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    • I found a couple of interesting blogs offered by the Oregon Office of Economic Analysis which discusses Oregon Housing Affordability and Oregon Population Growth. After reading through these, I took away some important information and wanted to tell you about house filtering, and how it helps.

      What is House Filtering?

      Home affordability isn’t going to get better unless we overbuild.  The writer, Josh Lehner, outlines that lower cost of housing tends to come from filtering.  In housing, filtering refers to how newly constructed homes will often cost more per sqft than other older homes do in that time period. However, as they age they tend to depreciate in cost per sqft and will filter down to the homes that fill the inventory of the middle and least expensive homes in an area. 

      The writer acknowledges that though the graph is shorting the 2010s by 4yrs compared to the other years like 1998-2004, as a total for Oregon, 2017 building permits are still off by almost 20% and for the Willamette Valley, they are off by nearly 25%. 

      This means that we have and may continue to be underbuilding for the need of housing here in Lane County and most of Oregon since 2010. This continues to hamper house filtering and therefore, puts pressure on home affordability for low and moderate-income households.

      Interestingly, Oregon’s population growth isn’t all that extreme. Census data seems to indicate that from 2010-2014, the State has seen a total population growth of just under 1% year over year, compared to Portland at almost 1.5% and the US just under Oregon’s total average.  So population growth is not the main culprit to the problem with affordable housing but does contribute. 

      Why We Need More Houses Built

      In my opinion, build for the current demand but overbuild to backfill the lack of building that didn’t take place during the housing recession.  Currently, Lane County has 1.4 months of inventory for homes available for sale.  If you have been thinking of buying a home and you can, don’t worry about a housing bubble, it’s not coming.  If you are someone that has considered buying a home as an investment to rent, you should strongly consider it.  All indications point to prices continuing to go up and so will rents.