The streak continued in April: Yet again, home values in the Portland region grew faster than in any of the other 20 major metro areas measured by the monthly Standard & Poor’s Case-Shiller home price index, released Tuesday.
It was the seventh straight month Portland topped the list.
Local home values posted a 12.3 percent year-over-year increase in April, the highest gains among the 20 cities by a fairly wide margin. Seattle’s 10.7 percent increase over the same period represented the only other double-digit increase.
The Portland market also posted 12.3 percent year-over-year gains in March.
Homes across the country, meanwhile, saw an annual increase in value of 5 percent in April, down from 5.1 percent in March, the report found.
“The home price increases reflect the low unemployment rate, low mortgage interest rates and consumers’ generally positive outlook,” said David M. Blitzer, the chairman of the index committee, in a statement. “One result is that an increasing number of cities have surpassed the high prices seen before the Great Recession. Currently, seven cities – Denver; Dallas; Portland, Oregon; San Francisco; Seattle; Charlotte; and Boston – are setting new highs.”
Prices in Portland have been pushed upward, in part, by extremely low inventory. The most recent report from the Regional Multiple Listing Services found that inventory in the area totaled 1.4 months in May. The figure estimates how long it would take for all current homes on the market to sell at the current pace. Six months indicates a balanced market.
What’s more, a new report last week from Zillow found that Portland saw the nation’s largest decrease in the inventory of bottom-tier homes among the 35 largest metro areas. The Portland market lost 37.6 percent of its inventory of middle-tier homes (homes worth between $279,200 and $420,900) and 39.3 percent of its bottom-tier homes (homes worth less than $279,200) – not good news for first-time homebuyers.
Svenja Gudell, chief economist at Zillow, said in an email that there is “a growing divide between the top and bottom of the market that the Case-Shiller numbers don’t reveal.”
“Home values for the least-expensive homes are growing twice as quickly as they are for the most-expensive homes, and the gap is widening,” Gudell said. “Given last week’s Brexit news and the ensuing market reaction, it doesn’t look like interest rates are going to rise meaningfully any time soon, which means it will remain cheap to finance a home for those that can afford one.