The Portland real estate market is cooling down as the months pass in 2018. However, if you want to buy Portland investment properties, now is the time.
Portland Real Estate Market 2018
What sets apart one housing market from the other? Well, a couple of things. Portland’s hot housing market is cooling off, but you should still invest in Portland real estate for a number of reasons. Portland is the 25th largest city in the United States but has the 9th largest millennial population. With 36 colleges and universities, Portland has been attracting many people.
Related: What Are the Hottest Real Estate Markets 2018 in the US?
Portland has had a strong real estate market for quite a while now. It’s experienced double-digit annual price growth in recent years. For example, home values rose 11.4% in 2016 alone. This surge in home values is mainly due to the imbalance between supply and demand. Plenty of people were looking for homes, but supply was very limited resulting in the rise of home prices which even outpaced the national average. However, Portland real estate investors know that in 2018 this is no longer the case. The market has started to cool down in terms of home-price appreciation. If you’re considering buying an investment property in the Portland real estate market, we recommend you do it before the end of the year. Here’s why.
Affordability is a big player in the game. Personal income is rising faster than the national average and unemployment is lower than the national average. Although home prices are high, Portland is still the most affordable city on the West Coast. Houses for sale in Portland have been listed at considerably less-than-average prices over the last couple of months. It could also be the unwillingness or inability of home buyers to meet the once ever-rising prices which are slowing down home value appreciation.
Related: Where to Invest in Real Estate for Affordable Investment Properties
#2. High Competition
Home prices aren’t the only thing cooling down. Home sales are also declining. According to the Regional Multiple Listing Service (which serves the Portland metro area), home sales in the area dropped by 4.9% in March 2018 compared to a year earlier. But this could be due to the shortage of homes for sale, more so than weakening demand. In fact, competition among buyers still remains quite high in the Portland housing market. When there’s competition you know it’s a winning housing market.
#3. Job Growth
Portland has seen a lot of job growth and newcomers. The state of Oregon ranked 7 for Net Domestic Migration (the number of people moving to Oregon). To compare, Washington ranked 3 and California was number 48. The Northwest region is known to have the strongest economy in the country. Some investors may see Portland, Oregon as the best place to invest in real estate because of this reason.
Related: Location Location Location: What Makes for The Best Place to Invest in Real Estate?
#4. Real Estate Analytics
The last reason is the data. For many real estate investors, this is the only important factor. In real estate investing, data is key. With Mashvisor, data is what we’re all about. We use analytics to find lucrative traditional or Airbnb properties in a matter of minutes. No spreadsheets and no searching. Mashvisor gets its listing information from reliable sources like MLS, Airbnb, Redﬁn, and more. We then use our algorithms to make projections for nationwide areas, providing our customers with insight and accurate predictions. Our investment property calculator finds the average city-level numbers across the nation. Let’s see what numbers our calculator has on Portland real estate.
Related: Mashvisor’s Investment Property Calculator: Real Estate Investing Made Easier
Portland Real Estate Market 2018- city Level
- Median Property Price: $557,248
- Monthly Traditional Rental Income: $2,074
- Monthly Airbnb Rental Income: $2,405
- Traditional Cap Rate: 0.89%
- Airbnb Cap Rate: 0.80%
- Traditional Cash on Cash Return: 0.89%
- Airbnb Cash on Cash Return: 0.80%
So like we said, home values are high. Although home values have begun to rise at a slower rate, they’re still rising. So we recommend you invest in Portland rental properties now while there’s still a sustainable home price appreciation level. Taking a look at the return on investment metrics on Portland real estate shows us a relatively stable return. Both traditional Portland real estate properties and Airbnb Portland real estate properties seem to be performing at the same level.
The average cap rate for both rental strategies may not prompt you to view Portland as the best city to buy rental property; however, keep in mind that these numbers are averages. That means that you will definitely find individual Portland real estate properties performing at much higher rates. Let’s get into our neighborhood analysis of the Portland real estate market to get a better idea of how Portland real estate is performing.
Best Neighborhoods in Portland
- Median Property Price: $583,904
- Monthly Airbnb Rental Income: $3,493
- Average Airbnb Cap Rate: 2.04%
- Average Airbnb Cash on Cash Return: 2.04%
- Airbnb Occupancy Rate: 52.08%
- Median Property Price: $560,458
- Monthly Traditional Rental Income: $2,376
- Monthly Airbnb Rental Income: $2,200
- Average Traditional Cap Rate: 1.44%
- Average Airbnb Cap Rate: 1.04%
- Airbnb Occupancy Rate: 58.56%
- Median Property Price: $387,029
- Monthly Traditional Rental Income: $1,671
- Monthly Airbnb Rental Income: $1,471
- Average Traditional Cap Rate: 1.15%
- Average Airbnb Cap Rate: 0.2%
To start your search for Portland real estate investment properties, click here.
You can click the link above to start using our Property Finder tool. We’ve already used it and have picked out a couple of top-performing properties currently listed for sale in the Portland real estate market. Here are the specs.
- Property Type: Condo/Coop
- Listed Property Price: $350,000
- 928 Sq/Ft
- $377 per Sq/Ft
- 2 Beds and 2 Baths
- Airbnb Cap Rate: 7.78%
- Airbnb Occupancy Rate: 56%
- Traditional Cap Rate: 2.04%
- Traditional Occupancy Rate: 95%
- Short Description: Portland condo remodeled corner unit with a patio. Features a master suite and a second bedroom, 2 full baths, and attached garage space with parking. Nearby groceries and shopping making this unit a convenient spot.
Pearl District, Portland
- Property Type: Condo/Coop
- Listed Property Price: $188,200
- 399 Sq/Ft
- $472 per Sq/Ft
- Hideaway Bed and 1 Bath
- Traditional Cap Rate: 6.73%
- Traditional Occupancy Rate: 95%
- Short Description: This unit lives large with a hide-away bed, large walk-in closet & wood floors. Updated kitchen with SS appliances & gas cooktop. Spacious bath with claw-foot tub, tile floor & storage. Shops, fine-dining, grocery & library are all within walking distance.
- Property Type: Single Family Home
- Listed Property Price: $649,900
- 2,290 Sq/Ft
- $284 per Sq/Ft
- 4 Beds and 3 Baths
- Airbnb Cap Rate: 6.60%
- Airbnb Occupancy Rate: 54%
- Short Description: A real show stopper. The perfect blend of original charm and quality modern updates. Pocket doors, leaded and stain glass thru-out, maple floors, wainscoting, and tin ceiling. Just steps away from restaurants, shops, public transportation & downtown, this urban home with no yard or mowing has several outdoor spaces to enjoy.
For more details on these properties and other great Portland real estate investment properties, click here and see what our Property Finder tool can really do. Do you have questions about Mashvisor? Click here to read our FAQs and learn about our tools.