Lately there has been a large rise in apartment construction and housing permits issued (primarily due to the large increase in the number of apartment permits issued). This created more work for home builders and the hope that the housing market will improve. The rate, which is seasonally adjusted, at which home builders broke ground on new homes in November is at the highest level since April of 2010. This rate, of 685,000 homes, represents a 9.3 percent increase from the rate in October (which was 626,715 homes). Although this is still far below the level of 1.2 million homes that economists say represents the annual rate in a healthy housing market, Portland buyer agents say it indicates that the housing market may be taking a turn for the better.

New homes account for only 20 percent of the housing market, which would lead you to think that they do not have a very prominent effect on the overall economy. Realtors report, however, that each new home built creates an average of 1 year’s worth of three jobs and $90,000 in taxes. Portland real estate agents do warn that although the rate of production of new homes is increasing, the rate at which people purchase these new homes is decreasing. The buyers are instead either purchasing foreclosed homes and short sales, or becoming renters and renting homes.

The Portland real estate market is currently in a state of change. The market had a large peak in 2007 with agents reporting that the median value for homes in Portland was $301,000. The market has been in a general state of decline since then with an exception with a brief upturn in 2009. This has created a market with cheaper prices for potential home buyers, but with the outcome of the home losing value after purchasing. This has created a perceived sellers market with a deficit in the amount of people willing to buy property expected to decrease in value short sales.

There is good news however. That news is that the market is about to shift and rise. It is true that the median value for homes in the metro area, reported by Brokers, has dropped 6.5 percent from the value 1 year ago. The good aspect of this is that the market has the ability to rise in a situation like this. This is due to the fact that if people take advantage of the low housing prices the values of homes will rise. The current lower value of homes in Portland, as reported by Portland real estate agents, also has the effect of limiting production of new housing developments. This causes there to be a limited number of homes to be sold. The limited number of homes, coupled with the low prices of current homes, means that as the currently available houses are sold the values of homes will increase due to demand for homes of a diminishing supply. This creates a market, perfect for potential home buyers, that guarantees that people who take advantage of the current state of the market early will have made an investment that will increase in value.