How to Buy a House in Portland: Edge Out the Steep Competition

If you’re looking for a breath of fresh air, Portland is where you can start and end your home search. The city is the 24th-largest in the United States, but the abundance of green spaces mean you won’t be stuck in a concrete jungle. The urban growth boundary in Portland also means that new housing has been limited, leaving any of the 653,000 Portlanders looking to buy with fewer options — so you won’t be the only buyers vying for that Victorian in Nob Hill.

We talked to experts in Portland real estate, scoured all 125 neighborhoods and suburbs, and did the math to find the best recommendations for your budget and lifestyle, putting them all together in this comprehensive guide to where and when you should be shopping, what to know about buried oil tanks, and where you can expect to pay the most in property taxes.

Start with your budget in Portland

Housing in Portland can be pricey, whether you’re renting or buying. Before you start scoping out neighborhoods, visiting open houses, and falling in love with places you might not be able to afford, sit down and run some numbers.

HomeLight’s Simple Home Affordability Calculator will help you figure out how much you can afford to spend on a home and potentially save you some heartache. (And maybe you’ll discover you can actually afford a bigger place or fancier neighborhood than you thought!)

Home prices vary greatly depending on which neighborhood you are considering. One of the best ways to check recent home prices in Portland is by using The Oregonian’s Oregon Live Home Sales Tracker. It tracks the most recent quarter’s total residential home sales by ZIP code and calculates the median days on market and median home prices relative to the same quarter last year.

For example, in Q3 of 2019, the median home sale in 97209 (the Pearl District) was $445,250, which is less than the median home price of $479,500 in Q3 of 2018.

One thing to note about this calculator is that it does not factor in the square footage of the houses sold, so don’t use these numbers to set hard price expectations.

They are simply for getting an idea of what housing might cost in various neighborhoods as you’re doing preliminary research. If you’re already working with a top Portland real estate agent, trust their numbers, as they’ll have better insight into housing costs relative to square footage in each neighborhood.

One piece of good news for buyers it that in January 2019, the housing market in Portland showed signs of ceasing to be a relentless seller’s market with few available options for anyone looking to buy a home in Portland.

For the first time in seven years, The Oregonian reported that the median home price in Portland has dropped. Like everything else, home prices fluctuate over time; buyers in Portland who know where to shop and how to find a great deal can start investing in real estate today if they play their cards correctly.

Calculate ongoing homeowner expenses

Even if you’re able to pay for your home in cash, you’re going to have ongoing homeowner expenses on a monthly or annual basis. The other expenses you need to consider are:

Property taxes

While property taxes vary in every city, Portland residents can pay incredibly different rates depending on which neighborhood they live in.

When you find a house you love, you can check what the property taxes will be like on that address by visiting PortlandMaps and entering the address in the search bar. In the panel on the right hand side, choose “Assessor Detail” in order to see the property tax and assessed value, which can be different from real market value.

Homeowners insurance

Happily, your homeowners insurance in Portland may be significantly cheaper percentage-wise than for your last home, assuming you aren’t moving from elsewhere in Oregon. According to ValuePenguin, Oregon has the cheapest homeowner insurance rates in the United States.

Utilities

Every home in Portland is required to get a home energy score report, which your seller might be offering as part of the information package on their house. This report will give you an idea of what your energy costs will be so you aren’t surprised by your electricity and heating bills once you’ve bought a house and moved in.

Remember that while additional home expenses might feel high in Portland as compared to other cities, Oregon doesn’t charge sales tax. So if you’re moving in from another state, your spending on goods and services could decrease by several percentage points.

Get the lay of the land in Portland

Zoning rules and regulations in Portland are one of the biggest reasons housing can be hard and expensive to find in this city.

As Forbes magazine reports, the city of Portland has a very strict urban growth boundary, which leads to many first-time buyers looking outside of Portland for more affordable housing. Beaverton, Vancouver, Sandy, and Canby are popular nearby locales for those who want access to everything Portland has to offer but who can’t afford Portland housing prices.

The New York Times points out that Portland is approving additional housing construction inside the urban growth boundary, but this new construction is usually dense and vertical.

The trend in Portland housing purchases is toward single-family homes with plenty of yard space. This is partly due to retirees who are moving to Portland wanting a bit of space to themselves and partly due to some native Portlanders growing tired of living in condos or other shared housing buildings.

Portlanders love their proximity to the wonderful wines of the Willamette Valley and to the Columbia River Gorge for hiking, kayaking, and windsurfing.

They relish the incredible and affordable street cart food, last Thursdays on Alberta, and the abundance of book stores and locally sourced products. Each neighborhood in Portland has its own feeling and set of pros and cons, but some of the most popular neighborhoods in the Portland area are:

Pearl District

The Pearl District is one of the most popular neighborhoods in Portland, both for its central location and abundance of activities ranging from galleries to restaurants. The neighborhood has plenty of family-friendly parks and many local businesses.

Benefits:
One of the most walkable neighborhoods in Portland with plenty of restaurants and activities in the neighborhood, the Pearl District also has several TriMet lines; residents can easily access other parts of the city.

Drawbacks:
One of the highest property tax rates in Portland, the high cost of living, and the overall average school districts in the Pearl District may make it a less-than-perfect choice for your family.

The Pearl District is so well-loved that there is an official website, Explore the Pearl, so residents and visitors can keep track of all the cool things going on every week.

Nob Hill

Nob Hill is a beautiful neighborhood in northwest Portland full of old Victorian homes, boutiques and restaurants, and easy access to Forest Park.

Benefits:
NW 23rd Avenue is one of the most popular streets in Portland, with a diverse range of restaurants and independent stores. The Pecularium Museum is a free way to experience the “Portland Weird” for when you have friends or family visiting.

Drawbacks:
While parking is free in Nob Hill, it is also incredibly hard to find, with overflow from residents and visitors taking up all the street parking spots. Be prepared to walk and take public transportation to and from this neighborhood.

Nob Hill is best known to Portlanders as “the area up by NW23rd Avenue” so don’t be surprised if no one knows where you live when you say “Nob Hill.”

Laurelhurst

Laurelhurst is a fairly walkable neighborhood in Portland with good TriMet connectivity. If you’re an avid biker, you might love Laurelhurst.

Benefits:
Laurelhurst has an older, more established feeling while retaining easy access to downtown Portland. It has a range of building styles from sprawling brick and stone homes with grand lawns to the cute bungalow with a covered front porch.

The tree-lined streets are popular with families who adore the easy access to Laurelhurst Park, which is the largest park in Portland. In addition to the unpaved and paved paths, gorgeous mature trees, playground, pond, basketball court, horseshoe pit, soccer field, tennis court, and off-leash dog area, Laurelhurst Park shows outdoor movies all summer long.

Drawbacks:
Laurelhurst’s property prices are expensive, and the neighborhood is fully residential, which means you’ll need to go somewhere else to access restaurants and activities other than those in Laurelhurst Park.

Sellwood-Moreland

Sellwood-Moreland is a very popular neighborhood in Portland, full of craftsman bungalows, cottages, and old Victorians. Sellwood is in Southeast Portland and runs along the Willamette River. Walkscore.com reports that the average resident in Sellwood-Moreland can walk to five restaurants, bars, and coffee shops within five minutes.

Benefits:
Sellwood feels like a small town within a big city with great schools as well as plenty of local restaurants, cafes, and even coffee roasters within the neighborhood. The area is very family-friendly and has a strong sense of community.

Drawbacks:
Sellwood-Moreland has limited access to TriMet lines so you’ll need to be willing to walk to the available lines, to bike, or to drive.

“Neighborhoods like Sellwood and Saint Johns and some of the closer neighborhoods are extremely hot, as is North Portland, because of affordability and proximity to the town,” explains top buyer agent Brian Bellairs, who’s been involved in 788 transactions.

Arlington Heights

Arlington Heights is one of the most family-friendly neighborhoods in Portlands. The homes in Arlington Heights tend to be single-family ranch homes, English Tudors, and Victorian cottages, most of them built before 1939.

Benefits:
If you love the outdoors, you’ll love Arlington Heights for its access to 323 acres of open space. This open space includes the Hoyt Arboretum, the International Rose Test Garden, and Washington Park. The Children’s Museum is also easily accessible.

Drawbacks:
Arlington Heights does not have as many restaurants or theaters as other neighborhoods in Portland, and you’ll be paying for the beautiful views of downtown with higher property prices and taxes.

Know the housing in Portland

Portland is known for both its limited housing availability and the range of housing styles you can find. You can usually find Craftsmans, Foursquares, and bungalows primarily in East Portland, while Cape Cods and mid-century modern ranch houses are scattered throughout the city.

While Portland is addressing its limited housing availability and expects housing supply to meet housing demand by 2035, you should be prepared for plenty of other interested buyers to attend the same open houses you attend.

Aesthetically, Portlanders are loving modern architecture and styles. People are moving away from earth-toned granites and towards quartz countertops, and luxury vinyl plank flooring is replacing engineered hardwood floors.

Kathleen Kessinger, a popular interior decorator in Portland, explains that in many neighborhoods, there is a lot of new construction, which impacts both buyers and sellers.

She elaborates that when looking at older homes, many buyers are “looking at the quartz countertops and painted woodwork and wide-planked floors and all the different, more modern light fixtures, and if a resale house doesn’t look like that, they’re fine with it — but they want a discount because they’re going to want to make it look like that.”

If you don’t care about having your house look like the neighbors’, you could benefit from your ability to negotiate based on what these common renovations would cost…and then just not do them.

All homebuyers should have a traditional home inspection done before putting in an offer, but buyers in the Portland area should also consider a sewer scope, an oil tank search, and a radon test.

Sewer scope

A sewer scope involves running a camera down the sewer line and will identify issues with the home’s connection to the main sewer line. Common issues include bellies or sags where water isn’t fully draining, disjointments or breaks, and root penetration.

On average, these issues cost $5,000 to $10,000 to fix, so you’ll want to include the repairs in your overall home purchasing budget, whether you’re responsible for completing them or the seller is.

Buried oil tank scan

If the home or neighborhood existed before 1985, an oil tank search will confirm that there are no buried oil tanks on the property.

Buried oil tanks can cause both health and safety issues, as well as problems selling the home in the future.

While an oil tank scan can cost as little as $100, paying the Oregon DEQ for a certificate of decommissioning starts at $1,000 and goes up based on the amount of oil that has leaked. Additionally, home purchase financing can be hard to get if you don’t have a DEQ certification for any property with a history of oil tank leaks.

Radon testing

Due to the Missoula Floods about 15,000 years ago, there are high levels of granite, and with it uranium, in the ground.

This uranium is undergoing radioactive decay and releasing radon. A radon test is incredibly important because after smoking, radon is the second leading cause of lung disease.

High radon levels in Oregon soil can leak into your new house and damage your lungs. It’s possible to take steps to minimize your potential radon exposure, but you need to know that you should take those steps.

A radon test will let you know what, if anything, you need to do in order to keep your lungs safe in your new home.

When to buy a house in Portland: Save money in the winter

You might not have complete control over when you’re house-hunting in Portland, but if you can, try to put an offer in on a house in the winter.

Portland home sales prices tend to be lowest in the winter months of January and February, although they are lower than average in March, April, and September as well.

If you can, avoid June, July, and August when home prices are highest — though inventory and homes for sale will also be higher in those months if you want more choices.

Find a top buyer’s agent in Portland

When you’re ready to start your home search, it’s time to find a great agent to help you tour and negotiate. Portland real estate is competitive, and most home sellers know that working with a top sellers agent will increase the number of qualified buyers at their home showings and boost their final home sale price.

As a homebuyer, you could be at a disadvantage and end up spending significantly more time and money on your home purchase if you work with an average buyer’s agent. A top 5% agent can help homebuyers in Portland save 2.5% more than the average real estate agent, which translates to roughly $35,767 on their home purchase.

Working with a top real estate agent will help you find your Portland dream home without blowing your budget.

Header Image Source: (Nathan Dumlao/ Unsplash)