As the Portland real estate market transitions into fall 2024, let’s dive into the current trends on the west side, including areas where buying makes more financial sense and others where renting may be the smarter option. The seasonality of the market affects demand and pricing, so a fall slowdown doesn’t necessarily signal a crash. Let’s break down the data, from annual price changes to which suburbs offer the best value for buyers versus renters.
Market Overview: West Side Portland Trends
As fall sets in, demand has naturally tapered, causing the market to feel slower. Compared to September, the slowdown might look drastic, but that’s typical for this time of year. When factoring in seasonality, the current west side market is relatively stable, with an overall annual price drop of only -0.63%. Additionally, the median days on market is now 74 days, reflecting a slower pace, but not by an extraordinary amount.
Where Renting Beats Buying: High-Value Areas for Renters
Let’s start with areas where renting is more economical. Lake Oswego is a prime example: here, the median home price sits at $1.5 million, while the median rent is only $3,750. This discrepancy makes renting a wise choice if you’re planning to stay for up to five years. Lake Oswego’s purchase-to-rent ratio doesn’t favor buyers; in fact, the area has seen a year-over-year price drop of -9.7%, highlighting the market’s volatility. If you do need to live here for job or school reasons, renting for a few years might offer substantial savings.
Areas Where Buying Makes Sense: Affordable Suburbs with Strong Rents
For those interested in purchasing, several west side suburbs offer a better balance of purchase price and rental income potential. Here are three top spots:
- Beaverton
- Tigard
- Hillsboro
In these cities, home prices are more reasonable, but median rents remain high, supporting long-term investment value. For instance, if you choose to rent in Beaverton, you’ll only save about $487 per month versus buying. While that’s a decent amount, you’d be spending roughly $140,000 over five years in rent. Given the relatively affordable home prices here, Beaverton and similar cities are excellent options for first-time homebuyers.
Comparing Price Trends Across Suburbs
Let’s look at other surrounding cities for additional insights. In Northwest Portland, prices are softening, potentially due to recent Intel layoffs, which have added to inventory and increased days on the market. Here, median rent has dropped slightly, from $2,345 in September to $2,280, reflecting less demand as rental availability increases.
Meanwhile, Southwest Portland has seen a slight decrease in home prices, but still sits higher than Beaverton, Tigard, and Hillsboro. And in high-priced areas like West Linn and Lake Oswego, it’s generally more cost-effective to rent unless you plan on long-term residency.
Seasonal Trends and Mortgage Rate Impacts
With seasonal adjustments, October and November naturally bring a market slowdown. This fall, mortgage rates have climbed to around 6.5%, which continues to impact affordability. As a result, many potential buyers are choosing to stay put, adding to the seasonal cooling effect.
Election Impact: What to Expect
With the election that happened, the market outlook may shift depending on policy changes that could impact housing. In a separate analysis, we discussed how the election could influence the housing market through shifts in tax policy, consumer confidence, regulation changes, and investor behavior. New policies could play a large role in the market’s trajectory moving forward, particularly if they address supply constraints or favor either homeownership or renting.
Final Thoughts: Where to Buy vs. Rent in the West Portland Metro
In summary, if you’re in the market for a home, Beaverton, Tigard, and Hillsboro offer good purchase opportunities, with affordable prices and high rental income potential. Lake Oswego and West Linn, on the other hand, tend to favor renters over buyers due to high purchase prices and relatively low rents.
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Disclaimer: The content in any of Shawn Yu (Shawn Realty) Youtube videos or this website shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other & may be outdated or inaccurate. Shawn Yu/Shawn Realty is a licensed principal real estate broker/brokerage doing business in Oregon. To contact Shawn Realty for selling, buying investing in Oregon, please email shawn@shawn-realty.com or call 503-515-4499.
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