Home prices continue to soar in the mid-Willamette Valley, with the average sale climbing above $400,000 in Corvallis and $300,000 in Albany in 2018, according to data from the Willamette Valley Multiple Listing Service.
Last year marked the first instance each city hit those milestones, and the Linn County side of Albany (without North Albany, which is in Benton County) alone also topped $300,000.
Perhaps more impressive, the average sale price in both Albany and Corvallis, as well as Benton County overall, has grown by more than $100,000 in the last five years, according to Multiple Listing Service figures.
Lebanon and Linn County saw their average sales price climb by more than $90,000 between 2014 and 2018. Every city in mid-Willamette Valley monitored by the Willamette Valley Multiple Listing Service saw increases of tens of thousands of dollars.
Real estate experts expect the market to stay hot for a simple reason: There still isn’t enough supply to meet demand.
“Inventory is probably our biggest concern. It’s in short supply, in Corvallis specifically,” said Catherine Fisher, managing broker and co-owner of Town & Country Realty.
The lack of supply is amplified in the strong economy, as people feel financially secure and confident in their employment status. Interest rates also have remained low, providing another incentive to buy, experts said.
Albany and Linn County also are seeing a shortage of houses on the market.
“There’s not enough new construction to keep up with demand,” said Leslie Wells, of Coldwell Banker Valley Brokers in Albany.
“The new construction that I see, there’s nothing in that lower price range. There’s nothing under $200,000,” she added.
The shortage around Albany might ease somewhat with new developments off of Knox Butte Road and and more people willing to put their houses for sale, said Kristin Smith, a principal broker with Keller Williams Realty.
The rapid price increases, however, concern to Smith.
“When you can’t help a young individual, a first-time buyer, get into a house at a price that’s not going to completely bankrupt them, it just makes it difficult. It’s discouraging. And that’s why a lot of these millennials are just like, ‘I’m not going to own a house,’” she said. “I like to be able to help people get into homes, not tell them why they can’t.”
Smith said that while the market under $200,000 remains ultra-competitive, she’s seeing more stabilization, houses staying on the market longer and even reductions at higher price points in Albany.
“We’re seeing less multiple offers,” she said.
Corvallis, unlike the Albany area, doesn’t have many new developments, Fisher said.
Another factor driving the price of homes is the cost of construction itself, especially in Corvallis, said Steve Redman, owner of Windermere Willamette Valley Real Estate and Windermere Central Oregon Real Estate.
He added that builders can’t afford to build new housing that’s affordable with the cost of land, permits and labor.
“If you can’t find affordable land to build on, you have no chance to add affordable housing,” Redman said.
Albany and Lebanon are viewed as more affordable options than Corvallis, and people are willing to commute from outlying communities to jobs in the Benton County seat.
Corvallis still remains an attractive place to live, and demand will remain high due to employers such as Oregon State University, tech companies and Samaritan Health Services, Redman said. “To think people are going to stop moving here is not reality,” Redman said.
And compared to places like California, Oregon real estate, even in Corvallis, remains a bargain, Fisher and Redman said.
With housing prices continuing to rise, many people worry the market is going to bottom out, the way it did about a decade ago, Wells said. But she and other Realtors don’t see that happening again, in part due to increased banking regulations.
“We don’t have the same perfect storm we had for the last bubble,” Fisher said.