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Updated: March 28, 2024

Real Estate Insider: Portland condo prices continue surge

Courtesy / Vitalius Real Estate The average sales price of a Portland condo rose by 26% on the peninsula, while off-peninsula prices rose by 9%, according to Vitalius Real Estate Group, which released its annual Condo Report.

The cost of a condominium in Portland surged again in 2023, according to a new sales analysis.

For the Portland condo market, the average sales price rose by 26% on the peninsula, while off-peninsula prices rose by 9%, according to Vitalius Real Estate Group, which released its annual Condo Report this week.

Transactions included second home sales, new construction, divorce sales and estate sales.

Vitalius condo report
Courtesy / Vitalius Real Estate
Portland condo values went up again in 2023, according to Vitalius Real Estate. Transactions included second home sales, new construction, divorces and estate sales.

Now in its 11th year, the report highlights Portland condo inventory, current condo market conditions, new development, and forecasts condo sales for the year. 

Courtesy / Vitalius Real Estate
Elise Loschiavo, Vitalius Real Estate

The report is compiled by Vitalius broker Elise Loschiavo.

Key takeaways 

While the number of condos sold stayed relatively flat, existing condo prices rose 9%, Vitalius reported. New construction was especially valuable, up 33% on a square foot basis.

The average downtown price jumped 19% per square foot, likely because of larger developments that came onto the market. Off-peninsula condos saw a more modest 6% increase on a square-footage basis.

Higher interest rates were a factor in sales, Vitalius reported. Rates for a 30-year mortgage fluctuated between 6.5% and 8%, settling around 6.8% by early this year.

"Constrained inventory defined the market, as owners holding mortgages from when rates were at historic lows are still reluctant to list properties and lose 'plum' interest rates," the report said. 

As we've seen in the past four years, cash buyers had the upper hand in the market. "Nearly 60% of all condo sales over $500,000 went to cash buyers, presumably enjoying the fruits of a booming stock market," the report said.

Market ups and downs

Not everything is selling like hotcakes, as they say.

Of the 99 new condos that came on the market in 2023, Vitalius reported, only 60 have sold. The new inventory was from the Daymark, at 75 Chestnut St., and 218 Washington Ave. In each case, the developers have switched real estate brokerages.

"Location may be an issue as many of the remaining units reflect waterfront pricing in challenging locations," the Vitalius report said.

Other projects have sold well, the report said. 

Stevens Square, an over-55 community, is now completed and has sold out. Presales have begun for Phase 3 of the development, and two more phases are planned in the next decade. The remaining projects that are mid-construction have sold at a brisk pace, with only a handful of units remaining.

Dougherty Commons will be the first income-restricted condo project built in several years — and is expected to begin pre-sales this fall.

Courtesy / Vitalius Real Estate
The Vitalius Real Estate Group has produced the annual Condo Report for 11 years.

Development and municipal news

  • The price of new construction condos in 2023 rose 33% year-over-year on a per square foot basis, shifting buyer focus to existing buildings, especially for smaller units. "Very few new condo projects appear to be in the works due to ongoing city planning challenges and resident opposition to new construction in their neighborhoods," the report said.
  • Portland residents have been warned they could face a 9.5% property tax increase due to state and federal funding cuts, a $10 million school budget deficit and the increasing costs of municipal and social services.
  • The Portland City Council approved a provision that allows for up to four units on any residential lot, while eliminating parking requirements.

2024 outlook

  • Looking at the Portland condo market, Vitalius Real Estate said values are expected to be steady for existing condo sales. The price of new construction condos will continue to rise.
  • Low inventory will continue to fuel bidding wars on units that "present well, do not have deferred maintenance and are priced competitively." Demand will stay high at the upper end of the market.
  • Out-of-state buyers will "continue to flock to Portland."
  • The outlook for mortgage rates is optimistic and most experts believe that rates will drop further going into 2025. Regardless, a large portion of condos will continue to be purchased by cash buyers.

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