Buying a house in Portland
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If you’re looking for a one-of-a-kind place to call home, consider Portland, Oregon. Here, you’ll get to soak up the stunning natural scenery of the Pacific Northwest while also enjoying a vibrant arts scene and some of the country’s hippest coffee shops, trendiest craft breweries and coolest eateries.
However, this enviable combination of nature and culture comes at a cost, with the median sale price for a home in Portland nearly $140,000 higher than the national average. Below, we’ll explain what else you should know before buying a house in Portland, including where to live and how to navigate the process.
Deciding where to live in Portland
Like most other major cities, housing prices in and around Portland vary significantly from one area to another. According to the Portland Metropolitan Association of Realtors (PMAR), the most affordable parts are the southeast, north and northeast regions of the city, where the median sale prices in March 2023 ranged from $455,000 to $500,000. West Portland represents a significant jump at $646,500, while the most expensive area by far was the suburb of Lake Oswego/West Linn, just south of the city, at $850,000. The metro area’s overall median price was $514,900.
If you’re relocating from another city or state, it’s a good idea to get familiar with the cost of living in Portland, especially as it compares to your current hometown. Bankrate’s calculator can show you how prices here stack up against other cities in the U.S.
How to buy a house in Portland
Ready to take the leap and buy a house in Oregon’s biggest city? Here’s how to prepare.
Saving for a down payment in Portland
With home prices quite a bit higher here than the national median of $375,700, you’ll need to save for a bigger down payment than you would in many other parts of the country. A standard 20 percent down payment on a median-priced $514,900 home in Portland would come out to $102,980 — a hefty sum of money for sure.
Fortunately, though, you might not need to put that much down. Depending on what type of loan you qualify for, you might have a minimum down payment as low as 3 or 5 percent, and some loans might require none at all. Explore low- and no-down payment options to see if you can become a homeowner without a six-figure upfront payment.
Get preapproved for a mortgage
Before you start house-hunting, get preapproved for a mortgage. To do this, you’ll need to work with a lender and submit information related to your finances, such as pay stubs, tax returns and bank statements. Preapproval is important for budgeting because it helps you understand how much money you can likely borrow for your home loan. It also shows sellers that you’re a legitimate, qualified buyer.
Find the right lender
When it’s time to apply for a mortgage, you don’t necessarily have to stick with the lender who issued your preapproval. Different lenders might offer different rates, have different credit requirements, charge different fees and more. Shop around for an Oregon mortgage lender that can best accommodate your needs.
Find the best local real estate agent in Portland
While you don’t necessarily have to hire a real estate agent to buy a home, it can pay to have an experienced local agent on your side. Agents understand the ins and outs of their market and can identify properties that meet your criteria, help you negotiate with sellers and get you the best deal possible on a new home.
This kind of professional expertise is particularly important for homebuyers in Portland, where the market currently favors sellers. PMAR’s latest data shows only a 1.7-month supply of housing inventory, which is very far below the 5- or 6-month supply that would be needed for a balanced market. With the market not in your favor, why not enlist all the help you can get?
Once you’ve taken these steps to prepare for your purchase, it’s time to kick off your house search. Talk openly with your agent about your ideal location and how much space you need, as well as how much you may need in the future — whether that means extra room for a new baby, an older relative or a home office. You should also discuss your must-have and nice-to-have features to help your agent refine their focus. The better they understand what you want, the better the chances that they can find it for you.
Make an offer
When you’re ready to submit an offer, your agent will help you put together a competitive bid. They’ll take into account several factors, including recent sale prices of similar homes in your area (often referred to as “comps”) and how fast inventory is selling in your area (often referred to as “days on market”).
Some positive news for hopeful Portland homeowners: PMAR data indicates that homes are spending about 57 days on the market right now. That’s more than twice as long as they were last year, giving buyers a bit of breathing room.
Get a home inspection and appraisal
If the seller accepts your offer, your next step is to schedule a home inspection. A professional inspector will complete a comprehensive review of the property’s condition, noting any current problems and issues that could pop up in the future. If the inspector finds that the house needs major work, you can ask the seller to cover the cost of repairs — or, if you’ve included an inspection contingency in your contract, you may even choose to walk away from the deal.
Your lender will also require a home appraisal. They don’t want to lend more than the home is worth, so the appraised value should be higher than the amount that you’re borrowing. If it isn’t you’ll need to make up the difference; in most cases, that means either coming up with more cash or renegotiating the price.
Requirements to buy a house in Portland
The housing market in Portland is shifting, as it is in many cities around the country. Keep these things in mind as you consider buying a home here.
Can I afford a house in Portland?
The median sale price of a home in the Portland metro area is $514,900, which is down 6.8 percent from the previous year, according to PMAR. While the price decline may sound like good news for buyers, much of it is related to the steep rise in interest rates.
With rates still high, many buyers are unable (or unwilling) to enter the market. That’s also seen in the declining volume of home sales in Portland, which fell from 2,683 in March 2022 to 1,745 in March 2023. If you’re able to take on a mortgage at the current rates, you could get a good deal on a home in Portland right now. On the other hand, if you wait until rates drop, you’ll be able to get more house for your money.
First-time homebuyers in Portland
The high home prices in Portland can make it an overwhelming place for first-time homebuyers, who might struggle to come up with the upfront costs without the proceeds from a previous home sale. Luckily, there is help available in the form of various down payment assistance programs. For those who qualify, these can help reduce your down payment or closing costs in the form of a grant, forgivable loan or low-interest loan.
The home closing is the final step in your buying journey. Your agent will help you prepare everything you need — it involves a lot of paperwork, a lot of signing and initialing and a lot of money changing hands. You’ll get a closing disclosure from your lender that outlines all the details of your loan beforehand. And when it’s all over, you’ll get the keys to your new Portland home.
It depends on your budget and what you’re looking for. Homes in Portland are more expensive than in many other parts of the country, but they’re still significantly cheaper than other major West Coast hubs, like Los Angeles, San Francisco and Seattle. And there’s a lot to love in this city, especially for fans of the great outdoors and the arts.
As of March 2023, the median home price in the Portland metro area was just under $515,000, according to the Portland Metropolitan Association of Realtors. However, prices vary by location. In Southeast Portland, for example, the median price is $455,000, but in more exclusive areas, like Lake Oswego/West Linn, it’s $850,000. It’s smart to work with a local real estate agent to figure out which part of town can best meet your needs for a price you can afford.
It’s tricky. On the one hand, housing prices have dropped and homes are spending longer on the market, which is beneficial for buyers. But Portland is still a seller’s market, with far less housing supply than is needed to meet demand. And with today’s steep interest rates, buyers’ budgets aren’t stretching as far as they used to.