Real Estate Prices Climbing Fast in NW OregonApril 7, 2021 The global pandemic hammered many industries and led to massive unemployment, but home owners are coming away with a big win. Home prices not only continued to rise in many cities across the nation, but they increased even more than in the previous year. The widely quoted Case-Shiller Index of national home prices available from the St. Louis Federal Reserve showed an 11.2% increase over the year to January 2021. That was nearly three times the growth rate of the year before.
This raises the question, how is the real estate market in Northwest Oregon? The answer is that most Northwest Oregon counties seem to be doing very well. Residential property average sales prices reported by RMLS in January 2021 rose 14.5% to $425,300 in the North Coast region (Clatsop, Tillamook, and Lincoln counties combined), by 9.4% to $359,292 in Columbia County, and by 7.3% to $423,508 in Benton County. (Based on a 12-month moving average.) It should be noted that Benton County reports few home sales to RMLS so the prices can vary quite widely from month to month.
The volume of homes sold as reported by the RMLS system also held up pretty well in 2020. The North Coast region reported 1,960 closed sales for the year versus 1,776 sales for 2019. Columbia County had 914 closed sales in 2020 versus 867 in 2019, and Benton County reported 189 sales in 2020 versus 154 sales in 2019. Not all realtors report sales to RMLS.
One drawback in using home sales to evaluate the real estate market is that the quality of houses sold each month is not consistent; one month may see more high-quality houses sold, the next month may see more low-quality houses being sold. One way around this problem is to use economic models to estimate values for all the residential property in an area. Zillow does this modeling and makes the data available on the company’s website. The chart below shows the smoothed, seasonally adjusted measure of the typical home value for each county. It reflects the typical value for homes in the 35th to 65th percentile range.
The Zillow estimates for the five counties in Northwest Oregon show that home values hit new highs in 2020 and that the rate of increase was high in the four smaller counties and a bit lower in Benton County. Prices also continued to converge. In early 2005, when data for all five counties were first available, the most expensive county (Benton) had prices that were about 44% higher than the lowest-price county (Lincoln). By 2020 that difference had dropped to 27%, and it seems to be headed even lower in 2021. Additional opportunities for remote work may be one factor causing that trend.
Many jobs, especially brokers, in the real estate industry are not covered by unemployment insurance and consequently aren’t reported to the Oregon Employment Department. The employment that is reported for real estate was 11 jobs higher in September 2020 than September 2019 for the five Northwest Oregon counties as a region, but the individual counties varied widely. Benton County lost 33 jobs, Clatsop County’s employment was down 40 jobs, and Tillamook County shed nine jobs. Columbia County added one job and Lincoln County gained 92 jobs. The jobs are more likely to be support and office staff for brokers or maintenance and cleaning staff for real estate rental agents.