Best Places to Invest in Real Estate in Oregon

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Oregon has become a prime destination to invest in real estate as its housing industry recovers after the Great Recession. The state has seen a 3.63% growth in population since 2010, but new housing construction hasn’t kept pace, and as a result, rents have surged.

The state is still feeling the effects of the recession with the nation’s seventh-highest unemployment rate. However, in Oregon, higher jobless numbers aren’t linked to slow job growth, but instead to the number of people looking for jobs who have moved to the state — a figure that has outpaced over half of all states in the past four years.

Projections by the Oregon Office of Economic Analysis point to a strong housing recovery starting this year and accelerating in 2016. As well, the surge in renting is likely to turn into a housing boom, as millennials, who are the bulk of renters in Oregon, start buying homes.

NerdWallet crunched the numbers to find the cities and towns that are likely to be the best for real estate investors in Oregon.

Key takeaways

Umatilla County is surging. Of our top 10 communities, five are in Umatilla County, in the northeast part of the state, which has seen an influx of commuters and early retirees.
Outdoor recreation is valuable. While Bend has already made a name as a destination for outdoor enthusiasts, several of our top places are seeing housing values increase as buyers discover the natural beauty and outdoor recreation elsewhere in the state.
Expensive communities and stagnating values. The most expensive communities, typically in the Portland area, saw some of the lowest yearly increases in housing values, indicating there is a ceiling in higher-end areas.

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What we analyzed

Our analysis took into account several factors:

Market health. We looked at how quickly houses sold compared with other cities in the state.
Price per square foot. Weighting for affordability, we measured the price per square foot of housing in a city, averaging all of 2013 and 2014 to avoid seasonal fluctuations.
10-year housing price change. Averaging monthly price data since 2004, we examined the percentage of houses that increased in value over the past 10 years.
Property taxes. Using state data, we calculated the city and county property tax for each city.
Change in vacancy rate. We used U.S. Census Bureau data to see how vacancy rates have changed from 2010 to 2013.

Our list of 153 places in Oregon doesn’t include cities and other communities with incomplete data, as well as those with residency restrictions, such as American Indian reservations and retirement communities.

Click here to see more NerdWallet studies on Oregon

Best places to invest in real estate in Oregon

1. Bonanza

Bonanza, a small dairy and ranching community, has seen 76% of houses increase in value in the past 10 years, which is the biggest jump on our list. Here, buyers will find housing that costs $100 a square foot and a total city and county tax rate of $3.55 per $1,000 of assessed value. However, our analysis shows that Bonanza appears to be better for a long-term investment and not the best place for buyers looking for a quick return.

2. Milton-Freewater

Milton-Freewater is in northeast Oregon’s Umatilla County, at the base of the Blue Mountains and about 10 miles south of Walla Walla, Washington. Milton-Freewater’s competitive market health score combined with the city’s low price per square foot make it an attractive investment opportunity. However, low prices aren’t likely to last: Milton-Freewater’s year-over-year increase in housing value is the second highest in the state, an indication that investors have already discovered the city.

3. Umatilla

Umatilla makes our list for its combination of low cost per square foot and a high market health score. In contrast to its neighbors, such as Hermiston and Pendleton, Umatilla’s economy has seen a sluggish recovery after the recession. However, good schools and low housing costs have made Umatilla an ideal location for people commuting to jobs in Hermiston’s growing economy. Umatilla holds long-term appeal for investors with its city tax rate, which is the lowest in Umatilla County.

4. Hermiston

Hermiston, which made our Cities on the Rise in Oregon list, has seen over $260 million in business investments by ConAgra Foods Lamb Weston, DuPont Pioneer and FedEx Freight in the past five years. The city is a transportation hub with its proximity to interstates 84 and 82. The economy has helped boost the housing market with a high score on Zillow’s market health index. The city also saw a 0.8% drop in its vacancy rate since 2010.

5. Weston

Weston is a small community in the Blue Mountains’ foothills. Smith Frozen Foods provides jobs in a place that’s known as a working-class community. Representatives at Coldwell Banker Whitney and Associates believe that the high price per square foot of housing in Weston and its market health are largely due to luxury homes bought by people who want to live in one of the cities closest to Spout Springs Ski Resort.

6. Pendleton

This city, south of Hermiston and along Interstate 84, has seen its vacancy rate drop 3.7%, one of the biggest decreases statewide. Pendleton offers a trade-off with its neighbor Hermiston: housing is slightly more affordable in Pendleton, but the 10-year increase in housing value is slightly lower than in Hermiston. Pendleton residents have the advantage of accessibility to the Eastern Oregon Regional Airport and St. Anthony Hospital.

7. Yoncalla

Yoncalla is a city of just over 1,000 people located between Eugene and Roseburg. The city has seen vacancy rates drop 10.8% as the timber industry recovers. Realtor Ralph McGove believes Yoncalla appeals to people who seek more affordable housing prices and who commute to Eugene, home of the University of Oregon. City and county taxes are a low $2.57 per $1,000 of assessed valuation, and the housing price here of $86 a square foot is the lowest in our top 10.

8. Oakridge

Oakridge, which takes pride in its location surrounded by the Willamette National Forest and the Cascade mountains, calls itself the “Mountain Biking Capital of the Northwest.” The city’s claim that it is an undiscovered gem is well founded: Oakridge’s average housing cost of $86 a square foot is the fifth lowest on our list. The city’s investment score also benefits from a 7.6% drop in vacancy rates since 2010 as well as a competitive market health score.

9. Prineville

Prineville is a community that mixes its healthy economy with natural beauty. Casey Kaise, executive director of the Prineville-Crook County Chamber of Commerce, describes Prineville as an “up-and-coming outdoor recreation area,” which offers access to mountain biking, hiking and fly-fishing. The economy is diversified, and last year, 25 new or expanding businesses invested $130 million in building development in Prineville. Phil Stenbeck, the city’s planning director, said he believes there will be continued growth, and the city is planning to add 2,000 houses over the next 20 years.

10. Jennings Lodge

Jennings Lodge is an unincorporated community of about people 7,000 in Clackamas County about 11 miles south of Portland. The value of Jennings Lodge is well above other places in our top 10, with houses that are priced at an average of $151 a square foot. Jennings Lodge, with lower housing costs and property taxes, is less expensive than nearby Oregon City.

Click on an icon in the map below to see more details about each city in the top 10 list.

Best places to invest in real estate in Oregon (full data)

 

Rank City Market health index
(0-10)
Price per square foot Percentage of housing value increase
from 2004 to 2014
City and county tax
per $1,000 of assessed valuation
Decrease in
vacancy rate
Investing score
1 Bonanza 3.36 $100.65 76.80% $3.55 -3.3% 81.19
2 Milton-Freewater 9.22 $100.13 64.97% $7.62 -0.8% 75.80
3 Umatilla 8.97 $90.17 61.22% $7.49 0.2% 73.98
4 Hermiston 8.89 $97.70 63.76% $9.65 0.8% 73.95
5 Weston 9.50 $118.96 64.25% $8.76 2.2% 73.93
6 Pendleton 8.50 $94.65 62.47% $10.36 3.7% 73.49
7 Yoncalla 5.80 $86.22 50.11% $2.57 10.8% 69.65
8 Oakridge 8.18 $86.61 53.72% $9.12 7.6% 69.22
9 Prineville 8.58 $92.39 54.31% $7.03 0.0% 67.82
10 Jennings Lodge 9.66 $151.13 55.65% $2.66 0.8% 67.21
11 Klamath Falls 4.16 $82.74 57.56% $7.41 -1.0% 66.19
12 Oatfield 8.52 $148.61 56.31% $2.66 -0.8% 66.14
13 Nyssa 3.88 $61.39 56.25% $9.46 -0.8% 65.73
14 Happy Valley 8.28 $142.96 56.43% $4.70 0.1% 65.54
15 Philomath 8.63 $145.39 57.17% $8.19 4.0% 65.44
16 Corvallis 9.76 $160.61 61.14% $8.98 -2.3% 65.14
17 Oak Grove 7.91 $153.13 55.70% $2.66 0.5% 65.05
18 Hood River 9.53 $195.48 60.89% $5.20 -0.9% 64.20
19 Oak Hills 7.34 $175.87 57.11% $2.97 3.2% 64.09
20 Metzger 9.08 $185.09 58.11% $2.97 -1.1% 64.00
21 Wood Village 9.04 $127.65 53.35% $8.57 3.2% 63.99
22 Bandon 8.21 $133.22 51.15% $3.50 2.2% 63.82
23 Sublimity 8.48 $125.39 51.99% $3.74 -1.8% 63.81
24 North Plains 9.61 $156.83 54.85% $5.14 -1.0% 63.39
25 Four Corners 5.13 $102.04 51.60% $3.03 -0.8% 63.35
26 Banks 9.10 $152.74 55.51% $6.83 0.3% 63.19
27 Coquille 7.63 $102.70 54.57% $7.64 -6.2% 62.93
28 Cedar Mill 9.46 $201.57 55.73% $2.97 4.2% 62.86
29 Monmouth 7.04 $114.65 52.72% $6.17 -0.9% 62.72
30 Redmond 5.81 $112.26 53.90% $6.04 -1.4% 62.53
31 Columbia City 7.36 $128.04 50.86% $3.10 -0.2% 62.51
32 Keizer 5.23 $115.09 53.71% $5.11 -0.8% 62.36
33 West Linn 8.69 $173.26 55.27% $5.07 2.0% 62.30
34 Riddle 8.01 $90.96 49.61% $7.60 -1.9% 62.27
35 Mount Angel 3.96 $128.30 57.58% $7.22 1.0% 62.10
36 Dayton 5.62 $116.35 53.99% $6.14 -1.6% 61.82
37 Cornelius 6.96 $133.26 54.88% $6.95 -1.1% 61.81
38 Estacada 8.96 $160.22 54.11% $6.29 1.1% 61.79
39 Cave Junction 6.83 $111.30 45.72% $2.65 4.5% 61.73
40 Canby 7.81 $141.39 53.48% $6.56 0.7% 61.70
41 Veneta 7.07 $122.17 51.48% $7.72 3.5% 61.66
42 Lakeside 7.65 $116.30 50.42% $1.54 -8.4% 61.40
43 Wilsonville 8.29 $164.22 54.69% $5.47 0.2% 61.32
44 Molalla 7.75 $140.39 54.42% $8.10 0.3% 61.28
45 Forest Grove 8.55 $143.91 53.89% $8.64 0.6% 61.06
46 West Haven-Sylvan 8.77 $211.96 56.08% $2.97 3.4% 60.98
47 Turner 5.47 $127.65 52.90% $6.54 2.5% 60.96
48 Oregon City 7.68 $156.35 55.05% $6.93 0.5% 60.93
49 Scio 4.93 $122.35 52.31% $8.95 7.5% 60.86
50 Aloha 5.01 $151.96 53.86% $2.97 1.6% 60.81
51 Beavercreek 9.30 $196.78 55.27% $2.66 -1.3% 60.76
52 Garden Home-Whitford 6.43 $199.83 57.33% $2.97 3.2% 60.76
53 Milwaukie 7.68 $158.35 55.33% $7.12 0.3% 60.73
54 Cedar Hills 9.14 $215.91 56.64% $2.97 1.4% 60.59
55 Albany 8.50 $115.91 52.82% $11.35 -0.9% 60.58
56 Gladstone 7.88 $146.09 55.22% $8.46 -1.3% 60.55
57 King City 5.13 $158.39 55.22% $5.05 3.1% 60.54
58 Damascus 9.34 $164.22 54.03% $5.95 -2.3% 60.53
59 Tualatin 7.18 $163.09 54.62% $5.42 0.8% 60.50
60 Hubbard 6.01 $130.57 53.20% $7.01 0.8% 60.44
61 Dundee 6.66 $139.52 51.22% $4.89 1.6% 60.34
62 Rockcreek 5.35 $176.96 58.15% $2.97 -2.6% 60.33
63 Warrenton 3.59 $124.87 54.67% $5.35 -0.6% 60.29
64 Hayesville 1.88 $103.43 52.63% $3.03 -1.6% 60.28
65 Troutdale 6.71 $135.87 55.32% $10.37 1.4% 60.27
66 Mulino 9.19 $189.91 55.61% $2.66 -5.0% 60.11
67 Myrtle Point 6.77 $92.74 52.80% $9.54 -6.8% 60.02
68 Bend 6.99 $160.83 53.28% $4.60 0.2% 59.75
69 Scappoose 5.86 $128.30 50.28% $5.00 1.2% 59.66
70 Clatskanie 4.89 $107.39 53.80% $7.91 -4.1% 59.56
71 Chiloquin 7.54 $96.22 57.03% $7.06 -21.7% 59.53
72 North Bend 6.95 $110.65 50.90% $7.72 -3.3% 59.44
73 Gaston 8.94 $176.04 57.11% $9.45 -1.3% 59.36
74 Jefferson 4.16 $121.87 51.86% $5.19 0.0% 59.24
75 Sherwood 7.62 $166.22 54.64% $6.93 -0.1% 59.21
76 Stayton 5.13 $120.83 53.05% $6.94 -2.9% 58.93
77 McMinnville 6.86 $123.48 51.44% $8.28 -1.3% 58.86
78 Gervais 3.57 $94.13 51.20% $11.12 4.8% 58.86
79 Harrisburg 3.58 $121.00 56.15% $7.88 -3.7% 58.85
80 West Slope 8.43 $219.74 54.80% $2.97 3.6% 58.81
81 La Pine 2.33 $108.96 51.02% $3.35 -1.1% 58.80
82 Waldport 5.63 $135.91 49.43% $5.70 4.5% 58.78
83 Independence 3.78 $110.13 49.54% $7.91 6.0% 58.75
84 Creswell 5.37 $131.65 52.91% $4.06 -5.9% 58.68
85 Canyonville 1.70 $91.65 48.29% $4.61 2.9% 58.49
86 Beaverton 7.00 $165.22 54.00% $7.15 1.1% 58.48
87 Tigard 7.40 $169.22 53.98% $5.94 -0.9% 58.47
88 Sandy 7.32 $146.96 53.84% $6.77 -5.0% 58.38
89 Astoria 4.90 $118.57 55.75% $10.26 -4.3% 58.27
90 Salem 5.14 $112.26 52.00% $9.72 0.0% 58.24
91 Silverton 5.86 $135.30 52.75% $7.18 -1.7% 58.24
92 Merlin 4.62 $140.61 46.25% $0.75 4.8% 58.15
93 Coos Bay 4.71 $106.83 53.06% $8.48 -4.9% 58.08
94 Glendale 2.74 $70.70 46.90% $6.82 0.3% 58.04
95 Gresham 4.36 $136.43 54.39% $9.05 1.7% 58.00
96 Sweet Home 5.28 $97.48 51.98% $12.68 0.1% 57.92
97 Junction City 5.55 $133.22 52.31% $7.43 -1.4% 57.72
98 Willamina 1.68 $97.09 53.39% $6.62 -5.3% 57.31
99 Winston 3.88 $90.26 48.74% $5.38 -5.5% 57.29
100 Aumsville 3.38 $127.65 53.82% $6.66 -2.7% 57.27
101 Sheridan 1.88 $100.83 51.21% $4.71 -4.2% 57.11
102 White City 3.69 $103.87 44.58% $2.21 0.8% 57.03
103 Hillsboro 5.63 $152.22 54.12% $8.36 -0.6% 56.96
104 Saint Helens 1.94 $110.39 50.04% $3.61 -2.3% 56.75
105 Reedsport 4.29 $95.74 48.51% $7.30 -2.9% 56.69
106 Rainier 3.26 $101.78 53.35% $9.57 -4.8% 56.59
107 Dallas 3.25 $114.87 51.76% $7.38 -2.3% 56.43
108 Aurora 6.80 $152.35 51.90% $8.89 0.4% 56.38
109 Roseburg 4.88 $110.26 50.20% $9.25 -1.6% 56.34
110 Mill City 2.56 $99.57 50.20% $7.44 -1.7% 56.24
111 Seaside 2.47 $152.52 55.15% $5.25 -1.6% 56.19
112 Tillamook 3.02 $123.83 55.98% $4.43 -13.6% 56.12
113 Eugene 6.15 $150.48 52.65% $9.54 0.0% 55.90
114 Lake Oswego 9.20 $209.96 54.90% $8.55 1.2% 55.85
115 Fairview 6.30 $136.91 50.74% $8.93 -1.2% 55.84
116 Raleigh Hills 9.59 $248.61 55.32% $2.97 -0.2% 55.80
117 Springfield 3.34 $127.52 52.67% $8.42 -1.2% 55.68
118 Talent 7.08 $138.61 47.03% $5.64 -1.6% 55.54
119 Rogue River 5.93 $112.57 46.08% $5.85 -3.2% 55.50
120 Monroe 6.81 $142.26 56.73% $10.00 -12.4% 55.39
121 Phoenix 4.83 $120.30 44.48% $5.86 4.3% 55.28
122 Jacksonville 8.32 $174.39 46.27% $4.65 3.2% 55.09
123 Portland 8.80 $222.61 59.38% $12.41 0.6% 54.85
124 Rockaway Beach 3.88 $156.39 55.27% $3.62 -10.5% 54.83
125 Woodburn 4.07 $105.13 49.73% $9.48 -3.3% 54.77
126 Toledo 4.32 $135.30 51.91% $8.64 -2.4% 54.60
127 Lyons 4.59 $135.43 51.75% $5.93 -7.9% 54.35
128 Newberg 3.32 $141.30 51.34% $7.25 -0.4% 54.22
129 Lafayette 2.10 $110.65 52.76% $6.07 -10.4% 54.05
130 Sutherlin 4.91 $104.17 47.18% $6.89 -7.6% 53.67
131 Eagle Point 3.94 $117.57 45.22% $4.92 -1.5% 53.49
132 Nehalem 5.75 $202.17 51.71% $4.10 1.2% 53.48
133 Myrtle Creek 2.05 $93.43 49.47% $7.62 -7.2% 53.34
134 Oakland 6.59 $102.70 47.54% $7.52 -13.6% 52.98
135 Lebanon 2.43 $100.65 49.66% $10.92 -2.1% 52.95
136 Sisters 6.76 $179.13 52.81% $4.19 -10.9% 52.83
137 Central Point 4.72 $115.74 44.52% $6.68 -1.9% 52.54
138 Bay City 1.26 $117.43 50.48% $5.14 -8.3% 52.07
139 Cottage Grove 1.98 $115.35 48.67% $8.60 -1.5% 51.95
140 Yachats 1.84 $162.91 46.36% $3.42 6.9% 51.92
141 Florence 2.12 $131.35 47.41% $4.26 -4.0% 51.34
142 Depoe Bay 1.33 $169.78 49.94% $3.68 1.8% 51.33
143 Brownsville 3.03 $108.52 52.94% $15.01 -5.4% 51.23
144 Vernonia 0.33 $102.17 49.49% $7.52 -6.0% 51.17
145 Newport 5.35 $143.09 49.31% $10.06 -3.8% 51.11
146 Grants Pass 3.23 $121.43 44.02% $7.08 -0.3% 50.32
147 Lincoln City 3.79 $155.61 48.42% $8.18 -0.5% 50.07
148 Medford 3.30 $117.52 44.08% $7.59 -2.0% 49.80
149 Ashland 6.88 $202.39 45.50% $6.92 0.2% 47.09
150 Shady Cove 1.44 $124.48 35.27% $3.11 -0.3% 43.60
151 Cloverdale 4.13 $185.43 54.73% $2.63 -37.3% 41.09
152 Carlton 5.88 $121.91 28.76% $7.29 -2.1% 39.47
153 Neskowin 2.38 $221.48 33.47% $2.63 -13.8% 27.45

 

Our list of 153 places in Oregon doesn’t include places with incomplete data and residency restrictions, such as American Indian reservations and retirement communities.

Methodology

The investment score for each city was derived from the following measures:

  1. Market health score. This score is from indexing Zillow’s 2014 market health score for each city. Market health is measured by the number of days a house is on the market, relative to other cities in the state. The quicker a house sells, the higher the score — a 10 is the highest. This is 10% of our score.
  2. Square foot per dollar. Using data from Zillow, we negatively indexed a house’s cost per square foot in each city to find how much a buyer could get for their dollar. The higher the score, the lower the cost per square foot. To avoid seasonal fluctuation, we averaged data from the 24 months of 2013 and 2014. This is 20% of our score.
  3. 10-year change in value. Using data from Zillow, we averaged the percent of houses that increased in value over the past 10 years. This is 40% of our score.
  4. Tax rate. Using data from the Oregon Department of Revenue, we calculated the combined city and county property tax rate for each place. All tax rates are per $1,000 of housing value. This is 10% of our score.
  5. Decrease in vacancy rate. Using data from the U.S. Census Bureau, we calculated the difference in housing vacancy rates from 2010 to 2013. A vacancy decrease was treated positively. This is 20% of our score.

Eastern Oregon’s Blue Mountains via iStock.