Having waded through the first two months of the 2016 Portland real estate market, ever curious as to what the 2016 market holds for us, I can now say I believe 2016 will be another banner year for Portland home sales.
Why? Here are the top 4 reasons why Portland’s real estate market will be HOT in 2016:
1. The ten year US Treasury Bond has dropped to the lowest levels in the past 4 years: Treasury bonds are the leading indicator of interest rate movement. Rates are back down into the 3’s! This is the lowest in six months according to an article from Inman.
2. A large population growth: Portland ranked most moved to city in 2015. You have all heard the news and seen the hundreds of Facebook articles stating that Oregon is the popular new kid. “Oregon was the top moving destination in 2015 for the third year in a row, according to a study of 123,000 moves from United Van Lines.” (CNN Money) You have also heard the news of rising rents and home prices pushing many people out, rest assured though, your home equity is stable and growing because those folks are being replaced by the people moving-in from out of state. In reality Portland’s real estate is one of the most affordable on the west coast.
3. Increased wages: Increased wages will put more buyers in the market: Just this past week the Oregon Senate passed Senate Bill 1532. “The proposal, introduced by Democratic Sen. Michael Dembrow, of Portland, would begin raising the current $9.25 an hour minimum in July. At that time, the Portland metro area and a group of countys including Salem and Eugene would see a 50 cent increase while a third category of rural counties would see a 25 cent increase.” (Statesman Journal) The increase would gradually continue through 2022 where the wage would be set at $14.75 per hour in the Portland Metro area. The combination of rising wages with low unemployment and healthy industry growth gives you a very positive outlook for the 2016 housing market.
4. Low Inventory: If you have been paying attention to the market you already know the inventory is low…very low. Inventory size is measured in months. That is how many months (if no more houses where listed) it would take to sell the current inventory. We are currently around 2 months for the entire Portland metro area. To put this into perspective a balanced market, one that does not favor seller or buyer, would have around 6 months inventory. If you have 5 hungry people and only 1 apple you can bet there will be a fight and a significant premium paid for that apple.
In summary I predict we will have another record setting real estate year where home owners see a significant gain in equity.
Sellers-Food for thought: Been putting off that kitchen or bath remodel? Don’t! From my experience I can say that buyers love new! They will pay a premium for new and fresh. Put your extra pennies into home renovation this year to ensure your equity gain. Your home is your greatest investment!
Buyer- Food for thought: Waiting for the bubble to burst? I can honestly say I do not see that happening any time soon. Portland is a diamond in the rough, just now being discovered. It’s population, industry growth, and over-all appeal will continue to grow into the foreseeable future. Not to mention interest rates are historically low. If you are going to make the biggest purchase of your life, now is the time.
Curious as to how much equity is in your Portland home? Contact me today! Contact Barbara