Low Inventory and High Home Prices Impact Portland Homeowners
Oregon is home to some must-see destinations, from the picturesque mountains of Crater Lake National Park to the waterways of the southern coast and bustling downtown Portland. With all that there is to enjoy in Oregon, it’s hard to imagine why homeowners wouldn’t want to plant roots in the Beaver State.
According to the Oregon Employment Department, more people move to Oregon than leave, and of the people who migrate, a large portion is from California. An estimated 42,600 people move from California to Oregon each year. The Department also discovered that Oregon loses about 5,900 more residents than it gains from Washington each year, which may be due to the difficult housing market and homeowners chasing lower housing costs.
How Much Does It Cost to Live in Portland?
Living in hip and trendy Portland can come with a hefty price tag for young adults trying to stay out of debt, save for a future home, and keep up with everyday expenses. A studio apartment can cost around $1,500 per month in rent and groceries and transportation are 15% and 6% higher than the national average, respectively.
Even Portland homeowners looking to buy face additional challenges. Oregon has the largest housing shortage in the nation, causing Portland’s housing costs to be 79% greater than the U.S median. With low inventory and high demand driving prices up, aspiring first-time homeowners are struggling to afford their dream home.
In fact, Portland’s median home price of $620,783 well exceeds neighboring cities. The median home price in Boise, Idaho, is $305,013, Sacramento, California is $474,696, and Reno, Nevada is $370,596, according to Payscale. And, when comparing the salary needed to buy a home in Portland at $72,187, the average household income of $65,740, and the combined cost of living expenses, it’s easy to see why Portland-area homeowners are tight on cash.
Rise of In-State Tuition
On top of especially high living expenses, the costs of a college education can also leave Portland homeowners in debt. The average cost of in-state tuition and fees was $11,715 in 2019, and it’s projected to rise to $12,291 for the 2020-2021 school year, an increase of 4.92%. Additionally, on-campus living costs have increased by 3.26%, and off-campus living costs increased by 4.19% in the same time frame.
When comparing in-state tuition costs, Oregon ranked 14th on the most expensive college tuition list, while neighboring states like California ranked 24th, Washington ranked 29th, and Idaho was at 41st. As tuition and the cost of living in Oregon continue to rise, residents in Oregon might see the impact.
Impacts of the Pandemic on Small Businesses
Oregon small businesses employ more than half (55%) of the state’s workforce. So it’s no surprise that the Oregon small business community was vulnerable to the pandemic’s ripple effect. Portland and other cities quickly responded to the pandemic by offering loans, grants, and additional assistance to small business owners, but the need was too high to help every applicant.
However, there might be some good news for small business owners who also have equity in their homes. Those who either don’t qualify for loans or haven’t received enough financial assistance to bring their businesses back to pre-pandemic conditions may be able to tap into their home equity to help keep their business afloat.
How Your Home Equity Can Help
According to a November 2020 ATTOM Data Solutions report, 49 of the 50 states saw an increase in the percentage equity-rich homes from the second to third quarters of 2020. And for Portland’s housing market, in particular, sellers have an advantage due to the low inventory of homes for sale. As the low inventory of homes continues to be an issue and the demand increases, homeowners with equity could continue to see the increase down the line.
For homeowners who are looking for ways to unlock the growing equity in their home without having to sell or apply for a loan, a home equity investment might be the ideal solution. A Hometap Investment provides homeowners with the ability to tap into their home’s equity without having to take on debt or monthly payments. This could be an excellent option for those struggling to pay for living expenses, fund their child’s college education, or even provide additional support for their small business.
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You should know
We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.