Your House: Are Homes in Metro Portland/Clark County a Bubble Waiting to Pop? (Part One)
Housing Prices Nationally Now Above Previous Bubble Peak
Americans’ biggest investment just made up its losses from the correction of 2008: US housing.
In fact, home prices are at an all-time high and surpass levels of 2008.
Despite this recovery, Zillow.com estimates that 10.4%, or 1 of every 10 homes, in the US remains in negative equity. (“Negative equity” is defined as the mortgage exceeding the estimated sales value of housing). This number has stabilized after falling dramatically from a peak of 31.4% (nearly 3 in 10 homes) in 2012.
Portland Housing Is Even Hotter: Reason to Celebrate or Fear?
Additionally, home prices in the local Portland region are outperforming the nation.
According to the US Federal Housing Finance Agency, home prices today well exceed the prior peak in 2007. The graph below estimates that prices today are +26% above the prior peak achieved 10 years ago.
Clark County Housing: Should We Laugh or Cry?
Clark County homes have also enjoyed a strong recovery. Prices are nearly +10% above the prior peak price a decade ago.
So, is this a rational development or a return to an irrational property bubble?
On the one hand, current low supplies of homes, low vacancies, and more renters might support further gains for housing. However, risks such as a possibly weaker job market or a future spike in interest rates might put housing out of reach for many buyers. That might cool the real estate market.
 https://www.zillow.com/research/q1-2017-negative-equity-15888/ Retrieved on March 14, 2018.