Happy 2020! We have entered a brand new year — and a new decade — filled with excitement, new beginnings and endless potential. In addition to your fitness and lifestyle goals, you may be setting aside money for a significant purchase in the new year, like a car or home.
This may just be a great year to consider a home purchase in the Pacific Northwest — as several markets in the area look promising, we currently have relatively low national interest rates, and frankly, it’s just an excellent place to settle down. If you’re on the fence about an investment in PNW real estate, read on for insight and details about its promising future.
NOTE: Keep in mind that these factors do not necessarily apply to each and every community in the region, as statistics and features vary widely throughout the Pacific Northwest. Feel free to contact one of our brokers to learn more about a specific area and its unique market activity. You may also access our Market Activity Report, complete with a wide range of market data specific to your community or a community of interest, through your HomeTracker account. Input a specific address to view the data and set up email alerts to stay informed as the market fluctuates. Login or create a HomeTracker account today to generate your Market Activity Report.
We’re Enjoying Relatively Low Interest Rates
For several months, we have lingered at a national interest rate in the mid-to-upper 3 percent range. This rate is predicted to rise slightly while remaining relatively low, not exceeding 4.2 percent and staying around 3.7 percent for a 30-year mortgage — and as low as 3.2 percent for a 15-year mortgage. To understand how low these rates are, take a look at history. Over the past 49 years, the rates for a 30-year fixed rate mortgage have fluctuated from as low as 3.31 percent in 2012 to 18.63 percent in 1981. To see updated rates, and a look at trends over the past few years, click here.
The Region is Filled With Growing Cities
An important factor to look at when considering a real estate investment is the area’s potential for growth, usually based on its recent progress. And it’s no secret our region has increased in popularity in recent years. While the population growth rate has slowed a little, there is still promising growth occurring, which is likely to continue next year and beyond. According to research from Portland State University, in the past year, Oregon’s population has increased by more than 41,000 people, mostly due to people moving into the state (versus new births). And even better news for Portland Metro residents, Multnomah County, Washington County and Clackamas County accounted for nearly half of that growth between 2018 and 2019. Both Multnomah and Washington Counties added more than 7,000 new residents each. Specifically, Portland added more residents than other cities in the state, experiencing a 1.3 percent increase.
Bend and Eugene each added 1,500 residents to their number, which is especially significant for Bend, which has an estimated 2018 population of 97,590. Bend was even named one of the country’s top “boomtowns” based on factors like population change, unemployment rate, five-year housing growth, and more.
It’s (Usually) More Wise to Buy Than Rent
In many cities throughout the region, it makes more sense to buy than rent. While a home purchase is a significant financial decision, you are at least investing in something that is likely to increase in value and gain equity in the long-term. Renting is a good solution short-term, but after several years, you may be throwing money away that you will never see again. If you plan to stay somewhere for a while, buying is usually wise — and even if you plan to move in the near future, you could keep the home as a rental property! Rising rent rates make this an especially wise investment.
Employment Opportunities Abound
Just last year, Washington State was ranked the number one state in the entire country by U.S. News & World Report. Washington did especially well in the first four (and most weighted) categories used to determine the ranking, including fourth in the country for both health care and education, third in economy, and second in infrastructure. The economic health of Washington caught our attention in particular, as it looked at each state’s unemployment rate, job growth and labor force participation rate. And Oregon wasn’t far behind, coming in at the number five spot for the economy rating. Both Washington and Oregon show promising potential for improvement, as they ranked #1 and #2 for job growth, respectively. In other words, employment opportunities abound in the Pacific Northwest.
Price Increases Have Slowed
In general, we’re experiencing a more steady market after the more dramatic market trends we’ve seen in recent years. For example, home prices in the Portland Metro are 29 percent higher than they were at the July 2007 peak of the housing bubble and have climbed 42 percent in the last five years. According to the S&P/CoreLogic Case-Shiller index, home prices in the Portland Metro grew by 2.4 percent from June 2018 to June 2019, climbing at a slower rate than the national average. And nationally, home prices rose 3.1 percent year-over-year, which is half the rate of the year before. This slow down in Portland and the nation as a whole makes entering the market a bit less intimidating. Yet, future home price gains in most cities remain positive, lingering in the low single-digit range.
This is a Great Place to Settle Down
We may be a bit biased, but we think the Pacific Northwest is the best place to put down roots and settle down. Touted for its outdoor recreation, gorgeous scenery, varied climates and terrain, strong sense of community, a variety of local businesses, excellent schools, and much more, the Northwest has something for everyone. If you live here, you already know about these factors first-hand — and maybe it’s time to make your stay a bit more permanent. The region offers incredible variety, whether you’re searching for an outdoorsy and craft beer haven like Bend or elsewhere in Central Oregon, you want to be in the heart of activity in the Portland Metro or Southwest Washington, or you’re looking for a slower pace of life along the Oregon Coast in Cannon Beach or in the Columbia River Gorge area.
It’s a Wise Investment Long-Term
If you’re looking to stay in the area for many years, buying a home makes a lot of sense. The opportunity to build equity and make a profit down the road is an obvious reason to consider home buying — but it must be mentioned. And the sooner you begin putting money towards a mortgage (instead of your landlord’s pocket), the better. Plus, you will be able to create a space that is your very own — your home sweet home!
Need More Info?
View our Local Market Trends to see the average sale price, percent of asking price, days on market and active properties for specific neighborhoods throughout the region.
If you have a specific question about buying a home, selling a home, or if you just want to know more about the market and the communities of the Pacific Northwest, please contact us directly.