Real Estate Prices Holding Up in NW Oregon

by Erik Knoder

September 3, 2019

Home prices continue to rise in many cities across the nation. The widely quoted Case-Shiller Index of national home prices available from the St. Louis Federal Reserve showed a 3.1 percent increase over the year to June 2019. That was less growth than the year before. The index has been increasing since February 2012, and it’s now nearly 14 percent higher than its pre-Great Recession peak. The index for Portland is higher, but increased only 2.4 percent over the year.

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 as well or better. Residential property average sales prices reported by RMLS rose 8.2 percent to $365,800 for the North Coast region (Clatsop, Tillamook, and Lincoln counties combined) and average prices increased by 4.3 percent in Columbia County to $311,100 over the year to June 2019 based on a 12-month moving average.

North Coast residential prices increased a little faster in 2019 than in 2018. In 2018, the average price increase was about 5.5 percent over the year to June, but prices increased faster in later 2018 and early 2019. In Columbia County, the average price increase was 12.1 percent over the year to June 2018, then price gains slowed later in the year and into 2019. So, the residential market remained fairly good along the North Coast and Columbia County in 2019, but price increases were not quite as strong as in 2018 and seem to be still slowing.

The 12-month moving average of sales prices ­bottomed out in March 2012 in the North Coast region at $242,650. Monthly average sales prices are more volatile so a 12-month moving average is used to smooth the trend. The low point for monthly average sales price for the three counties was $225,400 in February 2012. The 12-month average of Columbia County’s median sales prices reached its low point in January 2012 at $156,000.
The number of closed sales (791) in the North Coast region from January through June of 2019 entered into the RMLS system was 34 fewer than those same months in 2018. In Columbia County, the number of closed sales (398) from January through June dropped by 52 from 2018. All told, it seems as though the market in both regions has moderated a bit from the previous year.

The data are from RMLS of Portland and combine Clatsop, Tillamook and Lincoln counties into one reporting area for the North Coast counties. Not all realtors in the North Coast counties report sales to RMLS. RMLS has fairly limited data for Benton County so it is not presented here.

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. Their estimates for the median home values is show in the chart.
The Zillow estimates for the five counties in Northwest Oregon show that home values have surpassed their pre-recession highs in all counties and hit new highs in 2019. Perhaps noteworthy is that the highest prices in Benton, Columbia, and Lincoln counties occurred in the first three months of 2019, and prices have dipped a little since then. It is also interesting to note that Benton and Lincoln counties have switched ranks over the past 22 years. Benton County had by far the lowest house prices in 1996 and Lincoln County had the highest prices; that situation had reversed by 2015.

Many jobs, especially brokers, in the real estate industry are not covered by unemployment insurance and consequently aren’t included in data published by the Oregon Employment Department. The remaining employment that is published for real estate has surpassed pre-recession levels by about 100 jobs for the five Northwest Oregon counties as a region. Comparing covered employment in real estate during the first quarter of 2019 with the first quarter of 2018, Benton County lost three jobs, Clatsop County’s employment was unchanged, and Columbia County lost seven jobs. Lincoln County gained 20 jobs and Tillamook County added six jobs. This is growth of 1.5 percent over the year, which was as fast as total nonfarm employment grew over the same period.

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