The real estate market in Oregon has held up very strong compared to many predictions that it was headed for a correction. The higher rates and some signs of a weaker economy had many pundits sure prices would tumble down, but that outcome has not happened. The video attached here, posted by the RMLS, shows that our markets are up year over year. It takes longer to sell, and those listing a property can not be greedy or will soon reduce prices to attract buyers. That said, prices are up. An outcome that seems odd when viewed through the lens of a buyer trying to make sense of all of this. How can we still be at historically high price levels? The answer lies in the richness of Oregon and some other key factors.
By now, any of you reading the Herald should know that my day job is that of a real estate broker. I have sold successfully here in Washington County and beyond for 43 years. I rarely tout that in my work, and many do not realize the depth of my work. No matter. Economists and housing experts often call me to report on the market conditions, sales data, and trends from the trenches. It has been my life’s work. From homes to golf courses and farms to parks and commercial properties- this is what I do 60 hours a week.
Let’s have a look at the greater Hillsboro markets-
The Median List price in Hillsboro, Oregon, 97124, is $677,500 today. Median Rents are an incredible $2,713. The market sectors are shown below; there is not much for sale below $500k. This makes our market very hard for locals to own, and the median household wage makes it hard for most to purchase a home. Many of the sales are made to inbound new residents and investors. This market has a Market Action Index of 54, which makes this zip code a Strong seller’s Market. Remember that the 97124 covers the very expensive acreage districts, including Helvetia, where it takes millions to live. Also, new construction in this zip code is non-existent, and the mature areas of NW Hillsboro, Jackson School, and Downtown are places people don’t leave, and homes are expensive. Sellers should expect a longer time to sell and price where the comparable sales indicate the value is. Hoping for a bid up to get 10% more is no longer a great strategy. This market is one of the hottest in the Pacific NW and should remain that way into the future.
And our other Zip Code, 97123, is not far behind the 97124. This covers the central city and heads South into the massive new South Hillsboro market. Median List prices are significantly lower at $617,357, but the average price per SF is the same- $323 PSF. Inventory is at 108. Also, note the days on the market are shorter. BUT- realize that the South Hillsboro market is controlled by builders who are mostly building row houses and townhomes in the $450K to $550K price point, and statistics are carefully reported to not show any lag in sales or absorption of homes. This zip code also has fewer country properties and estates. The Market Action Index shows a weaker 42 rating. With rates at 6.75%, it is still a very strong market.
Why are these markets appreciating and hotter than many others? The answers are fairly simple. Let me take a stab:
- JOBS: Hillsboro is home to Intel and about 200 other technology companies. Those jobs led Oregon, and with recent industrial land expansions, there is no chance any city, including Portland, will compete with Hillsboro, which is widely acknowledged as the super engine of the state’s economy.
- Lack of Housing- Hillsboro has prioritized jobs over houses, and it seems we are bound to stay that way.
- Geography – Hillsboro is tapped out for land to the West to grow onto. To the East are Aloha and Beaverton, which have tightly grown against our Eastern borders. North is walled off with thousands of acres of industrial projects and long-protected farmlands. That is changing, but the fight over this interplay is on big time now! The only way Hillsboro grows homes in the next decade is South. This is taking time and a tremendous infrastructure build-out.
- TRAFFIC – For decades, people living in Tualatin, Tigard, Lake Oswego, and Portland resisted moving to Hillsboro. Why would they leave those wonderful places? Hillsboro schools are solid but can’t claim the scores those places do. But a few years ago, our real estate community all began to see inter-valley moves, which has only risen. Drives that were 10 to 20 minutes are now 40 minutes to an hour one way. This has created the “Bay Area Effect,” as I coined it a few years back. Jobs create traffic, and once it becomes crippling to the way people live, the value of homes closer to the employers goes up. Try living in Silicon Valley anywhere close to employment centers. Yikes! Here is the story I wrote on this matter a year or more ago.
- Livability – Hillsboro has become a mecca for foodies, and those who like cultural events and arts, and it has truly great parks. Jackson Bottom nature areas, river trips on kayaks, abundant wineries, rising shops, and medical options are all a part of the story. Once an agrarian town, Hillsboro now finds itself struggling to preserve its connection to the farms and produce supply. This is one thing that needs serious work, and that discussion has begun in earnest, at least, I hope so.
- Investors: Yep- they are here big time. Wall Street likes Hillsboro, as do well-oiled investors. The City now has more renters than owners. That sad reality does not bode well for the young, the old, or anyone not ready to pay up to get a home. This trend was foretold when the City put its foot on the gas and prioritized jobs. With a captive workforce, rents are only going to rise! I plead with my friends to invest and ensure their extended families get homes settled lest more and more of them are gentrified out of the Hub City as Hillsboro has traditionally been called.
Conclusion-
I do not have all the answers. This report is one I do about once each quarter, and I think understanding the numbers, the forces at play, and the market. If you need help, more information, or a free sit down, I am here. I work out of my office at 222 East Main Street everyday and am all over our valley daily plying my trade. You can find me at CallDirk.com or call me at 503-799-8383. No doubt I am here for all of you-locals and newcomers alike. My journalism is an extension of my life, my decades here in Hillsboro and Wahsington County, and it is a passion of mine to share with all of you the world as I see it and live it.
Have a great June everyone!
