Real Estate Analysis and Commentary

September 28th, 2023 4:03 PM

Oregon Housing Market Forecast 2023-2024

As of July 31, 2023, the average home value in Oregon is $496,690, which reflects a 3.3% decrease over the past year. Homes in Oregon are seeing quick activity, going pending in approximately 11 days.

Here are key home value indicators:

  • Typical Home Values: $496,690
  • 1-year Value Change: -3.3%
  • Median Sale to List Ratio (June 30, 2023): 1.000
  • Percent of Sales Over List Price (June 30, 2023): 38.9%
  • Percent of Sales Under List Price (June 30, 2023): 39.9%
  • Median Days to Pending (July 31, 2023): 11

Posted in:Oregon Real Estate and tagged: Market Forecast
Posted by Robert W. Peterson on September 28th, 2023 4:03 PMLeave a Comment

Subscribe to this blog
September 28th, 2023 4:00 PM

Will the Housing Market Crash in Oregon?

It's difficult to predict with certainty whether the Oregon housing market will crash or not in response to rising interest rates. While higher interest rates can have a cooling effect on the housing market, it's important to consider other factors that could impact the market as well.

One such factor is the strength of Oregon's economy. According to the latest data from the Bureau of Labor Statistics, Oregon's unemployment rate was 3.4% in July 2023, which was lower than the national average. Additionally, the state has seen strong job growth in recent years, particularly in industries like technology and healthcare.

Another factor to consider is the supply and demand dynamics of the housing market. While interest rates are rising, there is still a significant shortage of housing inventory in many parts of Oregon, particularly in urban areas like Portland. This can help support home prices even as interest rates increase.

It's also worth noting that while interest rates have risen in recent months, they are still historically low compared to previous decades. This means that while some buyers may be priced out of the market due to higher rates, there will still be many who can afford to buy homes.

Population growth can also have a significant impact on the housing market. Oregon has been experiencing steady population growth in recent years, with many people moving to the state for its natural beauty, job opportunities, and quality of life. According to the United States Census Bureau, Oregon's population grew by 9.3% between 2010 and 2020, making it the ninth-fastest-growing state in the country.

This population growth has increased the demand for housing, which has helped to drive up home prices in many areas of the state. However, it has also led to a shortage of affordable housing, particularly in urban areas like Portland. As a result, policymakers are exploring ways to address this issue, such as increasing funding for affordable housing programs and encouraging the development of more housing units.

Overall, population growth is likely to continue to have an impact on the Oregon housing market in the coming years. While it will help to sustain demand for housing, it may also exacerbate affordability challenges and put pressure on local governments to address these issues. As such, it is important for investors and homebuyers alike to carefully monitor population trends and their impact on the housing market.

Ultimately, whether the Oregon housing market crashes or not will depend on a complex interplay of factors, including the strength of the economy, supply and demand dynamics, and interest rates. While rising interest rates can have an impact on the market, it's important to consider these other factors as well when making predictions about the future of the housing market

Posted by Robert W. Peterson on September 28th, 2023 4:00 PMLeave a Comment

Subscribe to this blog
September 28th, 2023 3:56 PM

The 10 Oregon MSAs for Home Price Growth by July 2024

Looking at Metropolitan Statistical Areas (MSAs) in Oregon, we can identify the top 10 areas projected to experience home price growth by July 2024:

  1. Ontario, OR: Expected to see a significant growth of 11.9% by July 2024, showcasing robust potential for this MSA.
  2. La Grande, OR: Anticipated to experience growth with a projected increase of 7.4%, indicating positive market dynamics.
  3. Klamath Falls, OR: Projected to witness growth with a forecasted increase of 7.1%, reflecting a resilient market.
  4. Bend, OR: Expected to maintain growth momentum with a projected 7% increase in home prices.
  5. Coos Bay, OR: Projected to see steady growth, with a forecasted increase of 7% in home prices.
  6. Hermiston, OR: Anticipated to experience moderate growth, with a projected increase of 6.8%, showcasing stability.
  7. Prineville, OR: Expected to maintain its growth trend, with a projected 6.8% increase in home prices.
  8. Astoria, OR: Projected to witness steady growth, with a forecasted increase of 6.7% in home prices.
  9. Newport, OR: Expected to experience growth with a projected increase of 6.6%, indicating positive market conditions.
  10. Roseburg, OR: Projected to continue its upward trajectory with a growth of 6.3%, reflecting a resilient local market.

The Oregon housing market demonstrates varying dynamics across its MSAs, with some areas projected to experience notable growth while others maintain stability. Despite the decrease in average home value over the past year, the projected growth in select areas points toward a potential rebound. These insights can guide potential buyers and sellers in making informed decisions based on their preferences and goals, and keeping an eye on these projected trends can provide valuable insights into the trajectory of Oregon's real estate market in the coming months.

Posted by Robert W. Peterson on September 28th, 2023 3:56 PMLeave a Comment

Subscribe to this blog
February 9th, 2023 2:51 PM
Property taxes almost always depend on what your property is worth. If you’re wondering how, exactly, they’re calculated, we have some insight to share with you.

Mill Rate

To calculate property taxes, cities, counties, and even school districts combine their own levies to work out a total tax rate for a region, which is called a mill rate.

The mill rate is multiplied by the assessed value of your property.

The more valuable your property is, the higher your property taxes are likely to be.

Property Values

Land and structures have different values attached to them. For example, vacant land without a house or a building will have a lower assessed value than a comparable piece of land that has a 4-unit apartment building on it.

Property improvements will also impact value. The upgrades and updates you made in order to raise your rental value will also raise your property value and your taxes.

Posted in:Real Estate and tagged: Taxes
Posted by Robert W. Peterson on February 9th, 2023 2:51 PMLeave a Comment

Subscribe to this blog
January 30th, 2023 1:46 PM

Sacramento, CA is One of the Most Overpriced Housing Markets in America

Demand for housing has risen sharply in 2021, and that has affected prices. According to the carefully followed S&P CoreLogic Case-Shiller Indices, home prices nationwide rose 19.1% in October, compared to the same month last year. In several markets, the figure was over 25%.

Surging demand, in addition to limited housing inventory, has created a sellers market unlike anything seen in recent memory. Homes are now selling faster than ever before – and also for more money than ever before.

The reasons behind this trend are varied. Certainly, low mortgage rates have contributed to increased demand for housing, although these have begun to rise. Further, during the COVID-19 pandemic, tens of thousands of people have departed expensive coastal cities such as New York and San Francisco, where home prices exceed twice the national median, for cities inland where prices have been lower.

Because of the high demand for housing in some markets, sellers are able to command a premium price for their homes, and in many parts of the country, homes have become overvalued compared to historical numbers.

A new report from researchers at Florida Atlantic University’s College of Business identifies Sacramento, California, as one of the most overpriced housing markets in the country. Currently, the average home in the area is selling for about $570,569, according to estimates from real estate data company Zillow. This is well above the average predicted price buyers should be paying of $455,309 – an estimate based on calculations using historical sales data.

The 25.3% premium home buyers are paying on the average house sold in Sacramento ranks as the 47th highest of the 100 metro areas covered in the report.

The ranking of the most overpriced cities is based on a methodology developed by researchers Ken H. Johnson, Ph.D., and Eli Beracha, Ph.D.


Rank City Premium paid on avg. homesale (%) Average home price ($) Expected home price ($)
1 Boise City, ID 78.4 500,137 280,406
2 Austin, TX 58.0 534,433 338,345
3 Ogden, UT 55.9 482,461 309,392
4 Phoenix, AZ 50.1 422,463 281,372
5 Provo, UT 49.8 530,171 353,892
6 Las Vegas, NV 49.4 391,346 261,958
7 Spokane, WA 48.9 402,085 269,963
8 Atlanta, GA 47.5 330,218 223,835
9 Salt Lake City, UT 47.3 544,529 369,626
10 Detroit, MI 47.2 225,601 153,230
11 Charlotte, NC 44.6 329,961 228,218
12 Stockton, CA 42.0 526,520 370,716
13 Colorado Springs, CO 41.8 452,127 318,846
14 Lakeland, FL 40.6 267,184 190,054
15 Tampa, FL 39.9 323,040 230,843
16 Memphis, TN 39.7 205,936 147,421
17 Raleigh, NC 38.8 391,444 282,093

Posted in:Real Estate and tagged: Mortgage
Posted by Robert W. Peterson on January 30th, 2023 1:46 PMLeave a Comment

Subscribe to this blog
January 16th, 2023 4:00 PM

Instant Reaction: Mortgage Rates, January 12, 2023

Following market trends, mortgage rates dropped this week. According to Freddie Mac, the average rate on a 30-year fixed mortgage fell to 6.33% from 6.48% the previous week. Rates moved closer to 6% as inflation slowed further in December for the sixth straight month. Since their latest peak in mid-November, mortgage rates have decreased by 0.75 percentage points.

The beginning of the new year allows people to start over again and set their resolutions for the year. One of those resolutions may be buying a home. This downward trend of mortgage rates gives a scrap of hope for many home buyers for the months ahead. With a 6% rate instead of 7%, buyers pay about $2,700 less every year on their mortgage. As a result, owning a home becomes affordable to about 1.4 million more renters and 4.3 million more homeowners. This could bring more buyers back to the market, boosting demand for housing and increasing market competition.

Nevertheless, it’s not just affordability that’s a roadblock. There’s also a persistent shortage of homes. Historically, a 6-month supply is necessary for a normal market with enough homes available for active buyers. However, there’s a 3-month supply of homes at the current sales pace. Even with 1.1 million homes available for sale, buyers still have difficulty finding a home to purchase.

Posted in:Real Estate and tagged: Mortgage
Posted by Robert W. Peterson on January 16th, 2023 4:00 PMLeave a Comment

Subscribe to this blog
January 11th, 2023 2:36 PM
What do we mean when we talk about property taxes?

That term can actually mean a lot of different things. You probably pay taxes on your own home - the one you occupy. As a real estate investor and property owner, there are also the taxes that you’ll pay on your investment property.

Tax time is often stressful, especially for those of us who cannot count on a juicy refund. That doesn’t mean it has to be awful. You know tax time is coming and you have a whole year to prepare.

Let’s take a look at what we’re working with so you know what we mean when we talk about taxes across the next few months.
  • Real estate taxes are levied on most properties in our market and even across the country. These real estate taxes are not federal; they’re paid to state and local governments, and they most typically fund local and state services and programs.
  • Personal property taxes are levied on mobile assets, not fixed and stationary assets like a home. Cars and boats are subject to personal property taxes.
Here’s a snapshot of what we mean, which might make it easier to conceptualize:

Real Estate

Personal Property

Single-family home that you live in.  

Car that you drive or purchase for someone else to drive.

Condo, townhome, or other multi-family property.  

Mobile homes.

Any rental or income-producing property you own.  

Planes, boats, motorcycles, and trailers.

Posted in:Real Estate and tagged: Taxes
Posted by Robert W. Peterson on January 11th, 2023 2:36 PMLeave a Comment

Subscribe to this blog
February 25th, 2019 6:25 AM

No end in sight for the cost battle entry-level home buyers face in Eugene-Springfield

While sales have been swift in a Spring Capital Group subdivision project — on one of the largest developable tracts of lane in or immediately near the Eugene-Springfield urban area — it doesn’t show any signs of easing the growing affordability crunch facing local entry-level home buyers.

Since getting its subdivision plat recorded, the local developer has finalized contracts to sell 122 of its 192 home lots at the far northern edge of the city limits since the lots became available in early December, firm principal Tom Connor Jr. said.

Seven miles south, just outside Eugene’s southern boundary, prominent Creswell developers Norman and Melvin McDougal have been busy clearcutting and building a network of gravel roads through their 500-acre ridgeline property above Lane Community College, with secretive plans for what is believed to be dozens of large, high-end homes, each on multiple acres.

The two development groups bought their properties and entered the land-use process in 2016 and 2017, as Lane County’s housing market was accelerating at record pace.

But storm clouds have been growing over Lane County’s housing market. The city of Eugene last year issued 111 fewer permits for new single-family houses than in 2017. It marked the first time in four years that the number of issued permits declined from the previous year.

Meanwhile, prices continued their torrid rise. The average price of a single-family home sold in the county last year was a record $309,000, according to the Portland-based Regional Multiple Listing Service, up 7.3 percent from 2017. And that year’s average sale price was 9.2 percent higher than 2016.

It adds up to what many real estate agents, homebuilding advocates and economists are calling an imbalance in the local market — an unevenness that’s crowding out many local and first-time buyers and depressing sales activity, with no end in sight.

“Supply is a huge problem, especially in the lower end of the market,” said Kip Lohr, owner and principal broker of Eugene-based Lohr Real Estate. “The difference between 2018 to ’19 and, say, 2017 to ’18 is that we’re seeing the price point for the entry-level homes rise.”

A tightening market hasn’t deterred Spring Capital Group. Construction on the first homes, on the former RiverRidge Golf Complex east of North Delta Highway, could start as soon as next month. But with the very cheapest houses in its north Eugene development expected to run in the mid-$400,000 range, the project is targeting buyers above the typical homebuyer’s means.

“We chose the project and the location because we feel very good about that market in town,” Connor said. “We haven’t seen any slowdown.”

But would-be buyers looking for a house around the county’s $309,000 average price are encountering a completely different market.

“There’s a total structural imbalance, and it’s not easily fixable,” said Kim Heddinger, co-owner and principal broker of Eugene-based Golden Realty.

Lane County has averaged less than two months of housing inventory over the last three years, RMLS data show. That means it would have only taken that long to sell all of the houses for sale in the local market, based on the current sales pace. Most real estate agents consider a healthy market as offering four to six months of inventory, with anything less tilting the scale in favor of sellers and against buyers.

But the inventory varies widely by price point, further highlighting the challenges facing entry-level buyers, Heddinger said.

The county has about six months of housing inventory priced between $500,000 and $800,000, according to data she’s compiled. There’s 16 months of inventory above $800,000.

But for houses between $350,000 and $500,000, there’s just 2.7 months of inventory. Below that, inventory is even less than the 1.9-month average since early 2016.

“There just isn’t enough supply. Everything has gotten so expensive, from the land, to city charges and all of that,” Heddinger said. “It’s still a really good time to buy or sell in certain price ranges. I just don’t know when this is going to change.”

The extended price gains and supply crunch appear to have affected overall sales activity last year. According to RMLS data, 5,203 home sales closed in Lane County last year, excluding the Florence area. That is one fewer than closed in 2017.

By contrast, closed sales rose by 41 more from 2016 to 2017, and by 299 from 2015 to 2016.

The leveling off locally matches a nationwide trend. Home sales in November dropped to a more than seven-year low as rising mortgage interest rates sapped buyers’ purchasing power, according to the National Association of Realtors.

Interest rates have since dipped, sparking some hopes of an upswing in the first half of this year. But urban areas, especially in the western United States, are struggling to control rising home prices as more people migrate there from other parts of the country, said Matthew Gardner, chief economist for Windermere Real Estate.

“I honestly believe we have reached an affordability ceiling,” Gardner said. “That’s not to say there aren’t dirty houses anyone could afford in, say, Ohio, or parts of Michigan. But I expect we’re absolutely going to see across the western United States a slowing down of price growth to allow incomes to start catching up.”

While sales have slowed down locally, the area’s population has continued to rise. Lane County added more than 13,000 residents between mid-2015 and 2017, according to U.S. Census Bureau estimates. That two-year gain was higher than the county’s population growth in the five years prior.

And the University of Oregon’s Phil and Penny Knight Campus for Accelerating Scientific Impact only stands to bring more high-wage jobs to the Eugene area — good for the overall economy, but another possible strain on prices as new residents move to the area for the high-paying jobs, pushing lower-income earners out of the market.

The county’s $309,000 average sale price last year was up from $200,900 in 2012.

“Ultimately, where we have seen prices rise fairly precipitously since 2012, we have to start seeing a softening,” Gardner said. “There must be a relationship between home prices and incomes.”

But many local housing market experts have trouble imagining a leveling off without more of one thing: land for cheap housing.

“There’s not an area where a big subdivision can be built anymore,” said Ed McMahon, executive vice president of the Home Builders Association of Lane County.

The Spring Capital and McDougal projects are developing some of the largest developable tracts in or immediately near the Eugene-Springfield urban area. With those projects targeting affluent buyers, McMahon and others aren’t sure how the region can reverse its growing affordability crunch, without pushing out its urban growth boundary.

That’s a proposal Eugene city officials have largely rejected over years-long discussions about a boundary expansion, arguing the city has enough residential land and should more densely develop what’s already available.

McMahon worries the land crunch — combined with rising labor costs, increasing city charges for infrastructure work and City Council-led talks of a tax on residential construction projects to fund affordable housing units — could sap demand for new construction in Eugene at a time he said it’s sorely needed.

“All the (building) costs are increasing. All the regulation is increasing, and it’s getting to the point where that profit margin isn’t going to be there,” McMahon said. “Builders aren’t going to build if everything keeps going in the same direction.”

Easing the crunch likely will take some government intervention, according to real estate agents like Lohr with Lohr Real Estate. Local and state policymakers could take steps to encourage a greater mixture of low-cost single-family housing, apartments and accessory dwelling units — second, smaller houses built on single-family lots where a home already exists, he said.

But any action figures to help only in the long term, Lohr said. He projects sales and price activity this year will largely mirror 2018, but likely with lower price growth.

“It’s not like you can create land out of thin air,” Lohr said.

As a result, “In the $200,000 to $250,000 price range, what you’re getting for that between 2017 and 2019 are completely different homes,” Lohr explained.

“If you don’t have cash do to a fixer-upper, or don’t want to live in northwest Eugene, you’re going to have a hard time finding a house. Whereas in 2017, there were still a lot of homes where a young couple, somebody who doesn’t know how to swing a hammer, can buy and not spend a bunch of money after purchasing the house. By the end of 2018 there were almost no homes that didn’t need somethi

Posted in:General
Posted by Robert W. Peterson on February 25th, 2019 6:25 AMLeave a Comment

Subscribe to this blog
January 23rd, 2019 6:23 AM

The Bay Area, infamous for high home prices and stiff competition for housing, is unique in California’s housing landscape. Of course, it’s relatively expensive and difficult to be a homebuyer almost anywhere in California, but these complications are multiplied exponentially in the Bay Area, leading to what many have deemed a housing crisis.

But have high home prices and competition finally reached their tipping point? Signs across the Bay Area point to: yes.

The Bay Area’s housing market is cooling in more ways than one, according to a recent Trulia report.

The average days on market has increased across the Bay Area in 2018. This increase has been most significant in the:

  • Napa neighborhoods:
    • Springwood Estates, from 57 days on market in 2017 to 79 days in 2018;
    • Fuller Park, from 66 days on market in 2017 to 83 days in 2018;
    • Westwood, from 44 days on market in 2017 to 55 days in 2018;
  • San Francisco neighborhoods:
    • Russian Hill, from 45 days on market in 2017 to 56 days in 2018;
    • Telegraph Hill, from 46 days on market in 2017 to 57 days in 2018;
  • Richmond neighborhoods:
    • Hilltop Green, from 49 days on market in 2017 to 60 days in 2018;
    • Coronado, from 59 days on market in 2017 to 67 days in 2018; and
  • Mill Valley neighborhood, Cascade Canyon, from 75 days on market in 2017 to 97 days in 2018.

As homes have sat longer on the market, the share of listings receiving a price cut has also increased in cities across the Bay Area, including in the:

  • Richmond neighborhoods:
    • Southwest Annex, from 4.9% of listings in 2017 to 28.0% in 2018;
    • Atchison Village, from 7.7% of listings in 2017 to 19.2% in 2018;
    • Santa Fe, from 1.6% of listings in 2017 to 11.6% in 2018;
  • Napa neighborhoods:
    • Sheveland Ranch, from 6.1% of listings in 2017 to 24.6% in 2018;
    • Shurtleff, from 12.6% of listings in 2017 to 23.8% in 2018;
  • Oakland neighborhoods:
    • Rancho San Antonio, from 2.2% of listings in 2017 to 17.4% in 2018;
    • Toler Heights, from 2.2% of listings in 2017 to 14.7% in 2018; and
  • San Rafael neighborhood, Glenwood, from 4.7% of listings in 2017 to 17.3% in 2018.

Prices to follow next

After nearly seven years of consistently rising home prices and competition for limited inventory, Bay Area homebuyers are finally beginning to see some relief. But for sellers and real estate professionals, a slower market can be problematic.

As homes have begun to sit longer and more price cuts have occurred, home prices are starting to decline. In fact, mid-tier prices in San Francisco have experienced a decline each month since June 2018.

This may be news to our readers, as most media reports choose to focus on annual gains — after all, prices can be volatile on a month-to-month basis, and mid-tier home prices are still 9% above a year earlier in San Francisco due to gains experienced earlier in the year. But first tuesday is confident that the decline in home prices in the latter half of 2018 is only the start of a longer trend.

This forecast is based on three criteria:

  • home sales volume is declining across the state, contributing to longer days on market and more price cuts;
  • mortgage interest rates are increasing, decreasing buyer purchasing power and discouraging homebuyers; and
  • the economic indicator, the yield spread, is quickly approaching zero, indicating an economic recession is imminent 12 months hence, likely in 2020.

What are real estate professionals to do with this information?

Armed with knowledge of a coming slowdown, real estate professionals can prepare today by:

  • increasing marketing efforts to homebuyers, who will have the most to gain in the coming buyer’s market;
  • expanding their skillset by becoming a broker, short sale specialist or property manager to increase their profits;
  • partnering with like-minded individuals to invest in property once the recession takes hold and prices have hit their bottom; and
  • saving their earnings for the rainy days ahead.

Posted by Robert W. Peterson on January 23rd, 2019 6:23 AMLeave a Comment

Subscribe to this blog
January 22nd, 2019 8:44 AM
Peterson Appraisal Group is registered with Dun & Bradstreet

Posted in:Finance
Posted by Robert W. Peterson on January 22nd, 2019 8:44 AMLeave a Comment

Subscribe to this blog