Home Prices in Oregon Run Counter to National Trend
While residential real estate prices have turned south in much of the United States, Portland’s housing stock continues to appreciate - by double-digit percentages.
Why?
According to The Oregonian, you can thank young families looking for hip, yet livable, places. Retirees following their kids around. Wads of cash inherited from the World War II generation. Tight supplies caused by the planning and zoning restrictions that lead to “livability.” Easy terms for even first-time home buyers. Relatively higher prices next door in California.
Explanations from those in the real estate business are abundant, which itself may help to explain the continued rise in prices.
The S&P/Case-Shiller composite index for 20 major markets in the United States released on Tuesday showed homes in Portland, along with its bigger Pacific Northwest neighbor - the Seattle housing market - posting strong gains: 13.2 percent in Portland, 14.1 in Seattle.
Native Portlanders may be shocked at the valuations on their houses, but the surprise among people looking at the market from the outside is how cheap it is, said real estate agent Charles Turner.
“One of the prime reasons is still California,” he said. “The difference between what their dollar buys down there and what their dollar buys up here is huge.”
As a result, individuals seek an Oregon mortgage as they look to “cash out” of pricey homes in California. There’s also activity from comparison shoppers in the rest of the country looking all along the West Coast.
Portland’s reputation - heavy on brew pubs, bicycling, high tech, outdoor recreation - attracts young people. A 2004 study, titled “The Young and the Restless,” by two economic consultants identified Portland as among half a dozen U.S. cities gaining population among those 25 to 34 years old, key to building high tech and “knowledge-based” businesses.
“I think one word: hip,” said home mortgage broker Francine Corriere. “I really think our Gen Yers want hip.”
Many young people, she added, come with enough cash to handle expensive houses and payments, thanks to parents of the World War II generation handing down “the largest volume of money that’s ever been moved from one generation to the next.”
Even those who don’t come with lots of cash still find “very easy terms” for buying, said broker Fred Montgomery. “There are actually lenders that will do 100 percent financing,” with no down payment, he said. “In some cases, they’ll get their closing costs financed also.”
The state’s chief economist, Dae Baek, noted in his recent forecast to legislators getting ready for a session in 2007 that he expects housing prices statewide to continue rising even as the housing industry slows in 2007.