Home prices across Oregon have risen at an above-average pace for the last couple of years. This was largely due to the still-lingering imbalance between supply and demand. (Lots of buyers, not enough homes for sale.)
Recent forecasts and predictions, however, suggest that the Oregon housing market could be slowing to a more “normal” rate of price growth in the coming months.
A related report from an economic group suggests that increased demand for homes will continue to put upward pressure on prices in 2018 and 2019. This could lead to additional price gains within Oregon’s housing market, even if the annual gains fall short of what we’ve seen in the past.
Latest Predictions and Trends for Oregon Housing Market
In March 2018, the real estate research team at Zillow offered an updated forecast for the Oregon real estate market stretching into 2019. By their estimation, the median home value for Oregon will rise by around 3.8% over the next 12 months. This particular market prediction extends into March of 2019.
That would be a fairly “normal” rate of appreciation, if you look at home-price trends going back several decades. The overheated growth we’ve seen over the last couple of years (double-digit gains in some cities) is abnormal and generally unsustainable over the long term. So, from an economic perspective, it’s good to see a more modest prediction for the Oregon housing market in 2018 to 2019.
Strong Demand Due to Household Formation
Oregon’s Office of Economic Analysis (OEA) recently published an “Economic and Revenue” forecast for the state. Issued in March, this report offers in-depth analysis of the state’s labor market, household formation, and other trends that could affect the Oregon housing market in 2018 and 2019.
One of their key predictions relating to the real estate market had to do with demand. Currently, there is strong demand for housing in most cities across Oregon — at a time when inventory is limited. And demand could remain strong throughout 2018 and into 2019. It might even rise.
According to the OEA forecast report:
“As the economy [in Oregon] continues to improve, household formation is increasing too, which will help drive up demand for new houses. Household formation was suppressed earlier in the recovery, however the improving economy and increase in migration have returned in full force. Even as more young Oregonians are living at home, as the Millennials continue to age beyond their early 20s, demand for housing will increase as well.”
When demand outweighs supply, prices tend to rise over time. And that’s what we are seeing in real estate markets across the state right now. There just aren’t enough homes listed for sale to satisfy demand, especially in Portland and other major cities. This is why most economists are offering positive projections and predictions for the Oregon real estate market in 2018 and 2019.
The OEA report mentions this supply-and-demand imbalance as well, but offers an optimistic note regarding new-home construction:
“Expectations are that new construction will pick up in the next year or three, to match the increase in demand, which will alleviate some price pressures.”
Disclaimer: This article includes forecasts and predictions relating to the Oregon real estate market in 2018 and beyond. Such statements were provided by third parties not associated with our company. We have curated and compiled them here as an educational service to our readers.