Home. The one thing almost all of us struggle to find and maintain. Perhaps the essential element of the American Dream is the opportunity to own a home and have a stake in the future of a community. Home equity has long been the cornerstone to building wealth and to moving up in the world. Beyond that, housing security and shelter are even more important. No one wants to be displaced and feel at risk of not having a place to call home. For more and more Hillsboro residents having a home is becoming more of a dream than a reality.
Let me advise you all that I have been an active Realtor here in Hillsboro since I was 18 years old. There is no part of this market I have not sold in or built-in these past 40 years. At that starting point in 1981, Hillsboro was 20,000 people and a bit smaller than Forest Grove. Now we are at 110,000 and on the way to 150,000 or more. When people talk about this market with me they need to know I am not just speculating- I have lived this 365 days a year.
The Market In 2021
The big picture Portland-wide is seen here on the Feb. 2021 market index report released today. The entire region is in trouble- big-time trouble. With just 1 month of housing available, the overall market has a reduced inventory of 100% less than we had in 2020 and almost 300% less than we had in 2019.
Look at this graph – and imagine this red line of available inventory sinking more and more – if something does not happen fast that is where we are headed- a near non existent market.
The Hillsboro Market – Worse than any other?
Now let’s have a look at the Hillsboro, Oregon market and the inventory here. This is a very tight market and we are all feeling it. Those of us in the business sell homes and properties everywhere. I knew Hillsboro was experiencing a tight market. With my last 3 listings landing 5 to 10 offers each (within 24 hours) I had to dig in and look closer. What I found has confirmed the in-the-field notes and the chatter my fellow brokers and I are sharing.
72 Homes For sale RIGHT NOW in the entire City at all Price points. That includes new homes, condos, all types of homes. This is the lowest number of homes ever to be offered for sale in documented records that I have found. This is not some anomaly – this is happening now.
Look at 2020 below. 277 Homes were active City-wide in February, that was before COVID officially hit.
Officially based on the best statistic our housing base of for-sale homes is down 384%.
In February of 2019 we had 234 homes for sale- and as I looked back more years I confirmed this market in 2021 is at a crisis stage. That is not to be debated.
Let me speak honestly and plainly; something I hope you will all know about me by now. This situation in Hillsboro, Oregon has been predicted by many of us for years. This is the “Bay Area Effect” I predicted years ago.
Here are the dynamics that have brought us to this point:
- Land Use Laws and Urban Growth Boundaries – love them or hate them, these very Oregon regulations are the biggest factor. Supply and demand are totally subject to these boundary lines. We use them to prevent sprawl and they have made us chew up all the land in our City. If I had a million dollars in a briefcase and stood here in Old Orenco and headed towards North Plains looking to buy 1 lot, I would be unsuccessful. The reason is there is not 1 lot left to be had.
- TOO MANY JOBS- Hillsboro’s Success in Job Creation has spiked the housing market- Hillsboro is the super economic engine by design. For 30 years the plan in Hillsboro has been to have the largest mass of Industrial land in the region. That landmass, and the tax incentives we have offered, have brought jobs by the thousands. Tens of thousands. Now we find ourselves in a situation where there are too many jobs and not enough homes. Supply and Demand- super demand – have now come home to roost.
- Traffic- Traffic – Traffic- Many of my clients in the past few years have been from Tigard, Tualatin, Gresham, Portland, and Lake Oswego. They come to Hillsboro because what was a 20-minute commute from their homes in those neighboring towns, is now 45 minutes to an hour. We have all lived this so I need not say anymore. Work In Hillsboro – Live in Hillsboro- Problem solved.
- The Bay Area Effect- I coined those terms 10 years ago when Hillsboro’s numbers were rising at a rapid pace. What that term means is what is spelled out in the three bullet points above. Take Palo Alto; a suburb of San Jose/Sunny Vale/Santa Clara. That market averages over $2.3 Million for a home and appreciation is up hundreds of percentages in the past decades. Hillsboro is tracking along with that. Traffic, Job, Tight land supply. All of these things happened there and are happening here.
- Low-Interest Rates- We love these low rates. But – they are hurting the market inventory. Existing homeowners are refinancing and not selling. Investors are aggressively buying everything they can for rental income and offering no inspections and non0-refundable earnest money to sellers. This is further frothing up the market.
- Outside Investors- This is something only use super busy brokers know. Our buyers are increasingly outsiders. Money is flowing to our City from all over the country, from Wall Street-backed groups, and from foreign countries like China. Farmland and land on the edge of our Urban Growth boundary is being bought up quickly by these outside influences. They know that the Bay Area Effect is in play and they intend to cash in bigtime. Being a hometown boy I want the citizens to have access to our homes first and foremost. But at no time can I discriminate – and so it comes down to survival of the fittest.
- COVID-19 – The inventory is so low that we know COVID is having an effect. As vaccines become available we hope that the inventory opens up. But it will not be enough.
What Can We Do?
I will cover that question soon. But we, the City, the County, and METRO have failed.
Here are some ideas to chew on until our next story:
FREEZE JOB CREATION AND TAX GIVEAWAYS
OFFER TAX INCENTIVES AND GIVEAWAYS TO BUILDERS OF AFFORDABLE UNITS
QUICKLY BUILD UP WITH A RESTRICTION ON RENTALS – FORCE FOR SALE OPTIONS
INFILL – GET SERIOUS ABOUT QUICKLY PERMITTING COTTAGES AND ADU INFILL
EXPANDING THE UGB ONLY IF LAND OWNERS COMMIT TO SPECIFIC HOUSING OPTIONS
The biggest gentrification in Oregon is actually happening in Hillsboro as we speak. We still have time to help our current people have a home- no matter what walk of life or circumstances they come from!