The Portland housing market saw a seemingly “impressive” 2016, where an excess of buyers and a low number of sellers drove up home prices to a record high. With such a year behind us, it leaves us questioning what 2017 will bring.
Here are some of our resident experts’ thoughts of what’s ahead for the Portland Metro market (all direct discussion of politics aside):
- Locally, the market has greatly benefited from steady job growth. Portland economists expect this to likely continue through 2017, perhaps even at a slightly quicker pace. Economic vitality will bring a more consistent demand for housing. However, expect more migration to the Metro, which we’ve seen puts further pressure on our housing market.
- One question experts are beginning to ask is are we building too many apartments? Developers completed 3,700 units in 2015 and close to 6,500 new units in 2016… a noticeable increase. Does that mean rental rates will slow as landlords vie for tenants? Perhaps slightly, given the extreme need for housing units the rental market is expected to remain fairly tight with demand still (surprisingly) exceeding supply.
- The millennials are coming! This generation is now ready to buy. 2016 saw noteworthy increases in the number of this age group of buyers and you can expect to see even more in 2017. However, will they be able to afford or even find anything?
- Home prices will continue to rise but expect to see price growth start to slow. Since the market’s “bottom out” in 2011, average home prices are up significantly by 64 percent, and 16 percent above the pre-recession peak seen in 2008. Given that interest rates will most likely be growing faster, there will be some slowing in price appreciation. However, values will still hit rates well above the national average.
- We may see a slight increase in home sales and overall inventory from 2016, but it still won’t be enough to meet the needs of the market.
- The issue of affordability will still resonate throughout, with home prices (especially in the big job areas) pulling ahead of incomes. Adopting rent control within the City may also negatively impact the housing supply. Though 2016 brought along many affordability initiatives, the solutions and actions are not aggressive enough to ease the issue anytime soon.