Property Management Blog

Portland’s Record Setting 2015 Bodes Well for 2016

Nicholas Cook - Sunday, January 17, 2016

2015 was a great year for sellers of Real Estate in the Portland Metro Area, and 2016 should see that trend continue. 2015 saw Portland post some remarkable statistical increases, including a record setting July with more closed home sales than any July on record, and an October where Portland home prices rose faster than any area in the country. Despite that fact, housing inventory remained low, staying under 2 months until the end of the year. Many Portland homeowners saw their property values rise 10% or more, and those who chose to sell their homes often saw bidding wars take their sale price above the list price. Mainly, rising home values are due to a low inventory of for-sale homes, combined with a stable economy and steadily increasing demand from Portland’s growing population. Many sources have ranked Portland in the Top 5 housing markets in the U.S. right now and for 2016, based upon data collected last year and favorable economic and demographic trends projecting into 2016 and beyond.

Portland Metro’s Favorable Future

It’s a numbers game. In-migration to Oregon, especially Portland Metro, continues to add more population than the existing inventory of homes can absorb, and the construction of single family residences has not yet returned to pre-bubble levels yet. The trend of in-migration to Portland shows no signs of slowing. In fact, United Van Lines has ranked Oregon as its “Top Moving Destination” for 3 years running. When this data is viewed in the context of the low housing supply in Oregon, it is easy to see why the sale prices of homes in Portland Metro have increased every quarter for each of the last 3 years.

Additionally, Portland homes remain affordable when compared with other major US cities’ housing stock, most notably that of close metro neighbors San Francisco and Seattle. Out of state buyers from markets with higher pricing than here in Portland also contribute to the rise in home values and sold-home-prices, as these buyers are less sensitive to the rising prices of the Portland market and often have more cash to leverage in the home purchase.

Until the construction of Single Family Homes starts to significantly increase, the low supply and steadily increasing demand should keep the Portland Real Estate Market trending in a direction favorable to current Portland homeowners who wish to sell their home.

Shadow of the Past

One dominant issue in the Real Estate market in recent years didn’t even happen this decade, and if you talk to homeowners it comes up almost without fail- The Bubble. People have long memories, especially when significant economic pain is attached to that memory. The Housing Bubble, and its role in the Great Recession, has cast a long shadow on the market. While median home values have increased beyond peak 2007 levels in many cases, the specter of another housing bubble has many homeowners and buyers still wary of entering the market. Stricter regulations spurred by the Dodd-Frank Act have made it more difficult to acquire mortgage debt for the average consumer, although those who do qualify have been enjoying historically low mortgage rates. This has helped fuel the bidding wars in the market, as mortgages initiated with favorable interest rates help homeowners lock in long term asset management strategies. Good mortgages help make good assets.

The Present: Seller’s Market

Regardless of the psychological impact of the Bubble on the housing market in the past few years, by most indicators the present is a very good time to be selling your home. On a macroeconomic level, the large cohort of Millennials is entering the U.S. housing market in their prime buying years, and just as many of the large cohort of Baby Boomers are entering their retirement and downsizing years.

According to Jonathan Smoke, chief economist at, “Assuming that most of these households will both sell and buy, it is important to recognize that 2016 is shaping up to be the best year in recent memory to sell. Supply remains very tight, so inventory is moving faster. Given the forecast that price appreciation will slow in 2016 to a more normal rate of growth, delaying will not produce substantially higher values, and will also see higher mortgage rates on any new purchase.” Smoke predicts a 60 basis point rise in the average mortgage rate by the end of 2016, indicating that the Fed’s decision to raise the rate again has signaled a turning point for the availability of historically low mortgage rates.

Real Estate relies more on local markets, though, and another major factor in making Portland a great place to sell right now is the rental market, which has also been stretched by in-migration and has had one of the nation’s lowest vacancy rates for a number of years running. This has caused Portland rental prices to skyrocket even faster than housing prices, driven by the same metric of low supply and high demand. At the same time, financial qualifications for renters have become stricter, making the rental process more costly and difficult, especially for those with lower than average credit scores. These factors should contribute to a larger percentage of the rental pool deciding to buy a home, rather than continuing to rent, as the price of rent continues to rise.

The most important factor will remain supply and demand, though. When demand is high, and supply is low, the price goes up. That makes 2016 a very good time to be a home seller in the Portland Metro Area.

Rise Realty, Inc. Jesse Tremblay OR Broker

Investing in the Portland, Oregon Rental Market

Nicholas Cook - Sunday, December 6, 2015
Portland is one of the top rental markets in the United States. Investors from all over, especially California are looking to buy rental property, second homes or future homes in the Portland market.
Even with all the buzz in the market it is important to know the differences between investing in single family homes or plexes and how minor change in location can impact your potential cash-flow.

While rents are strong, some properties do not cash flow (income is great than expenses) right away so it is important determine what your goals are before you start making offers on property.

We are seeing a large amount of 1031 exchanges which can be attributed not only to an improved housing market, but also out of state investors looking to maximize their buying power.

The most important thing to keep in mind as an investor is that you make your money or profit when you buy. Sounds odd right? What I mean by this is that a good deal is just that, it is an opportunity that you have vetted and are able to determine if what you have learned is in alignment with your goals. 

Some important questions to ask yourself are:
  • Is this a long term buy and hold or is this a short term purchase?
  • Will I live in the property one day?
  • Is appreciation more important or is cash-flow?
  • Do I have money to handle repairs?
  • How important are tax benefits and do they apply?
  • Why type of property do I want? High End or Economy?
A lot of investors fail to ask and/or answer these questions. You need to have an exit strategy and some way to measure when you have met your goal(s).

Another critical part of the process is making sure you are not only financially prepared for being a landlord, but also emotionally prepared as well. A rental property is not your primary residence, improvements should be based on returns, not necessarily what you would personally want.

While being a responsible landlord is critical, being a landlord means you are in the landlord business and without good judgment, you may not be in business long or may be unable to care for the property as you hoped.

Don’t get too attached, be careful and make plan.

Once you have determined what you want and how to plan to get it, you need to decide who is going to manage your property.

Will you manage your property or will you hire a professional company?

Like anything, managing property is a skill set and can be learned, but do you have the time or energy to do so? If so, great, we can provide you some wonderful resources. If you don’t want to manage your own property we recommend visiting our property management section of the website.

Our New Look

Nicholas Cook - Sunday, December 6, 2015
We’ve got a new website and couldn’t be happier. With the new website we will not only show case our latest listings, but will be providing bookmark worthy content packed full of great information.

We will share articles we write and information we think will be valuable for you to know as an owner or soon to be owner of real estate.

Our blog will also future videos with market updates, tips on being a homeowner and/or an investor as well as changes on the horizon that will affect your investment.

Check out our Recommended Reading list with books we’ve read and found to be both inspiring and transformative. 

There is no need to always reinvest the wheel. The books on our list pack someone’s lifetime of experiences and insight into something you can consume in a couple weeks (maybe faster depending on how much you read a day). 

Our Preferred Vendor list will also be a great resource for you. Instead of searching aimlessly on Google or opening the phone book, you can rest assured knowing that the vendor would not have made our list if we had not been impressed by them. Give one of them a call today!

Do you want to know how much your house is worth today? What if you know someone that does? Just give them our web address and they can fill out the form on our homepage and an agent will get in touch right away.

We are super happy with our website, but if you have any recommendations for things you want to see or that the website can do feel free to send your great ideas our way.

Take a look around, who knows, you may learn something new!

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4415 NE Sandy Blvd Ste 201 | Portland, Oregon 97213 | 971-258-0092