It has leveled out while many other metro areas have seen a drop in housing values. it is almost inevitable that home prices will continue to increase over time, however.

Inevitable yes. Watching the market closely over the last seven years Portland actually stayed under the national trend for spikes in living costs and specifically in real estate. For whatever reason, the last two years has been different. In the last year alone the cost of renting has skyrocketed to the point where the cost of living in the suburbs feels the need to match the cost of living in the city. Part of the deal of living amongst the soccer mom mocha sucking mini van driving horde was cheap rent. No more. Buying a home in the suburbs is slightly cheaper, but not rent. It doesn't really make any sense. The demand is there, so they're gouging people while their homes are being foreclosed on. It sucks.

I have such a huge paranoia about this city becoming completely unaffordable. Meaning, the vibe of people that work on Hawthorne vanishes because those people can no longer afford to live in the neighborhood where they work. Same for Alberta, etc..

For now, I think we're safe. Just so long as we all get a 8-10% pay increase a year, we'll be fine. Haha?

If you believe all the fawning articles from the NY Times and other places lately, Portland is still dirt cheap. That's great if you're moving here from NY or some other big expensive city, but what about those of use who have been here awhile? Seems to me it's getting out of reach pretty quickly.

I have read that portland area housing prices should drop 13% over the next 5 years. I wish I could remember where I read that.
I strongly agree with jason above. I just rented a small duplex to a couple from Connecticut. There's no way a native Portlander would have paid what I ended up getting for that place, but those Connecticutters were falling over themselves to get in.

Martin, I IN NO WAY blame you for renting your duplex to whoever you want for however much you want. It's yours and you're free to do with it as you'd like.

I'd just like to point out that it is action like that, that will continue to drive the cost of living here up to California/Seattle levels.

Andrew: Maybe you're talking about this? FORTUNE foresees a 19.2% drop for Portland. here's the full article.

Amy, How many times did you chuckle while reading the report? I have to admit I did a few times...

You have to remember that while Portland’s housing is relatively inexpensive to the aforementioned cities, the salaries here do not compensate. I would be making the same salary if not more in a city where housing costs are a lot lower (say 35-45%) than Portland. If I moved to New York, I would get at least a 50% pay increase which somewhat compensates the high cost of living. In this regard, Portland can be expensive regarding housing costs when compared to salary levels. But we all live here for a reason eh? I’m definitely not complaining.

Nothing lasts forever. There are not really great safe guards to prevent these things from happening, even here in Portland. Just hang on as tightly as you can, or you can move to Salem. Things will surely bottom out again, but the next rise will be that much more painful for our indie amusement park.