Current Opportunities in Portland
In the years between 2004 and 2007 there was a manic nature to the market and many people were buying property on speculation that double digit increases in value would continue indefinitely. During the following 5 years the market corrected to levels where affordability was at a sustainable pace. 2012 and 2013 will be remembered as the recovery years with 2014 looking to continue the trend of appreciation and expansion.
The biggest opportunity in the market I see is now in single family homes and multifamily on fringes of the “close-in” market. The true close in market has seen prices rebound and even surpass the past peak of 2007 and the rate of return on multifamily is dangerously close or below interest rates on investment loans. The vacancy rate for apartments in Portland is at a very low 2% right now but expected to rise with 16,000 new units coming online in 2014-2015. New construction has picked up substantially but still behind the pace needed to supply the demand. Factor in that in-migration to Oregon was the highest in the USA and demand looks to continue to be strong.
Property prices went up more than expected with both the Case/Shiller and RMLS quoting a 13% increase in 2013. From the bottom of the market in Portland properties are up 23% to date. I expect 2014 to yield another double digit increase in prices due primarily to the low housing inventory in the Portland area.
Historically real estate goes up about 3% a year and in this scenario a property would double in value in 24 years, about the same time a 30 year loan is almost paid off. Increases in rents are to be expected as well over this period putting you in a position of increased asset value, increased cash flow, and a lower loan to value ratio.
If you are planning on buying, selling, or investing give me a call or email anytime. My team and I can personally help you in the Portland area and also help you find the right agent in your city. (503) 901-8100 or nick@sellpdx.com.
To read the entire 2014 Portland Real Estate Market Report, click here.
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