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Portland is continuing to see an explosive real estate market. I’ve mentioned this before, but we are part of a 20-city composite for a Case Shiller S&P index that looks at national housing trends. The data that just came out last week shows the overall index leveling off a little bit. In January, we saw a 5.7% appreciation average across the 20 cities and that’s dipped down a bit to 5.4%.
However, in Portland we are still continuing to lead the pack with a 11.9% appreciation rate. We attribute our continued growth to a strong job market, strong housing demand, and the high quality of living we have here in the Pacific Northwest.
What’s also interesting is that mortgage defaults continue to be low, much lower than they have been in the past. We are at about a .75% default rate, which is a good place to be. Year-over-year price changes within that 20-city composite have remained very stable, right around the 5-6% range.
I get asked if we’re headed toward a housing bubble quite often, and my answer continues to be no. There are so many other factors that are propping up the real estate market. Our appreciation rate may not continue to be 11%, and it shouldn’t, because it’s not healthy. However, there is a huge upside to our market, and homes are still as affordable as ever.
For someone making a 20% down payment, their mortgage payments would only take about 15% of their income. Just 10 years ago, that figure was near 25%. A middle income family doesn’t need to stretch their wallet in order to buy a home, a statement that has been echoed by the National Association of Realtors’ Chief Economist, Lawrence Yun.
If you have any questions for me about the Portland market, don’t hesitate to reach out by phone or email. I would love to hear from you.
