Jun 13, 2023 - Real Estate

Home prices are falling in Portland, rising in the suburbs

Change in Portland-area home prices, by ZIP code
Data: Zillow; Map: Erin Davis/Axios Visuals

In 2020, buyers flocked to the suburbs in search of cheaper housing. Since then, prices have only gone up as prospective buyers look outside Portland, which is grappling with issues like rising rents and low housing inventory.

Why it matters: An increased interest in homes outside city limits has reduced inventory, which makes the suburbs more expensive and competitive.

What's happening: In the early days of the pandemic, many people working from home realized they wanted more space.

  • Between July 2020 and July 2022, Portland lost over 18,000 residents, according to the U.S. Census Bureau.
  • While other cities in the region saw relative growth, the population across the metropolitan area declined overall.

What they're saying: "We saw much more competition for properties further out of town, which of course drove up the prices," Rachel Freed, owner and principal broker of Urban Nest Realty, tells Axios.

  • Freed added young parents are particularly interested in buying homes in the suburbs, as "more great restaurants and businesses are heading to the 'burbs and bringing the cool Portland lifestyle along with them."
  • Quality education is also a top priority for young parents, Freed said, noting some of her clients expressed concern about Portland's public schools, which have seen a dramatic drop in enrollment.

By the numbers: Across the Columbia River in Camas, the average home price for April 2023 was $711,100, a 0.8% increase since last year. Government Camp, the town that sits at the base of Mount Hood, saw the biggest jump in property prices; the average sale price was $592,800 last month, a 5.7% increase since 2022.

  • Portland's Linnton neighborhood, as well as Burlington and Holbrook, saw the biggest decrease in average home price — down 8%, from $798,100 in 2022 to $734,600 last month.
  • St. Johns also saw a moderate drop in home prices, from a high of nearly half a million dollars last year to $469,600 last month.

Driving the news: In the last few years, Portland has seen a worsening homelessness crisis and an increase in petty crime, which may have inspired younger buyers who would traditionally have wanted to stay in the city's inner neighborhoods "to look for a suburban lifestyle," Freed said.

Zoom out: With high mortgage rates and low inventory across the board, buyers are settling down wherever they can find a house within their budget — or sitting on the sidelines, Redfin senior economist Sheharyar Bokhari tells Axios.

  • If home prices in urban areas continue to decrease, we could see a return to the city.
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