Hot, and getting hotter. It’s not just the weather. It applies to home prices in Oregon. We talked to an economist about how homeowners in both Salem and Portland can expect their home values to keep rising.
Dr. Frank Nothaft is the Chief Economist at Corelogic, which studies property values nationwide. He says the pandemic’s brought a side effect that’s been good for those fortunate enough to own their homes: “For homeowners who own their homes over the past year, we’ve seen a big boost in home equity.”
That boost is averaging more than $30,000 nationally, and more than $40,000, for Oregon’s Portland and Salem markets.
“In the Portland and the Salem area prices are rising even more rapidly than we’re seeing in our national measures. In Portland the average gain in home equity wealth was $46,000 in the last year. And in Salem, it was $42,000. So greater, than the national average.”
Nothaft, says he does not believe a crash is coming. “I don’t feel it’s a bubble. What’s driving the growth in home prices is the shortage of homes listed for sale.”
That, combined with near- record low mortgage rates, should keep the gains coming for local homeowners. He forecasts, “What we expect to see is that over the next several months we’re going to continue to see very strong very rapid home price growth.”
But he expects those gains to start slowing in 2022, when he believes interest rates will start to get higher.
Meantime, he says the same shortage of homes for sale that’s boosting prices, is making it tougher to buy a home. “The challenge you’re facing is that the double digit home price growth over the last year means that you’ve got to save up even a larger nest egg in order to afford the down payment and the closing costs.”