The S&P/Case-Shiller Index is often referred to as the gold standard for measuring housing appreciation. However, in Portland’s older neighborhoods, it can overstate the actual rise in home values. Here’s why.
How Case-Shiller Works
- It tracks the resale price of the same home over time.
- It assumes the difference between sales price = market appreciation.
- It does not account for remodels, additions, or significant upgrades.
Why That’s a Problem in Portland
In our older neighborhoods, new owners often:
- Tap HELOCs or cash-out refis to remodel kitchens, baths, or add ADUs.
- Benefit from cheaper, easier-to-install materials (LVP flooring, prefab cabinets, etc.).
- List homes after improvements, boosting resale prices far beyond “raw” market appreciation.
The Generational Shift
Silent Generation homeowners were thrifty and rarely remodeled. Younger buyers today remodel more frequently. That means more sales in Portland reflect improvement value, not just market value.
The Impact
- Case-Shiller may show Portland “up 10%.” In reality, perhaps half of that is driven by remodeling.
- Sellers: don’t assume all your price jump is market lift.
- Buyers: don’t overpay for an HGTV premium if the neighborhood itself hasn’t moved as much.
- Policy: Affordability metrics must distinguish between improvements and true appreciation.
Portland Case-Schiller vs Market-Only Appreciation Chart
What To Watch Instead
- Permit data (including major remodels, additions, and ADUs).
- Cost-vs-Value reports for Portland (many projects >80% ROI).
- FHFA and Zillow indices for faster, cross-check trends.
Bottom line: Case-Shiller remains valuable for national trends, but in Portland’s remodel-heavy neighborhoods, it can overstate appreciation. To obtain an accurate market signal, you must adjust for improvements.