The Portland, Oregon real estate market has been in the news a lot lately, mainly due to the rapid home-price appreciation that occurred during 2015 and 2016. Additional gains are expected in 2017 as well, but they’re not expected to be as large as last year.
Here are the latest home price trends for Portland, Oregon, as of February 2017.
Portland, OR Home Price Trends: February 2017
The Portland real estate market has been on fire over the last couple of years, with home prices rising by double digits in 2016 alone. But recent trends and reports suggest that Portland, Oregon home prices are slowing down. This is a trend that could continue throughout 2017, according to some experts.
Let’s start with a look back. According to Zillow and other sources, house values in Portland rose by double digits in 2016. Zillow’s research team puts the one-year gain at around 12%. Other sources come in slightly below or above that level. The point is, Portland outperformed most other U.S. cities in 2016, in terms of home-price appreciation.
But the latest release of the S&P Case-Shiller home price index, published at the end of January, suggests that Portland house values are starting to rise more slowly. This probably isn’t from a lack of demand. Housing demand in the metro area is still high, with homes selling quickly. But it might be a sign that the metro area has hit the upper limits of affordability.
In November of 2016, Portland, Oregon home prices rose 0.2% over the previous month. That’s on par with the national average for the same period, according to Case-Shiller. (This particular index measures relative changes in house values by using repeated sales of the same homes. It uses a three-month rolling average, which accounts for the reporting lag.)
The economists at Zillow expect home values in the area to rise more slowly over the next 12 months, compared to the last year or so. In February 2017, the company stated:
“The median home value in Portland is $406,200. Portland home values have gone up 12.9% over the past year and Zillow predicts they will rise 5.5% within the next year.”
Granted, a gain of 5.5% would still outperform historical averages, as well as Zillow’s forecast for the nation as a whole. But in light of the previous year’s gains, it suggests a cooling trend for Portland home prices.
In other words, we probably shouldn’t expect to see double-digit gains in 2017, like we did last year. Call it a return to normalcy.
Higher mortgage rates are also a factor in all of this. Six months ago, the average rate for a 30-year fixed mortgage loan was 3.44%, according to the long-running survey by Freddie Mac. During the week of February 2, 2017, the average rate for a 30-year loan had risen to 4.19%. This could soften demand over the months and contribute to a slowdown in Portland home price trends for 2017.
Though prices in the area might rise more slowly this year, they are expected to continue rising (to some extent) for the foreseeable future. Portland is a great area that attracts people from elsewhere in the state, and from across the country. So there will always be buyers coming into the market.