The outlook for the Portland real estate market in 2018 appears to be very favorable, so those involved in any way with this business can probably look forward to an exciting and rewarding calendar year. Whether your primary interest is in homes that are built new by reputable builders, or in pre-existing homes that come on the market 2018, promises to be at least a moderate continuation of the good health recently enjoyed by the metro housing market.
While the Portland housing market has experienced something of a boom time in recent years, that boom has been cooling off ever so slightly over the last year or two, and that barely noticeable cooling is likely to continue during the coming year. Still, even taking that possibility into account, an overall growth of between 4% and 6% is forecast for 2018 Portland real estate.
Factors Driving Portland Real Estate Forecast
Population slowdown – There are several factors which will drive the forecast for Portland housing in 2018, starting with a slowing down of the explosive population growth which the city has enjoyed for the past several years. Trends now indicate that this population growth will settle back down into alignment with national averages for growth, and hover around 1% annually, or slightly better. With a smaller influx of new residents, the demand for housing will diminish somewhat as well.
Employment fulfillment – Closely related to the population figures are those of employment, which are also expected to taper off in the coming year and beyond. While unemployment in the city is very low, it still means that most jobs are already fulfilled, and new job growth does not appear strong for the immediate future.
Fewer new homes – There are several reasons why fewer new homes will be built in the metro area this year, starting with the fact that the available land to build on is diminishing, since so much has been gobbled up in recent years during the housing boom. Then too, a very high number of apartment complexes have been built recently in the city, some of which are still under construction. This of course, is providing housing for a great many people who might otherwise have sought new homes, and with a limited number of incoming new residents, there is simply less demand for new homes to be built.
Strong neighbors – Fortunately for Portland, the adjacent states of California and Washington both have strong, stable housing markets and this reflects favorably on Portland. Populations and housing demands are still growing well in these two neighboring states, and that will trigger at least a moderate spillover into the Portland housing scene. The somewhat lower cost of living and of housing locally is sure to attract some of the new people in the area, and that bodes well for local demand.
Stable mortgage rates – Last year there was a scare circulating that there might be a significant increase in mortgage rates for 2017, a scare which never really materialized. It is not expected to happen during the coming year either, as rates are anticipated to remain at very close to the same levels throughout the coming year. The low rates should attract new buyers, and the fact of an extended period of stable rates is also very appealing to buyers.
Median Home Values
Median home values around the greater metro area will range from $308,200 in Gresham, to $442,000 in Wilsonville, all the way up to an impressive $604,800 at Lake Oswego. The neighborhoods which are expected to remain among the most active in terms of sales are Pleasant Valley, Hazelwood, Lents, St. Johns, Mont villa, Powell Hurst-Gilbert, and Brentwood-Darlington, with median home values in these areas ranging from $278,000 to $338,000.
Even with slower housing growth expected for 2018, Portland remains a very good area for new housing, and for the value of existing housing. Real Estate giant Zillow forecasts a 4.5% growth rate for the Portland area, which compares favorably with their prediction of 4.1% on a national level. Another major player in the industry, Realtor.com, predicts a somewhat higher figure for growth of the Portland housing market, at 4.98%. Regardless of which expert you might have more confidence in, it can be assumed with a fair amount of confidence that the metro housing market will slow down somewhat after its extended period of strong growth, and settle back to a more moderate period of growth.