At a glance: A recent forecast for the Portland, Oregon housing market suggests that it could be the #2 market in 2017, in terms of year-over-year price gains.
The Portland, Oregon real estate market has generated a slew of headlines in recent months, mostly due to rapidly rising home prices in the area.
The most recent Case-Shiller Home Price Index, published last month, showed a 12.5% increase in local home values from May 2015 to May 2016. According to the report: “In May, Portland led the way with a 12.5% year-over-year price increase, followed by Seattle at 10.7%, and Denver with a 9.5% increase.”
A recent forecast for the Portland real estate market suggests the city could experience significant gains in 2017 as well. In fact, it could be one of the hottest metro areas next year, in terms of home price appreciation.
Forecast: Portland Real Estate Market #2 in 2017?
In July 2016, California-based Veros Real Estate Solutions published a forecast for major metropolitan areas across the country. The property valuation company expects Portland to have the second-highest increase in home prices, from June 2016 to June 2017.
According to the report, published last month:
“The top forecast markets are showing appreciation in the 10% to 11% range with the Pacific Northwest and Colorado having a lock on the 8 of the top 10 forecast markets. Seattle, Wash. (+11.2%), Portland, Ore. (+11.1%), Denver, Colo. (+9.9%) and other metropolitan areas in these same vicinities appear very strong over the next year.”
These predictions are based on the company’s latest “VeroFORECAST,” a quarterly real estate market forecast for the U.S. that extends through June of 2017.
What the Top Markets Have in Common
The top-ranked real estate markets in the Veros prediction have a few things in common:
- For one thing, they all have populations that are growing faster than the national average. The Portland metro area gained more than 40,000 new residents from 2014 to 2015, according to a report released by the U.S. Census Bureau earlier this year.
- These cities also have strong economies, and strong tech industries in particular. Portland is often referred to as the “Silicon Forest” for this very reason. This attracts young, highly educated residents from elsewhere in the country. It also increases demand for housing, putting upward pressure on home prices.
- The third thing these housing markets have in common is limited inventory. In Seattle, Denver and Portland, there just aren’t enough homes on the market to satisfy demand — at a time when demand is rising. Portland’s housing supply is well below the five to seven months worth that economists consider “healthy.” Back in spring, Redfin reported the local supply was down to just 1.4 months.
You don’t have to be an economist to forecast what Portland home prices will do in 2017. More buyers are entering the market, at a time when inventory is limited. This kind of supply-and-demand imbalance usually sends home values north, and that’s exactly what analysts are predicting for the Portland real estate market in 2017.
Zillow: Home Prices Climbed 20% in Last Year
According to the economists at Zillow, home prices in Portland rose by a whopping 20% over the last year or so (Aug. ’15 – Aug. ’16). That was one of the largest year-over-year gains of any city in the country. And while additional gains are expected in 2017, they probably won’t match the tremendous increase of the last year.
“Portland home values have gone up 20.0% over the past year and Zillow predicts they will rise 7.4% within the next year,” the company said on its website.
The general outlook and forecast for the Portland housing market in 2017 appears to be this: House values probably won’t rise as fast as they have over the last year or so, but they could still outpace the national average. In fact, strong demand and limited supply could make Portland one of the hottest real estate markets in the country next year, like it was this year.
Disclaimer: This article includes forward-looking statements (predictions and forecasts) relating to the Portland real estate market in 2017. Such statements were provided by third parties not associated with our company. We have presented them here as an educational service for our readers.