It’s almost halftime for 2019 and I want to give you some highlights of how this year is shaping up for real estate in the Portland Metro.
Portland jumps up to 25th largest city in the US despite slowing growth. Portland grew by 4,500 people from July 2017 to July 2018 according to this Oregonian article. My gut tells me growth will continue to slow in our region.
Home inventory: 2.2 months – still a sellers market except in the million dollar plus range where inventory is 7 months. A great time to move up!
Average sales price: $452,100 up 1.2% through April but flat from last year. Lots of overpriced homes on the market so expect price drops this summer but the correctly priced homes will be getting multiple offers.
Interest rates: Dropping through the year – this is a surprise to many people. Lower rates and flat prices will increase affordability.
Apartments: According to the Barry Report there are close to 9,000 units under construction as of Summer 2018 – those units are hitting the market now. Match that up with only 4,500 new residents and you can see why vacancies are up and rental rates are down. Permits for future projects are down and there is an expectation that in 2-3 years apartments could be in short supply again.
The big picture: Portland is not building enough homes so I predict that below average priced homes [for their neighborhood] will continue to rise while higher priced homes will see prices come down until inventory drops below 6 months.
Apartment rents will drop or stay flat for the next two years but then rebound as people continue to move to Portland and construction slows. Many owners of rentals are selling when units go vacant due to the State of Oregon and City of Portland rent controls. The number of homes for rent will plummet over the next decade as vacant rental homes are sold to people who will occupy the homes.
I will update this report in mid July when we have closing numbers from June 2019