Portland, Oregon’s largest city, has grown in popularity over the last several years. With its eco-friendliness and thriving art scene, it’s no wonder people are attracted to the Portland real estate market. A healthy supply of parks, museums, microbreweries and outdoor entertainment means people are not just coming here to visit; they are coming to enjoy what Portland has to offer year-round.
Current Portland Real Estate Market Conditions
- The median home price and rental price in Portland have increased and are still on an upward trend.
- The population increased by 9,600 households in the last year.
- Foreclosures are at an all-time low of 0.1%.
Buying a House in Portland
Portland Home Prices
Portland median home value: $490,000
National average: $371,000
Home prices in Portland have been on an upward trend over the last 5 years. Values have increased by almost $200,000 since 2016 and are still rising. Portland has seen an increase of 17.8% in the past year. Nationally, home prices have seen an increase of $143,000 over the last 5 years. In the last year alone though, home prices nationally have seen an increase of 22.4%. These impressive increases mark a major change for the housing market. For homeowners, they are happy to know that their home is worth more than ever, while potential buyers may struggle to afford the price increases and competitive nature of the current real estate market.
Portland Housing Supply
Like most of the country, the housing supply in Portland is at a low right now. The supply has dropped by almost 2 months year-over-year. Nationally, statistics show just a 1.1 month supply of available homes. With such a short supply of homes, the sizable demand in this area makes for a difficult market for buyers. Multiple offers and over-asking-price offers are the norm right now. Competition is fierce, and not everyone has the money to play. Sellers, on the other hand, are thrilled by how much they are getting for their homes. It’s an excellent time to sell and turn a profit — if you have somewhere else to go. Otherwise, you’re struggling to secure a new home just like many other hopeful buyers.
Buying a Rental Property in Portland
Home price increases have caused some people to turn instead to renting for a year while they try to “wait out” the current market conditions. Low vacancies and higher rental prices mean lucrative opportunities for investors interested in owning rental properties. The demand for rentals has driven an upward trend in rental prices.
Portland Rental Prices
Portland median rent price: $1,608
National average: $1,704
Rental prices in Portland, like home prices, have seen increases in recent years. Rent increased by 3.6% in just the last year and almost $300 in the last 5 years. Nationally, the numbers are very similar at a 3% increase in the last year and almost $300 in the last 5 years. For investors looking to purchase a rental property, they will spend more right now to purchase a house in this competitive market, but rental prices are continuing to increase as well. However, it’s worth noting that the median home price in Portland is much higher than the national average, yet their rentals are less.
Portland Rental Vacancies
Portland rental vacancy: 5%
National average: 6.1%
Rental vacancies in Portland tend to fluctuate throughout the year. The lowest vacancy rate seemed to be around October, getting down to 2% to 3% regularly each year. Even with the fluctuating vacancy rate, Portland overall still has low vacancy, which means it's a strong rental market for investors. Nationally, the rental vacancy rate has stayed around 6% to 7% pretty steadily over the last 5 years. Portland has its highs and lows but still doesn’t get too high to be a concern for investors interested in purchasing a rental property.
Portland foreclosure rate: 0.1%
National average: 0.3%
Foreclosures are at an all-time low right now. They have continued to drop over the last few years to nearly nothing. With such a shortage in the housing supply, buyers and investors have turned to foreclosures to renovate. Foreclosures are few and far between now, which isn’t optimal for investors. It’s harder to score a terrific deal and flip a property for a profit. This situation benefits the real estate market as a whole, as it helps to increase nearby property values and the look of the community. For investors though, fewer foreclosure opportunities arise and there’s stronger competition when one does pop up.
N Hayden Island Dr. / N Tomahawk Island Dr.
A popular spot in Portland for waterside condos is N Hayden Island Dr/N Tomahawk Island Dr. Home prices here are just under $200,000 and rentals go for $1,846. Small to mid-sized single-family homes and apartments are located here. High rises overlooking the Columbia River draw people to this neighborhood. Mostly owner occupied, the vacancy rate here is high at almost 20%. However, being a vacation spot, 12.1% of the housing is only seasonally occupied. Residents have jobs in professional and executive careers, as well as sales and service. This upper-middle-class neighborhood is made up of over 13% of residents working from home and over 30% divorced.
An expensive neighborhood in Portland is called Portland Heights. Homes in this suburb go for over $1,000,000 and rentals average $2,645. Most of the real estate here is mid-sized to large single-family homes and apartment complexes built before 1939, making it a historic neighborhood. The vacancy rate is currently 10.8%, and homes are mostly owner-occupied. Residents here are known as “urban sophisticates,” enjoying the arts and theatre, as well as being highly educated individuals.
University Park/U of Portland is a college neighborhood with 40.5% of residents currently enrolled in college. The median home price is $524,973 and rentals are around $2,200. Homes here are smaller single-family homes and apartments. The mixture of owners and renters in University Park and a vacancy rate of 8.1% means it’s a sought-after place to live. Residents here enjoy the walkability and safety of the neighborhood, as well as cultural diversity.
Portland Economic Condition
Like all big cities, Portland’s economy was negatively affected by the pandemic in 2020. It’s taking time to get things back to normal. An increase in employment opportunities and households is helping, but the unemployment rate is still higher than before the pandemic.
Portland unemployment rate: 6.3%
National average: 6.9%
From 2016 to January 2020, the unemployment rate in Portland was on a downward trend. The rate got as low as just 2.8%. Then came the spike in unemployment while the world got turned upside down by the pandemic. Businesses closed, jobs disappeared and people struggled. Portland is succeeding in getting back to reasonable numbers, but it must continue the effort to get to pre-Covid numbers. An increase of 86,000 jobs year-over-year and a drop in the unemployment rate has lifted the economy here; it will just take a little extra time to successfully make a full comeback.
Portland Top Employers
The technology industry is big in Portland. The largest employer is Intel (NASDAQ: INTC) with 20,000 employees. Intel Oregon is the largest Intel site in the world, focusing on development and research as well as manufacturing and design. Known as a great place to work, employees are offered many benefits and programs as well as clubs and amenities.
Nike (NYSE: NKE) World Headquarters is located just outside of Portland and is another top employer with 12,000 employees. In addition to selling activewear and accessories, the headquarters consists of research labs and design studios. It offers a variety of positions in many fields, including manufacturing, human resources, technology and accounting.
Banks in Portland like U.S. Bancorp (NYSE: USB) and Wells Fargo (NYSE: WFC) are also top employers. Thousands of jobs are offered here for in-person work as well as remote positions in customer service, management and financial advising.
The Bottom Line on the Portland Real Estate Market
Portland is successful in its “new normal.” After the pandemic hit big cities so hard, Portland faced many challenges. Now, home prices and rental prices continue to increase, job opportunities are opening up and more households are coming in. This big city is well on its way to a prosperous future.