According to Forbes, Portland is the third most overpriced market in the country. Seattle and San Francisco rank 1 and 2.
Portland comes in on the northern end of the list once again. Like Seattle, it took some hard knocks during the dot-com bust. “Oregon’s economy has not yet recovered from the recession of 2001,” according to the state’s official fact book, the Oregon Blue Book. At the end of 2004, the state’s unemployment rate was lingering around 7% (it was 5% nationally in June). The quality of life is good, but real estate comes at a price. From the end of 2003 to the end of 2004, the median home-cost price increased by nearly $20,000 to $201,500, according to the U.S. Department of Housing and Urban Development
The median home cost in Portland is now $239,000.
Then Money (June O5) says that Portland has a low “past price risk” and a 9.6% “forecast growth to June 2006.” In the article, a graphic of the top 100 markets shows Portland as a green light. This means that the home prices are less than 3.3x the local median income level.
Who do you believe? Money rates San Diego as the “scariest” housing market. It doesn’t get mention in Forbes’s top ten. I have to lean in the direction of Money. Prices continue to climb in Portland; driven largely by low inventory levels and well qualified buyers that are jumping on low interest rates. Home prices are market driven. An overpriced house is still an overpriced house and will sit on the market. The seller may determine the listing price but the market will determine the selling price.
We can’t have this conversation without mentioning Californians (yeah, I was one of them 10 years ago). The Californiazaition of our market certainly exists. Fifteen out of our 38 transactions so far this year are either Californians relocating themselves or their money to the area. They have spent years in hot real estate markets and have a different psyche when looking at property here. The listing price is often considered the minimum starting point. It just becomes a question of how much over asking are we going to offer? Don’t forget that an overpriced property is just that, overpriced. Are people paying more than market value? I’d say yes since some appraisals are coming in low and some buyers are too embarrassed to tell their friends what they paid. Somehow real estate
Regardless of where you fall in the argument, the Forbes article sums it up best:
If you’re unfortunate enough to live in an overpriced city, stop your whining. After all, there must be something keeping you there, whether it’s the museums or the easy commute. And if you’re lucky enough to live outside of the top ten, count your blessings–and your dollars.
If you’re still not convinced, pack your bags for San Francisco. Median home price: $750,000.