock, and Kenton.
We recommend taking the help of the local real estate agents to find neighborhoods with an affordable entry price of homes, high appreciation forecast, and growing rent prices so that as an investor you can enjoy positive cash flow and nice profits. If housing supply meets housing demand, investors should not miss the opportunity since entry prices of homes remain affordable.
Find neighborhoods that are most popular among renters. Here are some of Portland’s best neighborhoods for investing in rental properties.
Portland’s Downtown is the most popular neighborhood for renters. Portland's compact, walkable downtown offers easy access to great food, green spaces, cultural offerings, and tax-free shopping. It has everything residents could need or want. According to RentCafe, downtown rents are lower than those in some of the more upscale neighborhoods in the city but the average apartment rate still hovers around $1,656, above Portland’s $1,431 average.
Goose Hollow is a neighborhood in southwest Portland, and it borders both the downtown area and Washington Park. Niche.com ranks it #6 in the list of “Best Neighborhoods to Live in Portland.” Living in Goose Hollow offers residents a dense urban feel and most residents rent their homes. There are a lot of bars, restaurants, coffee shops, and parks. Goose
It has a mixture of beautiful historic buildings and modern condos, plus a tried-and-true hub for sports fanatics and college students alike. The public schools are also highly rated. The median list price per square foot in Goose Hollow is $356, which is higher than the Portland average of $288. Apartments here go for $1,657 on average and the share of renters is about 67%.
University Park is another great neighborhood in Portland for investing in rental properties due to a large student population. It is located in North Portland and is bordered by Linton, Cathedral Park, and St. Johns neighborhoods. University Park is home to one of the oldest schools in the area. There are beautiful homes and buildings and old-growth trees that make this a stunning neighborhood as well. It’s an excellent location for those looking to get away from the hustle and bustle of Portland.
According to Realestateagentpdx.com, homes in this neighborhood are more modest than in many other parts of the city, have fewer improvements, and are often cited as being among the least affordable locations in the city. Perfect for first-time homebuyers. The median home value in University Park is $474,950 (Zillow), and home values have gone up 1.4% over the past year.
Pearl District is expensive or a high-end area but the population of renters is more than 70%. It is Portland's most desirable neighborhoods with virtually no crime. It features galleries and cultural institutions, as well as stylish shops and acclaimed eateries. It is Portland's top shopping destinations. As the neighborhood is the priciest in the city, the apartments here rent for $1,911 on average, according to RentCafe. The median list price per square foot in Pearl District is $520 (Zillow), which is higher than the Portland average of $288.
St. Johns is one of the most popular neighborhoods in Portland for nature-lovers. It is a nature lover’s paradise, located in North Portland, on the western tip of the peninsula formed by the convergence of the Willamette and Columbia Rivers. St. Johns is described by locals as “extremely friendly.” It has several parks including Cathedral Park, Columbia Slough, Kelley Point Park, and Smith and Bybee Wetlands. All are within walking distance for residents. Like much of Portland, this is also an up-and-coming neighborhood that it’s still developing,
The median home value in St.Johns is $375,730 (Zillow), and home values have gone up 2.1% over the past year. The median list price per square foot in St.Johns is $258, which is lower than the Portland average of $288. The average rent in St. Johns is $1,359 (RentCafe), below both the national and city averages.
Here are the ten neighborhoods in Portland having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- N Williams Ave / N Alberta St
- N Killingsworth St / N Interstate Ave
- SW Naito Pky / W Burnside St
- N Vancouver Ave / N Beech St
- N Lombard St / N Interstate Ave
- N Ainsworth St / N Interstate Ave
- N Interstate Ave / N Going St
- NE 15th Ave / NE Alberta St
- N Vancouver Ave / N Lombard St
Evaluate the specifics of these neighborhoods at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Portland.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Portland.
Consult with one of the investment counselors who can help build you a custom portfolio of Portland turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Portland.
Not just limited to Portland or Oregon but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Portland turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you’re seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States. They’re choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it's even harder to take out a mortgage for those who have student loan debt.
Portland | Oregon Real Estate Investment Opportunities
Apart from Portland, you can also invest in many other real estate markets which are equally good for investors. Bend is a small city in Oregon. It is nestled on the edge of the Cascade Range and the shore of the Deschutes River. It is a verdant spot in the High Desert. It sounds like a wonderful place to visit. Home prices in the Bend real estate market have gone up by 5.7% over the past year. The median home value is $475,132.
Oregon is bounded to the north by Washington state, from which it receives the waters of the Columbia River; to the east by Idaho, more than half the border with which is formed by the winding Snake River and Hells Canyon; to the south by Nevada and California.
If you head to the south, go for the Las Vegas real estate market. It is as hot as the desert heat in Nevada. Las Vegas is in the top 10% nationally for real estate appreciation. Las Vegas real estate has appreciated by 99.29% over the last 10 years. The Las Vegas real estate market is entirely brimming with new businesses. It isn’t just about casinos, medicine is a growing industry as well.
The University of Las Vegas and Zappo’s, the internet shoe store, is also based in Vegas. Its friendly business environment is propping up the economy and helping towards the positive Las Vegas real estate trends. The new businesses are propping up at a much faster rate than the national average.
Investing in a Las Vegas Property is a great option as Las Vegas has very low investment property taxes and no personal income tax. The average effective property tax in Las Vegas (Clark County) is 0.70%, slightly higher than the statewide average, but still significantly lower than the national average. The state’s average effective property tax rate is just 0.69%, which is well below the national average of 1.08%.
If you choose the nearby state of Washington, then we'd recommend the Spokane real estate market. Spokane is the second-largest city in Washington State. It is sited on the Spokane River in the foothills of the Rocky Mountains. The population of Spokane is around two hundred thousand. However, the Spokane real estate market includes the broader metropolitan area that is home to nearly 600,000 people. There is a high housing demand in the market and the current supply equals 1.2 months. The median home value in Spokane is $264,212 and home values have gone up 13.1% over the past year.
Let us know which housing markets you consider hot for real estate investing?
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Portland real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
Market Data, Reports & Forecasts
Impact of Covid-19 & Recovery
Rental Statistics for apartments
Oregon Tax Rates & Way of Computing
Top Reasons to Invest in Portland