I’m always late with this sort of thing, but last Friday’s New York Times had some interesting data on rising housing prices in US Metropolitan areas.
Three things stand out to me as worth noting. First, even though runaway home prices are a hot topic at party conversations, the gains in greater Portland and greater Seattle aren’t too far from the national average. Across the US, housing prices have grown by 7.7% per year since 2000. Seattle homes have grown a little faster than that (8.2% per year), but Portland homes a little slower (6.6% per year). Neither are near the extremes.
Second, the cost of rent hasn’t mirrored the house price trends: Portland rents have remained roughly flat since 2000, while Seattle rents have dropped by about .4% per year. So on average, owning a home has gotten far more expensive, but the cost of housing per se has not. (Of course, these numbers are averages—so I’m sure there are some places where rents have increased beyond peoples’ means to pay.)
And finally, there’s this: I keep hearing claims that Portland’s (and to a lesser extent Seattle’s) growth management laws are leading to rapid escalation in housing prices. That may be so for certain kinds of housing: houses with really big lawns tend to be more expensive in places where the supply of developable land is limited. But Portland’s overall housing price appreciation over the past 5 years has been very modest—prices have risen at about the same pace as in El Paso, TX, and just a little faster than in New Orleans, Houston, and Atlanta; but they’ve gone up less than half as quickly as in Oakland, Tampa, Baltimore, Boston, San Diego, Las Vegas, Newark NJ, and so on, and on. And this in spite of the fact that some fugitives from the red-hot California real estate markets have moved northward (sometimes with some cash in hand) to try to take advantage of Portland’s relatively low-cost housing.
Of course, Portland’s lower-than-average appreciation in housing prices may be a result of a tepid economy following the dot-com crash; Oregon’s unemployment rates were the highest in the country in 2003, for example. But it certainly should make one think twice when you see claims that Portland’s housing policies are making housing prices go through the roof. So if you see someone make that claim, make sure you check what years they’re using; it’s easy to cherry-pick the data, to find a few years or places that support whatever political theory someone holds dear.