Tag: deep-dive

Appraisal Deep Dive: The Ritz-Carlton Residences, Portland — Market Resistance and the Principle of Conformity in Downtown Condominiums (2023–2025)

The Ritz-Carlton Residences Portland closed only 11 of 132 units in 2024–2025 at an average $274,000 reduction from original list, illustrating external obsolescence and violation of the principle of conformity in downtown Portland’s soft condo market.

Block 216 tower, home to The Ritz-Carlton, Portland hotel and the Ritz-Carlton Residences condominiums, downtown Portland Oregon
Block 216 (The Ritz-Carlton, Portland hotel and Ritz-Carlton Residences) viewed from West Burnside Street, Portland, Oregon.
Photo: Steven Walling via Wikimedia Commons (CC BY 2.0)

As 2025 draws to a close, Block 216—Portland’s tallest residential tower at 460 feet and 35 stories—stands as a prominent feature of the downtown skyline. Completed in 2023–2024, the mixed-use project includes The Ritz-Carlton, Portland hotel on the lower floors and 132 branded luxury condominiums above, marketed as the Ritz-Carlton Residences, Portland.

Launched with considerable optimism for a post-pandemic downtown revival, the residences were positioned as the pinnacle of urban luxury living—complete with Ritz-Carlton service access, premium finishes, and panoramic views. Original list prices ranged from $850,000 to $7,850,000.

Yet the market response has been markedly different. As of December 31, 2025, only 11 units have closed. The original developer transferred the unsold inventory to the lender via deed in lieu of foreclosure in summer 2025, and Christie’s International Real Estate Evergreen was appointed exclusive brokerage in December 2025, with significant price reductions scheduled for January 2026.

This appraisal deep dive examines the project’s sales and listing history through RMLS data, placing it within the broader context of the Portland Downtown condominium market and highlighting key valuation principles brought into sharp relief.

Timeline of Key Developments

  • 2019–2023: Block 216 construction and pre-sales period. Residences marketed under Ritz-Carlton branding license as ultra-luxury product with hotel amenity access.
  • 2024: Tower completion and public launch of condominium sales under LUXE Forbes Global Properties. Phased marketing begins.
  • Late 2023–early 2025: Eleven closings recorded in RMLS, eight of which show 0 days on market (indicative of off-market or exclusive arrangements).
  • Summer 2025: Developer executes deed in lieu of foreclosure, transferring bulk unsold inventory to lender Ready Capital—a project-level transaction, not individual buyer foreclosures. Public records confirm the hotel portions of Block 216 transferred to a lender REO entity in July 2025.
  • December 2025: Christie’s International Real Estate Evergreen appointed exclusive brokerage; major price repositioning announced for January 2026.

The Portland Downtown Condominium Market: A Soft Backdrop

The Ritz-Carlton Residences are located in the City of Portland’s “Portland Downtown” neighborhood—the central area immediately south of the Pearl District, encompassing the West End and cultural district around Pioneer Courthouse Square and the South Park Blocks.

Map of Portland Downtown neighborhood boundary showing location of Block 216 and The Ritz-Carlton Residences Portland
The Ritz-Carlton Residences, Portland (Block 216) within the City of Portland’s “Portland Downtown” neighborhood boundary, immediately south of the Pearl District.
Map via Bing Maps

This area offers exceptional walkability and proximity to cultural institutions, but the condominium market has remained soft for years. From 2022–2025, 482 condominium sales closed in the neighborhood at an average price of $407,358 and $372 per square foot. Units averaged 1,109 square feet in size, with an average year built of 1982 and average monthly HOA fees of $784.

The scatterplot below illustrates the price distribution over time:

Scatterplot showing condominium sales prices over time in Portland Downtown neighborhood with points sized by total square feet and Ritz-Carlton Residences sales highlighted as outliers above the main cluster.
Sales Price vs. Date of Sale for condominiums in Portland’s Downtown neighborhood (2021–2025). All points are sized proportionally by total square feet. Gray dots represent all other sales; colored dots are the 11 closed sales at the Ritz-Carlton Residences, Portland. The Ritz units closed well above the neighborhood norm.

Sales prices have shown remarkable stability—remaining largely in the $200,000–$1.2 million range, with the historical high (prior to Block 216) at $3.065 million from a 2017 transaction. This stagnation reflects persistent oversupply and slow absorption in the urban core.

The table below quantifies the contrast between the neighborhood and the Ritz-Carlton Residences:

MetricPortland Downtown (482 sales)Ritz-Carlton (11 sales)Insight
Avg Close Price$407,358$1,500,364Ritz closed at 3.7× the neighborhood average.
Avg PPSF$372.27$1,052.73Ritz realized 2.8× higher PPSF—still far above neighborhood norm.
SP/OLP %93.29%84.48%Ritz required significantly larger price reductions from original list to close.
Avg Year Built19822023Ritz is brand-new vs. 40+ year-old neighborhood average.
Avg Total SF1,1091,363Ritz units larger on average.
Avg HOA Monthly$784$2,402Ritz HOA 3× higher—significant carrying cost difference.
Avg CDOM11425Skewed by Ritz exclusives; real public marketing time much longer.
Data: RMLS | Portland Appraisal Blog

The Ritz-Carlton Residences: Pricing Premise vs. Market Reality

Of the 132 total residences, 71 distinct units were publicly marketed in phases—full release of floors 21–23 (the “entry-level” tiers) and selective listings on higher floors. These 71 units generated 105 separate listing records in RMLS, with a median of 145 days per active spell and many accumulating 400+ cumulative days across repeated expirations and re-lists.

Only 11 closings were recorded:

  • Average sold price $1,500,364 (average reduction of $274,000 from original list price per unit).
  • Average PPSF $1,053 (marginal trend from regression ~$1,665).

These closings occurred between late 2023 and February 2025, with no additional sales recorded in the remainder of the year.

The developer’s original pricing was highly disciplined and size-driven:

Scatterplot of list price versus total square feet for marketed Ritz-Carlton Residences Portland units showing tight linear correlation.
List Price vs. Total Square Feet for the 71 marketed units at the Ritz-Carlton Residences, Portland (2022–2025). Trend implies ~$2,096 per square foot.

The closed sales followed a similar pattern but at a lower level:

Scatterplot of sales price versus total square feet for closed Ritz-Carlton Residences Portland units showing consistent reduction from original pricing premise.
Sales Price vs. Total Square Feet for the 11 closed sales at the Ritz-Carlton Residences, Portland (~$1,665 marginal PPSF trend, average realized $1,053/psf).

Among the 11 closed sales (primarily on floors 21–31), no discernible premium for higher floors was observed in realized prices:

Scatterplot showing no correlation between sales price and floor level in closed Ritz-Carlton Residences Portland sales.
Sales Price vs. Floor Number for the 11 closed sales at the Ritz-Carlton Residences, Portland (floors 21–31). R² near zero—no contributory value observed for higher floors in current data; upper floors remain unsold.

Notably, eight of the 11 closings showed 0 days on market—likely off-market or exclusive arrangements. The publicly marketed units faced far greater resistance.

The Inclusionary Housing Obligation and Additional External Pressure

Portland’s Inclusionary Housing program requires new residential developments of 20 or more units to either include affordable units or pay a fee-in-lieu. For Block 216, the developer initially proposed 26 on-site affordable units during the entitlement phase but switched to the fee option in 2023.

On-site inclusion proved functionally challenging: even with restricted sale prices, the project’s elevated monthly HOA dues (averaging $2,402 across closed sales) and luxury service model would likely exceed income qualifications for targeted buyers. The calculated fee-in-lieu obligation totaled approximately $7.8 million (base plus interest) and was due December 31, 2025.

Following the summer 2025 deed-in-lieu transfer to lender Ready Capital, uncertainty remains regarding collection of this amount. As of the post date, it is unknown whether the fee has been paid. If unpaid, it would represent an additional external factor appraisers must consider—a financial encumbrance separate from the physical improvements that may influence marketability and value reconciliation for both unsold inventory and existing ownerships.

Appraiser Perspective: The Principle of Conformity and External Obsolescence

The original pricing strategy for the Ritz-Carlton Residences appears to have been calibrated to the Pearl District rather than the property’s actual location in Portland Downtown. The Pearl has demonstrated a proven ceiling around $7 million for top-tier condominiums, as detailed in an earlier Portland Appraisal Blog post analyzing that market over the past decade. In contrast, the highest condominium sale in the Portland Downtown neighborhood prior to Block 216 was $3.065 million in 2017.

By listing units up to $7.85 million, the developer effectively positioned the project outside the neighborhood’s historical range of conformity—a principle of appraisal theory that holds value is maximized when a property aligns with prevailing market expectations in its location. The resulting resistance illustrates how site-specific external factors can override new construction, branding, and amenity premiums.

This pricing strategy mirrors a common challenge appraisers encounter when reviewing sale transactions or proposed listings: comparable sales selected from superior or more established submarkets to support an optimistic value conclusion. The uniform price reductions required on closed sales (average $274,000 reduction from original list price per unit) and prolonged adverse listing history on the unsold inventory further demonstrate concentrated external obsolescence within an already challenged submarket.

Outlook and Implications for Owners and Lenders

The January 2026 price repositioning may improve absorption at levels more aligned with neighborhood norms. However, the influx of discounted intra-building comparable sales could create reconciliation challenges for appraisals of the existing 11 ownerships—particularly the eight early exclusive buyers who closed near original asks.

Lenders and owners of recently purchased units should monitor upcoming sales closely, as distressed marketing conditions on remaining inventory can influence market value indications even for arms-length prior transactions.

For developers and lenders contemplating future high-rise condominium projects in the urban core, the Block 216 experience underscores the importance of grounding pricing premises in location-specific comparable data rather than aspirational benchmarks from adjacent submarkets.

Sources & Further Reading

  • Christie’s International Real Estate Evergreen appointment and price repositioning announcement: Press Release
  • Ready Capital secures ownership via deed in lieu (summer 2025): Investor Relations News
  • KGW coverage of price reductions and brokerage change: Article
  • Willamette Week on lender taking possession: Article
  • Street Roots on inclusionary housing fee and deadline: Article
  • Portland Inclusionary Housing Program overview and requirements: City of Portland
  • Block 216 hotel unit ownership transfer (July 2025): Multnomah County Property Records (search Account P727368)
  • The Portland Pearl District Condo Market – The Last 10 Years (2015–2024): Portland Appraisal Blog

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Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Appraisal Deep Dive: Portland Seniors and the Condo Dream — Q3 2025 Data Shows Only 5% of Sales Are Truly Affordable

Dramatic upward view of the entrance facade of the Empress Condominiums at 20 NW 16th Avenue in Northwest Portland, Oregon. Built in 1927 as the Empress Hotel, this five-story brick building was later converted to condominiums. The photo emphasizes the tiled signage, arched window, and vintage lanterns in the Nob Hill/Alphabet District.
Entrance detail of the Empress Condominiums in Northwest Portland—a 1927 building exemplifying the historic character of many pre-1970 condominium conversions in the region.
Photo: Abdur, Abdul-Malik, Portland Appraisal Blog (CC BY-SA 4.0)

Condominiums have long been viewed as an ideal downsizing option for seniors seeking lower-maintenance ownership, potential aging-in-place features, and proximity to urban amenities. National narratives—including recent discussions of a “silver tsunami” of baby boomer downsizers—often highlight condos as a key solution for older households looking to “rightsize.”

Yet Q3 2025 condominium closed-sales data from the Portland Region reveals a starkly different reality for seniors reliant on typical fixed incomes.

Using the Portland Appraisal Blog Affordability Index (PABAI)—a distribution-averaged metric calculated individually for each transaction based on actual sale price, reported HOA dues, and property taxes, combined with current mortgage rates, insurance estimates, and a conservative 20% down payment with 28% qualifying ratio—only 5.4% of the 651 condominium sales (35 units) generated a monthly carrying cost affordable on a median senior household income of approximately $68,284.

This analysis focuses exclusively on single-family residential class condominiums across the Portland Region—the six-county area that is the focus of this blog.

The Equity Divide in the Condo Market

Financing terms, as reported by listing agents in RMLS, tell much of the story (see table below). Cash purchasers accounted for 33.8% of transactions (220 sales) and paid the highest average price ($407,000) while accepting the highest average monthly HOA dues ($669). Conventional financing dominated another 54.1%, reflecting buyers with strong credit and often substantial down payments.

Financing Type% of Sales# SalesAvg Close PriceAvg Monthly HOA
Cash33.8%220$407,000$669
Conv.54.1%352$365,000$460
FHA8.0%52$283,000$403
VA2.6%17$340,000$356
Q3 2025 Portland Region condominium financing terms as reported by listing agents in RMLS, showing average close price and monthly HOA dues by type. (Top 4 financing types only.)
Data: RMLS | Portland Appraisal Blog

In contrast, FHA financing—typically associated with lower down payments and more income-sensitive qualification—represented only 8.0% of sales, with an average close price of $283,000 and more moderate HOA dues ($403 monthly).

This segmentation underscores a clear divide: equity-rich seniors downsizing from detached homes can readily access the market, often paying cash or leveraging large down payments to absorb elevated carrying costs. Seniors without significant prior home equity, reliant primarily on Social Security, pensions, or modest retirement savings, face severe barriers.

Price Distribution and the Narrow Affordable Tier

Q3 2025 condominium sales clustered heavily in the $200,000–$400,000 range, but the truly affordable segment for median senior incomes proved far smaller.

Price Band# Sales% of TotalAvg Close PriceAvg Year BuiltAvg Monthly HOA
Under $200k538%$164,0001968$461
$200–299k21633%$255,0001984$500
$300–399k20331%$346,0001997$431
$400–499k8914%$443,0001999$492
$500k+9014%$779,0001997$889
Q3 2025 Portland Region condominium sales distribution by price band, with average year built and monthly HOA dues.
Data: RMLS | Portland Appraisal Blog

The 35 units affordable under conservative PABAI assumptions were overwhelmingly concentrated in the under-$200,000 and lower $200,000–$299,000 bands—older, smaller properties that appear accessible on purchase price alone.

Age, Obsolescence, and Elevated Carrying Costs

Older condominiums—many conversions of pre-1970 apartment buildings — present particular valuation challenges. The table below excludes new construction deliveries, as agent-reported HOA dues for newly completed projects are often provisional or incomplete.

Year Built Bracket# SalesAvg Close PriceAvg Sq FtAvg Monthly HOAAvg HOA per Sq Ft
Pre-197095$304,000977$572$0.67
1970–1989194$309,0001,146$575$0.52
1990–199943$388,0001,117$555$0.52
2000–2009199$443,0001,265$661$0.54
2010+51$474,0001,394$284$0.26
Average Q3 2025 condominium characteristics by year-built bracket (new construction excluded due to provisional HOA reporting). Pre-2010 stock shows markedly higher HOA burden per square foot.
Data: RMLS | Portland Appraisal Blog

Pre-1970 stock carries the highest average HOA dues per square foot ($0.67), reflecting ongoing capital needs for aging systems, reserves, and occasional special assessments. This elevated recurring cost creates meaningful external obsolescence for income-constrained buyers, even when entry prices appear lower.

A scatterplot of sales price against year built further illustrates this dynamic. While newer construction generally commands higher prices, the weak correlation (R² = 0.047) confirms that factors beyond age—location, views, amenities, and building quality—dominate value. Older units cluster at lower prices, yet as shown above, they often carry disproportionately high recurring costs.

Scatterplot of condominium sales prices versus year built in the Portland Region for Q3 2025, showing weak correlation between age and value with most sales clustering between $200,000 and $800,000 across 1980–2010 construction.
Sales Price vs. Year Built — Q3 2025 Portland Region condominiums (651 sales). The weak correlation (R² = 0.047) illustrates that location, amenities, and building quality drive value far more than age alone.

County-Level Consistency

The challenge persists across the Portland Region:

County# Sales% Affordable for Seniors
Multnomah4266.3%
Washington1443.5%
Clackamas694.4%
Portland Region Total6515.4%
Share of Q3 2025 condominium sales affordable under conservative PABAI assumptions, by county.
Data: RMLS | Portland Appraisal Blog

No county offers a meaningful suburban relief valve for fixed-income seniors. (Over 98% of Q3 2025 condominium sales occurred in the three counties in the table above.)

Even FHA Terms Do Not Meaningfully Expand Access

Conventional wisdom might suggest FHA financing—with 3.5% down payments and more lenient debt-to-income ratios—would open the market wider for seniors with limited savings. Yet when mortgage insurance premium (0.55% annual) and the resulting larger loan are included, the share of affordable units actually declines to 3.8%.

Higher principal and interest, combined with permanent MIP, outweigh the benefits of lower upfront equity for households with constrained monthly cash flow.

Appraiser Perspective: Comparable Selection and Reconciliation Challenges

When appraising condominiums, comparable selection must account for competitive market segments defined by building age, location, complex-specific amenities, and HOA structure. Units in markedly different projects—for example, a 1960s conversion versus a 2000s high-amenity tower—are rarely direct substitutes.

Differences in functional utility, functional obsolescence, and market-perceived recurring costs often require careful adjustments or exclusion from the primary grid.

Conclusion

While condominiums remain a logical theoretical choice for seniors seeking reduced maintenance and urban access, Q3 2025 condo data demonstrates that ownership is realistically attainable only for those with substantial prior home equity. For senior households reliant primarily on fixed incomes near the median, monthly carrying costs—particularly in older stock with higher HOA burdens—render the vast majority of the market out of reach without additional equity or savings.

Many will continue to rely on rental options or supportive housing models, such as the recently opened Julia West House in Portland, which provides dedicated affordable senior housing.

Senior couple happily moving into a new condominium home, representative of the downsizing dream for many older households in the Portland Region.
For many seniors, condominiums represent an appealing downsizing opportunity—yet Q3 2025 data shows monthly carrying costs limit access for those without substantial equity.
Via Canva Pro

Sources & Further Reading

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Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Appraisal Deep Dive: Portland’s First-Time Buyers Have No Choice But to Wait Until 40 — Q3 2025 Data Explains Why

Q3 2025 data shows only 10% of detached homes in the Portland Region were affordable to typical 25–44 households under realistic PITI assumptions using the Portland Appraisal Blog Affordability Index—explaining why first-time buyers have little choice but to wait until age 40.

Two classic homes in a Portland neighborhood, with the right house having sold for $1.1M in Q3 2025.
Classic Craftsman bungalows homes in a Portland neighborhood. While older detached stock like this offered relatively better access for younger buyers in Q3 2025 (15% affordable in Multnomah County under realistic PITI assumptions), many close-in properties commanded premium prices—this example on the right sold for $1.1 million.
Photo: Abdur Abdul-Malik, Portland Appraisal Blog

The National Association of Realtors recently reported that the median age of first-time home buyers has reached 40—the highest on record—with their share of purchases falling to a historic low of 21%. These trends are driven by affordability challenges that national indices like NAR’s Housing Affordability Index attempt to measure.

Using NAR’s standard methodology (principal and interest only, 25% qualifying ratio), approximately 28% of Q3 2025 detached single-family sales in the six-county Portland region were affordable to a household earning the area’s median income of $124,100.

In reality, no buyer escapes property taxes or homeowners insurance. When we incorporate actual taxes from listings and a conservative insurance estimate into the full monthly payment (PITI, 28% ratio), affordability drops to 20% for that same benchmark household.

To provide a more accurate local measure, this analysis introduces the Portland Appraisal Blog Affordability Index (PABAI)—a PITI-based index designed for the Portland Region’s residential market. Like traditional housing affordability indices, the PABAI expresses affordability as an index value where 100 means a household at the reference median income can exactly qualify for the typical home under realistic lending conditions. Values below 100 indicate unaffordability. A secondary calculation—the percentage of sales affordable to that reference household—derives directly from the index and serves as the primary insight in this post. For the overall Portland Region benchmark (using HUD’s Area Median Income of $124,100), the PABAI stood at approximately 78—confirming an unaffordable market even before drilling into younger households.

The challenge is even more severe for the cohort most people associate with first-time buyers: households headed by someone aged 25–44. With a median income of approximately $110,000 (2024 American Community Survey estimate), the PABAI drops to 69—meaning the typical younger household fell 31% short, with only 9.8% of Q3 detached sales (460 homes out of 4,682) within reach. The typical $600,000 detached home required roughly $159,000 in household income—45% above the cohort median.

Q3 2025 Affordability for Younger Buyers — County by County

Q3 2025 PABAI modeling reveals stark geographic variation for households aged 25–44.

CountyMedian Q3 PriceRequired Income for Median Home% of Sales Affordable: 25–44 Age Group
Columbia$471,000$122,00034%
Yamhill$510,000$132,00023%
Multnomah$555,000$150,00015%
Clackamas$675,000$178,0005%
Washington$625,000$165,0003%
Hood River$773,000$195,0003%
Regional$600,000$159,00010%
Percentage of Q3 2025 detached sales affordable to typical 25–44 household under the PABAI (PITI model). Affordability modeled using 20% down payment, 28% front-end ratio, actual weekly rates, listing taxes, and 0.40% annual insurance estimate.
Data: RMLS | Portland Appraisal Blog

Under the PABAI, outer counties like Columbia (34%) and Yamhill (23%) offered the highest shares of reachable detached homes, but this comes with trade-offs. Homes in these more rural areas typically involve longer commute times to Portland’s core amenities, job markets, and urban services—a key consideration for households prioritizing proximity over initial affordability. More urban Multnomah (15%) outperformed the pricier suburban counties of Washington (3%) and Clackamas (5%). Hood River’s premium inventory made it effectively inaccessible at just 3%.

The suburban counties’ low accessibility reflects their inventory mix. Clackamas County’s average lot size in Q3 sales was 1.07 acres—significantly larger than Washington County’s 0.36 acres or Multnomah’s 0.27 acres—contributing to higher median prices and required incomes well above the 25–44 cohort median. Larger lots and newer improvements demand stronger buyer qualifications, while Multnomah’s denser, older stock provided relatively more options for younger households.

Horizontal bar chart showing the percentage of Q3 2025 detached single-family home sales affordable to a typical household aged 25–44 in the Portland region under the Portland Appraisal Blog Affordability Index (PABAI PITI Model). Columbia County leads at 34%, followed by Yamhill (23%), Multnomah (15%), Clackamas (5%), Washington (3%), Hood River (3%), with the regional average at 10%. Data source: RMLS | PortlandAppraisalBlog.com

The Realistic Paths to Ownership for Younger Buyers

For most households in their 20s and 30s, entry into the detached-home market in Q3 2025 required one of three things:

  1. Substantial family assistance (gift for down payment, co-signer, or direct equity help).
  2. Extreme lifestyle sacrifice (aggressive saving for larger down payment, renting with multiple roommates far longer, minimal discretionary spending).
  3. Outlier household income (well above the cohort median—e.g., $150,000+ dual incomes early in careers).

Without one of these, even well-qualified younger buyers were effectively priced out until they aged into higher earnings—typically the late 30s or early 40s. Or they had to consider alternative housing options, like condominiums or townhouses.

This dynamic directly explains the national shift toward older first-time buyers and underscores the limited market participation of younger cohorts in the current environment.

Methodology Note

This analysis introduces the Portland Appraisal Blog Affordability Index (PABAI)—a PITI-based metric designed for the Portland region’s residential market (detached single-family, attached homes, condominiums, and manufactured homes on owned land). The PABAI measures the percentage of sales affordable to a reference household under realistic lending conditions. The PABAI can be calculated for distinct property types or the residential market as a whole. For this post, the PABAI is calculated for detached single-family homes only.

Affordability is modeled using a 20% down payment, 28% front-end housing expense ratio (per Freddie Mac guidelines), actual weekly 30-year fixed rates at closing, property taxes from listings, and a conservative 0.40% annual homeowners insurance rate (aligned with 2025 Oregon averages per Bankrate). Unlike national indices that rely on principal and interest only, the PABAI incorporates full PITI for a more accurate reflection of buyer qualification in the Portland region.

For an overall regional benchmark, the PABAI uses HUD’s Area Median Income for a 4-person household in the Portland–Vancouver–Hillsboro MSA ($124,100 as of 2025). In Q3 2025, the PABAI for this benchmark stood at approximately 78—meaning the typical household at the area median income could afford about 20% of detached sales under realistic PITI assumptions.

Reference incomes for specific age cohorts are estimated from the U.S. Census Bureau’s 2024 American Community Survey (Table B19037) using standard linear interpolation on grouped income data. For households aged 25–44, this yields an estimated median of approximately $110,000. This lowers the PABAI to approximately 69 for this age band, placing only 9.8% of Q3 2025 detached sales within reach.

For quarterly market context, see the Q3 2025 detached single-family update.

Sources & Further Reading

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Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Appraisal Deep Dive: Portland’s Starter Home Market (Q3 2025) — What $469k Really Buys

Q3 2025 RMLS data shows the Portland Region’s detached starter homes (5th–35th percentile) average $469k and are dominated by mid-century builds on larger lots—with new construction offering modern features but far less space. Appraisal and buyer insights below.

Yellow 20th-century bungalow in the Portland area typical of starter homes.
A classic early-20th-century bungalow in the Portland area—the type of modest, well-loved home that dominates today’s starter-tier inventory.
Via Canva Pro

Earlier this month, Redfin highlighted Portland as one of the stronger markets nationally for starter-home activity, defining starter homes as sales in the 5th–35th percentile by price. We adopt the same percentile convention here for consistency.

Redfin’s reported median of approximately $420,000 for Portland starter homes includes all property types (condos, townhomes, and single-family). Focusing solely on detached single-family residences—a popular choice across the region, including for many urban buyers seeking yard space and privacy over attached ownership—Q3 2025 RMLS data for the 5th–35th percentile tier shows an average close price of $469,000.

Few would be surprised that new construction plays a limited role in true entry-level pricing—after all, building costs remain elevated. Yet the data shows builders are still delivering a modest but meaningful number of brand-new homes into this tier (about 4.2% of starter sales, compared to 9.1% across the full market). This demonstrates that, through efficient design, infill strategies, and lot divisions, new product can compete in the lower price bands.

Local buyers want to know: how much home does a starter budget actually buy? This analysis examines square footage, lot size, build era, and location differences across counties—revealing a market dominated by mid-century homes with a modest but noteworthy presence of brand-new construction.

How Much Home a Starter Budget Buys by County

The table below summarizes Q3 2025 closed sales for detached single-family homes in the 5th–35th percentile across the core Portland Region counties (Hood River row excluded due to only two qualifying sales).

CountyAvg Close PriceAvg Yr BuiltAvg Total SFAvg Acres# of Sales
Clackamas$474,73819651,5530.279256
Columbia$457,10819831,7740.61758
Mult.$459,90919511,5910.163666
Wash.$488,95419761,4950.154323
Yamhill$453,52219811,5320.197113
Grand Total$468,59519631,5650.2031,418
Data: RMLS | Portland Appraisal Blog

Multnomah County drives nearly half the volume, delivering the oldest average build year (1951). Washington County posts the highest average prices and hosts the most new construction. Outer counties like Columbia and Yamhill provide newer homes on larger parcels, though with far fewer transactions.

Surprisingly, across the region, starter homes are very similar in average price. The standard numerical metrics which are easy to see in RMLS, (e.g. total square footage, lot size, year built, etc.), are not the primary determinant of value. As we shall see, what matters more is quality, condition, and overall site & functional utility. Buyers in the starter home tier make conscious trade-offs between older homes with larger lots and newer homes with little to no functional backyard.

Of all the standard numeric metrics, total square footage shows one of the stronger relationships with price in the starter tier—though the influence is still modest.

Scatter plot of Close Price versus Total Square Footage. The graph shows a slight tilt, indicate a noticeable though modest correlation between the two variables.
Close Price vs. Total Square Feet for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).
Note: The Y-axis begins at $350,000 to allow for better viewing of the dataset.

Larger homes tend to sell for higher prices, though with considerable variation—most sales fall between 1,200 and 2,000 square feet. The very slight tilt to the right indicates a weak but present relationship between starter home size and close price. The coefficient of determination (R2) for this graph is 0.1253, meaning total square footage explains only about 12.5% of the variation in price. Since total square footage is often one of the primary determinants of value in the broader housing market, this is a big clue that the size of the home isn’t the primary factor for buyers looking to enter the starter home market.

The Historical Supply Pattern: Lot Size and Build Era

Portland’s entry-level inventory bears the clear imprint of the post-war building boom.

Scatter plot of Lot Size versus Year Build. The graph shows lot sizes rising up to the 1960s, where it begins steadily declining into the modern era, indicating the high cost of land and increasing lot splits.
Lot Size vs. Year Built for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).

A polynomial trendline highlights the peak lot sizes during the 1940s–1950s post-war era, followed by a steady decline that began in the early 1960s and accelerated in recent decades. The pattern reflects an era when generous lots were standard, followed by shrinking parcels as land values rose, urban growth boundaries took effect, and lot divisions became common. Buyers choosing older starter homes today typically gain significantly more outdoor space than those selecting new construction.

New Construction: A Modest but Noteworthy Presence

While new homes account for only 4.2% of starter-tier sales, their ability to reach this price range in a high-cost building environment remains impressive.

SegmentAvg Close PriceAvg Total SFAvg Acres# of Sales
Existing$467,9961,5690.2071,359
New$482,3871,4790.10759
Grand Total$468,5951,5650.2031,418
Data: RMLS | Portland Appraisal Blog

New homes sell for only about 3% more than existing ones despite brand-new condition, but deliver less interior space and roughly half the land.

Buying a new home in the starter tier is akin to buying a new car on a tight budget: you gain the benefits of fresh systems, modern design, and warranty peace of mind, but often in a smaller package with fewer amenities compared to a well-maintained used model from a higher trim line.

CountyAvg Close PriceAvg Yr BuiltAvg Total SFAvg Acres# of Sales
Clackamas$489,80320251,6060.1548
Columbia$420,00020251,4580.1302
Mult.$450,82020251,0980.08818
Wash.$509,36620251,6990.07925
Yamhill$475,57820251,5400.2166
Grand Total$482,38720251,4790.10759
Data: RMLS | Portland Appraisal Blog

For buyers, this creates a clear choice: a brand-new home with modern efficiency but typically on a very small lot—often with minimal or no usable yard space, especially in Multnomah and Washington counties where most new construction occurs—or an existing mid-century home that generally offers significantly more land and outdoor space, albeit with the potential challenges of older systems and layouts. This trade-off is particularly relevant for growing families or those prioritizing play areas, gardens, or privacy.

Appraisal Insights and Challenges

One of the most revealing patterns appears when plotting close price against build year.

Scatter plot of Close Price versus Year Built. The graph shows virtually no correlation between the two variables, indicating start homes are driven by factors other than the year built.
Close Price vs. Year Built for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).
Note: The Y-axis begins at $350,000 to allow for better viewing of the dataset.

The remarkably consistent price band across decades illustrates that chronological age has little direct influence on value in the Portland Region’s entry-level segment.

In this tier, actual age correlates weakly with sales price because buyers weigh multiple factors:

  • Functional obsolescence in mid-century stock (outdated floor plans, smaller kitchens/bathrooms, less efficient systems) is often mitigated by updates and strong location appeal.
  • Effective age and condition drive far more of the value than the original build date.
  • Lot size and site utility frequently favor older homes; the smaller parcels common in new construction require substantial negative adjustments that offset much of the credit for new condition.
  • Comparable selection remains within county, where abundant mid-century comps in Multnomah, Clackamas, and Washington provide solid support — but thinner volume in outer counties demands careful bracketing.
  • When appraising a new-construction home in this tier—where truly similar recent sales are still limited and down approximately 25% year-over-year in Q3 2025 (with Multnomah County off 48%)—appraisers typically rely on other relatively recent builds (often within 10 years) and apply appropriate adjustments for differences in site characteristics, size, and location.

The same pattern holds when looking at the data from a price-per-square-foot lens, but with a slight twist:

Scatter plot of PPSF (TSF) versus Year Built. The graph shows virtually no correlation between the two variables, but with a twist. There is a clear compression of PPSF for homes starting in the 1950s up to the modern era. This indicates a homogenization of the market following WWII. The only exception are completely brand new homes, where the PPSF widens again. This indicates new homes form a distinct submarket where location and site utility play a large role.
PPSF (TSF) vs. Year Built for Starter-Tier Detached Homes ≤ 0.5 Acres (Q3 2025 RMLS data – 1,380 observations).

From the 1950s onward, PPSF becomes progressively more compressed—older homes exhibit wide spreads driven by dramatic differences in condition, updates, historic appeal, and location premiums, while mid-era and late-20th-century stock tightens as market expectations and remodeling homogenize perceived value.

Brand-new 2025 homes, however, break this decades-long compression pattern. Their PPSF spreads out again, reflecting greater influence from location-driven land costs and builder-specific choices (e.g., finishes, lot configuration) rather than the uniformity imposed by age and updates on existing stock. In effect, today’s entry-level new construction reintroduces variation that mirrors pre-1950 homes—but for different reasons: land value dominance and strategic specs to hit price points, rather than condition swings. This underscores why new-construction starter homes often form their own submarket. Appraisers valuing them face a narrower but distinct comp pool.

These dynamics show that the starter home market is not uniform and the appraiser needs to carefully delineate the competitive market segment to avoid having to make large adjustments between disparate properties. One technique appraisers often employ is to use similar, but older sales when recent data is thin and make an appropriate market conditions adjustment.

Conclusion

The Portland Region’s Q3 2025 starter-home segment continues to rely predominantly on mid-century inventory on lots larger than anything new we’re building today—a pattern unlikely to shift dramatically in 2026 absent major changes in new supply. (Although the City of Portland is certainly trying to incentivize new projects with SDC waivers.) The modest foothold of new construction shows builders adapting through infill and efficient design, but at the clear cost of site size and outdoor space.

For buyers, the choice boils down to priorities: modern and low-maintenance on a small lot, or more space and yard with the realities of an older home. For appraisers, lenders, and agents, recognizing how effective age, site utility, location, and condition outweigh chronological age remains key to accurate valuation in this segment.

Sources & Further Reading

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Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Appraisal Deep Dive: The Measure 50 Compression Trap and the 2024 MAV Reset Clarification

How pre-1997 Portland metro homes—especially those with veteran or active-duty exemptions—are facing sudden property tax jumps on sale or disqualification.

Exterior view of a well-maintained pre-1940 Colonial-style home in Portland, featuring a symmetrical facade, dormer windows, columns, red front door with wreath, and landscaped yard with steps leading to the entrance on an overcast day.
A classic pre-1940 home in the Portland Region – the type of property often benefiting from deep Measure 50 tax compression.
Photo: Portland Appraisal Blog

Table of Contents

  1. Introduction
  2. Understanding Measure 50: The Foundation of Tax Compression
  3. The Data: Tax Compression in the Portland Metro Market
  4. The Veteran and Active-Duty Exemptions
  5. The 2024 Rule Change
  6. Real-World Implications
  7. What Appraisers Should Do
  8. Closing Thoughts

Introduction

Imagine closing on a well-maintained pre-1940 Craftsman in an established close-in Portland neighborhood. The sale price felt fair, the taxes shown on the listing and county statement appeared reasonable, and the transaction cleared due diligence without issue. Then the next year’s tax bill arrives—$2,000 to $6,000 higher than anticipated. The increase isn’t due to a sudden spike in market value, but to a change in how Oregon counties now calculate Maximum Assessed Value (MAV) when certain partial property tax exemptions end.

This situation is no longer hypothetical. Oregon REALTORS first highlighted the risk in a December 12th, 2025 internal “Forms Tip of the Week” communication, alerting members that the loss of veteran or active-duty partial exemptions—commonly triggered when a qualifying veteran or surviving spouse sells the home or passes away without a qualifying successor—can lead to significant tax increases under updated guidance from the Oregon Department of Revenue.

While the veteran and active-duty exemptions (ORS 307.250 and 307.286) have drawn attention to the issue, the underlying driver is broader: the substantial tax compression created by Measure 50 for properties built or long-held before 1997.

Historically, when these modest partial exemptions ended, counties simply removed the discount and allowed the low underlying MAV to continue. The 2024 guidance change now enforces a constitutional requirement to reset MAV closer to current market reality upon disqualification.

The outcome: buyers may face permanently higher carrying costs they did not expect, sellers (including veterans and surviving spouses) can find their properties harder to market at full value, and appraisers encounter a marketability factor worthy of note when present.

This Deep Dive reviews the mechanics, illustrates the pattern with Portland Region sales data, and provides practical steps for identifying and addressing the issue in appraisal assignments.

Understanding Measure 50: The Foundation of Tax Compression

To grasp why the loss of a veteran or active-duty exemption can now lead to significant tax increases, we must first understand Oregon’s Measure 50 property tax system, approved by voters in 1997.

Measure 50 replaced the previous tax structure with two key values for each property:

  • Real Market Value (RMV): The county assessor’s estimate of what the property would sell for on the open market. This value can rise or fall annually with market conditions.
  • Maximum Assessed Value (MAV): A separate taxable value created by Measure 50. For existing properties in 1997, MAV was initially set at approximately 90% of the 1995–1997 RMV. Thereafter, MAV is generally limited to a 3% annual increase, with exceptions for major additions, improvements, or certain other events.

The Assessed Value (AV) is the lesser of RMV or MAV. Taxes are calculated by multiplying the AV by the local tax rate.

In high-appreciation markets like the Portland metro area, this 3% cap creates substantial tax compression over time. A home purchased or built before 1997 can have an MAV far below its current RMV after decades of strong market growth.

Scatter plot of annual property taxes versus year built for Q3 2025 single-family detached residential sales in the Portland Region, excluding new construction and data errors. Pre-1960 homes cluster tightly below $10,000–$12,000 in taxes; post-1990 homes show higher and wider spread, with a slight positive red trend line. Data source: RMLS via PortlandAppraisalBlog.com.
Annual property taxes vs. Year Built, excluding new construction and obvious data errors.
Note: Scatter plots are limited to properties with annual taxes of $21,000 or less to highlight the primary distribution and improve readability.

The scatter illustrates the effect clearly: pre-1960 homes are overwhelmingly clustered below $10,000–$12,000 in annual taxes, with the densest grouping under $8,000–$9,000. Properties on the far left (pre-1920 builds) often show the deepest compression, having benefited from the longest period of capped MAV growth. Post-1990 homes, by contrast, display significantly higher tax burdens, reflecting less historical compression.

When a triggering event occurs—such as disqualification from a partial exemption—the MAV can be recalculated using the Changed Property Ratio (CPR), typically around 0.54 for residential properties in Portland Region counties for the 2025–2026 tax year, applied to current RMV.

In the next section, we examine local sales data that quantifies the scale of this compression and illustrates why the reset can matter in real transactions.

The Data: Tax Compression in the Portland Metro Market

Q3 2025 sales data from detached single-family residences (SFR) in the Portland Region (Clackamas, Columbia, Hood River, Multnomah, Washington, and Yamhill counties) illustrates the scale of Measure 50 compression and why a MAV reset can create material differences in carrying costs.

The table below summarizes average sale prices and annual property taxes by approximate decade built. Flagged new construction is excluded due to frequently incomplete or preliminary tax assessments at the time of sale, which can distort the pattern of long-term compression. This brings the Q3 2025 dataset to 4,256 sales total.

Decade BucketAvg Sale PriceAvg Annual TaxesAvg Tax per $1k Sale Price
Pre-1940$671,295$6,396$9.33
1940–1959$607,466$5,766$9.53
1960–1979$640,000$5,783$9.16
1980–1999$714,535$7,367$10.31
2000–2019$761,061$7,685$10.10
2020+ (non-new construction)$924,420$8,016$9.12
Grand Total (excluding new construction)$688,838$6,665$9.68
Data: RMLS | Portland Appraisal Blog

Several patterns stand out:

  • Absolute tax burden increases with newer construction: pre-1980 homes average $5,766–$6,396 in annual taxes, while 2000–2019 properties average $7,685 and 2020+ non-new construction reaches $8,016.
  • Effective burden consistency: The Tax per $1k column remains remarkably stable at ~$9–$10 across all eras. This indicates the market prices properties assuming a similar overall tax load, regardless of age.
  • Pre-1940 premium: Outside recent construction, pre-1940 homes command the highest average sale prices ($671,295) despite paying among the lowest absolute taxes.
Street sign for NE Knott St in Historic Irvington, Portland, featuring the neighborhood's decorative column logo on a green and black background.
Street sign in Portland’s Historic Irvington neighborhood—one of the areas with many high-value pre-1940 homes exhibiting significant Measure 50 compression.
Photo: Portland Appraisal Blog (CC BY-SA 4.0)
Scatter plot showing sale price versus annual property taxes for Q3 2025 single-family detached residential sales in the Portland Region. Points form a strong upward trend from approximately $500,000 sale price at $5,000 taxes to over $4,000,000 at $20,000 taxes, with a red trend line indicating positive correlation. Data source: RMLS via PortlandAppraisalBlog.com.
Sale price vs. annual taxes, excluding new construction and obvious data errors.
Note: Scatter plots are limited to properties with annual taxes of $21,000 or less to highlight the primary distribution and improve readability.

This scatter shows a strong positive correlation, confirming the market efficiently incorporates expected tax burden into pricing.

Scatter plot of annual property taxes versus total square footage for Q3 2025 single-family detached residential sales in the Portland Region. Points cluster along an upward red trend line, with many low-tax outliers below the line. Data source: RMLS via PortlandAppraisalBlog.com.
Annual taxes vs. total square footage, excluding new construction and obvious data errors.
Note: Scatter plots are limited to properties with annual taxes of $21,000 or less to highlight the primary distribution and improve readability.

Here, numerous low-tax outliers are visible below the trend line—properties paying substantially less than size and location would otherwise suggest, consistent with Measure 50 compression.

Taken together, the data reveals a market that rewards older stock with lower absolute taxes without discounting sale prices accordingly. When a MAV reset occurs, absolute taxes move toward levels seen in newer comparable properties, creating the potential for noticeable increases in annual carrying costs.

In the following sections, we explore the specific veteran and active-duty exemptions and the 2024 guidance change that can trigger this alignment.

The Veteran and Active-Duty Exemptions

The exemptions at the center of the current concern are partial property tax reductions for certain military veterans, surviving spouses, and active-duty service members. With approximately 267,000 veterans living in Oregon (and over 114,000 in the Portland metro region), even a fraction of qualifying owners selling or changing status can affect a meaningful number of transactions.

The disabled veteran or surviving spouse exemption (ORS 307.250) provides a reduction to assessed value for homeowners with a service-connected disability rating of 40% or higher (or unremarried surviving spouses). For the 2025–2026 tax year, the reduction is up to $31,565 (service-connected) or $26,303 (standard), worth roughly $400–$700 in annual tax savings in Portland metro areas depending on local rates.

A separate active-duty exemption (ORS 307.286) offers a larger reduction (up to $108,366 for 2025–2026) for Oregon-domiciled service members on qualifying active duty outside the state.

Both are partial exemptions applied to the assessed value of the owner’s primary residence and tied to personal status. Eligibility generally requires a one-time application and VA certification (re-filing needed only if moving to a new property or certified by a private physician rather than the VA).

While the direct savings from these exemptions is modest ($400–$700/year for most veteran claims), the 2024 DOR guidance change treats their disqualification as triggering a full MAV reset—potentially closing decades of Measure 50 compression and leading to significantly higher taxes.

Active-duty cases (e.g., exemption ending upon return home) are less common and typically involve properties with less historical compression.

In the next section, we detail the 2024 guidance change and how it activates the reset.

The 2024 Rule Change

For decades, when a veteran or active-duty partial exemption ended, county assessors typically removed the reduction but preserved the underlying compressed MAV, allowing it to continue growing at the standard 3% rate.

This practice changed with updated guidance from the Oregon Department of Revenue, effective for disqualifications on or after January 1, 2024.

The DOR clarified that disqualification from a partial exemption triggers the constitutional requirement to recalculate MAV using the Changed Property Ratio (CPR)—the county-wide ratio of average MAV to average RMV for the property class. The new MAV becomes current RMV multiplied by the CPR (typically around 0.54 for residential properties in Portland Region counties for the 2025–2026 tax year).

This administrative enforcement of the existing constitutional language means the modest exemption savings ($400–$700/year) is no longer the only consequence. The reset can close much of the Measure 50 compression gap.

In the Portland Region data, pre-1980 homes average $5,766–$6,396 in taxes. A reset aligns absolute taxes closer to 2000+ levels ($7,685–$8,016 average), producing increases commonly in the $1,500–$4,000 annual range on typical sales, with $4,000+ possible in deeper-compression or higher-rate scenarios.

The change is statewide, though impacts vary by local appreciation and rates. Some counties have noted the potential for “significant increase” on loss of exemption.

In the next section, we examine the real-world implications for transactions and what appraisers should watch for.

Real-World Implications

The 2024 guidance change does not turn every pre-1997 home sale into a crisis, but it introduces friction that can affect negotiations, marketability, and reconciliation of comparables.

Typical tax increases fall in the $1,500–$4,000 annual range for properties in the Portland Region dataset ($600,000–$800,000 sale prices with pre-1980 build years). This translates to $125–$333 extra per month.

The Silent Car Payment

In late 2025 terms:

  • Average used-car payment: ~$532/month
  • Average new-car lease: ~$596/month
  • Average new-car purchase payment: ~$748/month

A $2,000–$4,000 annual increase ($167–$333/month) is less than a typical car payment but still noticeable—equivalent to a permanent, non-negotiable “utility bundle” that never goes away. For buyers already stretched in a higher-interest-rate environment, it can shift affordability and prompt renegotiation.

Outlier cases with deeper compression (often “sweet” pre-1940 homes in high-appreciation locations) can see $4,000–$8,000+ increases ($333–$667/month)—territory overlapping average used-car or new-lease payments. These are the transactions Oregon REALTORS described as producing “increases in the thousands,” sometimes requiring substantial seller concessions or risking fallout during due diligence.

The primary impact is often on marketability rather than outright deal death:

  • Savvy buyers (or their agents/lenders) anticipate the higher future taxes and adjust offers downward.
  • Sellers—particularly veterans or surviving spouses downsizing—may receive lower net proceeds (capitalizing a $3,000 increase at 6% equates to ~$50,000 less effective value).
  • Listings can linger if the low current taxes mask the post-closing reality.

For appraisers, this creates a new lens for outliers:

  • A comparable with an unexplained lower price, large concession, or extended days on market may reflect buyer reaction to a pending MAV reset.
  • Low-tax outliers in the grid (visible in the Taxes vs. Total SF scatter) could indicate compressed MAV or an active exemption—worth verifying via county records when material.

The change is statewide, but effects are most pronounced in areas with strong historical appreciation, like the Portland Region.

In the next section, we outline practical steps appraisers can take to identify and address this factor in reports.

What Appraisers Should Do

The 2024 guidance change introduces a marketability factor that appraisers in Oregon should consider when the subject or comparables involve pre-1997 properties, particularly those with potential veteran or active-duty exemptions.

Practical Checklist

  1. Verify Exemption Status Review county tax records and the preliminary title report (if available) for indications of an active veteran, surviving spouse, or active-duty partial exemption. Many counties list it on the property tax statement or online portal.
  2. Estimate Post-Transfer Tax Liability If an exemption is present and likely to disqualify on transfer (e.g., sale to non-qualifying buyer), note the potential increase. Use county assessor tools or CPR data to project the reset MAV (current RMV × CPR) and resulting taxes. Typical jumps in the Portland Region fall in the $1,500–$4,000 annual range, with higher amounts possible in deep-compression cases. Note that tax rates vary by code area.
  3. Comment on Marketability When Material Include commentary if the differential is significant: “The subject property currently benefits from a veteran partial exemption expected to end upon transfer, potentially increasing annual taxes by an estimated $X. This may affect buyer affordability and market reaction.”
  4. Reconcile Outliers with This Lens Low-tax outliers in the sales grid (visible in Taxes vs. Total SF analysis) may reflect compressed MAV or an active exemption—a “decaying asset” under the new guidance. Check effective tax rate (annual taxes ÷ sale price): ~0.6–0.8% may indicate compression; consider post-reset alignment (~1.1–1.3%) in reconciliation. Using a compressed comparable without adjustment risks overvaluing the subject’s marketability, as savvy buyers increasingly factor in the reset.
  5. Use Dual Scenarios if Appropriate For subjects with active exemptions, provide current and projected post-reset tax estimates in the addendum or comments to inform the intended user.

Resources:

  • County assessor websites (tax statements often flag exemptions)
  • DOR Veteran Exemptions page
  • MAV Manual for general mechanics

As resets propagate into closed sales (expected more visibly in 2026 onward), this factor may explain otherwise puzzling comparables. Early identification helps ensure accurate valuation and informed clients.

In the closing section, we look at the broader outlook.

Closing Thoughts

The 2024 DOR guidance change is an administrative enforcement of a long-standing constitutional provision, but its impact is only now becoming visible as disqualifications occur and 2025–2026 tax statements arrive. Larger effects are expected in the 2026–2027 cycle as more veteran-owned properties sell or change status.

The 2025 Oregon Legislative Session saw bills (e.g., HB 2361/SB 387 aiming to lower the disability threshold, HB 3287 to increase exemption amounts) intended to expand veteran benefits. While these efforts highlight recognition of the issue, none addressed the MAV reset trigger itself. The constitutional requirement remains unless amended or re-interpreted.

For appraisers working in the Portland Region and similar appreciation-driven markets, this issue adds one more layer to marketability analysis. Low-tax outliers in older properties represent a benefit that can evaporate on transfer—reliable today, but potentially “decaying” tomorrow.

Awareness helps everyone involved: appraisers reconcile comparables more accurately, agents counsel clients proactively, and buyers/sellers avoid surprises.

If you encounter real-world examples (anonymized comps with concessions due to reset concerns, or listings noting the risk), please share them for future updates. Documenting patterns strengthens our collective understanding.

Thank you for reading this Appraisal Deep Dive. Stay informed and precise in your work.

Quick Reference Cheat Sheet

Reset FormulaReal Market Value (RMV) × Changed Property Ratio (CPR)
Typical CPR (2025–2026, Portland Region residential)~0.54 (updated annually each October)
Reset TriggerDisqualification from veteran/active-duty exemption
Typical Annual Increase$1,500–$4,000 ($125–$333/month)
Outlier Increase$4,000–$8,000+ ($333–$667+/month)
Data: RMLS | Portland Appraisal Blog

Sources & Further Reading

Decorative text divider.

Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland who wonders why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.