Real Estate Prices Climbing Fast in NW OregonApril 7, 2022
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 a 19.2% increase over the year to January 2022. That was up from an 11% 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 2022 rose 29.2% to $543,700 in the North Coast region (Clatsop, Tillamook, and Lincoln counties combined), grew 12.9% to $434,700 in Columbia County, and increased 18.2% to $470,800 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 2021. The North Coast region reported 1,941 closed sales for the year versus 1,960 sales for 2020. Columbia County had 970 closed sales in 2021 versus 914 in 2020, and Benton County reported 258 sales in 2021 versus 189 sales in 2020. 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 also show that home values hit new highs in 2021 and that the rate of increase was high in all counties. Price increases ranged from 18% in Clatsop County to 29% in Lincoln County. Prices also continued to converge. In early 2009 when data for all five counties were first available the most expensive county (Clatsop) had prices that were about 26% higher than the lowest-price county (Lincoln). By the end of 2021 that difference had dropped to 14% (Benton vs. Columbia). To the extent that more opportunities for remote work are occurring, it may be one factor in causing that trend.
Of course the real industry is much broader than just buying and selling homes. Some of the larger businesses are involved in rental management. Additionally, 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 reported jobs are more likely to be support and office staff for brokers or maintenance and cleaning staff for real estate rental agents. The employment that is reported for real estate was 76 jobs higher in September 2021 (the most recent data) than September 2020 for the five Northwest Oregon counties as a region, but the individual counties varied widely. Over the year Benton County lost nine jobs, Clatsop County’s employment was down 12 jobs. Columbia County added three jobs, Lincoln County gained 87 jobs, and Tillamook County was up seven jobs. The region as a whole had 1,244 jobs that were reported to the Employment Department in September 2021.